Petro Chemicals

PREFACE-
INTRODUCTION

GLOBAL SCENARIO
 CHALLENGES AT WORD WIDE LEVEL

 CHALLENGES AT INDUSTRY LEVEL

 TRENDS

 EXPECTATION AT MACRO LEVEL

COUNTRY SCENARIO- “India”

 HISTORY

 CURRENT SCENARIO

 INVESTMENT OPPORTUNITIES

 CHARACTERISTICS

 GROWTH

 KEY SEGMENTS

 CHALLENGES

 EXPECTATION

 SWOT ANALYSIS

PROMOTING ENVIRONMENTAL, SOCIAL AND ECONOMIC GAIN

IN PETROCHEMICAL INDUSTRY

Submitted by: Himanshu Kumar

INTRODUCTION
The petrochemical industry, which produces chemicals using OIL AND NATURAL GAS as major raw
materials, occupies an important position in MANUFACTURING and consuming sectors. Oil and
natural gas are composed primarily of hydrocarbons. Most petrochemicals contain hydrogen or
carbon or both. Petrochemicals can be converted into thousands of industrial and consumer
products, including PLASTICS, paints, RUBBER, fertilizers, detergents, dyes, TEXTILES and solvents.
The industry consists of 2 major divisions. The primary petrochemical industry produces basic
chemicals, such as ethylene, from oil or gas. The secondary industries convert the basic
petrochemicals into materials that may be directly used by other industries. Standard of living is
dependent to a significant degree on domestic petrochemical production. The availability of
economic petrochemicals allows the domestic production of numerous items that could be more
costly if imported.

PETROCHEMICALS-
Petrochemicals, as the name suggests, are chemicals obtained from the cracking of petroleum
feedstock. Petrochemicals are used in many manufacturing fields. The industry is built on small
number of basic commodity chemicals, also known as building blocks such as ethylene, propylene,
butadiene, benzene, toluene and xylene. Ethylene, propylene and butadiene are commonly referred
to as olefins, while benzene, toluene and xylene are known as aromatics. Together, they form the
basis of all petrochemical products.
The broad product segments of the industry include:-

1. Basic petrochemicals: These are the basic building blocks, which are divided into olefins and
aromatics. These are used primarily for polymerization. These are mainly used to designate
the capacity of industry.
2. Polymers: These are made from basic petrochemicals by polymerization. Major products
include PVC, HDPE, LDPE and PP. These find use primarily in the packaging industry and
plastic industry.
3. Polyesters: These are synthetic fibre used in textiles industry. These include polyester
filament yarn (PFY) and polyester staple fibre (PSF).
4. Fibre Intermediates: These consist of PTA, DMT, MEG, paraxylene, caprolactum, and
acronitrile and are mainly used for manufacturing synthetic fibres like PFY and PSF.
5. Chemicals: These include Linear Alkyl Benzene (LAB), methanol, maleic anhydride, phenols,
ethylene oxide, orthoxylene and vinyl acetate monomer. They find use in chemical industry.

GLOBAL SCENARIO
On the global front the Petrochemical Industry is expected to see a structural shift during coming
years. Both the demand and the supply drivers of the industry namely North America and Western
Europe are expected to be replaced by China as a demand driver and Middle East as supply leader.
With increase in the crude oil prices, polymer commodity prices increased drastically while prices of
speciality are struggling to maintain a premium over prices of polymer prices.

Submitted by: Himanshu Kumar

CHALLENGES AT WORLD-WIDE LEVEL

Over the past year, the petrochemical industry worldwide has faced one of the most challenging
periods. The combined effects of the economic slowdown and a cyclical industry posed major
challenges. The supply-side continued to lengthen as new cracker and derivative capacity came on
stream.

Despite the fragile demand in the US markets, petrochemical markets were largely kept tight last
year with a shortage of olefins constraining production of derivatives.

With constrained demand, the long-term outlook for growth is still bright. The new growth outlook
sees major markets contracting; however, the GDP is expected to grow as industries rebuild
inventories and confidence returns. In fact, prospects for the petrochemical industry depend on
many factors beyond production control such as outlook for crude oil price, global economy outlook
and even currency fluctuations.

