Building Skill India :Petrochemical Industry

Manish Khandelwal

General Manager (Marketing)

GAIL (India) Ltd.

Index

Global and Indian Scenario

Stimulus for Growth

Updation of Skill Requirement

GAIL’s Saksham Program: Remolding the future

Global Scenario

Global Polymer Consumption 2018:

260 Million MT

96

113

66

80

0

20

40

60

80

100

120

"2017" "2021"

PE PP

PE & PP Demand Growth:

AAGR: 4.2%

Data in Million MT

Indian Scenario

• Present Polymer demand is at 14 MMT.

• Growth in Last 5 years has been at ~9.1% per annum.

• Indian Polymer Market to grow at ~8.5% per annum till 2021.

• Indian Polymer Demand in 2021 estimated at 18 MMT.

Polyethylene Capacity in India: 5.5 MMTPA

2000

830220 700

6501050

0

500

1000

1500

2000

2500

RIL GAIL BCPL HPL IOCL OPaL

5000

6800

4800

6500

0

2000

4000

6000

8000

"2017" "2021"

PE PP

➢ Present Polyethylene demand is around 5 MMT

and Capacities of over 5.5 MMT

➢ Growth in Last 5 years has been at ~9.3% per

annum.

➢ Indian Polyethylene Market to grow at ~8 % per

annum from 2017 to 2021 to estimated 6.8 MMT.

➢ PP to grow from 4.8 MMT to 6.5 MMT at around

8% growth rate.

PE & PP Demand Growth

Indian PE / PP scenario

109

65

45

11

32

28

0 20 40 60 80 100 120

USA

Europe

China

India

Brazil

World Average

Every 1 Kg/ year increase in per capita consumption will require an additional

1.25 million tonnes of polymer in India.

10%

9%

9%

9%

9%

8%

8%

7%

7%

0% 2% 4% 6% 8% 10% 12%

Film

Injection Moulding

Blow Moulding

Raffia

Fiber

Extrusion

Pipe

Other

Wires & Cables

Stimulus for Growth

• Big Market : 1.3 Billion Population

• 50+ cities with population over 1 Million

• Expected GDP growth to be around 7 %

• Rise of Middle Income Group with disposable income and propensity to spend

• Growth of Retail Sector

• Growth in packaged food industry and processed food production

• Market moving from loose to packaged

• Growth in Infrastructure

• Growth in Agriculture and Irrigation

• Growth in Appliances and Electronics sectors

• Government Support

State and Central Government schemes

Smart City

Swatch Bharat

Start up India

Make in India

Industrial development (FMCG, Food processing etc.)

Agriculture sector

Huge investment in Infrastructure

Availability of skilled force

Rapid Urbanization and rise in middle class population/income.

o To construct 7 crore houses by 2022 means huge plastic consumption in the form of water storage tanks, septic tanks etc.

o Increase in demand due to high demand in low income housing projects

13

14

If 10 percent of the toilets are made from rotomolded

plastic, that would represent a market worth a total of

about 280,000 metric tons over the next five years in India.

15

193.7*

65

0

50

100

150

200

250

India's GrossCropped Area

Net IrrigatedArea

Major Monsoon Dependency

27

3.8

0

5

10

15

20

25

30

Area Suitable fordrip Irrigation

Area Coveredunder dripIrrigation

42.5

4.2

0

10

20

30

40

50

Area suitable forsprinkler Irrigation

Area Covered undersprinkler Irrigation

Pradhan Mantri Krishi Sinchai Yojana

•More subsidy for Plasticulture in Agriculture.

Figs. In Million Hectare

*Net cropped Area is 141 million haSource: NCPAH

LLDPE pipes for

micro irrigation

HDPE nets for green house

applications

PE liners for pond

lining applicatio

n

Non oven for

mulching applicatio

n

Leno bags and films

for packaging applicatio

n

KisanPipe

Economy of India is heavily reliant on agriculture.

Immense potential for Plasticulture

a) City gas distribution

b) Potable water distribution

c) Sewage application

d) Drainage systems

e) Ducting (power and telecommunication)

f) Industrial

g) Automobile Sector

h) Growth in Retail industry

HDPE Pipes for

water transmis

sion

HDPE corrugated pipes for

sewage and drainage

applications

HDPE corrugated

pipes as conduit for

various applications

Bins for

waste management

Manholes for

effective sewage

management

OFC Duct

Smart City Projects

Smart city projects will boost consumption of PE/PP in the coming years

City Gas Projects creating lot of opportunities of Growth

Will generate huge demand for HDPE/MDPE pipes for gas transmission and household

Sizes in demand 20-180 mm diameter

• Direct manufacturing i.e. crackers and derivative units like GAIL, IOCL Reliance

Industries etc.

• Downstream processing i.e. plastic processing units converting commodity polymers

into endproducts

• Logistics: i.e. movement of manufacturedproducts

• Reprocessing – Collection / Segregation and converting the used plastics into

granules.

