T
he chemical industry is critical for the economic development of any country.
Indian chemical sector accounts for ~13% of the gross value added by the
industries segment. With Asia's increasing contribution to the global chemical
industry, India emerges as one of the focus destinations for chemical companies
worldwide. Chemical industry is critical for the economic development of any country
as it offers products and solutions for virtually all sectors of economy.
The chemical industry in India currently stands at ~USD 115 Bn in FY13 and is expected to
grow at ~8% p.a. over the next 5 years.
Indian petrochemical industry which includes
the end products like polymers, synthetic fibers, surfactants etc. constitute ~20% i.e.
~USD 23 Bn market.
Petrochemical products permeate the entire spectrum of daily use items and cover
almost every sphere of life like clothing, housing, construction, furniture, automobiles,
household items, agriculture, horticulture, irrigation, packaging, medical appliances,
electronics and electrical etc. These industries hence drive the demand growth of
petrochemicals. Current low per capita consumption level of plastic products as
compared to developed countries per capita consumption suggests that India offers a
huge opportunity over long term
A
wide variety of plastics raw materials are produced to meet the material
needs of different sectors of the economy. These polymeric materials are
broadly categorized as commodity, engineering and specialty plastics.
Commodity plastics are the major products that account for bulk of the plastics and in
turn for petrochemical industry. Commodity plastics comprise of Polyethylene (PE),
Polypropylene (PP), Polyvinyl Chloride (PVC) and Polystyrene. While engineering and
specialty plastics are plastics that exhibit superior mechanical and thermal properties
in a wide range of conditions over and above more commonly used commodity plastics
and are used for specific purpose. These include styrene derivatives (PS/EPS &
SAN/ABS), polycarbonate, poly methyl methacrylate, polycarbonates, poly oxy
methylene (POM) plastics etc.
There are three broad types of PE, viz: Low-density Polyethylene (LDPE), High-density
Polyethylene (HDPE) and Linear Low-density Polyethylene (LLDPE). Major plastic
materials like PE and PP are derived from Ethylene and Propylene respectively, while
other plastics such as PVC, PS & ABS and PC are produced from benzene, butadiene and
other feedstock.
Plastics industry is one of the fastest growing industries in India. It has expanded at ~8%
CAGR over the last five years to reach ~8.5 MnTPA (million tonnes per annum) in FY13
from ~6 MnTPA in FY08. (Refer Figure 3).
1) Demand overview
Knowledge &
Strategy Partner
08
Polyethylene (PE) is the most largely used plastic raw-material by Indian industry. Its
demand has grown at 8% CAGR in last 5 years to reach ~3.6 MnTPA in FY13.
Polypropylene (PP) is the second largest with consumption growing from 1.8 MnTPA in
FY08 to 2.1 MnTPA in FY13 at a growth rate of 2% p.a.
Polyvinyl Chloride (PVC) demand has grown at 10% p.a. from 1.2 MnTPA to 2.1 MnTPA in
FY13. Poly-Styrene (PS) has observed a slower growth rate of 3% p.a. to reach ~250,000
TPA in FY13, while other (PC/ ABS etc.) have grown at 7% p.a. from 94,000 TPA to
141,000
TPA in FY13 (Ref figure 4)
Figure 4: Demand breakup of plastics by types, Fy13
A report on
Plastics Industry
Figure 3: Demand growth of plastics ('000 TPA), CAGR, FY08-13
9000
7500
6000
4500
3000
1500
0
FY08 FY13
PVC Polypropylene HDPE Polyestyrene Others
5,824
8,456
Source: Chemicals & Petrochemical Statistics, Analysis by Tata Strategic
3%
10%
2%
7%
8%
LDPE
5%
PS 3%
Others
2%
PVC 28%
HDPE 20% PP 24%
LLDPE 18%
Source: Chemicals & Petrochemical Statistics, Analysis by Tata Strategic
A report on
Plastics Industry
Knowledge &
Strategy Partner
09
Polyethylene (PE), which includes HDPE, LLDPE and LDPE (High Density PE, Low
Density PE and Linear Low density PE), accounts for the largest share i.e., 43% of total
consumption, while PP accounts for 24% of total consumption. Within PE, HDPE is
observing a moderate growth and has a consumption share of 20%. LLDPE is expected
to grow at higher pace due to its increased penetration in LLDPE applications. Others
include PS/EPS, ABS and engineering plastics.
To manufacture finished products, polymers are processed through various types of
techniques namely extrusion, injection moulding, blow moulding and roto moulding.
Various products manufactured through these processes will be doministrated in reference
Western region comprise of Maharashtra, Gujarat, the union territories of Daman and
Diu & Dadra and Nagar Haveli along with Madhya Pradesh and Chhattisgarh. The total
consumption of plastics in India in 2012-13 was ~10 MnTPA. Out of this Northern India
accounted for ~23%. For the purpose of this report Northern India comprises of J&K,
Himachal Pradesh, Punjab, Haryana, Uttarakhand, Rajasthan, UP, Delhi and NCR
region.
Bulk of the consumption in Northern India is from end use industries of Auto,
packaging (including bulk packaging), plasticulture applications, electronic appliances
etc. Figure below reflects indicative list of some end use industries (Refer Figure 6) in
Northern India.