ChemCareers India Specialist presentation

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  • While at the moment India only has small pockets of world-class Chemistry , it has huge potential and a national strategy to create an broad-based S&T economy.
  • ChemCareers India Specialist presentation

    1. 1. An overview of Indian Chemical Industry Royal Society of Chemistry
    2. 2. INDIAN ECONOMY India’s GDP – US $ 1.53 trillion 10th largest in terms of market exchange rate In terms of purchasing power parity (PPP)  4th Largest  US $ 4.06 trillion Agriculture – 16.1% of GDP  Industry – 28.6% of GDP  Service sector – 55.3% of GDP 2010 per capita income  US $ 1,265 in terms of market exchange rate  US $ 3,339 in terms of PPP GDP growth 8.8% during 2003 – 08 GDP growth 8.5% (2010-11) 2
    3. 3. SIZE OF INDIAN CHEMICAL INDUSTRY 12th largest in terms of volume 3rd largest in Asia Industry size - US $ 76 billion in 2009-2010 5% of india’s GDP Expected to grow at 10% - double the growth rate of the global industry 3
    4. 4. CHEMICAL CLUSTERS ARE CONCENTRATED IN THE WEST Chemical clusters in India Baddi States Share of Dera production Bassi Panipat Gujarat 53% NCR Maharashtra 9% Vadodara Ahmedabad Madhya 5% Pradesh Jamnagar, Nagda Uttar Pradesh 6% Bharuch, Hazira, Vapi Haldia Tamil Nadu 6% Punjab 4% Thane, Pune , Chiplun Hyderabad Others 17% Vishakhapatnam, KakinadaSource: Working Group of Chemicals, Planning MangaloreCommission (11th Five Year Plan) Bangalore Chennai Cuddalore, Pondicherry Cochin 4
    5. 5. CHARACTERISTICS OF INDIAN CHEMICAL INDUSTRY High domestic demand potential, as the Indian markets develop and per capita consumption levels increase; High degree of fragmentation and small scale of operations; Limited emphasis on exports due to domestic market focus and smaller scale of operations; Low cost competitiveness as compared to other countries due to high cost of feedstock & power, taxation structure and cost of capital; Low focus on R&D despite initiatives to innovate processes to synthesize products cost effectively 5
    6. 6. TRANSFORMING INDIAN CHEMICAL INDUSTRY Large petrochemical capacities Trend towards outsourcing of different chemical intermediates to India Domestic companies moving up the value chain Stringent environmental laws and practices leading to shifting of plants to India 6
    7. 7. SEGMENTS OF INDIAN CHEMICAL INDUSTRYKnowledge 30.69% Basic 47.84% Speciality Basic 21.47% Speciality Knowledge 7
    8. 8. THE INDIAN CHEMICAL INDUSTRY - THREE KEY SEGMENTSSegment Share of Market Market segments market growth Organic Chemicals Inorganic Chemicals Petrochemicals – Basic Fertilizers (Ethylene, Propylene etc) Petrochemicals – Polymers Chlor Alkali Basic 48% 8.82% Other organic chemicals – Other inorganic Benzene based, alcohol chemicals based, others Paints and varnishes Dyes and IntermediatesSpecialty 21% 10.00% Textile Chemicals Others PharmaceuticalsKnowledge 31% 11.60% Biotechnology Agrochemicals 8
    9. 9. TOP TEN BASIC CHEMICAL COMPANIES SL no Top ten companies Revenue (US $ billion ) 1 Reliance Industries 52.79 2 IFFCO 3.58 3 Tata Chemicals 1.32 4 National Fertilizers Ltd. 1.23 5 RCF 1.17 6 JBF Industries 0.76 7 Indo Rama Synthetics 0.59 8 Finolex Industries 0.42 9 Aarti Industries 0.31 10 Guj Alkalies & Chemicals 0.30Source : Annual Report of respective Companies. 9
    10. 10. FERTILIZER INDUSTRY SNAPSHOTInvestment US $ 5.53 bnNumber of plants Total 128 of which Urea – 31 (28 operational) Complex fertilizers – 19 (including 11 dap plants) SSP – 66 Others (amm. Sulphate etc) -12Capacity (2009-10) N – 12.05 million tonnes P – 5.63 million tonnesProduction of fertilizer nutrients N – 11.90 million tonnes(2009-10) P – 4.32 million tonnes K – imported Stagnation in indigenous capacity, production Steep rise in costs of imported raw materials and intermediatesSource for Tonnage : Annual Report 2009-10, Department of Fertilizers, Government of India 10
