INDUSTRIAL STUDY ON DARANGADARA CHEMICAL WORKS INDUSTRY BACKGROUND The chemical industry in one of the oldest domestic industries in India, contributing significantly to both the industrial and economic growth of the country since it achieved independent in 1947. The chemical industry comprises the companies that produce industrial chemicals. It is central to modern world economy, converting raw materials into more than 70,000 different products. Chemical industries in India are worth US$ 28 billion and these industries are responsible for 12.5% of the country's industrial production. Chemical industries are referred as keystone industries because of the way the rest of the manufacturing sectors relay only chemicals. The largest corporate producers worldwide, with plants in numerous countries, are BASF, Dow, Degussa, Eastman Chemical Company, Shell, Bayer, INEOS, ExxonMobil, DuPont, SABIC and Mitsubishi, along with thousands of smaller firms. History of chemical industry Since the Industrial Revolution, we have had many examples of how new discoveries have translated into greater economic growth for the world. Before that era, there was no real concept of growth, except by conquest, plunder, or exploration. Most people understood that they were born with a particular status in life. 1
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INDUSTRIAL STUDY ON DARANGADARA CHEMICAL
WORKS
INDUSTRY BACKGROUND
The chemical industry in one of the oldest domestic industries in India, contributing significantly
to both the industrial and economic growth of the country since it achieved independent in 1947.
The chemical industry comprises the companies that produce industrial chemicals. It is central to
modern world economy, converting raw materials into more than 70,000 different products.
Chemical industries in India are worth US$ 28 billion and these industries are responsible for
12.5% of the country's industrial production. Chemical industries are referred as keystone
industries because of the way the rest of the manufacturing sectors relay only chemicals. The
largest corporate producers worldwide, with plants in numerous countries, are BASF, Dow,
Degussa, Eastman Chemical Company, Shell, Bayer, INEOS, ExxonMobil, DuPont, SABIC and
Mitsubishi, along with thousands of smaller firms.
History of chemical industry
Since the Industrial Revolution, we have had many examples of how new discoveries have
translated into greater economic growth for the world. Before that era, there was no real concept
of growth, except by conquest, plunder, or exploration. Most people understood that they were
born with a particular status in life. It is no coincidence that Adam Smith's The Wealth of
Nations appeared in 1776, at the beginning of the modern era, and we are still indebted to him
for his insight into an economic system that could accommodate and build on this revolution. We
must not lose sight of the miracle that growth rates since then have raised remarkably, even
though the world's population was growing rapidly. Increasingly, jobs have been found for this
growing population at an amazing rate, albeit unevenly in different countries.
Although the early inventions of the Industrial Revolution were not scientific but largely
empirical technology, later on, and especially in the twentieth century, science has been essential
to modern technologically based industry, and thus crucial to the great economic growth
described earlier. The science of chemistry originated in the eighteenth century. The first truly
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scientific chemist was Antoine Lavoisier, who systematically measured and studied chemical
reactions. Unfortunately, he was guillotined by that other Revolution in 1794, not because of his
chemical knowledge, but because he was a tax collector for the Ancien Regime in order to earn a
living. It was not the only time politics and science have collided-think of Galileo and the
Inquisition, and Lysenko in the Soviet Union. In fact, history records that Robespierre and Hitler,
at different times and in different circumstances, both said in effect that their revolution had no
need of scientists!
In the 1830s and 1840s, the British had the world's dominant chemical industry, which was
focused on production of inorganic chemicals. Inorganic compounds are those taken from the
earth, such as salt and minerals, and processed into useful products employed directly or used in
further processing. One leading set of products is the alkalis, such as lime, soda ash, and caustic
soda, used extensively in textiles, glass making, fertilizers, etc.; another includes acids such as
sulfuric and nitric, which are often used in tanning, textiles, dyeing, and a myriad other
applications. Alkalis and sulfuric acid produced in large quantities are commonly referred to as
heavy chemicals. Currently, organic chemicals such as ethylene, benzene, and propylene, which
are produced in large quantities, are more typical examples of heavy chemicals.
The development during the 1940s and 1950s of a group of independent developers and sellers
of process technology, known as specialized engineering firms (SEFs), accelerated the
international transfer of technologies and planted the seeds of the competitive challenges faced
by the U.S. and European firms in the 1960s and 1970s, especially by oil firms. But the
technological response of these firms, especially that of U.S. firms in the 1980s and 1990s, to
these competitive challenges has involved the development of new variants of existing products,
customized to the needs of specific users, and greater integration between products and process
innovation. These steps have not only eroded the markets for the services and technologies of
SEFs but also reduced investment in basic research.