Energy majors such as Indian Oil have for long had a presence in the specialty chemical and
aromatics segment of petrochemicals with world-scale linear alkyl benzene (LAB) and an integrated
para-xylene/purified terephthalic acid (PX/PTA) capacity. It has recently commissioned the world's
largest operating naphtha-based cracker along with a downstream petrochemical complex at
Panipat.

With this, the company has entered the olefin segment and offers a full product slate covering all
segments of petrochemicals.

Today, its petrochemicals investments are primarily for enhancing operating performance and
downstream integration.

As per Nexant's (a global provider of clean energy solutions) forecasts, the price of crude oil and the
growth rate of the global economy potentially have the greatest influence on the performance of
the petrochemical industry; yet they are among the hardest measures to predict.

Impact of crude prices

The price of crude oil is of critical importance to petrochemical producers, as the prices of the
majority of petrochemical feedstocks directly track crude oil. Strengthening demand generally allows
producers to raise prices to support higher margins.

The overriding factor is, thus, the need to respond to the global energy challenge since it will have an
impact on the petrochemicals business that relies heavily on oil and gas for feedstock and energy.

CHALLENGES AT INDUSTRY LEVEL

The challenges facing India petrochemical industry provides the industry with better tools which
would in turn help the growth of the economy.

India has stably established itself in the core of the international production of petrochemical and
petrochemical- related products in the present scenario. With the economic growth cycle slowing
down in the United States, the Asian developing nations, especially India, would ideally fortify its

Submitted by: Himanshu Kumar

stand in the global petrochemical market as a producer of these products. This is one of the major
challenges facing Indian petrochemical industries.

A recession has many attributes and can include declines in: (1) overall economic activity, (2)
employment, (3) cash flow, (4) investment, and of course, (5) the corporate profits. Recessions are
the result of falling demand and cash flow – and are called DEFLATION when associated with falling
prices, INFLATION when associated with raising prices and STAGFLATION when prices go up without
growth.

THE IMPACT OF A RECESSION ON PETROCHEMICALS AND STRATEGIES

Here are some of the potential events and strategies for reacting to the petrochemical recessions –
industry with high capital intensity – applicable to petrochemical industries.

THE SEQUENCE OF EVENTS

1. Markets (demand) weaken, the prices will fall

2. Falling prices will depress the short-term margins

3. The secondary impact – the utilization rates will fall

4. The variable costs will (ex- raw materials) will go up – putting additional pressure on margins

5. Overall impact – lower revenues

– Constant to increasing expenses

– Lower margins

TRENDS

Global Petrochemical Industry Future Trends-

Global Shifting Trade Flows - 2008-2020

 The China and Middle East – a regional balance until China’s reaches self sufficiency

 Middle East positioned to supply Europe and North America to replace the Chinese demand

 U.S industry will stand still till the regional balances are complete

 Overall, Middle East will supply the raw materials, China will be the processor; US, Europe
and Japan will be the primary consumers – followed by China India/Asia

Basic Scenario – 2012 Middle East Phase I on Stream

 The phase I of Middle Eastern production comes on stream

Submitted by: Himanshu Kumar

  China’s supply/demand moves toward a balance
 Less direct impact on U.S, Japan and Asia
 ASEAN economies continue to benefit from Chinese growth
 Phase II of Middle Eastern expansion announcements – emphasis on level II and value added
products
 The New Race for Global Value Added Products

Basic Scenario – 2015 Middle East Phase II on Stream

 The phase II of Middle Eastern demand comes on stream

 China’s supply/demand closer to a balance
 The Middle Eastern Demand needs outlet Impact on ASEA , Japan
 ASEAN economies continue to move to value addition and downstream
 Phase II of Middle Eastern expansion on stream = level II and value added products

