Indian Polymer Industry Past, Present and Future G.S. Kapur and Shashikant Indian Oil Corporation Limited R&D Division Faridabad 121 007, India 1
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
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•
•
•
•
•
Indian
Indian
Indian
Journey so far……
Chemical Industry
Polyolefin Industry-Outlook
Growth Drivers
Challenges
Conclusions
2
India -
Independence in 1947
a snap Shot
25% of the population below
poverty line 20% of the population have no
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…..
over 20%
4
Large Gas discovery-Changing energy landscape
Global recession – Not
much Impacted.
Indian, If not Indian are making
their presence in global business.
Aviation sector grew by
Automotive
growth over 20%
IInd Fastest
growing economy
will grow by 8-9%
Polyethylene growing @
healthy double digit
Polypropylene growth over
25%
Polymer Growth Vs GDP - Global
Per Capita Polymer Consumption vs Per Capita GDP - 2009
PO + PVC ~ 5.7 kg
Polymers ~ 8 kg 5
Ref: Chemical & petrochemical Manufacturers’ Association, India
Polymer Growth Vs GDP - India
Average of Last 5 Years
6 Ref: Chemical & petrochemical Manufacturers’ Association, India
With robust GDP projections; all polymers are expected
to grow in double digits
GDP
HDPE-
1.1 X
PP-
1.4 X
LLDPE-
1.7 X
Major Polymers – Outlook India
Considering all the announced capacities (under
construction and commissioned); India still will import over 3
MMT of Polymers in 2016
Product 2010 2016
HDPE Short Short
LLDPE Short Short
LDPE Short Surplus
PP Surplus Short
EVA Short Short
PVC Short Short
Indian Chemical Industry
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Indian Chemical
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
Industry
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•
•
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13th 200 Billion by 2020, Ranks
in the world
Industrialization and Economic Growth – Key Drivers
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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 other countries, due to higher cost
power, import duties, taxes and cost
capital and
Low focus on R&D – few initiatives
innovate processes
to of
of
to
In spite of disadvantages, few proactive companies created
sizable International presence
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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
Polyolefin’s
A decade back, India met
its demand of polymers
through imports
•
•
•
Polyethylene and Polypropylene constitute ~ 71% of the commodity resins consumed in India
12
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 summarised as under:-
1957-Polystyrene
1959-LDPE
1960-SBR
1961-PVC
1968- HDPE
1978-Polypropylene
of Indian polymers is
The first Integrated Petrochemical Complex “Indian
Petrochemical Corporation Ltd” now a part of RIL - 1969
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Indian Polymer Industry
Major Milestones
March 1969 – “Indian Petrochemical • 22nd
Corporation ltd incorporated”
• March-November commissioned
1973 – Xylenes – DMT
28th 15th • March 1978 to March 1979 –
Naphtha cracker commissioned along
with all down stream units
• 1982 – 1988: RIL entered
Petrochemical sector, commissioned operations PFY, PSF, LAB, PX and PTA
1992 - Indian Petrochemical Corporation Ltd commissioned
First Gas Cracker in India along with downstream MEG,
LDPE, LLDPE and PP plants
14
Commodity Polymer Consumption
Indian Scenario
• Estimated Global polymer
consumption :193 million TPA
Name
PE:
PP:
PVC:
PET:
PS and
Quantity(MTPA)
71
48
36
16
others: 22
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Polymer consumption in India about 3.8% of global consumption
Indian PE consumption is 3.7% of Global PE capacity.
Indian PP consumption is 4.7% of Global PE capacity.
