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ICPE CPMA Indian Petrochemical Industry An Overview.

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Presentation on theme: "ICPE CPMA Indian Petrochemical Industry An Overview."— Presentation transcript:

1 ICPE CPMA Indian Petrochemical Industry An Overview

2 ICPE CPMA CPMA member Profile


4 CPMA Value Added Oil & Gas E & P Petroleum Refining OlefinsAromatics Polymers Fiber Intermediates Chemicals Fibers Textiles Raw Material Building Blocks Main Products Product to Customer Structure of the Petrochemical Industry Electronics, Furniture, Packaging, Pipes, Detergents, Fertilizers, Paints, Pharma High value addition across various sector

5 ICPE CPMA World Chemical Market COMMODITIES (56%) SPECIALTIES (44%) Source: Chem Systems/ BAG Petrochemical dominate with share ~40% Total Size tr. USD (2002) ~ 5.3% of global GDP 1.5 times GDP

6 ICPE CPMA... Polymer demand to touch 193 mmt by 2010 Global Growth in Demand Source: Chem Systems,Technon,CMAI, figs for PVC for 2010 pertain to 2006 & that for PS to 2008

7 ICPE CPMA Ethylene Consumption & GDP A Strong Correlation over 2 decades GDP (Tr. $) Global ethylene Production (MMT) R 2 = 0.89

8 ICPE CPMA Asia: Emerging Consumption Center Source: Chem Systems share rises from 19% in 1980 to >35% in 2003

9 ICPE CPMA High economic growth in Asia Source:World Bank... fuelling capacity growth

10 ICPE CPMA Global MNC JV - driving growth in EOS Exxon Mobil BP Chevron ? Mitsui Basell Shell... which have skipped India due to its non-conducive investment climate

11 ICPE CPMA Capacity build-up in EoS - on the back of incentives placing the petrochemical industries in India’s neighborhood at a distinct advantage

12 ICPE CPMA Low per capita polymer consumption Source: Chem Systems, CMAI, DCI, World Bank, a pointer to enormous growth potential in Asia

13 ICPE CPMA In the next 25 years, China will overtake US in the global output with India becoming the 3rd largest economy in the world ahead of Japan & Germany The value of global output would have increased from 35 trillion dollars to 95 trillion dollars by By then China will account for 26% of global product with output of 25 trillion dollars while US will remain at the same level of 21%. The two elephant economies of Asia - China & India would have increased their global output from only 16 % to 40% by Source : The New World Economic Order Asian economic leaders would not be “fast running tigers but stampeding elephants” Mr. Javed Burki - World Bank Expert

14 ICPE CPMA New Ethylene capacity needed : 49 MMTPA... nearly half of it to come up in the EOS region Source: Chem Systems, POPS & CMAI World Vinyl Analysis, Light Olefins Analysis

15 ICPE CPMA Past 5 years - difficult for the industry Industry getting increasingly squeezed between rising feedstock cost & declining product prices

16 ICPE CPMA New capacity build-up : Restricted to M.East & China 0% 5% 10% 15% 20% 25% 30% 35% Market pole Feedstock pole * by capacity volume; 97 top petrochemical products China Other Asia North America Western Europe C & E Europe Middle East Latin America Regional shares of new petrochemical investment (2003 to 2013)* Much needed build-up in S.Asia remains at planning stage due to uncertain environment & sector specific Govt. Policies

17 ICPE CPMA Indian Petrochemical Industry Vital to economic prosperity Chemical Industry - Largest Contributor to Exchequer Chemicals Industry Revenue 2003: Customs Rs Cr. Excise Rs Cr.

18 ICPE CPMA Petrochemicals Demand in India grew at two to three times GDP in 1990s However has seen a slow down since 2000 GDP: Revised series, =100 Fibers Surfactants Polymers Syn. Rubber

19 ICPE CPMA Ethylene Capacity Built up in India 5 Global Sized plants set up during 1990s in contrast with only 2 in the past 40 yrs

20 ICPE CPMA Polymer Capacity Built up... Import dependency nose dived sharply from 59% in to 10% in

21 ICPE CPMA Indian Plastics Scenario  Agriculture  Raffia  Furniture  Infrastructure  Water  Natural Gas & Oil Key Growth Drivers

22 ICPE CPMA Global Rank in Polymer Consumption Investment potential $15 bn Provided... India:3 rd largest polymer consumer by 2010

23 ICPE CPMA 9 Crackers required by Conducive Investment climate necessary

24 ICPE CPMA Plastic processing industry: Requires Investment Large Employment Potential

25 ICPE CPMA Assam (300) PSIDC Punjab (300) Karnataka SIDC (300) Jamnagar (800) MPSIDC (300) Kerala SIDC. (300) TIDCO (300) Total 2.6 MMT Source: CPMA Nonstarter Crackers Adverse investment climate

26 ICPE CPMA Supporting globalization & freer trade... Indian Industry supports free trade as it would: –fuel economic growth & consequently spur higher demand growth in the Chemical & Petrochemical Industry –throw open immense investment opportunities within the country thereby fuelling further economic growth.... however experience in the last decade establishes that pace of globalization has been much faster than the pace of internal reforms

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