EXPECTATION AT MACRO LEVEL

As the world watches crude oil prices fluctuate at high levels, attention is inevitably drawn to the
Middle East for signals regarding the potential direction for this basic resource. Similarly, participants
in the global petrochemical industry must consider the changes brought about by the capacity growth
in the Middle East and the subsequent impact on global markets. This region is poised to become a
larger factor in the world of petrochemicals such that its petrochemicals market share could ultimately
rival its share of world oil and gas production. CMAI estimates that by the year 2010, the countries of
the Middle East will produce about 20% of the world’s basic petrochemicals and polymers, such as
ethylene and polyethylene. This is significant in itself, when one considers that there was little-to-no
petrochemical production in the region as recently as 20 years ago. To put these changes and their
implications in perspective, this article will briefly address important factors which have and will
continue to shape Middle East petrochemical development. These include:

Demographics, Employment and GDP-

Submitted by: Himanshu Kumar

Despite this record of continued improvement, unemployment rates of more than 10% exist
in many countries in the region. As a result, governments are actively promoting both
primary (basic) and secondary (intermediate and finished goods) petrochemical industries as
a means of economic development. It is well known that the petrochemical industry, like
refining, is a very capital intensive industry. Thus one key trend for the future, CMAI expects,
is that governments throughout the region will seek to develop secondary industries as well
as production of finished goods.

Oil Revenues-
In a very general sense, high oil prices imply that Gulf countries maintain a share of oil
markets at or near current levels. On the down side, higher oil prices also negatively impact
the world economy, which translates to lower world petrochemical demand growth and the
requirement for fewer new facilities. As the incremental low cost producing region, however,
Middle Eastern petrochemical investments are likely to continue in the face of reduced
demand at the expense of investment in other regions. Lower demand could also force
rationalization of existing old (1970s’ vintage) units in areas of sustained high cash costs.
Additionally, higher oil prices imply that advantaged ethane feedstock regimes may well be
built in preference to naphtha-based capacity.

Cost-Advantaged Gas and Gas Liquids-

Capacity growth has happened in most Middle Eastern petrochemical markets, but most dramatically
in gas-based petrochemicals, such as methanol and ethylene. The olefin market is a good example of
the petrochemical growth in the region. The chart shows global ethylene capacity in 1985 and
forecasts capacity for 2010.

Submitted by: Himanshu Kumar

Further Downstream Development Potential-
Other opportunities for continued and future petrochemical development include exploiting the energy
advantage to an even greater degree. This means not to stop with methanol and ethylene, but build
capacity in energy intensive chemicals, such as chlorine.

Existing Infrastructure-
In a number of countries (ie, Saudi Arabia, Kuwait, Qatar, UAE) there is already in place
healthy and growing base chemical production that utilizes methane, ethane, and gas liquid
feedstock in petrochemical units that are among the best in class producers on a global
basis.

Financing-
Well established economic and industrial centers are forming around petrochemical industrial sites in
the region, further propagating investment. Jubail and Yanbu΄ in Saudi Arabia are examples. Just as
highly skilled technical and craft personnel migrate toward areas of opportunity, so do the industries
necessary for further development. In the past decade, strong growth has occurred in the Middle East
banking sector, and equity markets have emerged in many Arab countries. No fewer than 15 of the
top 20 banks in the Arab world, including Egypt, are based in the GCC., In addition to a relatively
large banking sector, the regional markets for equity are also beginning to grow.

Technology and Know-how-

Governments and companies in the region are actively pursuing and forming collaborative
relationships with petrochemical industry participants to gain access to characteristics critical to
market success. Governments and petrochemical producing entities are taking the necessary steps to
form alliances and ventures to promote further development. With the exception of Saudi Basic
Industries Corporation (SABIC), most Middle East petrochemical companies require the participation
of international petrochemical companies to provide access to technology and markets. This will
change over the next five-to-ten years as more companies, such as NPC of Iran, reach critical mass
in the competitive global marketplace.