    11. 11. INDIAN SPECIALITY CHEMICALS : OVERVIEW At an estimated $16.25 Bn India’s Specialty Chemicals Market represented roughly 4% of the Global Market in 2008Source : Tata Strategic Management Group, ISP Estimates 11
    12. 12. PHARMACEUTICAL INDUSTRY IN INDIA  Size of pharmaceutical industry in India. US $ bn Domestic 12.94 Exports 8.79 Total 21.73  Projected growth - 11.6% per annum  US $ 20 billion domestic market by 2015  US $ 30 bilion domestic market by 2020  Acute therapy  Value contribution – 71%  Growth - 16.3%  Chronic therapy - 18.7% growthSource : Dept of Pharmaceuticals, Govt. of India 12
    13. 13. Pharma in India: Key Strengths High GDP growth rates, rising population numbers and, as a result, a growing middle class are the drivers of Indias pharmaceutical market. Strong and well developed chemistry R&D and manufacturing infrastructure Majority of the Indian firms comply with cGMP standards and India has the largest number of US FDA approved manufacturing sites (about 80) outside the US. India’s cost arbitrage: Manufacturing costs are 30-40% lower, labour costs are 1/7th of US, production costs are 40-50% lower while R&D costs are 20-30% lower when compared to other developed nations Over USD 50 bn and 2 bn Euro worth of patented drugs will go off patent in US and Europe by the end of year 2010, which would encourage more outsourcing activity to India. Offer value added services including data management, biostatistics etc. 13
    14. 14. Pharma in India: Weaknesses Price regulation: The NPPA (National Pharma Pricing Authority), decides the various pricing parameters and sets prices of different drugs, which leads to lower profitability for the companies. Continuous rise in R&D expenditure (from 2% to nearly 8-10%) increases pressure on the industry to enhance productivity Shortfall of over 800 trained professionals per annum for the pharma industry owing to the burgeoning growth of the sector and the increasing focus on R&D. India is not yet a part of the eco system of academic research, VC community, key opinion leaders Inadequate strength in early discovery Low risk appetite – VC & PE funding availability 14
    15. 15. LEADING INDIAN COMPANIES IN KNOWLEDGE CHEMICALS SECTOR- 2010-11 Sl No Top ten companies Revenue (US $ Bn) 1 Cipla 1.31 2 Ranbaxy Laboratories 1.20 3 Dr. Reddys Laboratories 1.10 4 Lupin Labs 0.95 5 Aurobindo Pharma 0.88 6 United Phosphorus 0.65 7 Cadila Healthcare 0.46 8 Bayer CropScience 0.46 9 Glaxo Smithkline 0.45 10 Sun Pharmaceuticals 0.41Source : Annual Report of respective Companies. 15
    16. 16. Top Pharmaceutical companies in India 16
    17. 17. INDIAN AGROCHEMICALS INDUSTRY Domestic market : > US $ 1 billion Exports :> US$ 0.5 billion Market share of multinationals : 50% + The balance is shared between  Basic manufacturing company  Formulators / repackers / marketing companiesSource : The Third India Chemical Industry OutlookConference 17
    18. 18. India and the future• By 2050- 61% of Indian population in working group (15-59 yrs)= 900 m• 18 % of world’s working age population• 1 in 6 persons of global workforce will be an Indian• India could have the second largest economy in the world (larger than the US) of $36 trillion, and a per capita income of about $22,000 by 2039Mashelkar, 2010
    19. 19. Acknowledgments/Sources:• Indian Chemical Council• UK Trade & Investment• Science & Innovation Network• British High Commission, India

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