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By D. P. Misra Director General Indian Chemical Council

GLIMPSE OF INDIAN CHEMICAL INDUSTRY. By D. P. Misra Director General Indian Chemical Council. September 2008. Indian Chemical Industry - Overview. 12th largest in the world and 3rd largest in Asia Indian Chemical Industry (incl. pharma)= $50 bn in 2006 – 10.8% CAGR 2002 to 2006

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By D. P. Misra Director General Indian Chemical Council

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  1. GLIMPSE OF INDIAN CHEMICAL INDUSTRY By D. P. Misra Director GeneralIndian Chemical Council September 2008

  2. Indian Chemical Industry - Overview • 12th largest in the world and 3rd largest in Asia • Indian Chemical Industry (incl. pharma)= $50 bn in 2006 – 10.8% CAGR 2002 to 2006 • Market is expected to grow to $75.8 bn - 13.6% CAGR by 2011 • Evolved from being a basic chemical producer to also offering specialty and fine chemical products

  3. Source: IBEF/KPMG Report October 2007 Indian Chemical Industry –Segmentation • Industry divided into 3 segments • Basic chemicals, specialty & fine chemicals and knowledge chemicals. • Basic chemicals 57% • Specialty & Fine Chemicals & Knowledge Chemicals is 43% • API’s for Pharma co-formulations for Pharma • Dyes and pigment paints and inks • Adhesives • Flavors & fragrances • Agrochemicals

  4. Indian Segmental Market Growth (Value wise) All values in US$ Billion CAGR: 16.2% CAGR: 30.1% CAGR: 8.5% CAGR: 16.3% Total Market – US$ 35 billion as on March’05 Source: Our estimation

  5. Export – Import Scenario Indian Chemical industry All values in US$ Billion As on March’ 05 Source: http://www.chemicals.nic.in

  6. Source: Indian Chemical Manufacturers Association Indian Fine Chemicals Industry • Represents 43% of total Indian Chemical Industry – market size USD $17.2 bn • Forecasted to grow at CAGR of 15%, double the growth of Global Fine Chemicals Industry • Exports of Fine Chemicals (excld. pharma) forecasted to grow USD$ 4bn in 2007 to USD$ 13 bn in 2013 • Per Capita consumption in India is still well below world average

  7. Pharmaceutical Market Indian Pharmaceutical Industry Overview • India is among the fastest growing pharmaceutical markets in the world • The domestic pharmaceutical market recorded sales of US$ 7.3 billion in 2006, grew by 17.5% over the previous year* • Indian pharmaceutical Industry is 8th in terms of volume & 13th in terms of value – due to lower drug prices

  8. Exports, the core of Indian Pharmaceuticals • Total export revenues (2005-06)……………………….. $ 5.2 billion • Bulk drugs (APIs) ………………………………………..…….$ 2.8 billion (54 %) • Finished drug formulations (FDFs) …………………………$ 2.4 billion (46 %) • Revenues from FDF exports expected to reach $ 9.5 billion and surpass those from APIs ($ 8.7 billion) by 2010-11 and also exceed those of the domestic market

  9. Source: FDA / CDER; Crisil Research DMF Filings – Top Ten countries

  10. INDIAN INORGANIC INDUSTRY TOTAL – $2.5 Bn

  11. INDIAN CHLOR ALKALI - 2006

  12. SODA ASH GROWTH SCENARIO CAGR – EXPECTED APPROX – 5%

  13. Alcohol-based Chemicals – Existing capacities in India

  14. CAPACITIES OF COMMODITY POLYMERS CAPACITIES OF SYNTHETIC FIBRE

  15. CAPACITIES OF ELASTOMERS CAPACITIES OF SURFACTANTS

  16. Polymers : India Vs WorldGlobal Rank in Polymer Consumption Rank Country 1988 Country 2000 Country 2010 2010/ 2000 (MMT) (MMT) (MMT) 1 USA 16.6 USA 27.3 USA 38.9 3.6% 2 Japan 6.4 China 14.4 China 31.3 8.1% 3 Germany 4.3 Japan 9.1 India 12.5 14.0% 4 China 3.7 Germany 6.4 Japan 11.5 2.3% 5 Italy 3.1 S. Korea 4.7 Germany 9.4 3.9% 6 CIS 2.4 Italy 4.7 S. Korea 7.4 4.8% 7 France 2.4 France 4.1 Italy 6.8 3.8% 8 UK 2.2 UK 3.5 Brazil 6.7 7.0% 9 Taiwan 1.9 India 3.4 CIS 6.2 9.1% 10 S. Korea 1.8 Brazil 3.4 France 6.1 4.1% 16 India 1.6 Taiwan 3.3 UK 5.2 4.0% Source CPMA India - 3rd largest polymer consumer globally, by 2010. . .

  17. Agrochemical Industry • Global Agrochemical market in 2005 was $33,576 mn (Source:Agrochemicals-Executive Review, Agronova 2006) • India is 4th largest producer of Ag Chem after USA, Japan and China. • India is the second largest producer of pesticides in Asia. • India exports pesticides for approx.Rs.2500 crores (US$.532 billion). • Total Ag Chem market in India =Rs.4500 crores (US$ 1 billion).

  18. Growth triggers Strong Economy High GDP growth Favorable Demography Growing Middle Class Rising Disposable Income Policy thrust Export through SEZ Agriculture Infrastructure Retail Revolution India – Growth in Polymers 12.5 MMT By FY12

  19. CARG Projected (2006-07 to 2011-12) % Sub-group report on Petrochemicals

  20. Projected Demand Capacity Additions Source: Based on Information from Dept. of Petrochemicals, MOC&F

  21. Concept of PCPIR • Specifically delineated investment region/s • Area of around 250 sq. kms • Covers manufacturing facilities & associated services & infrastructure • Includes SEZ/s, Free Trade & Warehousing Zones, Industrial Parks, EOU units, or Growth Centres duly notified, and existing industrial clusters. • Refineries/feedstock companies as anchor tenants • Developer/co-developer to build & develop internal infrastructure • External linkages to be provided by Central Govt & by concerned State Govt.

  22. Contd…. • Users to pay for use of infrastructure except when supported through budgetary resources. • Developer would develop/ build / design/ maintain/ operate part or whole of infrastructure/facilities in PCPIR. • Selection of developer through transparent process. • Developer - benefit of tax holiday under Section 80(I)(A) of IT Act • Eligibility for location - any chemical industry / supporting service in area of manufacturing, stocking, trading including logistic and utilities • Dispute resolution through arbitration.

  23. Likely PCPIR Locations • Project proposals received for:- • Dahej in Gujarat, • Mangalore in Karnataka, • Visakhapatnam in Andhra Pradesh and • Haldia in West Bengal have been identified • Paradeep in Orissa • Cuddalore in Tamilnadu

  24. Investors in PCPIR Could Look Forward to • World class infrastructure • Highly skilled manpower • Co-existence with value chain • Easier approach to Gulf, Asia & Africa • Fast growing domestic demand • Potential for downstream petrochemical projects • Large unsatiated & growing market In case of commodity polymers India’s per capita consumption is 4 .8 kg compared to world average of 25 kg Similarly in case of synthetic fibre India’s per capita consumption is 1.8 kg compared to 3.5 kg for the world

  25. An Invitation • Indian Chemical Industry specially petrochemicals, speciality, pharma / biotech experiencing significant growth possibility • Time to collaborate between India and US both in manufacturing and trade • Invitation to US companies to invest in India and experience growing market with huge untapped potential

  26. Thanks

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