Fig. (Million TPA)
Per Capita Polymer Consumption (Kg) 2007-08
Polymer Consumption
India Vs Global
15
120
100
80
60
40 30 30
20
0
India ASEAN China World USA
100
17
8
Polyolefin Industry
16
17
Current Feedstock Pattern
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
Power
Fertiliser
Petrochemical
2006 2008 2010 2012
Naphtha consumption shifted to Petrochemicals drastically
19 Ref: PPAC, Govt of India
20
Monomer capacity
Current Scenario - India
Operating rates in 2010
C2 production = 3 mmt
C3 production = 2.7 mmt
> >
Source: Crisil
Only ~3% of Global capacity
21
Capacity addition >C2
and >C3
2011-2014
>C >C
Source: HPL 22
Indian Polyolefin Industry
Current Scenario
LLD/HD
Existing
Market Dominated By Only 4 ManufacturersRef: IOCL data base
Upcoming
Petrochemical Capacity
Addition -India
#Dahej: 10 mtpa of LNG brings more than 10 Wt% ethane
India building huge Polymer capacities 23 Ref: IOCL data base
Company
PE
PP
Exp Time line
IOCL, Paradip None 650 2012-13
ONGC, Dahej (OPAL)
1100#
340
Q1 2013
RIL, Jn 550 None 2014
GAIL, Pata
90
None
Yet to declare
MRPL None 440 2011-12
BCPL, Assam 220 60 2011-12
HPCL-Mittal, (HMEL) Bhatinda
None
350
2011-12
Total, KT 1960 1950
HDPE – Market Segments
FILM 6%
OTHERS 3%
Raffia 18%
PIPE COAT 2%
IM 13%
BM-GP 18%
PE-100 6%
PE-63/80 7%
HM-FILM 18%
MBM/LBM 9%
24 Ref: IOCL data base
HDPE Major Market – Blow Molding
2010-11 / 1459 KTA
LLDPE – Market Segments
25 Ref: IOCL data base
Market Dominated by Film Sector
2010-11 / 1043 KTA
26
PP Market Segments
RCP 3%
EXT 5%
ICP 14% Raffia
36% F&E 6%
BOPP 10%
IM 16% TQ
10%
se
Major Sector – Raffia, Injection Molding and Impact Copolymers
Ref: IOCL data ba
2010-11 / 2462 KTA
Demand Supply Balance
(2010-2011)
27 Ref: Chemical & petrochemical Manufacturers’ Association, India
Capacity
Production
Import
Export
Apparent/
Demand
LDPE
205
197
180
377
LLDPE/HD
Swings
1585
1040
23
20
1043
HDPE
1055
1450
130
105
1459
All PEs
2845
2687
333
125
2879
PP
3575
2900
245
779
2462
Indian Polymer Demand
PP, 4441
PVC, 3331
2462 HDPE, 2381
1926
1459
1043
377
LLDPE, 1866
LDPE, 480
• Indian robust
polymer growth is
• In 2015-16 India will import 3 Mn MT of polymers
• Case to build additional
capacity
28 Ref: 12th Indian PETROCHEM Conference
Product 10-11 15-16 CARG
HDPE 1459 2381 10%
LLDPE 1043 1866 12%
LDPE 377 480 6%
PP 2462 4441 12%
PVC 1926 3331 10%
Growing at 11%+
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PE (HD + LL) Demand Vs Supply
5000 RIL
OPAL 4000
3000
Supply
Demand 2000
1000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Ref: Chemical & petrochemical Manufacturers’ Association, India
Domestic Market to Remain Deficit- India will import ~ 600 KTA of HD/LL in 2016
IOCL addition
30
LDPE- Demand Vs Supply
700
600
500
400
300
200
100
0
Supply
Demand
2009 2010 2011 2012 2013 2014 2015
ndia
• RIL adding 400 KTA of LDPE capacity will ease the situation • LDPE has reached equilibrium with LLDPE- higher growth projected Ref: Chemical & petrochemical Manufacturers’ Association, I
RIL addition
31
PP - Demand Vs Supply
6000
5000
4000
3000
2000
1000
0
IOCL
Supply
Demand
2008 2009 2010 2011 2012 2013 2014 2015 2016
Ref: Chemical & petrochemical Manufacturers’ Association, India
• India will turn PP importer by 2016 • Deficient ~ 500 KTA
HMEL OPAL / GAIL
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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Drivers Growth
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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
Very High Growth Rate for Polymer Consumption 34
Strong Fundamentals
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Rising India
Source: World bank
37
Promising India
Source: IMF World Recovery Outlook, October 2010
Confident India
38
Source: Nielsen Global Consumer Report, Oct’10
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Young India
Agriculture
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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
developed countries)
Groundnut Cultivation
Total area: 6.8 million hectares
Even as 1% of this land is
cultivated using Mulch Films-
5000 MT PE required for 1 season
• Estimated food wastage
worth US$ 1 Billion
is about
40 Ref; Modernizing the Indian Food Chain, FAIDA, CII & Mckinsey Study
Application of plastic in Crop management, PHM & Water management to play a vital role
41
Growth - Automobiles
Total sales of 12.2 million automobile vehicles achieved - 2009-10
42
Growth In Luxury Goods
Consumption
43
Growth in Communication
India second largest mobile user after China 575 Million Mobile user and 37 Million Landline User
Key Growth Areas
(MMTPA)
44
Demand Change in
India (MMTPA)
45
Country
FY 05-06
FY 11-12
% of Global Demand (FY 12)
China 30 44 24
US 26 30 17
India 5 12 7
Japan 7 8 4
Germany 6 7 4
Others 77 79 44
Total 151 180 100
Challenges
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Barriers to Growth
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 by 2015 - 16.
