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.
The Indian petrochemical industry is a highly
concentrated one and is oligopolistic in nature. Even a few days back, only
four major companies viz. Reliance Industries Ltd (RIL), Indian Petrochemicals
Corporation Ltd. (IPCL), Gas Authority of India Ltd. (GAIL) and Haldia
Petrochemicals Ltd. (HPL) used to dominate the industry at a large extent. The
recent amalgamation of IPCL with RIL has made the industry more concentrated
further, as they jointly account for over 70% of country's total petrochemical
capacity. However, the scene is a bit different for the downstream
petrochemical sector, which is highly fragmented in nature with over 40
companies exist in the market.
The Characteristics of Indian Petrochemical Industry
The Characteristics of Indian Petrochemical Industry
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
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.
- 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