Petrochemicals : Growth

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Petrochemicals Growth Challenges

• IndiaChem 2006 Conference

9th November 2006
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Presentation Overview

• Economic Profile India Snapshot
• Opportunities and Growth of Indian Petrochemical
  Industry
• Challenges in Indian Petrochemical Industry
• IndianOil integration into petrochemicals
• Conclusion

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Economic Profile India Snapshot
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India 4th largest economy in world
of World GDP
GDP based on PPP Source World Economic Outlook
2006
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India 4th largest economy in world
Real GDP Growth
GDP based on PPP Source World Economic Outlook
2006
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Opportunities and Growth of Indian Petrochemical
Industry
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Petrochemicals - Per capita consumption
Per capita consumption in India is much lower
than world average Ample potential for growth
Task Force Report on Petrochemicals, April 2003
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Consumption of major Petrochemicals
last two decades
CARG
Growth in consumption during last two decades has
been significant and consistent
CARG achieved more than double the growth rate
of GDP
Task Force Report on Petrochemicals, April 2003
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Growth Potential for India

• Polymer consumption in developed countries are
  reaching a stagnation growth areas in Asia.
• Amongst fastest growing world economies.
• Opening up of petrochemical sector for
  investment.
• Large and growing domestic consumer market.
• Investments in Infrastructure
• Large working age population
• Growing middle class households.

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Polymer Demand Growth Potential Snapshot
in KTs
CAGR,
CAGR 15-16
CAGR 13
New capacity additions required to meet the
growing future demand of Polymers
Source Information from Dept. of Petrochemicals,
MOCF
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Domestic Supply Demand Balance - Polyethylene
Demand as per recent indication by DOCP, MOCF
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Domestic Supply Demand Balance - Polypropylene
Demand as per recent indication by DOCP, MOCF
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Emerging opportunities Fibres

• Global restructuring of textile and clothing
  trade post MFA.
• International competitiveness in Quality, Service
• India and China are best placed in entire
  clothing value chain- cost competitiveness

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Domestic Demand projection Synthetic fibre
Demand, KT
CARG
While the Task Force has projected growth of
around 6 in future, considering the opening up
of the market and post MFA, it is expected that
the growth in the fibre sector would be in double
digits
Source Task Force report on petrochemicals,
April03
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Domestic Supply Demand Balance - Fibres
Figs. TMT
Based on Task Force report demand projection
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Domestic Supply Demand Balance Para-xylene
Figs in TMT
Significant potential exists for addition of new
PX capacity
Source Industry
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Domestic Supply Demand Balance Fibre
Intermediates
Figs. TMT
PTA
MEG
Based on Task Force report demand projection
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Petrochemicals Imperatives

• Indian petrochemical industry has
• Large growing domestic market
• Low per capita consumption
• Growing GDP growth
• Expertise in specialized products
• Large availability of trained manpower
• Ability to adapt assimilate new technology
• Competent managerial technical manpower
• Emergence of petrochemical hubs

Indian petrochemical industry has grown poised
to grow further in near future
Indian Petrochemicals on the move
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Petroleum, Chemicals and Petrochemicals
Investment region (PCPIRs)

• Government is working on PCPIRs to promote
  investment both domestic and international
  markets
• These regions will have state-of-the art
  infrastructure and support to boost
  manufacturing, augment exports and generate
  employments.
• Benefits of co-citing, networking and efficiency
  through common facilities

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Drive for Growth

• Indian companies are willing for collaboration
  with international majors to add new capacities
  in India to explore the growing demand of
  products.
• Government of India is also advocating and
  promoting new investments in the country.

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Challenges in Indian Petrochemicals Industry
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Key Challenges- Polymers

• Focus/thrust areas on development of newer
  applications/ value added products
• Plasticulture leading to modern farming
  resulting in improved productivity
• Packaging processed foods consumer
  non-durables
• Automotives better performance plastics for
  automobiles consumer durables

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Key Challenges- Polymers

• Focus/thrust areas on development of newer
  applications/ value added products
• Geo-textiles/Geo-synthesis infrastructure
  development gas piping, canal lining,
  inter-river linkages, roads (polymer modified
  Bitumen) etc.
• Innovative products for telecom IT sectors
• Engineering polymers electronics, telecom,
  automobiles, substitution of metals etc.
• Substituting construction materials

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Key Challenges- Synthetic fibres

• Future growth areas
• New varieties of polyester fibres yarn
• PP filament yarn
• Acrylic fibres
• Technical textiles including performance fibres

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Key Challenges- environmental aspects

• To achieve environmentally sustainable growth
  through
• Innovative methods of plastic waste management
• Recycling
• Development of bio- photo-degradable polymers
• Approach through
• Setting up of dedicated plastic park to promote a
  cluster concept for applications recycling,
  which would yield benefit to
• Areas of technology development
• Best practices
• Market development
• Recycling of wastes

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IndianOilIntegration into Petrochemicals
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(No Transcript)
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Conclusion
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Conclusion

• World has become a single global market
  Manufacturers to be highly competitive to survive
• Opportunities are available for growth in
  Petrochemicals to cater to India and global
  markets
• India needs significant investment for addition
  of new capacities on petrochemicals

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Thank You