around 3Mn MT of POs
• There is enough DEMAND to demand capacity expansion.
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Summary
• Indian refinery capacity and petroleum products to
be surplus.
• Indian production
competitive.
of Naptha, C2 and C3 to remain
• Middle East is
to be tough.
not a real threat; though next 2 years
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Indian Oil Corporation Limited Enabling the growth…….
Indian Oil Corporation Limited
India’s largest commercial enterprise
Highest ranked Indian company in the
98th Fortune ‘Global 500’ listing: Rank
Revenue for the
US$ 73 billion
fiscal 2010-11:
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Refinery Network
Controls 10 of India's 20
2.35
BRPL
refineries Panipat 12.0
Digboi 0.65 Guwahati
1.0
Haldia 6.00
Mathura 8.00 Barauni
6.00
Koyali 13.7
Paradip 15.0
IOC Refineries
Proposed Refinery
Stand Alone CPCL 9.50
Refining capacity: 60.20 MT/annum (1.2 million barrels per day)
54
d
Pipeline Network
Jalandhar
Ambala Sangrur
N Roorkee Bhatinda
Najibaba Panipat Meerut
Tinsukia Rewari Delhi Sanganer Mathura
Siliguri Ajmer Tundla Bongaigaon Chaksu Digboi Jodhpur
Guwahati Kanpur Chittaurgarh
Barauni Kot
Ahmedabad
Sidhpur Bolpur
Rajbandh Mundra Maurigram Navagam Ratlam Budge Budge
Koyali Salaya
Haldia Dahej
Paradip Mumbai
LEGEND
EXISTING CRUDE OIL PIPELINES Chennai
Sankari EXISTING PRODUCT PIPELINES
ONGOING CRUDE OIL PIPELINE
ONGOING PRODUCT PIPELINE Trichy
Madurai
O SCALE
Largest pipeline network in the country-9300 Kms
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
Just Commissioned
Planned (Tentative)
MTBE – 38 KTA
(CD Tech)
Naphtha Cracker (ABB Lummus)
857 KTA of Ethylene / 600 KTA of
propylene
Liquid Cracker
(PDRP-Phase-II)
1-Butene – 15
KTA
(IFP/Sulzer)
MEG - 320 KTA
(Scientific Design)
HDPE /LLDPE , LDPE
(PDRP-Phase-II)
LAB - 120 KTA
(UOP)
Swing LLDPE/ HDPE - 350 KTA
(Nova-SCLAIRTECH)-Solution
PP 650 KTA (PDRP-
Phase-I)
(Basell-Spheripol
PX - 360 KTA
(UOP)
HDPE - 300 KTA
(Basell-Hostalen) Slurry
PX (PDRP-Phase-I)
PTA - 553 KTA
(Invista)
PP - 600 KTA
(Basell-Spheripol) Bulk & gas
MEG (PDRP-Phase-II)
Styrene 600 KTA (PDRP-Phase-I) (ABB
Lummus) 57
58
Petrochemical &
R&D
Polymer
in IOCL
State-of-the-art
Petrochemical R&D
Infrastructure
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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