Chemical Industry Structure

• Highly fragmented and widely dispersed.
• Western India accounts for 45-50% of total Indian chemical Industry.
• Large players in bulk chemicals. Both large and small players in Fine and Speciality chemicals.
• Presence of many multinational companies also.

Foreign Trade

India was a net importer of chemicals in early 1990s , but has now become a net exporter due to reduction in Imports because of implementation of many large scale petrochemical plants like Reliance etc. and also because of tremendous growth of exports in sectors like bulk drugs and pharma, pesticides, dyes and intermediates.

Basic Chemicals Export did exceedingly well...

Exports by the basic chemical sector in 1995-96 surpassed the target of Rs 6,742 crore by reaching a figure of Rs 7,979.30 crore and showing a massive growth of 24% over the preceding year's figure of Rs 6,403.90 crore. During 1994-95 exports totaled Rs 6,403.90 crore against the target of Rs 5,504.60 crore, while in the preceding year shipments reached Rs 4,904.40 crore against the target of Rs 4,584.00 crore.

The drugs and pharmaceuticals and the organic/inorganic/agro-chemicals contributed as much as 63% of total exports. This has been a herculean task, which has been achieved by competing with big multinational corporations of the world. Turnover for the year ended 1998-99 is close to Rs.15,000 crores.


1. Petrochemicals

• The major category in the chemicals
• One of the fastest sectors at 13% p.a.
• Covers :
  • Basic chemicals like Ethylene, Propylene, Benzene and Xylene etc.
  • Intermediates like MEG, PAN and LAB etc.
  • Synthetic fibres like Nylon, PSF and PFY etc.
  • Polymers like LDPE/HDPE, PVC, Polyester and PET etc.
  • Synthetic rubber like SBR, PBR etc.
• Major players are Reliance, IPCL, NOCIL, Haldia and GAIL etc.

Petrochemical major players

Reliance Industries Ltd.	- 750,000 TPA Ethylene - 400,000 TPA Propylene - 27,000,000 TPA refinery
IPCL Baroda	- 300,000 TPA
Nagothane	- 300,000 TPA
Gandhar	- 400,000 TPA
Haldia Petrochem	- 420,000 TPA Ethylene - 200,000 TPA Propylene
GAIL	- 300,000 TPA Ethylene
NOCIL	-150,000 TPA

2. Inorganic Chemicals

• US$ 2.5 Billion industry.
• Covers basic products like Caustic, Chlorine, Sulphuric Acid etc.
• Inorganic chemicals mostly used in detergents, glass, soap, fertiliser, alkalies etc.
• Competition from imports are on the rise.

Products	Installed Capacity	95 - 96	96 -97	97 -98	98 -99	99 -2000*
Soda ash	1865	1552.1	1540	1545.8	1560	1560
Caustic Soda	1964.5	1243.1	1250	1309.2	1320	1350
Liquid Chlorine	1031.1	709	715	702.9	715	740
Carbon Black	286.2	223.6	250.8	208.3	230	240

Other Chemicals

Products	Installed Capacity	95 -96	96 -97	97 -98	98 -99	99 - 2000*
Calcium carbide	150	95.3	96	78.3	72	80
Titanium dioxide	47	29.4	25	26.2	27	27
Aluminium fluoride	30.1	17	17	14.3	15.4	17.5
Potassium chloride	13.3	4.1	3.5	4	5	5.5
Sodium chlorate	4.1	1.5	1	0.5	0.5	1
Red phosphorous	1.7	0.9	0.9	1	0.9	1

3. Organic Chemicals

• 1 Billion Dollar industry
• Covers a wide range of chemicals
• Units concentrated mostly in the Western India

Production Major Chemicals

Chemicals	Installed Capacity ('000 tonnes)	Production :98-99 ('000 MT)
Methanol	386.0	380.0
Formaldehyde	255.0	161.4
Acetic acid	203.6	190.0
Phenol	66.6	62.6
Acetone	63.6	5.0
Acetic anhydride	56.2	40.5
Nitrobenzene	52.0	42.8
Chloromethane	32.1	33.2
Aniline	28.1	23.5
Maleic anhydride	24.4	12.7
Pentaerithitol	15.2	13.9
PNCB	11.2	11.0
MEK	7.0	5.0
Citric acid	6.3	5.3
ONCB	5.3	5.3
Iso butyl alcohol	2.0	1.3

4. Fine and Speciality Chemicals

• Low volume, high price/margin chemicals
• Fragmented with large number of players
• Major Players
  • India: ION Exchange, Balmer Lawrie, Dai Ichi Karkaria. etc.
  • MNC: Ciba, Hoechst, Foseco, Nalco Chemicals, Clariant, ICI etc.
  • And many small Indian companies
• Market around US$ 80 million p.a.
• Major end user segments - Textile, Leather, paper, detergent, rubber, paints, polyester, oil and gas etc.
• Growing very fast