Submitted by: Himanshu Kumar

COUNTARY SCENARIO- “India”
HISTORY-
Chemical industry is one of the oldest industries in India. The industry, including petrochemicals,
and alcohol-based chemicals, has grown at a pace outperforming the overall growth of the industry.
Petrochemical industry is a cyclical industry. Globally the petrochemical industry is characterized by
sluggish demand and volatile feedstock prices. In India, consumption of petrochemical products is
still one of the lowest in the world. For example in case of polyester, India's per capita consumption
is 1.4 kg compared to 6.6 kg for China and 3.3 kg for the world. In case of polymers, per capita
consumption of India is 4 kg and is about a fifth of the world. Demand for the petrochemicals
products has grown in double digits for a long period.

CURRENT SCENARIO-
The Indian Chemical Industry ranks 12th by volume in the world production of chemicals. The
industry’s current turnover is about USD 30.8 billion which is 14 per cent of the total manufacturing
output of the country. In terms of consumption, the chemical industry is its own largest customer
and accounts for approximately 33 per cent of the consumption. In most cases, basic chemicals
undergo several processing stages to be converted into downstream chemicals. These in turn are used
for industrial applications, agriculture, or directly for consumer markets. Industrial and agricultural
uses of chemicals include auxiliary materials such as adhesives, unprocessed plastics, dyes and
fertilizers, while uses within the consumer sector include pharmaceuticals, cosmetics, household
products, paints, etc.
India also produces a large number of fine and speciality chemicals, which have very specific uses
and are essential for increasing industrial production. These find wide usage as food additives,
pigments, polymer additives, anti-oxidants in the rubber industry, etc. Some of the important
manufacturers of speciality chemicals include NOCIL, Bayer
India), ICI (India), Hico Products and Colourchem.

INVESTMENT OPPORTUNITIES-

FDI-
The procedure has been simplified for facilitating foreign direct investment. Most of the chemical
items fall under the RBI automatic approval route for FDI/NRI/OCB investment up to 100%
except the following
• Activities / items that require an industrial license
• Proposals in which the foreign collaborator has previous / existing venture/tie up in India in the
same or allied field
• All proposals relating to acquisition of shares in an existing Indian company by a foreign/NRI
investor
• All proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not
permitted

Due to its low cost infrastructure, India has potential of growth in exports. According to
a report by McKinsey, India’s manufactured exports have the potential to rise from $40 bn last year
to $300 bn by 2015. This defines an investment of $50 bn in chemical industry alone. India has the
capacity for major value addition being close to Middle East. This is a cheap and abundant source for
petrochemical feedstock.
In certain categories of chemicals India does have advantage for exports (dyes, Pharmaceuticals and
agrochemicals) by creating strategic alliances with countries like Russia and CIS countries. With the

Submitted by: Himanshu Kumar

know-how available in the country there is a tremendous potential to grow and increase exports in
dyestuff and agrochemical market. Availability and abundance of raw materials for titanium dioxide
and agro-based products like castor oil offer an opportunity to generate significant value addition.
This, however, would require substituting their exports in raw form by manufacturing higher value
derivatives. The major challenges are quest for feedstock and knowledge management. Traditionally
naphtha-based crackers have been providing feedstock to the industry. Today, they are being
replaced by new gas-based crackers. India and China will pose a stiff competition to the Middle East
due to the vibrant exports and large unexplored reserves of oil and gas.

CHARACTERISTICS of INDIAN PETROCHEMICAL INDUSTRY-

The petrochemical industry in India has been one of the fastest growing industries in the country.
Since the beginning, the Indian petrochemical industry has shown an enviable rate of growth. This
industry also has immense importance in the growth of economy of the country and the growth and
development of manufacturing industry as well. It provides the foundation for manufacturing
industries like construction, packaging, pharmaceuticals, agriculture, textiles etc.

Petrochemical Industry in India is a cyclical industry. This industry, not only in India but also across
the world, is dominated by volatile feedstock prices and sulky demand. India has one of the lowest
per capita consumptions of petrochemical products in the world. For example, the per capita
consumption of polyester in India lies at 1.4 kg only comparing to 6.6 kg for China and 3.3 kg for the
whole world. Similarly, the per capita consumption of polymers is 4 kg in India, whereas the per
capita consumption is around 20 kg for the whole world.

