Chemical Industry in India. Presented By

Size: px

Start display at page:

Download "Chemical Industry in India. Presented By"

Myron Blake
6 years ago
Views:

Chemical Industry in India Presented By BIG STRATEGIC

Marg, Vikroli (W), Mumbai, India Tel: 022 67427821-29 Fax 022

Tel 00971-4-431 5672 Fax 00971-4-431 5673 Mazustegui 21-2a

1 Chemical Industry in India Presented By BIG STRATEGIC MANAGEMENT CONSULTANTS 3, Hindustan Kohinoor Complex, L B S Marg, Vikroli (W), Mumbai, India Tel: Fax P.O. Box 29815, Dubai, United Arab Emirates. Tel Fax Mazustegui 21-2a Entreplanta Izquierda, 47806, Bilbao Vizcaya, Spain URL:

2 CONTENTS Indian Economy Scenario The Chemical Industry Understanding chemical industry product overview Chemical industry Trends in Indian market Chemicals industry segmentation How can BIG Help?

2005-06 2006-07 2007-08 2008-09 2009-10 Services 63% GDP Composition 2009 Agriculture 17% Industry 20% Primary Secondary Tertiary Source: International Monetary Fund (IMF) After several consecutive

3 INDIAN ECONOMIC SCENARIO India is among the top 15 countries in the global economy in terms of GDP at current prices. INR Billion (at Current Prices) INDIA- GDP Services 63% GDP Composition 2009 Agriculture 17% Industry 20% Primary Secondary Tertiary Source: International Monetary Fund (IMF) After several consecutive years of strong growth, the world economy entered into the worst recession which started in third quarter of All the advanced economies faced deep economic crisis, as the world GDP dropped by 1.3% in The signs of recovery shall be visible from fourth quarter of The Indian economy which has also been impacted by the global turmoil, posted a growth of 6.7% in FY 2009.

4 CONTENTS Indian Economy Scenario The Chemical Industry Understanding chemical industry product overview Chemical industry Trends in Indian market Chemicals industry segmentation How can BIG Help?

5% slightly slower than consumption 5.2%.

5 CHEMICALS INDUSTRY GLOBAL OVERVIEW The global Chemical Industry is valued at USD 2.4 Trillion in 2008, is one of the fastest growing sectors of the manufacturing industry. Over the years , chemicals sales grew at 4.5% slightly slower than consumption 5.2%. The average growth rate of Imports of chemicals in the over the last five years was 7% which exceeded considerably that of exports which was 3.6%. The pie chart below depicts the country wise share market in the global chemical industry. 5% 31% 1% 25% 8% 9% 2% 4% 10% 5% Africa Asia Japan India Korea China Latin America NAFTA Rest of Europe EU Source: CEFIC Facts & Figures Report 2008

6 CONTENTS Indian Economy Scenario The Chemical Industry Understanding chemical industry product overview Chemical industry Trends in Indian market Chemicals industry segmentation How can BIG Help?

7 CHEMICALS INDUSTRY SEGMENTATION The Chemical Industry is a vital part of Agricultural and Industrial development in any economy and has linkages with several other downstream industries such as automotives, consumer durables, engineering, food processing, textiles, plastics, dyes, paints and varnishes etc. This Industry is one of the oldest industries in the manufacturing setup. The classification of the Chemical Industry is given below as per its usage. Chemical Industry Basic Chemicals Speciality Chemicals Knowledge Chemicals Source: KPMG & Chemtech Foundation Analysis

BASIC CHEMICALS Basic Chemicals - High volume, low value added - Limited product differentiation - High entry barriers on account of high capital spend and stringent regulation.

