This document discusses about global markets, market trends, India's export partners. This document explores certain potential market for India and strategies that can be used to achieve them. This data is till 2012 and is from WITS.
4. Product
390210 - Polypropylene, in
primary forms
390220 - Polyisobutylene, in
primary forms
390230 - Propylene copolymers,
in primary forms
390290 - Polymers of propylene
or of other olefins, in primary
forms
8. Industry Characteristics
• High capital costs
• High energy costs
• Shortage of natural gas
• Lack of skilled manpower
• Low focus on end products
exports
• Cyclical nature of business
6-8 years
11. Key Export Drivers: Domestic Production
OPAL and BPCL
investing in new
capacity development
3650
3945
4295 4340 4521 4596
0
1000
2000
3000
4000
5000
2011-12 2012-13P 2013-14P 2014-15P 2015-16P 2016-17P
Production
Production Pattern in India in kilotons
Source: CPMAI
Existing players
planning for capacity
expansion
Expected increase in production
Source: CPMAI
12. Key Export Drivers: End Users
Existing High Volume Users
Automobiles Packaging
Upcoming High Volume
Markets
Construction
Medical
Devices
Electricals Transportation
Long term
growth
13. Key Export Inhibitor: Crude Oil Prices
Key raw material exposed to price volatility
Source: Macro Trends
14. Key Export Inhibitor: Price Wars
Gulf Countries always enjoyed a price advantage
Proximity to raw
material
Alleged Government
Subsidy
Source: Aljazira Capital
India contemplating on hiking import duty
19. India’s Export Trends: Top Markets
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
Top Export Market 2012
China has a major share in exports
20. India’s Export Trends: Top Growing
Markets
136.34%
100.34%
83.02%
66.64% 65.07%
58.64% 55.42% 51.70% 49.39% 49.23%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
Top Export Markets by Growth
Africa critical for growth in exports
29. Quick Numbers
• Production capacity: 288 million tons
• Capacity utilization: 90%
• Expected CAGR till 2016: 4%
Source: Plastics Europe
30. Top World Exporters
Saudi Arabia’s rise is notable
Saudi
Arabia
11%
Belgium
10%
Korea, Rep.
9%
United
States
8%
European
Union
7%Germany
7%
Singapore
7%
RoW
40%
0%0%0%0%0%0%0%0%0%
World Top Exporters in 2012
0
1000000
2000000
3000000
4000000
5000000
6000000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Top Exporters
Saudi Arabia Belgium Korea, Rep.
United States European Union Germany
Singapore
31. Market Dynamics
Top Exporters have comparative advantage
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Korea, Rep. Singapore Belgium Saudi Arabia
3.17 3.19
4.37
5.72
RCA in 2012
32. Market Dynamics: Price Competitors
• Gulf States want to become suppliers of end product
• PP manufacturing capacities will more than double within
the next five years.
• Domestic demand within the Gulf states continues to
remain low
• Proximity to crude oil is an advantage
• Competing in global markets with price
33. Market Dynamics: Developed World
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Germany France USA
1
1.41
1
RCA in 2012
Their comparative advantage is less
34. Market Dynamics: Innovation
Competitors
• North America and Western Europe will see a demise of
PP manufacturing plants
• Market prices are higher as compared with China or
Saudi Arabia
• Innovation in products becoming core competency
39. India’s Export share in World Top
Importers: Trade Intensity Index
Indication of lack of competitiveness
0
50
100
150
200
250
300
China
Germany
Turkey
Italy
Belgium
France
Mexico
244.73
0.84
269.28
78.65
4.59
0
0.15
42. Key Focus Markets
Peru Pakistan France China
Turkey Germany Mexico
India has trade investment agreement with EU
Duty reduced to 3% compared with 6% for MFN
46. Analysing Market Share and Price
13.4
10.4
9.3
8.3
7.57
4.2
3.82.6
2.5
2.3
2.3
26.4
Saudi Arabia Belgium
Korea, Republic of United States of America
Germany Singapore
France Netherlands
Thailand Hong Kong, China
Taipei, Chinese India
Rest of World
0
500
1000
1500
2000
2500
Unit Price in USD per ton
Low share in world exports though price competitive
India needs to expand production
48. Expand Production
Subsidy on Capital Investments
• Discount on purchase of machinery
• Overcomes high capital costs
Trade Agreements
• Seek FTA/PTA with the top countries
49. Developing Innovative Products
Promote Joint Ventures
• Facilitates technology transfer
Incentivising Portfolio
Diversification
• Capital subsidy given for expanding product portfolio
Editor's Notes
52.36% of total trade during the time period happened during the last three years
The production in India is expected to continuously rise. Due to increased demand of PP in the future years, companies like OPAL and BPCL have committed heavy investments in the PP production in India.Traditional players like RIL, HPCL, and IOCL have also planned to build new capital in an effort to enhance their capacities to meet the growing needs of PP in India.
India is mulling a proposal to place new duties on plastic imports from Saudi Arabia and Oman, after its ministry of industry and commerce concluded that the low costs of feedstock in the Gulf gave its petrochemical producers an unfair cost advantage.
Peru and pakistan need to be targettedGood news: we are growing exports in the major marketsOur export growth rate is greater than their import growth rate
Mathematical Formula: TII is the ratio of two export shares. The numerator is the share of the destination of interest in the exports of the region under study. The denominator is the share of the destination of interest in the exports of the world as a whole.Definition: TII tells one whether or not a region exports more (as a percentage) to a given destination than the world does on average. It is interpreted in much the same way as an export share. It does not suffer from any ‘size’ bias, so we can compare the statistic across regions, and over time when exports are growing rapidly. Range of values: Takes a value between 0 and +∞. Values greater than 1 indicate an ‘intense’ trade relationship. Limitations: As with trade shares, high or low intensity indices and changes over time may reflect numerous factors other than trade policy.