NCJ-Mar-2011

Nandini Chemical Journal, March 2011 1

and Global Development Efforts For Biomass Based Fuel Chlorinated Polyethylene Product Profile77

Volume 18 Issue 6 March 2011

Dedicated to the cause of chemical industries

* DIETHYL SULPHATE PRODUCT PROFILE

* NEGLECT OF OBVIOUS PROJECT OPPORTUNITIES WHY?

* ETHYL SILICATE- PRODUCT PROFILE

* CHLOROFORM - INDIAN AND GLOBAL SCENARIO

* CARBON FIBRE - INVESTMENT OPPORTUNITY


s VOLUME XVIII MARCH 2011 ISSUE 6

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CONTENTS 03 Talk Of The Month

Neglect Of Obvious Project Opportunities Why? 06 Chemical Industries In India And China Compared 08 Dupont And Dow Corning Announce R&D Plans In China 09 Global Oil Price Fluctuation And Its Implication Proceedings Of The Brain Storming Session 12 New Investigative Publication On Global Oil Price Fluctuation

Why And How? 15 Indian Crude Oil Output Trend 16 Status Of ONGCs G1-CS15 Field In Andhra Pradesh 17 Need For Comprehensive Natural Gas Policy 18 Need For Natural Gas Pipeline Grid 19 Power Projects To Face Delays In Gas Allocation 23 Capacity Addition In Cement Industry 24 Progress Of Indian Biotech Sector 26 Fertiliser Subsidy Rationalisation Plans Facing Uncertainty 28 Kraft Paper Mills Facing Difficult Time 29 Synthetic Substitutes For Costly Commodities 30 Indias Approach To Phase Out HFCs 31 Recent Trends In Nanotechnology 32 Nanosheet Tech May Offer Mega Energy Gains 34 The Kyoto Protocol Expires In 2012

Need For Government Strategies 35 Carbon Fibre - Investment Opportunity 43 Ethyl Silicate- Product Profile 46 Diethyl Sulphate Product Profile 50 Chloroform - Indian And Global Scenario 57 Increasing Demand For Lithium Carbonate 58 Global Rare Earth Crisis 60 News Round Up International 61 News Round Up India 62 China News 63 Technology Development 64 Agro Chemical Page 65 Pharma Page 65 Chinese And Italian Drug Units Under Scanner 68 Energy Page 68 Extraction Of Oil Using Solar Energy Experimental Project In USA 71 Waste Water Management Using Eco Bio-Block 74 Price Details 75 Tender 77 New Projects International 78 Ask For The Chemical Facts Free 80 Chemicals Imported At Tuticorin Port

During The Month Of November 2010


TALK OF THE MONTH

NEGLECT OF OBVIOUS PROJECT OPPORTUNITIES WHY? There is no doubt that Indian chemical industry today is marked by sort of lethargic attitude and lack of enthusiasm for moving ahead. Truly, Indian chemical industry is foregoing its earlier advantages, when India could create large capacities in several areas of chemical sectors. In the last few years, lackluster activities in new chemical projects in India have inevitably driven the Indian chemical industry much behind the developed countries and some countries in Asia and Middle East. The above dismal scenario particularly becomes obvious, when one would see the neighbour country China creating huge capacities in chemical industries in multiple directions at astonishing pace. It is particularly surprising that the government agencies do not appear to be concerned about such scenario and particularly the Union Ministry of Petrochemicals, Chemicals & Fertilisers appear to be least concerned. In recent times, due to lack of adequate capacity creation for several basic chemicals, India is increasingly importing many of the bulk chemicals such as methanol, styrene, titanium dioxide, phenol, acetone etc.and the trend is likely to continue. What is particularly distressing is that there is no reasons or justification for such lethargic attitude and lack of enthusiasm amongst the chemical project promoters in India. Certainly, the concerned ministry in Government of India and the different chemical industry associations have failed in their task of creating appropriate climate of growth and development for chemical industries in the country. There appears to be some sort of fear and anxiety amongst the chemical project promoters in India, that India now lacks competitive strength to set up large chemical projects, since India has become vulnerable to international price fluctuations and supply uncertainty with regard to petroleum feedstock and natural gas. The precarious dependence of India for its requirement of coal on imports in large quantity have also created some sort of apprehension amongst the project promoters about futuristic energy scenario. Government of India certainly has to explain its inability to chalk out the alternate feedstock and energy plans appropriate to the Indian needs and strength and its lack of efforts to create confidence amongst investors. If the Government of India can not take appropriate initiative to prepare such action plans, who else can do this?


