Indian Polymer Industry
Past, Present and Future
G.S. Kapur and Shashikant
Indian Oil Corporation Limited R&D Division Faridabad 121 007, India
1
Outline
Indian Journey so far Indian Chemical Industry Indian Polyolefin Industry-Outlook Growth Drivers Challenges Conclusions
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India - a snap Shot
Independence in 1947
25% of the population below 20% of the population have no poverty line access to electricity Food Inflation in double digit Ease of doing business index India ranks 133rd 8 Indian states are poorer than 26 African nations
Ranks 84th in corruption list
China makes 40,000 Kms of road In the same time India makes 6000 Kms
3
Still, there are some good news..
Polypropylene growth over 25% Polyethylene growing @ healthy double digit Aviation sector grew by over 20% Indian, If not Indian are making their presence in global business. Global recession Not much Impacted. Automotive growth over 20% IInd Fastest growing economy will grow by 8-9%
Large Gas discovery-Changing energy landscape
Polymer Growth Vs GDP - Global
Per Capita Polymer Consumption vs Per Capita GDP - 2009
PO + PVC ~ 5.7 kg Polymers ~ 8 kg
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Ref: Chemical & petrochemical Manufacturers Association, India
Polymer Growth Vs GDP - India
PP1.4 X GDP HDPE1.1 X
LLDPE1.7 X
Average of Last 5 Years
With robust GDP projections; all polymers are expected to grow in double digits
6
Ref: Chemical & petrochemical Manufacturers Association, India
Major Polymers Outlook India
Product HDPE LLDPE LDPE PP EVA PVC 2010 Short Short Short Surplus Short Short 2016 Short Short Surplus Short Short Short
Considering all the announced capacities (under construction and commissioned); India still will import over 3 MMT of Polymers in 2016
Indian Chemical Industry
Indian Chemical Industry
Indian Chemical industry - An integral part of economy Playing a key role in agriculture and industrial development Draws important linkages with downstream industries e.g. automotive, consumer durables, engineering, food processing USD 80 Billion Industry USD 200 Billion by 2020, Ranks 13th in the world
9 Industrialization and Economic Growth Key Drivers
Indian Chemical Industry Attributes
Characteristics of Indian chemical industry:
High domestic demand potential, as Indian market develops and per capita consumption increases High degree of fragmentation and small scale operations Low cost competitiveness compared to other countries, due to higher cost of power, import duties, taxes and cost of capital and Low focus on R&D few initiatives to innovate processes
In spite of disadvantages, few proactive companies created 10 sizable International presence
Indian Polymer Industry
Polymer industry - an integral part of mega petrochemical industry Industry in India is about four decades old The domestic polymer industry is dominated by Polyolefins A decade back, India met its demand of polymers through imports
Polyethylene and Polypropylene constitute ~ 71% of the commodity resins consumed in India
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Chronology Polymer Manufacturing
In 1957, the Plastics Industry in India made a modest but promising beginning by commencing production of Polystyrene The chronology of manufacture of Indian polymers is summarised as under:1957-Polystyrene 1959-LDPE 1960-SBR 1961-PVC 1968- HDPE 1978-Polypropylene
The first Integrated Petrochemical Complex Indian 12 Petrochemical Corporation Ltd now a part of RIL - 1969
Indian Polymer Industry Major Milestones
22nd March 1969 Indian Petrochemical Corporation ltd incorporated March-November 1973 Xylenes DMT commissioned 28th March 1978 to 15th March 1979 Naphtha cracker commissioned along with all down stream units 1982 1988: RIL entered Petrochemical sector, commissioned PFY, PSF, LAB, PX and PTA operations
1992 - Indian Petrochemical Corporation Ltd commissioned First Gas Cracker in India along with downstream MEG, 13 LDPE, LLDPE and PP plants
Commodity Polymer Consumption Indian Scenario
Estimated Global polymer consumption :193 million TPA Name Quantity(MTPA) 71 PE: 48 PP: 36 PVC: 16 PET: PS and others: 22
Fig. (Million TPA)
Polymer consumption in India about 3.8% of global consumption Indian PE consumption is 3.7% of Global PE capacity. 14 Indian PP consumption is 4.7% of Global PE capacity.