• Downstream Indirect, (packing & finishing, assembly units, maintenance), mould &die making, testing, master batch & additives, support institutions like training &development, trading & export promotion / exhibition centres, etc.

Source: Report of the sub – group on petro chemicals

Petrochemical SectorSegments of skilled manpower

Polymer Consumption in 2018–2019 14 MMT

Per Capita Consumption in 2018–2019 11 kg

Per Capita Consumption by 2024 -Expected 15 kg

Processing Capacity 45 MMT

Processing Capacity growth CARG 7 %last 5 years

Turnover 2,00,000 Crores

Investment in Machinery ~ US $ 7Billion

No. of Processing units about 33,500

Investment required for next 5 yrs.To reach to

65 MnT

~ US$ 10 Bn

(Project

Invest.)

An OverviewIndian Plastics Industry

Global consumption of 260 million tonne. With 18% of world population, India

accounts for barely 7% of global demand for plastics. Source: Industry; Status Report -

Machinery Manufacturing Industry

✓ ▪No. of plasticmachinery

manufacturing units~250

✓ ▪Domestic Market~US $750

Million p.a.

✓ ▪Machines Installed till March

2018153500

✓ ▪Installed processing Capacity 45 MMT

Present Scenario

Source: Industry; Status Report - October2013- PLASTINDIA

FOUNDATION

Indian Plastics Industry

Direct manufacturing involves high level of skill of manpower - Engineers, Scientists,

PhDs, Accountants, Technicians, MBA, etc. A typical 1 mmt cracker with derivative

units needs following manpower.

Cracker MEG LLD/HD EB/SM Total

Capacity 1000 500 600 450

Process 60 40 70 40 210

Maintenance 35 35 35 35 140

Lab 20 10 20 10 60

Contract 20 20 100 20 160

Administration,

Medical, Fire, Safety

& Security

30 30 30 30 120

Offsite 40 20 100 20 180

Business 20 20 100 20 160

Finance & Commercial 10 10 30 10 60

Shared Service Like

IT/ MIS

5 5 10 5 25

Total 240 190 495 190 1115Source: Report of the sub – group on petro chemicals

Employment Generation / 1 mmt Cracker

▪ Skills & Knowledge are the driving forces of economic growth andsocial development.

▪ In India, the skilled worker comprises only 5% of the total industrialworkforceas compared to85%inotherSouthEastAsian countries.

▪ The current direct technical manpower in the plastics processingindustry is estimated to be around 16 lakhs and the additionalmanpowerrequiredby 2027-28at around 13.35lakhs.

▪ There is a growing need to increase employability through skilldevelopment programmes.

▪ Urgent need to mobilize/motivate Unemployed / underprivilegedsegment of thesociety to pursue skill development training programsfor enhancing their Quality of life.

Skill Development in Petrochemicals

SKILL, SCALE & SPEED- 3S Mantra

Micro-Irrigation

Successful adoption of micro irrigation is expected to generate

significant employment opportunities in rural areas, which is one

of the thrust areas for theGovernment.

Source: Report of the sub – group on petro chemicals

Other Sectors

Reprocessing

About 55- 60 % of used plastics is being reprocessed in India, one

of the highest in the world. With the exponential growth of per-

capita consumption of plastics expected in India in the coming

decade, the manpower requirement for the reprocessing

segment willalso grow.

Total Technical Manpower Requirement in Plastics Industry by 2027-2028

Updation of gap by Program

Vocational Skill Development

Training(Three to Six month

training)

Professional Graduateprograms

(M.E / M.Tech. / M.Sc. /B.E / B.Tech)

Operator/ semi-skilled /

skilled

Professional Skill Development Training

(Diploma / PostDiploma/ Post Graduate

Diploma)

Designers / Supervisors /

Skilled Technicians /

Shift Engineers

Middle Management Executives, Scientists & Application

Development Engineers / Graduate Engineers / Junior

Executives

• Raw material manufacturers• Plastics machine

manufacturers• R&D in Plastics Sector• Plastics Processors• Tool Rooms• Works shops• Fabrication• Tool & Die Making• Plastics Mould Manufacturing

28

Skill Development Programsprovide skill development training programs to fulfil the

requirement of skilled manpower for the Plastics and allied industries

Tailor-made

Machine Operations

Film Extrusion

Injection Moulding

Pipe & Profile

Extrusion

Woven Sacks

Blow Moulding

Roto Moulding

Thermoforming

Recycling

Manufacturing

FRPProducts

Plastic Moulds

Advanced Plastics Moulds

Programming & Operation

Maintenance

Testing & Quality Control

CNC Lathe

CNC Milling

Plastics Processing Machinery

Plastics Materials & Products

Modular Skill-cum-TechnologyUpgradation

Entrepreneurship development

Onsite programs -Industry’s door-step

Specialized Programs

27

Industry Specific Programs

Entrepreneurship Development

Programs Sponsored Programs

Inplant Training

29

Entrepreneurship

To develop Entrepreneurship among the

under privileged / unemployed youth in the areas of

• Conversion

• techniques

• Recycling

• Granule making etc.