NEGLECT OF OBVIOUS PROJECT OPPORTUNITIES WHY? While India certainly has problems due to inadequate crude oil and natural gas resources, there are many other options for India to promote investment in chemical projects. There are many obvious project opportunities, which are not being considered by the Indian investors, for whatever reasons. Titanium dioxide It is extremely difficult to explain as to why capacities are not being built for production of titanium dioxide in India. India possesses more than 12% of the total world resources of ilmenite, which is the starting material for the production of titanium dioxide pigment. Chlorine which is the other raw material for the production of titanium dioxide is also readily available in the country. The global demand for titanium dioxide is now around 5.2 million tonnes per annum and it is steadily going up at the rate of 4 to 5% per annum. While Indias reserve of ilmenite constitute around 12% of the total world reserves, Indian production of titanium dioxide is just less than one percent of the total world production. The import of titanium dioxide in India is steadily going up and it is now in the region of around 50,000 tonnes per annum.

Molasses based chemicals Another glaring example for Indias lack of positive mind set about the investments in chemical projects in appropriate areas, is the country ignoring the investment opportunities in the field of cane molasses based projects.

Sea Water Magnesia In the same way, it is extremely difficult to explain as to why capacities are not being built for the production of sea water magnesia in the country. The Indian import of dead burnt magnesite ,which is used for refractory and substitute material for sea water magnesia is steadily going up due to depleting quality of magnesite ore deposits. In India. There is no constraint for building capacity for sea water magnesia which is produced from sea brine and finds application in the refractory sector. Even as the Indian import of dead burnt magnasite and sea water magnesia are inevitably going up, the country is not taking steps to meet its demand by indigenous production.


NEGLECT OF OBVIOUS PROJECT OPPORTUNITIES WHY? India is now second largest producer of sugar cane in the world after Brazil. Plenty of cane molasses are available in India. Still cane molasses based derivative products such as L-lysine, Citric acid, Mono Sodium Glutamate etc. are entirely imported due to want of indigenous production. Need for focus on non petrochemical areas In the non petroleum based chemical projects, there are plenty of investment opportunities for exploitation in India. While the Indian project promoters may blame Indias lack of strength with regard to petrochemical feedstock, the main thrust area for the project promoters should be to involve themselves is non petrochemical sectors.

INDIAN BUDGET IGNORES IMPENDING ENERGY CRISIS With around 90% of Indian crude oil requirement (around 180 million tonnes per annum) now being met by imports and with the spiralling crude oil price , there is severe energy crisis waiting to happen in India. To overcome the crisis, India urgently needs an appropriate energy plan in tune with the country's strength and opportunities. The option for India to overcome the impending crude oil crisis would be to focus on algae based and jatropha based bio fuel. Billions of dollars are presently being pumped in by several multinational companies abroad and governments in advanced acountries in developing technology for optimising the production of algae biofuel from the point of view of the cost and yield. They hope to introduce algae biofuel in a big way before 2020. Algae contains oil many times more than that of conventional biofuel source such as corn. India has appropriate climatic and soil conditions to grow algae in a very big way. India has to set up dedicated research and development centres with time bound action plan to optimise the yield and production cost of algae and jatropha biofuel, for use in the country. Finance Minister ought to have allotted atleast Rs.1000 crores towards such R&D activities, that would have provided an opportunity to Indian scientists and technologists to create appropiate energy options for India. A letter was sent to Union Finance Minister and Petroleum Minister in this regard some time back but the letter was not even acknowledged. Possibly, the Ministry of Petrochemicals has also not urged the Finance Ministry to allot funds for such appropriate R&D activity. Even now, it is not late and the Finance Minister should examine the feasibiity of making such provision in the budget and give a thrust to the energy research sector in the country.


