VINACHEM

The domestic petrochemical sector offers tremendous opportunities as India is a major unexploited market with immense growth potential. India’s current per capita consumption of polyester is 1.4 kg, whereas China’s and global per capita consumption is five times and three times higher, respectively, of India’s per capita consumption. Similarly, the 5 kg per capita consumption of polymers is one-fifths the average per capita consumption of the entire world. India accounts for 3.1% of the total world polymer consumption of 200 mtpa.

Petrochemicals have niche properties that replace metallic and wood products. Wide application has accelerated demand for petrochemicals and hence this sector has shown an enviable rate of growth. It is crucial to the growth of the country’s economy as well as the growth and development of manufacturing industry in vital sectors.

The government is very keen to develop the petrochemical sector by providing facilities and level-playing field. To this end, it has put in place a national policy on petrochemicals and has initiated steps to create mega integrated complexes called petroleum, chemicals and petrochemicals investment regions (PCPIRs). Implementation of these plans requires large investment, new infrastructure and new R&D centres. The government has already identified the locations to set up giant PCPIRs, ie, Haldia-Nayachar (West Bengal), Dahej (Gujarat), Visakhapatnam (Andhra Pradesh), Mangalore (Karnataka), Cuddalore-Nagapattinam (Tamil Nadu) and Paradeep (Orissa). These PCPIRs will be set up in a 2,000 sq km area with an estimated investment of $280 billion. As 100% FDI is permissible in chemical industry, this should provide a boost to the sector.

Domestic petrochemical sector will double its production capacity in the next four-five years, considering the current trend in capacity addition. Also, through the PCPIR route, India is going to invest several billion dollars to increase petrochemical production capacities, leading to improved trading of feedstock, intermediates, final products both inside and outside the country. It will also provide great opportunities to players in the field of equipment designing, manufacturing, EPC, industrial automation, project and programme management. India’s revenues from the chemicals & petrochemicals sector, currently at $65 billion, could reach $200 billion by 2020, according to an estimate by the Indian Chemical Council.

Public sector companies like IOCL, MRPL, GAIL and private companies like RIL, HPL and Mitsubishi Chemicals are already present in the sector and expanding by enhancing current capacities through brownfield and greenfield projects.

(Source:www.financialexpress.com)