Overall, however, the relative positions of the major industrial producers have not changed much
in the past twenty-five years. Indeed, the major change has been the increase in chemical
production outside the leading industrial countries. In 1959 the United States, Japan, and
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Western Europe accounted for virtually all chemical exports. By the 1990s their combined share
had fallen to two-thirds, with the rest coming from Asia, particularly South Korea and Taiwan,
Eastern Europe, and the Middle East. Much of the capacity addition took place during the 1970s
and especially the 1980s.
Evolution of chemical industry
The evolution of the chemical industry has been driven by advances in technology and by the
institutions that have facilitated the growth of new markets. In addition to the conventional
market growth in the form of demand from developing countries, the evolution of the chemical
industry also has been profoundly affected by the growth of a market for technology and a
market for capital. When technology becomes widely available, albeit at a price, it can cease to
be a decisive source of competitive advantage, be it for firms or for countries. Instead,
competitive advantage must be sought elsewhere, in cheaper inputs or in closeness to markets.
Similarly, a global market for capital gives shareholders the opportunity to look for the best
returns, putting managements under pressure to cut costs and improve shareholder value. In the
chemical industry, technological superiority was often a key component of competitive
advantage, and the clear relationship between advances in chemistry and chemical engineering
had led the market leaders to fund a substantial amount of basic research. Developments in the
industry in recent years have weakened this incentive. These developments have tended to raise
the payoff to applied, business-driven research relative to more basic and fundamental research.
The industry has responded by forming industry-wide research initiatives in specific areas and by
interfere joint ventures.
Following the big technology push in the industry during the 1950s and 1960s, technology
diffused more widely than it ever had before. In addition to the efforts of SEFs, increased
competition and slower demand growth lowered the payoffs to traditional types of innovations.
Commercialization became more expensive and required ever more sophisticated knowledge of
customers and the market. Faced with overcapacity, the industry, restructured. The drive to
reduce cost dominated the initial restructuring phase, driven in part by the relentless pressure
from shareholders and their representatives. Major realignments of the product portfolios of
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many firms followed, with many mergers, divestitures, and acquisitions and the rise of entirely
new firms in the industry.
During this phase, many firms cut down on R&D and refocused R&D expenditures on shorter-
term projects and away from more fundamental research. In the past couple of years, there are
some indications that the industry may be entering a new phase of technological change, and
R&D spending appears to be picking up also, as well as increased activity in transborder
acquisitions in addition to domestic ones.
U.S. chemical industry began to experience its competitive "crisis" in the late 1960s, well before
most other U.S. industries encountered growing competitive pressure from foreign sources and
well before the onset of the "oil shocks" of the 1970s that affected prices for the industry's key
raw material. Slower growth for its dominant products, including polymers, along with the
growth of production capacity offshore, led many leading U.S. chemical firms to pursue
diversification programs during the 1970s, with mixed results. In the 1980s, a far-reaching
restructuring in the industry focused firms on a narrower line of products and processes, which
contributed to improved results in many U.S. chemical firms. This restructuring process began
earlier and has proceeded further in the U.S. chemical industry than in those of continental
Europe and Japan.
In the U.S. there are 170 major chemical companies. They operate internationally with more than
2,800 facilities outside the U.S. and 1,700 foreign subsidiaries or affiliates operating. The U.S.
chemical output is $400 billion a year. The U.S. industry records large trade surpluses and
employs more than a million people in the United States alone. The chemical industry is also the
second largest consumer of energy in manufacturing and spends over $5 billion annually on
pollution abatement. In Europe, especially Germany, the chemical, plastics and rubber sectors
are among the largest industrial sectors. Together they generate about 3.2 million jobs in more
than 60,000 companies. Since 2000 the chemical sector alone has represented 2/3 of the entire
manufacturing trade surplus of the EU. The chemical sector accounts for 12% of the EU
manufacturing industry's added value.
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The chemical industry has shown rapid growth for more than fifty years. The fastest growing
areas have been in the manufacture of synthetic organic polymers used as plastics, fibers.
Historically and presently the chemical industry has been concentrated in three areas of the
world, Western Europe, North America and Japan (the Triad). The European Community
remains the largest producer area followed by the USA and Japan.