CHEMICAL INDUSTRIES IN INDIA AND CHINA COMPARED

While the strength and opportunities as well as weakness and threat facing the chemical industries in every region could be different due to combination of regional, cultural, geographical and political factors, the approach to the issues and attitude towards challenges in the particular prevailing conditions, make the difference between progress and lack of it between the regions. Analyzing from such point of view, one cannot but find glaring difference in the attitude and approach between the governments and investors in China compared to the the attitude and approach of the governments and investors in India. It is often said that strict government control on events and happenings that are enforced in China can not be done in India, due to the democratic set up prevailing in India. Many believe that several pro active policies could not be implemented in India by the government due to the protests, agitations and opposition from one segment or the other. Government of India can not handle such protests in the manner that are done in China. But are these reasons adequate justification for Indias lack of thrust and progress in chemical industries compared to China?

It is well known that the size of chemical industries in China is larger than that of India. The growth of chemical industries in China is also higher than that of chemical units in India. It therefore, implies that India stands no comparison with China today, as far as the size of the chemical industries and its growth are concerned. Then, where is the need to compare the chemical industries in India and China?

The desire to compare the chemical units in India and China largely arise from the fact that the opportunities for growth of chemical industries available for both the countries are huge. It is therefore, appropriate to compare and analyse as to how these two countries have exploited such opportunities in the recent past. From this point of view, many things could be said as to how India has missed the opportunities, while China has effectively utilized them .


CHEMICAL INDUSTRIES IN INDIA AND CHINA COMPARED The biggest and most positive aspect of the investment climate for chemical industries in China are the huge confidence level that China have been able to build amongst the multi national companies based in western Europe and Northern America, about the long term stability of China and the co operation that they could get from chemical industries and government in China. Such building up of confidence have brought forth huge investments into China in recent years. Certainly, Indian government and Indian chemical industries have not been able to match the China units in this aspect. Another aspect that is very conspicuous about the management attitude of chemical industries in China is their level of aggressive approach to product marketing around the world. Their enthusiasm to sell the products and reach the consumers all over the world appear to be unmatched by any other country in the world. Of course, the product marketing capability is the single most decisive factor in the success of any enterprise. With such aggressive approach, it is no surprise that chemical industries in China have been forging ahead, even in the present global melt down and recessionary conditions. In the past, a view prevailed amongst several people around the world that there was indiscriminate capacity expansion by chemical industries in China without adhering environmental requirements and quality standards of the products. While this suspicion was true to some extent, such conditions have been largely overcome now. The Chinese government and regulators in China are tightening the implementing of environment laws as in many other countries in the world and they have not hesitated to close down the units which cause pollution. Several chemical units in India also face environmental problems and some units have been closed down in India also. Therefore, it has to be seen that approach to environmental issues have not been made any different between India and China. The progress of chemical industries in China are after overcoming such environmental issues. In India, manufacturing capacity creation are substantially coming down in recent times due to several factors including petrochemical feedstock constraint, import dumping and technology sourcing problems. Indian R&D efforts are still at inadequate level and do not match the challenges of the times. In such aspects, the chemical Industries in China certainly have fared better. Indigenous technology efforts in China are commendable, particularly viewed from the fact that chemical industries in China have opened up to global competitiveness only around two decades back.