The Growth
Growth ofIndia petrochemical industry is playing a major part in the growth of the economy and
the development of the manufacturing sector. The petrochemicals industry provides more value
addition to theIndian economy than most of the other companies.

Petrochemicals are obtained from different chemical compounds which are by-products of crude oil
refining. Most of them fall may be categorized into hydrocarbons. With the fractional distillation of
the crude oil, chemicals like naphtha, kerosene, petroleum gases, ethane, methane, propane, and
butane are the primary stocks used in the petrochemical industry for the production of various other
chemical compounds.

Presently, the extent of penetration of the petrochemical products in day-to-day use is vast. It
actually covers most of the domain of existence such as apparels, accessories, household items,
furniture, electronics, construction, housing, automobiles, medical appliances, packaging,
horticulture, and agriculture.

TheIndia petrochemical industry originated in the 1970s and entered the arena of the industries
ofIndia. This sector was subjected to rapid growth in the period between the 1980s and 1990s. Even
today, expectations from this sector are sky-high. TheIndian petrochemical industry for it part is
doing very well and has been contributing significantly to the country's GDP fro several years now.
TheIndia petrochemical industry primarily consists of synthetic rubber i.e. elastomer, yarn of
synthetic fiber, synthetic detergent intermediates, performance plastics, plastic processing industry,
and polymers.

Submitted by: Himanshu Kumar

 The Bongaigaon refinery was set up as an experimental one with the capacity of a refinery and a
petrochemical unit. The success of this integrated petroleum refinery-cum-petrochemicals unit led
to a spree of activities in this sector. Many such units were established to boost production
capabilities. With the growth of India petrochemical industry, it holds the share of around 20% of
the total global producer of petrochemical related products.

In the present scenario, 5 naphtha and 3 gas cracker coordination compounds are in operation with
ethane production capability of around 2.6 million tons every year, jointly. Along with this, another 4
aromatic coordination compounds are in operation with a xylene production capability of around 2.1
million tons.

The petrochemical industry in India came into existence during 1970s. The 1980s and 1990s saw
some rapid growths for Indian petrochemical industry. The biggest reason for this growth was the
high demand for petrochemicals in India, which grew at an annual rate of 13 to 14% since late 90s. It
also called for rapid expansion of capacity. The BMI forecast of average annual growth in India over
2007-2011 is 14 to 16%. However, the industry suffered setbacks during 2008 due to surge in the
price of crude oil. It will be tough for Indian petrochemical industry to plug the deficit of 5mn TPA of
ethylene and 4mn TPA of polymer by 2012 (according to the predictions of the government).

The Present Scenario Presently India has three gas-based and three naphtha-based cracker
complexes with a combined annual capacity of 2.9 MMT of ethylene. Besides this, there are also 4
aromatic complexes with a capacity of 2.9 MMT of Xylenes.

The production of 5.06 MMT polymers during FY09 accounted for around 62% of the total
production of key petrochemicals. It also achieved 88.5% capacity utilization. The industry also
produced 2.52 MMT of synthetic fibres during FY09 with a 73% of capacity utilization.

Key Segments

Petrochemical industry is constituted of the following key segments:

 Polymers:

The demand for polymers saw a growth of 13.4% during 2007, comparing to a demand growth
of 5.6% in 2006. According to the prediction of Chemicals and Petrochemicals Manufacturers'
Association (CPMA), the demand growth for polymer would further be augmented to over 15%
in the coming year.

 Polyester Intermediates: The combined production of 5 fibre intermediates (CAN, DMT,

Caprolactum, MEG and PTA was 3,417 KT during 2007. Among those, PTA and MEG accounted
for 69% and 27% respectively, while the rest were DMT, Caprolactum and CAN.

 Aromatics (Paraxylene): The demand for Paraxylene (PX) saw a growth of 18% during
2007. According to the prediction of CPMA, it is expected to grow at the same rate in the
coming year as well.

Submitted by: Himanshu Kumar

 Benzene, Toluene, MX and OX: The demands for Toluene and OX saw a contraction rate
of 4% and 10% respectively during 2007. However, Benzene and MX saw a positive growth
though.