Speciality chemical usage

Category	Speciality Chemicals
Adhesives	Thickeners, tackifiers, binders, stabilisers
Construction Chemicals	Sealants, flame retardants, concrete setting accelerators / retarders, mastics
Cosmetic Additives	Moisturisers, UV absorbers, masking agents, emulsifiers, proteins
Diagnostic Aids	Dyes for angiogram, chemicals for other diagnostics (as NMR)
Elastomers	SBR, Silicones, Puf, EVA
Electronic Chemicals	Electronic substrates, packaging materials, plating chemicals, photoresists, etchnats, cleaners & strippers, dopants, sp gases
Enzymes (Indl)	Bates for leather, enzymes for pharmaceuticals, food processing industries
Flavours & Fragrances	Speciality esters, bases, concentrates
Food Additives	Antioxidants, Flavours, food dyes
Fuel Additives	Catalysts, stabilisers, functional additives
(Functional) Dyes	Dyes for reprographics & dyes for electronic chemicals
Foundry Chemicals	Binders, resins, mould release agents
Indl Cleaning Agents	Solvents based on Spl. Esters & alcohols
Lube Additives	Antioxidants, dispersants, antiwear & EP additives, pour point depressants, viscosity modifiers & antifoamers
Metal Plating & Finishing Chemicals	Cyanates, electrolytic Au/Ag plating, electrolytic / electroless Cu plating chems
Mining Chemicals	Flocculants, dispersants, thickeners
Oilfield chemical	Pour point depressants, corrosion inhibitors, demulsifiers, EP additives, thickeners, fluid loss control agents, stabilisers, mud additives, cement additives, EOR chemicals
Paint Additives	Wetting agents, dispersants, thixotropic, antisettling, antifoaming agents, defoamers, pH stabilisers, emulsifiers, biocides, corrosion inhibitors, plasticisers, thickeners, antiflotation agents, flow control agents
Paper Additives	Retention Aids, formation aids, drainage aids, flocculants, defoamers, wet web strength additives, defoamers, biocides, dry strength additives, sizing agents, creping agents, dispersants, binders
Photographic Chemicals	Fixing agents, toner, photoresists
Polymer Additives	Speciality plasticisers, antioxidants, UV stabilisers, modifiers, flame retardants, antistatic agents
Rubber Chemicals	Antioxidants, antizonants, vulcanisation accelerators / retarders, modifiers, inhibitors
Surfactants	Anionic & nonionic surfactants mainly used in India. Wetting agents, dispersants, emulsifiers, defoamers, antifoamers, detergency aids
Textile Auxiliaries	Sizing agents, leveling agents, dispersants, detergents, acid release agents, dye fixing agents, solvents, anticreasing agents, biocides
Water Management Chem	Flocculants, dispersants, corrosion, inhibitors, biocides

5. Bulk Drugs

• Large market due to large population
• Large exports (US$600-800 million) which is around 6-8% of global drugs market
• Total market is US$3 Billion / pa
• Out of 475 drugs used, 425 are locally produced.
• Over 350 units in the organised sector and many more in the unorganised sector
• Bulk drug units concentrated around three areas:
  • Bombay - Ankleshwar
  • Hyderabad - Madras
  • Chandigarh
• India very strong in reverse Engineering, molecular chemistry and because patents not on products but on process
• Major players:
• Ranbaxy, Shasun, Cipla, Dr. Reddy's, Cheminor, Lupin, IPCA, Sun, Cadilla, Wockhardt, Aurobindo, Kopran etc.
• Most of the bulk drug companies are Indian companies, whereas some of the major pharmaceutical formulation companies are MNCs.

6. Agrochemical

• India is a large agricultural economy which is the major user. Average Indian consumption is very low (1/20th of world average)
• Market size 100,000 MT (in terms of technical grade)
  • US$ 800 million
  • Growth 10% pa
• Consumption varies depending on crop and region
• Cash crops like sugarcane, tobacco etc. are the major consumers of pesticides (above 60%)
• Two types of producers - Technical - 40 nos.
  • Formulators - above 500 nos.
• Major players
  • India: United Phosphorus, Rallis and Excel
  • MNC: Hoechst Agrevo, Novartis, Bayer etc
• Significant exports

Production

Production ('000 MT)

Product	Installed Capacity	92 - 93	93 - 94	94 - 95	95 - 96	96 - 97	97 - 98	98 - 99
Insecticides	81.9	73.4	71.8	75.6	77.7	84.1	60.4	66.0
Fungicides	10.7	5.3	5.5	6.0	6.6	7.3	9.2	8.0
Herbicides	4.8	2.0	1.3	1.5	1.4	1.6	1.9	1.7
Weedicides	10.3	2.2	2.7	5.1	8.5	7.3	7.33	6.7
Rodenticides	0.9	0.27	0.51	0.46	0.40	0.40	0.5	0.5
Fumigants	1.6	1.0	1.5	1.8	1.8	1.9	1.6	1.8
Total	110.2	84.17	83.31	90.46	96.40	102.6	80.9	80.9

7. Paints and Dyes

• Total Market - US$ 1 Billion
• Growth Rate 12% p.a.
• Per capita consumption very low (400 gms) as compared to developed countries like USA (15 kgs)
• Market highly fragmented
  • 25 large and medium players - 50% market share
  • 2000 unorganised players - 50% market share
• Dyes used in Paints, Inks, Textiles, Polymers etc.
• India is a major exporter of dyes, mostly due to ban of production of some of the dyes and intermediates in the developed countries due to pollution
• Major Players:
  • Paints - Asian Paints, Goodlass Nerolac, ICI, Courtalds, Jenson & Nicholson
  • Dyes & Intermediates - Color Chem (Hoechst), Clariant, IDI, Atul, Mardia etc.
  • Inks - Coates, Hindustan Inks, Sakata

Reference
Web Site : http://www.indianchemicalportal.com

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