The traditional dominance of chemical production by the Triad countries is being challenged by
changes in feedstock availability and price, labor cost, energy cost, differential rates of economic
growth and environmental pressures. Instrumental in the changing structure of the global
chemical industry has been the growth in China, India, Korea, the Middle East, South East Asia,
Nigeria, and Brazil.
Chemical industry in India
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
pharmacy, pesticides, dyes and intermediates. The wide and diverse spectrum of products can be
broken down into a number of categories, including inorganic and organic chemicals, drugs and
pharmaceutical, plastics and petrochemicals, dyes and pigments, fine and specially chemicals
pesticides and agro-chemical, and fertilizers.
The Indian pesticide industry had advanced significantly in recent years, producing more than
1000 tones of pesticides annually. India is the 13th largest exporter of pesticides and
disinfectants in the worlds and in terms of volume is the 12th largest producer of chemicals.
Some of the chemical companies in India are :-
Amichem Corporation
Arichem group
Associated Agencies
Bharat Petroleum
CAE Business Systems
Chemical and Alkali Merchants' Association (CAMA)
Chemo India
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Colour- Chem. Limited.
D.K.Pharma Chem. Pvt Ltd
Finornic Chemicals
Galaxy Surfactants
Ganesh Trading
GMM Pfaudler Ltd
Gujarat Alkalies & Chemicals
Gujarat Chemicals
Heranba Industries Ltd
Indian Petrochemicals Corporation Limited (IPCL)
Karnavati Chemicals
Kopran Pharmaceutical Ltd
Kumar Industries
La NOVA Chem
Loba Chemicals
Mahalaxmi industries
Mahavir Expochem Limited
MegaVisa
Morepen Laboratories
National Organic Chemical Industries Ltd
Prima chemicals
Ram Nath & Co
Reliance Industries Limited (RIL)
Rishabh Colours Pvt. Ltd
S.A.Chemicals
Salvi Chemicals
Saraf Chemical Industries
Satya Cashew Chemicals
Sears Phytochem
Sood Group Of Companies
Sresan Pharmaceuticals
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Strides Arcolabs
Sunlite Lumiglo products Co
Surya Pharmaceuticals
Techno Drugs
Unitop Chemicals Pvt Ltd
Varuni Chemicals
Va-Sudha Chemicals Pvt. Ltd.
The chemical industry in India is poised for explosive growth in the coming years. India’s
population has grown nearly as large as that ofChina , with its consuming middle class
accounting for about a third of its population. Disposable income inIndia is rising, potentially
driving growth of chemicals consumption at exponential rates.India’s GDP growth exceeded 9%
for the last fiscal year, fueling double-digit growth of its chemicals industry.
India’s government has set in place policies and special economic zones to promote investment
in its petrochemical sector, and several key domestic companies have unveiled ambitious
expansion plans for the next few years.
The Indian Chemical Industry Outlook is the only chemical conference inIndia organized
specifically to address a broad range of issues impacting the industry. The conference will take a
look at different segments of the Indian chemical industry, and explore the growth opportunities
and challenges in each segment.
Chemical industry’s 2010 outlook
Chemical producers have had a wild ride in 2009. The year started off with companies facing
abysmal demand and sorry prospects for profitability. However, meaningful cost-cutting,
inexpensive North American natural gas, and relatively strong demand in emerging markets--
particularly in Asia--have improved the picture during the course of the year. Going forward,
improved cost structures should help to improve profitability, but companies will still need to
deal with relatively weak near-term demand in developed countries and a wave of new supply
coming on line in the Eastern Hemisphere. Chemicals players will likely continue to right size
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commodity chemical assets in mature markets, seek access to low-cost feedstock in areas such as
the Middle East, and look for exposure to above-average demand growth in Asia. In response to
the wave of new capacity coming on line, we expect chemical firms to continue restructuring
assets in North America and Europe. Meanwhile, firms will look to partner with resource-holders
in the Middle East to gain access to low-cost feedstock. Finally, exposure to more rapidly
growing markets--particularly in Asia--remains an important aspect of producers' near- and long-
term growth prospects, especially in light of a demand picture that is still relatively weak within
developed markets.
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ORIGIN AND PROFILE OF THE COMPANY
The DCW Limited is an India-based company. The Company operates as an integrated chemical
manufacturing company. The Company has three business segments: polyvinyl chloride (PVC),
chloro alkali and soda ash. Its products include poly vinyl chloride by suspension, caustic soda
and soda ash. The Company's subsidiary is, DCW Pigments Ltd. Its other subsidiaries include