Top Petrochemical Companies in India

Though the Indian petrochemical industry is highly dominated by only a few players, however, there
are a number of petrochemical companies in India, doing their share of business. Some of the top
companies can be listed as below:

 Reliance Industries Ltd.

 Haldia Petrochemicals Ltd.
 Indian Oil Corporation
 Gas Authority of India Limited
 National Organic Chemical Industry Ltd.
 Bongaigaon Refinery and Petrochemicals Ltd.
 Manali Petrochemical Limited
 I G Petrochemicals Limited
 The Andhra Petrochemicals Limited
 Tamilnadu Petroproducts Limited

CHALLENGES-
The availability of new hydrocarbon resources in India has spurred the demand for petrochemicals in
the country and spawned an industry that is based largely on captive and low-cost feedstock. There
is no denying that opportunities in the petrochemicals business must be capitalised upon for growth.

Today, the petrochemical industry is driven by size and cutting-edge technology. In the current
competitive environment, small-sized plants make no sense.

Following are the challenges facing India petrochemical industry:

 High cost of energy and feedstock and the impact on demand

 The transformation in the kinetics of competition in manufacturing
 Increase in the cost of project

Problems faced by the India petrochemical industry:

 The manufacturing units mostly use obsolete format of technology and are not able
produce optimally
 There is a necessity for the modernization of equipments
 Excise duty on synthetic fiber should be rationalized
 Prevention of reservation on Small Scale Units
 Plastic waste to be recycled and the littering habits to be discouraged
 India requires advantage on feedstock, so the import cost has to be brought down
 The industry should have access to the primary amenities of infrastructure

Submitted by: Himanshu Kumar

 EXPECTATION-
The key segments of Indian Petrochemical Industry are Polymers, Olefins, Surfactants, Polyester
Intermediates, Aromatics, and major petrochemicals like MX, Benzene, OX and Toluene. The major
growth drivers of Indian petrochemical industry are specialty chemicals, fertilizers, plastic, dyes and
intermediates with an aggregate demand of 23503kilotons in 2009. The increasing demand of these
products has played a vital role in the expansion of the sector and has triggered the restoration of
fertilizer and other chemical plants in India.

For the forthcoming Union Budget 2010-11, the Confederation of Indian Industry (CII) has proposed
the realization of direct tariffs in the Indian Petrochemical/ Chemical industry which can indirectly
assist the sector in expanding by leaps and bounds. This year also the emphasis will be on allocating
monetary incentives for setting and managing cross-nation oil and petroleum pipeline system for
circulation of the resource to common delivery centres.

Benefits of Petrochemical Products-

The Benefits of Petrochemical Products are profound in our daily life and without it this world
would come to a standstill. In India the Department of Chemicals & Petrochemicals, GOI are the
concerned highest authority of the Indian Petrochemical Industry and Environment related issues.
The Indian Petrochemical Industry and Environment related issues are well addressed to suit the
needs of the country. The Indian Petrochemical Industry is at par with world standard. Thus, India
share a good portion of Petrochemical business in world market. Asian countries, African countries
and even Arab world buys Indian Petrochemical products. The demand for Indian Petrochemical
products is high mainly because of its quality and competitive pricing. India’s low cost and high end
Petrochemical products manufacturing expertise coupled with developing world class infrastructure
is the main leveraging factor for the rise of this industry. India offers Petrochemicals at a substantial
discount than its western counterparts while delivering the same grade of output.