DUPONT AND DOW CORNING ANNOUNCE R&D PLANS IN CHINA

DuPont and Dow Corning have announced separate investments to boost their R&D capabilities at Shanghai. DuPont will double the size of its R&D center at the Zhangjiang Hi-Tech Park (Shanghai) to meet rapidly increasing demand for new materials used in photovoltaics, biobased products, and automotive applications in Asia/Pacific. The expansion will also add about 200 science and technology jobs in the next two years. Dow Corning has opened a $50-million business and technology center, also at the Zhangjiang Hi-Tech Park. The unit will focus on new applications and products for Chinas fastest growing industries, including automotive, construction and infrastructure development, electronics, personal care and solar power.

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GLOBAL OIL PRICE FLUCTUATION AND ITS IMPLICATION PROCEEDINGS OF THE BRAIN STORMING SESSION

ORGANISED BY CHEMICAL INDUSTRIES ASSOCIATION, CHENNAI

AT CHENNAI ON 2ND MARCH 2011 Chemical Industries Association, a Chennai based apex body of chemical industries all over India organised a brain storming session on Crude oil price fluctuation and its implication at Chennai on 2nd March 2011. The session was attended by 22 delegates from the cross section of industries including organizations such as Shasun Chemicals Ltd., Tube Investments India Ltd., Pure Chemicals Ltd., Thirumalai Chemicals Ltd. and others. Mr.Swaminathan Venkataraman, Director, Nandini Consultancy (S) Pte. Ltd., Singapore and Dr.D.M.Mohunta, Consultant Technologist, presented papers on global crude oil price fluctuation and its implication. The presentations were aided with tables, charts and indepth analysis of the scenario. Mr.P.K.N.Panicker, President, Chemical Industries Association and Mr.N.S.Venkataraman, Director, Nandini Consultancy Centre Pvt.Ltd., Chennai conducting the proceedings. The highlights of proceedings of the brain storming session are provided below: Price increase The crude oil price increase in global market have not been due to any significant increase in cost of production of crude but the price has been dictated by the demand supply trends, regional unrest and related political developments. Therefore, the oil price is largely speculative and the trend would continue. Increase in demand During the last few years, the demand for crude has substantially increased in countries like China and India, which resulted in increase in global demand at the rate of around one million barrel per day. This steep increase has resulted in high capacity utilization of the crude oil industry with the demand level almost reaching the capacity level.


GLOBAL OIL PRICE FLUCTUATION AND ITS IMPLICATION PROCEEDINGS Tight supply scenario There is not much scope for further increase in crude oil production capacity immediately, until major exploration efforts or new discoveries such as the recent discovery in Brazil would materialise and commence commercial operation. Under the circumstances, there is bound to be tight supply situation for crude oil in the global market, which is likely to continue, until the production would increase by renewed exploration efforts and new discoveries of oil fields. The politically sensitive OPEC countries such as Egypt, Venezuela, Libya, Nigeria, Iran, Iraq, produce substantial percentage of the world total crude oil requirements. In the situation of tight supply, even any marginal short fall in production in the above regions would lead to huge increase in price of the crude. This appears to be an inevitable condition. Falling confidence in US dollar Apart from the demand supply scenario, the debt ridden conditions of the US economy and fall in the value of US dollar have resulted in loss of confidence in the stability of US dollar around the world. Therefore, the buyers and speculators are resorting to forward trading in a big way to protect the value of their money and investments and as a result of the huge forward trading not only the price of crude but also other products such as copper, platinum, gold, etc. are increasingly steeply. Futuristic price scenario Under the circumstances, the price of crude oil would go up in the near future. It is likely that the price would largely remain at around US$100 to US$120 per barrel, as any price above this level, would lead to severe economic recession once again, that will affect the global economy and the economy of OPEC countries as well. Historical oil price fluctuation in recent times indicate that global economic recession has always been preceded by steep increase in crude oil price. In the past, when the crude oil price increased beyond the affordable level, consumers resisted the higher price, resulting in slowing down of global economy and consequent recession.


