Investment climate is still positive in the center of an secular growth and predictable rise in petrochemical manufacturing
The Indian petrochemical field is poised for sturdy growth, but the journey calls for navigating a complex landscape of opportunities and challenges. Strategic investments, underpinned by means of innovation and sustainability, might be key to unlocking the sector’s complete capacity.
In this context, the leading specialists from the petrochemical industry shared the latest traits at the third session of the second edition of PetroChem Summit 2024 titled ‘Investment: Opportunities and Challenges’ organized by means of the Indian Chemical News in New Delhi on December 18, 2024.
The session was moderated by Ankur Singh, Vice President & Head, Strategy – Chemicals Division, DCM Shriram Limited. Sharing an overview of the worldwide trends, Singh informed, “The chemical zone in India is doing good but going ahead the manner world dynamics are changing, the US has already got an energy good ecosystem and China is playing otherwise because the country is attracting funding despite the local issues. The latter is working on a mini cracker ecosystem in which they want to lower their dependence on the US energy circle. The Middle East, knowing the restricted future for the traditional oil feed stock, is going into the oil to chemical compounds (O2C) ecosystem aggressively. Suddenly the whole petrochemical ecosystem has modified as there is rise of electricity mobility and green electricity in the European ecosystem. It could be exciting to see how the future of the worldwide price chain will shape up and because it has emerge as a regional play, India’s function in profitability and cost curve, in particular when it’s been traditionally deprived with feedstocks.”
Sharing his global outlook on untapped opportunities in petrochemicals, Manas Majumdar, Partner – Energy & Chemicals, PwC stated, “Petrochemicals is and could remain a growing industry but there are challenges. Global petrochemical industry is sort of north of US$ 1100 billion (three trillion) and of route China dominates it each as a consumer and manufacturer of petrochemicals. India too has US$ 180 billion well worth marketplace with 30-35% petrochemicals being imported for consumption. Globally, Europe has gotten smaller as a customer marketplace and the Middle East continues to guide in oil manufacturing and could diversify into petrochemicals. Equivalent to that is the USA marketplace which has each a generating and consuming market. It has the advantages of getting both naphtha and steam crackers. A large player BASF is asking at putting in place a production plant in China. There is an earthly boom in petrochemicals no matter a few pockets of disturbance. Overall, there may be an earthly boom in petrochemicals in India and the country stays a vibrant spot, witnessing about 9% intake led growth.”
“There is an portion of uniqueness as the market is lucrative due to developing demand compared to petrochemicals. The technology is widely recognized and is largely cost competitive. There is a large capability building developing. Indian Oil is expanding in its Paradip complex with US$ 7 billion (Rs 65,000 crore) investment that has been signed off through its Board. PSUs consisting of IOC are searching at enlargement and so is GAIL at its Vijaypur facility. BPCL as a part of its Bina enlargement is also searching at it. The development is on the whole PSU led besides Reliance Industries. While most of the petrochemical is naphtha based, Reliance is looking at off gasoline and investing into vinyl. Adani may additionally observe it within the longer run. Overall, the funding sentiment is careful. There is aptitude but there is timing factor and different challenges. The time taken among statement and commissioning of the ventures is lengthy,” delivered Majumdar.
Delivering a policy perspective, Keshav Shrivastava, Mid-Level Consultant – Investment Promotion, Department of Chemicals & Petrochemicals, Ministry of Chemicals and Fertilizers, Govt. Of India stated that, “In phrases of coverage, we have a muti-ministerial technique in the petrochemical enterprise. We have the Ministry of Petroleum and Natural Gas that is making sure the feedstock for the petrochemical enterprise and we have the Ministry of Chemicals and Fertilizers to ensure the delivery chain for petrochemicals. We additionally have PCPIR policies for growing the petrochemical infrastructure inside the country. In phrases of downstream processing, we have the Ministry of Textiles that is supporting with textile parks and other projects. In terms of a clean economy, we are transferring in the direction of clean fuel intake which is likewise pushing the administration within the whole ecosystem. This is wherein the administration approach lies in promoting this area.”
“We have plans in place inclusive of 310 MMT of petrochemical feedstock by way of 2030. These plans are a way of pushing the value reduction. In phrases of making sure a policy framework for feedstock and value addition, we have visible downstream funding. In Dahej, we have got seen the downstream investments. 100% FDI inside the chemicals and petrochemicals. We have seen the World Competitive Index in which we have finished 40th rank from 83rd rank in 2015.We are running on supply chain for price competitiveness. We are looking for various forums including the Indo-Pacific Economic Forum for finding viable solutions. Internally, we are growing the capacities by PSU and also making sure that there may be no crunch in our future plans and guidelines. PM GATI Shakti promises to lessen the logistics price within the photochemical movement. We are seeking to map the most important infrastructure initiatives and help reduce the costs,” delivered Shrivastava.
Highly promising about the future growth capacity of Indian petrochemical sector, Sanjay Kumar Papneja, Chief General Manager – Petrochemical Projects, IOCL stated that, “India has a robust dearth of petrochemical products and we imported 10 MMT of petrochemicals post corona duration. With fast urbanization and rising incomes levels, we may want to see the import to 40 MMT if not supplemented by using extra production in India. The availability of feed-inventory is met in India. Energy sector is below transition. Ethanol blending is beneath progress and the EV and hybrid has reached to 50% levels in China. India is at the initiation stages however ultimately the share of fossil fuel in transport will pass down. Be it PSU or private sector, we are getting ready for it as the call for is going to increase. Therefore, there may be an growth in 10-12 MMT ability in 5-6 years. We have finished too much on commodities but now specialty chemicals need to be focused upon.”
“More than 80-85% product comes from C2-C3 cost chain that is majorly derived from crackers. There are different technologies available as well however a cracker plays a crucial function as it is the heart of the industry. There isn’t any difference between China and India in phrases of import of feed-stock. Europe is a similar case. Only the USA and Middle East are distinctive as they have sufficient feed-inventory. India has the downside that it imports the feed inventory but it additionally has a massive demand centre and right geography for intake. That may be witnessed by how true existing crackers are doing. In phrases of cost competitiveness, how 70-75% of Indian capacities are with the integrated set up. Integration ends in value performance and operational performance. Dahej is one instance wherein integration is going on,” delivered Papneja.
The PetroChem Summit 2024 themed ‘Identifying New Opportunities For Value Creation’ was supported through the industry institutions including Alkali Manufacturers Association Of India (AMAI) and Chemicals & Petrochemicals Manufacturers’ Association (CPMA). The Platinum Sponsor was Somaiya Vidyavihar University and Gold Sponsor, Tubacex Group.