The Indian Petrochemical products are -

 Fiber
 Cotton
 Cellulosics
 Synthetics
 Acrylics
 Polyamides
 Polyester
 Wool
 Elastomers
 Polymers
 Surfactants

Uses and final products of Petrochemicals are -

 Paints
 Alkyd Resins
 Industrial De-greasers
 Odorless Thinners
 Inks

Submitted by: Himanshu Kumar

 Construction Chemicals
 Dry Cleaning
 Cleaning chemicals
 Maintenance Chemicals
 Insecticides
 Insecticides Aerosols
 Agricultural pesticides
 Paints
 Thinners
 Charcoal Lighters
 Oil drilling

The advantages of manufacturing high class Petrochemical Products inIndia are -

 Friendly Government ofIndia policies

 Low cost labor
 Low and world class infrastructure
 Strong technical education
 Large number of science and engineering graduates
 Quality output
 Highly skilled workforce
 Usage of innovative process
 Good client relationships
 Huge scope for innovation
 Expansion of existing relationships
 Huge demand in overseas markets
 Availability of more technical work force
 Increased number and quality of training facilities

SWOT Analysis-

The Indian petrochemicals industry is finally discarding its nascent stage tag and the companies are
now vying for a major chunk of the global pie of the petrochemicals market. Indian major Reliance
has recently acquired a German polyester major Trevira GmbH and this marks the private sector
giant's entry into the European markets in a big way. At the same time, ONGC and IOC are planning
entry into the business in a major way as this is in line with their forward integration plans.

The petrochemicals cycle is currently on a global uptrend thanks to growing demand from China and
other developing nations. In the domestic markets, growing activity in infrastructure and
construction segments coupled with strong growth in the auto sector on the back of lower interest
rates have actually boosted the performance of the petrochemicals sector. Major beneficiaries of
this uptrend are the integrated players such as Reliance Industries, GAIL and IPCL (to some extent).

A low per capita consumption of 4 Kgs of plastic as compared to a global average of 20 Kgs leaves
enough scope for capacity expansion resulting in ONGC and IOC venturing into the business. The
following are the major uses of the products:

Strengths of Indian Petrochemical industry -

Submitted by: Himanshu Kumar

 Large and very fast growing Indian petrochemical market
 Huge trained talent pool
 Competitive labour cost

Weaknesses of Indian Petrochemical industry -

 Insufficient basic infrastructure for the petrochemical industry

 High feedstock cost in comparison to Middle East countries
 Prevalence and use of old technology
 Synthetic fibre industry is unorganized and operates in small clusters

Opportunities in Indian Petrochemical industry -

 Huge demand for polymer and synthetic fibre

 Great opportunity for product development exists
 Low consumption of polymer in comparison to global consumption rate

Threats to Indian Petrochemical industry -

 Stiff competition from other regional players like, china and the Middle East countries
 Stiff rational pricing pressures
 Environmental hazards concerns
 Low market recognition
 Relocation of manufacturing sites to region with abundance of feedstock

Notable points of the Indian Petrochemical industry -

 Represents 2% of world market

 Does business worth USD 30 billion
 Rate of growth of the Indian petrochemical industry is 10%
 Profit incurred is around 14%
 Wide variety of products
 Basic components are petrochemicals, inorganic chemicals and fertilizers
 The Indian states of Gujarat, Maharashtra, West Bengal and Andhra Pradesh have the
largest concentration of chemical and petrochemical units

PROMOTING ENVIRONMENTAL, SOCIAL AND ECONOMIC GAIN IN

PETROCHEMICAL INDUSTRY
 Create new economic opportunities through an efficient polymer cracking process for more
cost-effective plastics and petrochemicals manufacturing.

 Reduce the carbon footprint of plastics manufacture, limit the use of landfill and conserve
valuable fossil resources

 Challenge a substantial competitive advantage currently enjoyed by Middle-Eastern polymer

manufacturers over their Western counterparts

Submitted by: Himanshu Kumar

 Isolating and purifying valuable monomer molecules from waste plastics cracking processes
is currently energy-intensive and uneconomic at small scale. There are also significant supply
chain difficulties in recycling waste plastics that are slowing down the adoption of new
technologies.
 Aims to define and communicate industry's views, mainly on issues related to:

 Health, safety and environment, including REACH, management,

Responsible and Product Stewardship
 Regulatory issues
 Trade and competitiveness, e.g. the European feedstock’s situation
 Energy and climate change issues
 Logistics, e.g. the European pipeline network
 Market intelligence
 Integration of Western and Eastern European petrochemical activities.

Thank you..

Submitted by: Himanshu Kumar