GLOBAL OIL PRICE FLUCTUATION AND ITS IMPLICATION PROCEEDINGS Indias predicament At present, import of crude oil in India contributes to around 90% of the Indian requirement. With the near static production level of crude oil in India and increasing demand, Indian imports of crude oil would increase to around 95% of its Indian requirement by 2016. In such circumstances, India is facing vulnerable and explosive crude oil scenario. Indian options The only option for India is to urgently develop an alternate energy model and reduce its dependence on import of crude oil as much as possible. This would be possible only by developing alternate fuels such as algae based fuel and jatropha based biofuel, that are appropriate to the Indian conditions.. Unfortunately, Indian jatropha oil industry is in doldrums today. While several multinational companies are investing millions of US dollars in developing technology for algae based fuel in advanced countries, little efforts have been initiated in India so far. Countries like Denmark are working towards achieving a state of non oil dependent economy. The concern The brain storming session expressed concern about the Indian crude oil scenario and expressed anxiety about the Government of India not paying adequate attention to research and development efforts for developing technology, that would pave way for commercial exploitation of algae based fuel and jatropha based biofuel which are appropriate to the country. The brain storming session also expressed concern that in the budget for the year 2011-2012, even Rs.1000 crores have not been allotted for carrying out time bound research and development efforts on algae and jatropha biofuel, in dedicated R & D centres created for the purpose. It was pointed out that the Indian scientists and technologists have the knowledge level and capability to develop algae based and jatropha based biofuel appropriate to the need, if they would be given the opportunity and encouragement by Government of India.

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GLOBAL OIL PRICE FLUCTUATION WHY AND HOW?

Singapore based Nandini Consultancy (S) Pte. Ltd., has now released an investigative and research oriented publication on Global Oil Price Fluctuation Why And How?, that would provide clarity on the global oil price trend and behaviour, to the millions of investors, professionals and consumers around the world, The book discusses the causes for uncertainty in oil price and the likely futuristic scenario, with number of tables and charts with explanatory notes and investigative analysis.The content is enclosed. Author Mr.Swaminathan Venkataraman is a Chemical Engineer and MBA from Indian Institute of Management, Ahmedabad (IIMA), India with over twelve years of experience in management functions in global multinational organizations in Europe and Singapore. Mr.Swaminathan Venkataraman is presently Director of Nandini Consultancy (S) Pte. Ltd., Singapore. Price & Delivery: US $50 (US Dollars Fifty Only). The payment can be made via wire transfer or credit card. The publication would be sent in the form of hard copy and CD within five days on receipt of the order along with the payment. We look forward to your valued order for the publication.

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[email protected] Nandini Chemical Journal, March 2011


NEW INVESTIGATIVE PUBLICATION ON GLOBAL OIL PRICE FLUCTUATION WHY AND HOW?

CONTENTS

SECTION I Introduction SECTION II History of oil prices

Oil price benchmarks & how do they work ? World energy requirement and projections Oil price history - Period 1947 to 2011 US petroleum consumption and price trend Price drivers for crude oil

SECTION III Crude Oil demand situation

Crude oil demand (estimates by different agencies ) Crude oil demand Countrywise OECD vs non-OECD demand till 2015 Regionwise oil demand growth Oil demand growth Chinas contribution

SECTION IV Oil price supply situation

World oil supply capacity growth OPEC supplies ( 1973 2009 ) Non OPEC supplies ( 1973 2009 ) Global production and spare capacity in OPEC countries Worlds proven oil reserves Expected incremental change in OPEC capacity Non- OPEC supply capacity projection Non- OPEC supply Change by country Unconventional sources of oil

SECTION V Impact of speculation on oil prices SECTION VI Population, GDP and energy intensity

Geopolitical issues SECTION VII Macro currency issues and its impact on oil price SECTION VIII Can oil price be regulated ? SECTION IX How is the world planning to tackle the issue ? SECTION X Indian Crude Oil predicament SECTION IX PROGNOSIS

