1. Indian Petrochemical Industry An Overview

2. CPMA member Profile

3. ICPE

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

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

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

7. Ethylene Consumption & GDP A Strong Correlation over 2 decades
1985
1986
1987
1989
1994
1995
1996
1997
2003
1988
1990
1991
1992
1993
1998
1999
2000
2001
2002 40 50 60 70 80 90
100
110 12 16 20 24 28 32 36
GDP (Tr. $)
Global ethylene Production (MMT) R 2
= 0.89
A Strong Correlation over 2 decades

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

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

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

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

13. The New World Economic Order
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 2025.
Asian economic leaders would not be
“fast running tigers but stampeding elephants”
Mr. Javed Burki - World Bank Expert
Source :

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

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

16. New capacity build-up : Restricted to M.East & China0% 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. Indian Petrochemical Industry
Chemicals Industry
Revenue 2003:
Customs Rs Cr.
Excise Rs Cr.
Vital to economic prosperity
Chemical Industry - Largest Contributor to Exchequer

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

19. . . . in contrast with only 2 in the past 40 yrs
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. Polymer Capacity Built up
4.3
4.2
4.2
4.3
3.5
2.3
2.4
2.1
1.4
1.4
1.0
1.1
0.7
0.5
. . . Import dependency nose dived sharply from 59% in to 10% in

21. Indian Plastics Scenario
Agriculture
Raffia
Furniture
Infrastructure
Water
Natural Gas & Oil
Key Growth Drivers

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

23. Conducive Investment climate necessary
9 Crackers required by
Conducive Investment climate necessary

24. Plastic processing industry: Requires Investment
Large Employment Potential

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

26. 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