8 BASIC CHEMICALS Basic Chemicals - High volume, low value added - Limited product differentiation - High entry barriers on account of high capital spend and stringent regulation. Fertilizers Petrochemicals Inorganic Chemicals Other Industrial Chemicals Fertilizers are materials used to provide plant nutrients which are deficient in soils. Eg: Ammonium Nitrate, Ammonium Sulphate, Calcium Nitrate, etc. Petrochemicals are chemical products made from raw materials of petroleum or other hydrocarbon origin. Eg: Ethylene, Polyethylene, Polyesters, Vinyl Acetate, etc Inorganic Chemicals are those which do not include carbon and its derivatives as their principal element. Eg: Aluminum Fluoride, Calcium Carbide, Carbon Black, etc. Other Chemicals are alkali based, dyes stuff and other organic chemicals. Eg: Soda Ash, Caustic Soda, Azo dyes, Acid Direct Dyes, Acetic Acid, Citric Acid, etc. Source: KPMG & Chemtech Foundation Analysis BiG Strategic Management Consultants

SPECIALITY CHEMICALS Speciality Chemicals - High product differentiation and value addition - Typically smaller production units with more flexibility - Low capital investment levels Adhesive

9 SPECIALITY CHEMICALS Speciality Chemicals - High product differentiation and value addition - Typically smaller production units with more flexibility - Low capital investment levels Adhesive Sealants Catalysts Industrial Gases Plastic Additives Adhesive Sealant is a compound in a liquid or semi-liquid state that adheres or bonds items together. They may come from either natural or synthetic sources. Eg: Starch, Epoxy, etc. A catalyst is a chemical that increases the rate of a chemical reaction, but is not consumed or altered by the chemical reaction. Eg: Nickel, Palladium, etc. Industrial gases are group of gases that are commercially manufactured and sold for uses in other applications like metallurgy, refining, etc. Eg: Helium, Neon, Argon, etc Plastic Additives are Additives are essential to make plastics processable and to ensure their enduse properties. Eg: Antioxidants, PVC Stabilizers, Lubricants, Colorants, etc. Source: KPMG & Chemtech Foundation Analysis

10 KNOWLEDGE CHEMICALS Knowledge Chemicals - Differentiated chemical and biological substances used to induce specific outcomes in humans, animals, plants and other forms of life - High investment in R& D and marketing Agrochemicals Pharmaceuticals Biotechnology Agrochemicals are Pesticides, Fungicides, Seed Treatment or Nutrients protecting crops against pests & non essential herbs. Eg: Oragnochlorine, Pyrethroids Pharmaceutical Chemicals are chemicals which are used for manufacturing the drugs and medicines for treatment. Eg: Diclofenac Potassium, Chloramphenicol Sodium Succinate, Ciprofloxacin.,Etc. Biotechnology which is all into Life Sciences is the use of living organisms or their products to modify human health and the human environment. Eg: Enzymes, Bio-organic chemicals, etc Source: KPMG & Chemtech Foundation Analysis 10

11 CONTENTS Indian Economy Scenario The Chemical Industry Understanding chemical industry product overview Chemical industry Trends in Indian market Chemicals industry segmentation How can BIG Help?

INDIAN CHEMICALS INDUSTRY GROWTH INDIAN CHEMICAL INDUSTRY SIZE The Chemical Industry in India

It is growing at the rate of 15% annually. Its contribution to the GDP is 3%.

2009 17% Basic Chemicals Basic USD 26.22 Bn (INR 1,22,316.

12 INDIAN CHEMICALS INDUSTRY GROWTH INDIAN CHEMICAL INDUSTRY SIZE The Chemical Industry in India is USD Billion currently valued at USD 46 Billion (INR 2,14,590 crores). It is growing at the rate of 15% annually. Its contribution to the GDP is 3% Year This industry has a weightage of about 13% in the index of Industrial Production. SEGMENTWISE MARKETSHARE OF CHEMICALS 2009 (in %) Segment wise (Value) of Chemicals In India % Basic Chemicals Basic USD Bn (INR 1,22,316.3 crs) 26% 57% Speciality Chemicals Speciality USD Bn (INR 55,793.4 crs) Knowledge Chemicals Knowledge Total USD 7.82 Bn (INR 36,480.3 crs) USD 46 Bn (INR 2,14,590 crs) Source: Department of Chemicals and Petrochemicals

INDIAN CHEMICALS INDUSTRY- STATEWISE CONTRIBUTION The Chemical Industry in Maharashtra is a significant component of the State s economy, contributing to 8% of the Indian production of major

Maharashtra s Chemical Industry is currently around INR 18,000 crores in value.