1Size of the publication : 75 pages


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INDIAN CRUDE OIL OUTPUT TREND According to the survey, the increase in natural gas production is primarily due to production from Reliance Industries operated Krishna Godavari Basin deepwater block. Gas production from KG-D6, which began on April 1,2009, may hit peak output of 80 mscmd in 2012-13. The current production from D6 field is about 53 mscmd. Current Coal Based Methane production is at about one lakh cubic metres a day. Rajasthan Oil Block Crude oil production by the Rajasthan oil block (RJ-ON-90/1) operated by Cairn India was about 3.12 million tonnes up to November 2010. Production from this block is about 125,000 barrels a day. Touching upon the equity oil and gas abroad, the survey says, In view of unfavourable demand-supply balance of hydrocarbons in India, acquiring equity oil and gas overseas is one of the important components of enhancing energy security. The Government is encouraging national oil companies to aggressively pursue equity oil and gas opportunities overseas. The total investment by oil PSUs (OVL, OIL, GAIL, IOC, BPCL and HPCL) overseas is more than $ 13 billion (Rs.59,000 crore), the survey said. The countrys oil refining capacity is estimated to touch 185.40 million tonnes by April, 1,2011, and 238.96 million tonnes by the end of 2011-12.

The Economic Survey for the year 2010-11 says that crude oil output during the current fiscal is expected to be 12.67% per cent higher than the previous year, and natural gas production is projected to be up 12.80 per cent. The production of crude oil is estimated at 37.96 million tonne (33.69 million tonnes ) and the natural gas production including coal bed methane (CBM) for 2010-11 is 53.59 billion cubic metre (BCM), against 47.51 BCM in 2009-10.


STATUS OF ONGCS G1-CS15 FIELD IN ANDHRA PRADESH

The project is significant for more than one reason. Firstly, G1 is the first deepwater field to be developed by ONGC. Secondly, the project envisaged intensive use of new age oil production technology, requiring limited human intervention. Most importantly, the field was slated to produce the first non-APM (administered pricing mechanism) gas for ONGC. However, the development programme had run into rough weather from the word go, leading up to legal contest with the erstwhile project contractor, Clough Engineering of Australia. The legal complications were finally settled in 2010, paving the way for the development of the field. While the revised cost estimates of the G1-GS-15 are not known, it appears that ONGC decided to complete the project at a much higher cost than originally envisaged. The rate of return will be diluted. Last December, ONGC awarded a Rs.80-crore contract to Leighton India, for completion of offshore installations.

ONGC expects the G1-GS15 offshore field in Bay of Bengal to come into production by April-May, -five years behind schedule, and at a higher cost than estimated. Located 20 km off the amalapuram coast in Andhra Pradesh, the field is slated to produce at a peak rate of 2.7 million standard cubic metre of gas and 9,400 barrels of associated oil a day. G1 and GS15 are two marginal fields being developed together. Of the two, G1 is a deepwater field, 20 km from the shore line and GS15 is a shallow water field. Gas was scheduled to start flowing from the integrated field way back in April 2006, at an estimated cost of Rs.1,200 crore.


NEED FOR COMPREHENSIVE NATURAL GAS POLICY

For a project to be bankable, gas supply needs to be assured. In some cases, the argument has been turned on its head: first build the project, and then we will see if gas can be allocated. This is illogical.

The system needs to be made more transparent and encouraging downstream investment.

Need for natural gas grid

There is a view that for a gas market to develop, a national gas grid with trading hubs has to be developed.

But for a commercial entity to put up a gas pipeline (leave alone a national grid)there has to be an assurance of supply, consumption and a reasonable pipeline tariff. It would seem more logical for individual pipelines to develop over time to be eventually linked to organically form a grid, instead of building a gas grid in anticipation of supply .

In its judgment on the Ambani dispute, the Supreme Court has said that the Government of India must come out with a comprehensive policy on natural gas.