CIPET is conducting Skill Development Training programsunder various schemes - sponsored by State/CentralGovernment Departments, PSUs, etc. for the benefit ofunder privileged / unemployed youths of SC / ST / OBC/ Minority / Women / Economically Weaker Section ofSociety.

Skill Development training by CIPET under various schemes

conductingEntrepreneurship Developmentprograms as well as specializedtraining programs as perrequirement of IndustryAt institutes/industries door-step for the benefit of differentlevels of personnelworking in the industry forenhancing their technical skilland to uplift their carriereconomically.

Skill Development training

Top Level

•Senior Executives / Directors / CEOs

Middle Level

•Executives, Managers, Supervisors, Shift Engineers

Lower level

•Semi-skilled persons

•Unskilled persons

1.60 lacs (Nos)

Industry Responsive Manpower

During last five years No. of candidates trained -

Future Plans on Skill Development Training

• An online (E-learning) programs to be organised for the benefitof Industriespersonnel, who are not able to undergo training attheInstitutedue totheirwork constraints.

• An exclusive programs to be conducted for the manpowerrequirement viz. Lab Analysts /Lab Technicians /Lab assistantsinChemical /PetrochemicalLaboratories.

ANALYSIS AND FINDINGS

• Capacity utilization currently (2017-18) is 50% which is expected to improve to 60% by 2027-28.

• Current direct technical manpower in the plastic processing industry isestimated at 1. 6 Million (16 Lakh).Additional manpower required tothe Plastic Industries in next 10 years (2018-19 to 2027-28) is estimated to be 1.335 Million (13.35 Lakh).

• Technical Manpower currently is 3.49 per 100 Ton of installed Capacity. Itwould be 3.36 per 100 Ton by 2027-28 due to improvement in capacityutilization.

Manpower available in the Mould making industry (2017-18 ) - 69,540

Additional manpower required by 2028 – 27,331

Vocational Skill Development Training Program on ‘Plastic Product Manufacturing’ for underprivileged/ unemployed youth under GAIL’s CSR

(GAIL SAKSHAM PROGRAM:REMOULDING THE FUTURE)

HighlightsGAIL and CIPET jointly conducting Skill Development Training Program to impart skill oriented short duration training to the underprivileged/ unemployed youth for developing technical and professional skills

➢Conducting from last 7 years across the country and it has now become the flagship programme of GAIL under Corp Social Responsibility.

➢More than 1500 candidates imparted training & almost all the students were absorbed.

➢Providing the platform to such underprivileged unemployed youth for equipping the skill set to make them employable.

➢There is tremendous scope for the growth of plastic industries and opportunities of employment for skilled manpower will be certain and huge potential for career progression in time to come.

➢There are approximately 35000 Plastics Processing Industries in India.

➢Industry is facing acute shortage of skilled manpower which is one of the challenge which can be fulfilled by providing skilled manpower through such courses.

Objectives of this training program

➢Equipping the skill sets in young people who are the major driving force for economic development and technology innovation.

➢To impart skill oriented short duration training to the underprivileged / unemployed youth for developing technical and professional skills.

➢Enhance the employability of underprivileged / unemployed youth through skill development in selected areas

Salient features

➢20-30% Theory Sessions and 70-80% Practical Sessions.➢Tutorials (personal attention) ➢Lectures, assisted with models and multimedia aids ➢Interactive sessions➢Hands-on practical exposure on the state-of-the art equipment/machinery➢Industrial visits.➢Additional inputs on Soft skills and personality development➢Guest lecturers from industrial experts➢Exclusive placement / job counselling

The deliverables

➢Establishing / creating job oriented educational facilities to uplift the underprivileged / unemployed youth.

➢Enhance the skill and competency level of the participants for getting suitable employment/to become a successful entrepreneur.

➢Integrates business into community and promoted industry institute interface. The sponsoring of students fraternity culminated in not only contributing towards community based developments but also propagating the organizations products and services to the public.

➢ The petrochemical industry today is facing a tremendous shortage of skilled manpower and this program bridged the gap and provides the much needed skilled manpower to the industry.

➢ Through this program GAIL also serves the industry by making available skilled man power and the society by imparting training to the underprivileged students. GAIL as an industry friendly and society oriented organization is committed to contribute towards the noble cause which leads to the progress of the country.

Disclaimer: The information provided is supposed to be reliable as on date, butGAIL (India) Ltd. does not guarantee accuracy, reliability, or completeness of thisinformation. GAIL (India) Ltd. cannot be held responsible for any losses that a partymay sustain as a result of reliance of such forward-looking statements. Except incases directly regulated under the applicable law, GAIL (India) Ltd. shall not assumeany obligation to distribute or publish any updates or adjustments to its forward-looking statements that would reflect any changes of expectation or contain newinformation, or describe any subsequent events, conditions or circumstances.

Thank you