13 INDIAN CHEMICALS INDUSTRY- STATEWISE CONTRIBUTION The Chemical Industry in Maharashtra is a significant component of the State s economy, contributing to 8% of the Indian production of major chemicals. Maharashtra has some very good Chemical Companies including Pidilite, Aarti Drugs and Chemical, Deepak Fertilizers, etc. Maharashtra s Chemical Industry is currently around INR 18,000 crores in value. MARKET SHARE OF STATES (in %) State wise (Value) of Chemicals Industry In India % 4% 6% 8% 8% 51% Gujarat Maharashtra Uttar Pradesh Tamil Nadu Punjab Others Gujarat Maharashtra U.P. Tamil Nadu Punjab Others Total USD Bn (INR 1,09,440.9 crs) USD 3.68 Bn (INR 17,167.2 crs) USD 3.68 Bn (INR 17,167.2 crs) USD 2.76 Bn (INR 12,875.4 crs) USD 1.84 Bn (INR 8,583.6 crs) USD Bn (INR 49,355.7 crs) USD 46 Bn (INR 2,14,590 crs) Source: Ministry of Commerce

INDIAN CHEMICALS INDUSTRY TRADE STATISTICS IMPORT EXPORT STATISTICS USD Billion 20.00 15.00 10.00 5.00 11.71 10.9 13.77 15.67 13.1 14.1 17.59 16.5 Imports Exports 0.

14 INDIAN CHEMICALS INDUSTRY TRADE STATISTICS IMPORT EXPORT STATISTICS USD Billion Imports Exports Year The total Chemical Industry imports for the year were USD Billion (INR 82,064 crs), while the total exports were USD 16.5 Bn (INR 77,134 crs). The CAGR of Imports of Chemical Industry is 18.10% while CAGR of Exports is 22.17%. The Chemicals Industry accounted for 11% of the total Exports and 6.7% of the total Imports in the FY Source: Department of Chemicals and Petrochemicals

15 CONTENTS Indian Economy Scenario The Chemical Industry Understanding chemical industry product overview Chemical industry Trends in Indian market Chemicals industry segmentation How can BIG Help?

16 MAJOR SEGMENTS IN INDIAN CHEMICAL INDUSTRY The most important segment in the Chemical Industry is the Basic Chemical Segment which is also known as Commodity Chemical segment. In India, the Basic Chemical segment constitutes to 57% of the total Chemical Market, i.e. USD Billion (INR 1,22,316.3 crores). The components of this segment are Fertilizers, Petrochemicals, Inorganic chemicals and Other Industrial Chemicals. The pie chart below depicts the value of each component in the Basic Chemical Sector VALUE OF SECTORS IN BASIC CHEMICAL CATEGORY (in USD BILLION ) Fertilzers Petrochemicals Inorganic Chemicals Annual Growth Rates of Each Sector in India Fertilzers 8% Petrochemicals 13% Inorganic 4% Others Others 5% Source: Datamonitor & Market Research Report,

17 CONTENTS Indian Economy Scenario The Chemical Industry Understanding chemical industry product overview Chemical industry Trends in Indian market Chemicals industry segmentation How can BIG Help?

18 HOW CAN BIG HELP? GROWTH Market Research for foraying into new Business Segments Diversification and Identification of New Areas of Business and Export Markets Techno-Economic Analysis of New Business Segments & Leveraging Traditional approach with Modern Technology. Competitive Positioning and Acquiring Larger Market Share

Introduction... vii ACC Economics and Statistics Department Staff... vii 1. CHEMISTRY AND THE ECONOMY...1

TABLE OF CONTENTS Introduction... vii ACC Economics and Statistics Department Staff... vii 1. CHEMISTRY AND THE ECONOMY...1 Chemistry in Our Lives...2 Economic Contributions of the Business of Chemistry...4