Companies that discover oil enjoy a tax holiday but the same is not true for gas. When companies drill, they find either oil or gas or both. It seems unfair that those who discover oil get a tax benefit and those who discover gas do not.

Allocation policy lacks logic

The allocation policy of gas from the K-G basin, as formulated by the empowered group of ministers, leaves it open to interpretation.

For example, within a sub-sector, if there are competing requirements, who gets the priority?


NEED FOR COMPREHENSIVE NATURAL GAS POLICY

Role of regulator

The role of regulator too needs to be looked into.

The Petroleum and Natural Gas Regulatory Board Act gives the board limited powers and even these have caused a turf war between the government and the board, leading to delays.

While, the PNGRB Act was notified on October 1, 2007, section 16 was not notified. The section authorises the regulator to approve laying, building, operating or expanding a city or local natural gas distribution network.

Though the board had issued licences in six cities, it could not proceed with the bids for seven other cities following a restraint order by the Delhi High Court. The Union law ministry subsequently cleared a petroleum ministry proposal to notify section 16.

Apart from preventing such long delays, there is a need to give more teeth to the regulator if it is to function effectively.

Tariff

Meanwhile, in a positive development that the PNGRB has announced revised zone-wise tariffs for the main HBJ transmission pipeline and the newly constructed East West gas pipeline.

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NEED FOR NATURAL GAS PIPELINE GRID India has not paid due attention to developing a pipeline network because of the domestic gas scarcity. The poor pipeline system has now become a serious obstacle to implementing the government's plan to encourage the consumption of natural gas. LNG imports have helped India cut the gap in demand and supply of natural gas in recent years. However, plans to step up LNG imports are constrained by inadequate pipeline network. Now the risk is that India's ambitious plan to boost its energy security by undertaking shale gas exploration might also trip over the pipeline constraint. Availability of transportation infrastructure is the key to the viability of shale gas production. That aside, transportation infrastructure is also a critical factor in creating a competitive gas market. In the absence of a well-developed transportation network, consumers have little choice. GAIL and some private companies are involved in laying cross-country pipelines. However, the development of basic gas pipeline infrastructure cannot be left to entities operating on commercial considerations. They are unlikely to lay pipeline in areas where there is not much demand. The government should come forward to shoulder the responsibility of developing basic gas transportation infrastructure rather depend on corporates. The government has envisaged a national gas highway authority to develop cross-country gas pipelines. But unfortunately, there is not much progress in implementing the proposal. Besides, the government also needs to offer fiscal incentives to encourage shale gas production in the same way as it provides for non-conventional energy sources like solar and wind.

The Government Of India is working on a regulatory regime for shale gas exploration. India must also develop a gas transportation network if it is to exploit its shale gas potential optimally. What is important is that areas with commercially exploitable shale gas reserves should be identified and connected with a pipeline network on a priority basis.


POWER PROJECTS TO FACE DELAYS IN GAS ALLOCATION With output from domestic gas sources falling below expectations, the ministry is re-drawing the list. RILs KG D6 block, which was supposed to generate 80 mmscmd of gas this year, has reduced production to below 60 mmscmd. Those projects whose environment clearance process has either not begun or are at a very initial stage could be dropped from the priority list. The group of ministers (GoM) on gas allocation had provided fuel linkages to existing and stranded power and fertliser plants based on this level of output in 2009. With production of gas falling below the expected levels, even these projects are finding hard to get their full quota of gas.

The Government of India plans to further prune the list of power projects identified for priority allocation of domestic gas in the wake of perceived shortage in production, especially from Reliance Industries Krishna-Godavari D6 block. The move could impact the fortunes of 10 power projects including those of the biggest players in the sector like Reliance Power, Torrent, Lanco, GMR and GSPC which featured in the priority list of the power ministry last year. All these companies have committed to complete their respective projects in record time, by the end of 11th Plan, to get allocation of domestic gas.