Polymer Consumption India Vs Global
120 100 80 60 40 20 0 India ASEAN China World USA 17 8 30 30
Per Capita Polymer Consumption (Kg) 2007-08
100
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Polyolefin Industry
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Current Feedstock Pattern
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Naphtha Supply & Demand
India Continuous to be net exporter of Naphtha
18
Ref: PPAC, Govt of India
Naphtha Allocation
100 80 60 40 20 0 2006 2008 2010 2012 Power Fertiliser Petrochemical
Naphtha consumption shifted to Petrochemicals drastically
19
Ref: PPAC, Govt of India
Monomer capacity Current Scenario - India
Only ~3% of Global capacity
Operating rates in 2010 C2 production = 3 mmt C3 production = 2.7 mmt
>
>
Source: Crisil
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Capacity addition >C2 and >C3 2011-2014
>C
>C
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Indian Polyolefin Industry Current Scenario
LLD/HD
Existing Upcoming
Source: HPL Market Dominated By Only 4 Manufacturers 22
Ref: IOCL data base
Petrochemical Capacity Addition -India
Company IOCL, Paradip ONGC, Dahej (OPAL) RIL, Jn GAIL, Pata PE None 1100# 550 90 PP 650 340 None None 440 60 350 1950 Exp Time line 2012-13 Q1 2013 2014 Yet to declare 2011-12 2011-12 2011-12
MRPL None BCPL, Assam 220 HPCL-Mittal, None (HMEL) Bhatinda Total, KT 1960
#Dahej: 10 mtpa of LNG brings more than 10 Wt% ethane
India building huge Polymer capacities
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Ref: IOCL data base
HDPE Market Segments
2010-11 / 1459 KTA PIPE COAT 2% FILM 6% IM 13% PE-100 6% PE-63/80 7% HM-FILM 18% OTHERS 3% Raffia 18% BM-GP 18%
MBM/LBM 9%
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HDPE Major Market Blow Molding
Ref: IOCL data base
LLDPE Market Segments
2010-11 / 1043 KTA
Market Dominated by Film Sector
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Ref: IOCL data base
PP Market Segments
RCP 3% EXT 5%
2010-11 / 2462 KTA
ICP 14%
F&E 6%
Raffia 36%
BOPP 10%
IM 16%
TQ 10%
Major Sector Raffia, Injection Molding and Impact 26 Copolymers
Ref: IOCL data base
Demand Supply Balance (2010-2011)
Capacity LDPE LLDPE/HD Swings HDPE All PEs PP 205 1585 1055 2845 3575 Production Import 197 1040 1450 2687 2900 180 23 130 333 245 20 105 125 779 Export Apparent/ Demand 377 1043 1459 2879 2462
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Ref: Chemical & petrochemical Manufacturers Association, India
Indian Polymer Demand
PP, 4441
PVC, 3331 2462 1926 1459 1043 377 LDPE, 480 LLDPE, 1866 HDPE, 2381
Product 10-11 HDPE LLDPE LDPE PP PVC 1459 1043 377 2462 1926
15-16 2381 1866 480 4441 3331
CARG 10% 12% 6% 12% 10%
Growing at 11%+
Indian polymer growth is robust In 2015-16 India will import 3 Mn MT of polymers Case to build additional capacity
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Ref: 12 th Indian PETROCHEM Conference
PE (HD + LL) Demand Vs Supply
5000 4000 3000 2000 1000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016
IOCL addition OPAL RIL
Supply Demand
Domestic Market to Remain Deficit- India will import ~ 600 KTA of HD/LL in 2016
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Ref: Chemical & petrochemical Manufacturers Association, India
LDPE- Demand Vs Supply
700 600 500 400 300 200 100 0 2009 2010 2011 2012 2013 2014 2015 Supply Demand
RIL addition
RIL adding 400 KTA of LDPE capacity will ease the situation LDPE has reached equilibrium with LLDPEhigher growth projected
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Ref: Chemical & petrochemical Manufacturers Association, I ndia
PP - Demand Vs Supply
6000 5000 4000 3000 2000 1000 0
2008 2009 2010 2011 2012 2013 2014 2015 2016
HMEL IOCL OPAL / GAIL
Supply Demand
India will turn PP importer by 2016 Deficient ~ 500 KTA
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Ref: Chemical & petrochemical Manufacturers Association, India
India Fit Case for Capacity Addition
Favorable Factors Demand and growth of Polymers Feed stock availability Middle East - Not much a cause for worry
Indian manufacturers have real time opportunities to expand / put up new facilities
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Growth Drivers
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Indian Market Growth Potential
Per Capita Polymer Consumption India Global Average : : 8 kg ~ 30 Kg
With more than 1 Billion population, if India were to reach 50% of global average, Additional polymer demand will be approximately
8 Mio TPA
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Very High Growth Rate for Polymer Consumption
Strong Fundamentals
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Rising India
Source: World bank 36
Promising India
37 Source: IMF World Recovery Outlook, October 2010
Confident India
