Petrochemical Hub of India: GUJARAT

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Petrochemical

“The chemicals that are formed directly or

indirectly from petroleum based hydrocarbons and

natural gases”

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Petrochemical Industry Structure

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Petrochemical Industry Value Chain

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World Petrochemical Industry Flow and

Consumption pattern

India

ChainaMiddleEast

EuropeNorthAmerica

Legend Raw Material Source Processing hub and end-use market End use market Flow of Raw Material to Processing as well as end markets Flow of Processed goods

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INDIAN Petrochemical Industry Geographic Location

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Indian Petrochemical Industry Structure

Reliance Industry contribute 70% of Petrochemical sector In India only 40 companies work in this sectors

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Indian Petrochemical Growth Cycle

13% Growth rate - Which is more than twice the GDP of India approx 7%

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Fact and Figures of Indian Petrochemical Sector

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End user products of the Petrochemical industry of India

Plastics and Resins

Pharmaceuticals

Automotive Chemicals including Antifreeze Agents

Detergents, Solvents, Plasticizers, and Paint Varnishes

Agricultural Chemicals such as Fertilizers, Pesticides, and Herbicides

Synthetic Elastomers

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Key Chemical & Petrochemical Regions of India

1)Gujarat

2)Maharashtra

3) West Bengal

4) Other States - Assam - Tamilnadu - Arunachal Pradesh

Source: Gujarat Industrial Development Corporation., GoG

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Gujarat as a Petrochemical Hub of

India

Petrochemical Industry in Gujarat produces 13,048 (‘000 Tones) of petrochemical products and also contributes around 62% to the total production of the country.

Why?

Gujarat contributes 15% of the total national chemical exports.

The Petrochemical industry offers a wide spectrum of opportunities for the investors both from India and abroad.

Source: Gujarat Industrial Development Corporation., GoG

43 MoUs & Announcements were signed in Vibrant Gujarat 2009 for projects to be established in the chemical & petrochemical sector with a proposed investment INR 42473 crore

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Globalization

Increase use of IT

Cost Reduction

Focus on core business

Consolidation

R&DHigh Domestic Demand potential

Low level of R&D

Cost advantage

Fragmented Industry

Low export Focus

GujaratPetrochemical/

Chemical industry

Source: E & Y Analysis

Why Gujarat? Graphical Representation

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What are the factors supporting Petrochemical Industry of Gujarat?

Low cost of manufacturing Scale and operational efficiency Global reach, either through export activity or in-country production Technological advantage; potential for licensing process technology

Proven R&D effectiveness; intellectual property portfolio that may offer licensing and/or other revenue generation capacity

Government support through liberalize industrial policies, SEZ benefits, national and international investor meet through Vibrant Gujarat Concept

Source: Gujarat Industrial Development Corporation., GoG

Factors

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Government of Gujarat policy support to the Chemical/ Petrochemical industries

Licensing Policy

In chemical sector, 100% FDI is permissible. Manufacture of most chemical product inter-alia covering organic/inorganic, dyestuffs & Pesticides.

The entrepreneurs need to submit only IEM with the Department of Industrial Policy & Promotion Provided no location angle is applicable.

Only following items are covered in the compulsory licensing list because of their hazardous nature: - Hydrocyanic acid and its derivatives - Phosgene and its derivatives - Isocynates and di-isocynates of Hydrocarbons

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Customs Duty

The peak rate of Customs Duty on most Chemicals is 7.5%

On basic Raw material like acid grade fluorspar sulphur, rock phosphate, natural borates is 5%

On most building blocks and feedstock the duty is 5% (ethylene, propylene, crude, naptha, benzene, toluene, xylene, ethylbenzene)

Continue…

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Excise Duty

On almost all chemicals the Excise Duty is 16%.

Continue…

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Educational Infrastructure, which generate Skill manpower for this industry

1. Some of the major academic institutions offering chemical engineering course includes:

Nirma University Of Science & Technology, Ahmedabad Government Engg. College, Valsad L.D. College of Engg., Ahmedabad

2. There are 39 Engineering colleges in Gujarat offering course in Chemical Engineering.

3. 49 Polytechnics offer courses in Chemical sector in Gujarat. Some of these are in Rajkot Bharuch and Valsad

Govt. Polytechnic, Rajkot K.J. Polytechnic, Bharuch Govt. Polytechnic, Valsad

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Petrochemical Industries: Gujarat

Company name Location

Reliance Jamanagar, Hazira

IPCL Baroda, Gandhar

BASF Gandhar

Lanxess ABS Ltd Baroda

GE Baroda

GSFC Baroda, Jamanagar

Gharda Chemicals Panoli

ONGC Dahej

IOC Baroda

Tata Chemicals Mithapur

Indian Rayon Veraval

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Foreign companies contribute in Petrochemical Industry of Gujarat

Sr. no

Company name

1. Cheminova

2. Transpec Silox

3. Ciba

4. LANXESS

5. BASF

6. HUBER

7. Bayer

8. The Dow Chemical

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Investment Opportunity in Petrochemical industry: Gujarat

43 MoUs & Announcements were signed in Vibrant Gujarat 2009 for projects to be established in the chemical & petrochemical sector Proposed investment –INR 42473 crore

Scope of Employment Generation –20827 Projects primarily related to establishing industrial parks and production of: - Basic & fine chemicals - Specialty & performance chemicals - Organic & inorganic chemicals - Dyes and intermediates

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Chemical/ Petrochemical Projects of Gujarat

Methanol Production Propylene Oxide and Propylene Glycol Cumene Production Phenol / Acetone Nitrobenzene and Aniline Diphenylmethane diisocyanate (MDI) and Toluene diisocynate (TDI) Polyvinyl Chloride (PVC) ABS Resin Polycarbonate Resin Polyethylene Terephthalate (PET) Chips Styrene Butadiene Rubber (SBR) Bi-Axially Oriented Polypropylene (BOPP) Films BOPET Films Polyethylene (PE) Multi Layer Film Project Polyolefins Compounding and Masterbatches Polypropylene (PP) Ropes Fiber and Filament

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Plastic Crates Bisphenol-A Mono-Chloro Acetic Acid (MCA) Bromine Titanium Tetrachloride / Titanium Dioxide Chlorosilanes Synthetic Zeolite -Zeolite A Contract Research and Manufacturing Services (CRAMS)

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Conclusion

1. India's most Industrialized State (State Government support and Vibrant Gujarat Concept)

2. Leader in various industrial sectors, Chemicals, Petrochemicals, Drugs & Pharmaceuticals, Dairy, Cement &Ceramics, Textiles, Engineering and Gems & Jewellery

3. Longest Coastline of 1600 km with 18 active ports across the State

4. Highest Number of Airports: 13

5. Road network – exceeding 74000 kms

6. Only Integrated Statewide Gas Grid: 2200 km

7. Largest Grass root refinery

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References…

1. http://www.skyscrapercity.com/showthread.php?t=959182

2. http://info.shine.com/Article/Petrochemicals/Indian-Petrochemical-Industry-Overview/2179/cid912.aspx

3. http://www.infraline.com/apconference/index.asp

4. http://www.chemtech-online.com/events/chemtech/2010/01/indian-petrochemical-industry.php

5. http://business.mapsofindia.com/petrochemical/

6. http://www.vibrantgujarat.com/

7. http:/www.indextb.com

8. http:/Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

9. Ministry Of Chemicals & Fertilizers Government Of India

10. Department of Technical Education, Department of Employment & Training

11. Gujarat Industrial Development Corporation., GoG

12. Ernst & Young Analysis

13. Annual Survey of Industries (ASI)

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Thank You for Participation…