Source: Nielsen Global Consumer Report, Oct10
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Young India
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Agriculture
25% of Indian GDP, growing @2% 2nd Green Revolution already set in Fruits and Vegetables Corporate farming Large Corporate House already in race Post Harvest Management (PHM)(wastage 10-26% in India vs. 2% in Groundnut Cultivation Total area: 6.8 million hectares developed countries) Estimated food wastage is about worth US$ 1 Billion
Even as 1% of this land is cultivated using Mulch Films5000 MT PE required for 1 season
Application of plastic in Crop management, PHM & Water management to play a vital role
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Ref; Modernizing the Indian Food Chain, FAIDA, CII & Mckinsey Study
Growth - Automobiles
Total sales of 12.2 million automobile vehicles achieved - 2009-10
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Growth In Luxury Goods Consumption
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Growth in Communication
India second largest mobile user after China 575 Million Mobile user and 37 Million Landline User43
Key Growth Areas (MMTPA)
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Demand Change in India (MMTPA)
Country FY 05-06 FY 11-12 China US India Japan Germany Others Total 30 26 5 7 6 77 151 44 30 12 8 7 79 180 % of Global Demand (FY 12) 24 17 7 4 4 44 100
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Challenges
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Barriers to Growth
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Environmental Issues
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Summary
Indian demand for petrochemical is robust and growing fast. India petrochemical capacity addition lags the consumption growth. With all the projects under implementation / announced, India will import around 3Mn MT of POs by 2015 - 16. There is enough DEMAND expansion. to demand capacity
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Summary
Indian refinery capacity and petroleum products to be surplus. Indian production of Naptha, C2 and C3 to remain competitive. Middle East is not a real threat; though next 2 years to be tough.
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Indian Oil Corporation Limited Enabling the growth.
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Indian Oil Corporation Limited
Indias largest commercial enterprise Highest ranked Indian company in the Fortune Global 500 listing: Rank 98th Revenue for the fiscal 2010-11: US$ 73 billion
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Refinery Network
Panipat
12.0
Controls 10 of India's 20 refineries
2.35
BRPL Mathura
8.00
Barauni
6.00
Digboi 0.65 Guwahati
1.0
Koyali
13.7 15.0
Haldia 6.00 Paradip CPCL
9.50 IOC Refineries Proposed Refinery Stand Alone
Refining capacity: 60.20 MT/annum (1.2 million barrels per day) 53
Pipeline Network
Jalandhar
Bhatinda Panipat Rewari Sanganer
Ajmer Jodhpur
Sangrur
Ambala Roorkee Najibabad Meerut Delhi Mathura
Tundla
Largest pipeline network in the country-9300 Kms
Tinsukia Siliguri Bongaigaon Guwahati Barauni
Bolpur
Chaksu Chittaurgarh
Digboi
Kanpur
Sidhpur Mundra Salaya
Kot
Ahmedabad
Navagam
Rajbandh Ratlam
Koyali
Dahej
Maurigram Budge Budge
Haldia Paradip
Mumbai
LEGEND
Chennai Sankari
EXISTING CRUDE OIL PIPELINES
EXISTING PRODUCT PIPELINES ONGOING PRODUCT PIPELINE 54
Trichy Madurai
ONGOING CRUDE OIL PIPELINE
O SCALE
Marketing Network
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Expanding Wings
Globalization Exports Downstream Consultancy
Gas Sourcing City Gas Distribution Auto LPG CNG LNG Terminals Pipelines
Petrochemical LAB Px/PTA Polymers
E&P Domestic Overseas Operatorship
Alternatives Biofuel Wind Solar Hydrogen Nuclear
Moving across the value chain
Moving beyond the shores
Petrochemical & Polymer Processes in IOCL
Implemented
MTBE 38 KTA (CD Tech) 1-Butene 15 KTA (IFP/Sulzer) LAB - 120 KTA (UOP) PX - 360 KTA (UOP) PTA - 553 KTA (Invista)
Just Commissioned
Naphtha Cracker (ABB Lummus) 857 KTA of Ethylene / 600 KTA of propylene MEG - 320 KTA (Scientific Design) Swing LLDPE/ HDPE - 350 KTA (Nova-SCLAIRTECH)-Solution HDPE - 300 KTA (Basell-Hostalen) Slurry PP - 600 KTA (Basell-Spheripol) Bulk & gas
Planned (Tentative)
Liquid Cracker (PDRP-Phase-II) HDPE /LLDPE , LDPE (PDRP-Phase-II) PP 650 KTA (PDRPPhase-I) (Basell-Spheripol PX (PDRP-Phase-I) MEG (PDRP-Phase-II) Styrene 600 KTA (PDRP-Phase-I) (ABB 57 Lummus)
Petrochemical & Polymer R&D in IOCL
State-of-the-art Petrochemical R&D Infrastructure
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Acknowledgement Management of Indian Oil Corporation Ltd for kind permission to present this work
Thanks for your Valuable Time and Attention
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