The ministry of power has asked all the companies on its priority list to provide specific time frames by which their plants would get final environmental clearance. Based on this information, the ministry proposes to remove a few projects from the initial priority list which will be given to the petroleum ministry for gas allocation.


POWER PROJECTS TO FACE DELAYS IN GAS ALLOCATION On an expected output of 60 mmscmd from D6, the government has already made firm allocation of 63.715 mmscmd. Now, the power sector gets 31.1 mmscmd and the fertiliser sector gets 15.5 mmscmd, while the rest goes to sectors like petrochemicals and city gas distribution.... The GoM is expected to meet again now to allocate gas to the next set of customers (new power plants and other fertiliser units). But its meeting was postponed several times last year as there is no clarity on gas availability for allocation to new projects. Project of priority list companies On its part, the power ministry has already got the projects of priority list companies examined by Central Electricity Authority (CEA) to ascertain their level of preparedness for completion by March, 2012. In a recent report presented to the power ministry, CEA said that while work on all 10 projects is moving quickly, a few projects were progressing slowly. The delay in getting environment clearances and scheduling equipment supply could push projects to the 12th Plan period. Projects awaiting for gas allocation * Reliance Power: Samalkot * RVK:Godavari (E) * Panduranga: Godavari (W) * GSPC Pipavav * GMR Vemagiri * Gujarat State Energy Generation Hazira * Pragati Power Bawana Power project * Lanc: Kondapalli * Kashipur Uttarkhand * Torrent power: Dahej Reliance Industries Ltd As per the CEA report, Reliance Powers 2400 MW Samalkot project in Andhra Pradesh has made impressive progress with its 1200 MW units already getting environment clearance. Clearance for its remaining 1200 MW is expected shortly, with TOR already cleared. Equipment has been ordered and the company is in full possession of land needed for the project. RVK Energy But RVK Energy is yet to get MoEF clearance for its 436 MW gas project in Andhra Pradesh, with CEA noting that strict monitoring will have to be done to complete the project during the 11th Plan period.


POWER PROJECTS TO FACE DELAYS IN GAS ALLOCATION

Panduranga project Similarly, the 100 MW Panduranga project has secured clearance for its project from state-level environment impact assessment authority, but is yet to get it approved by MoEF. Torrent Power One of the units of the 1200 MW DGEN project of Torrent Power also needs MoEF nod. Apart from the projects mentioned earlier, private sector power utilities awaiting gas supply for their new projects include... GSPCs 700 MW Pipavav power project, Gujarat State Energy Generation Ltds 350 MW project at Hazira, Pragati Power Corporations 1,000 MW Bawana power project, Lancos 740 MW Kondapalli Phase III, GMRs Vemagiri expansion project, Uttarakhands Kashipur project. In all, the 10 projects need about 30 mmscmd of gas to run plants at 70-75% of capacity. The government has projected that gas availability will increase from present 142 mmscmd to 152 mmscmd by 2011-12 and further to 186 mmscmd.

ALL INDIA ESSAY COMPETITION FOR COLLEGE STUDENTS

ON INDIAS ENERGY NEEDS AND OPTIONS BY 2020

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Indias energy needs are steadily going up but the energy generation is not being stepped up in tune with the growth in demand . There are serious feedstock issues facing energy plants. India has to work out its appropriate action plan in tune with the countrys strength to tackle its energy needs and avoid energy crisis by 2020. The objective of the competition is to encourage the college students to think on the subject and provide them an opportunity to give their views and suggestions for the consideration of the government and industries.

Details of the competition :

Size of the essay : Maximum 2000 words Language: English Eligibility: College student studying at UG and PG level Prize: Best five entries would be selected for award Last date for submission of the essay: 30th March 2011 For further details please contact:

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CAPACITY ADDITION IN CEMENT INDUSTRY This fiscal, cement companies have added 24 million tonnes till October with another 20.9 million tonnes scheduled to be wrapped up by the end of this fiscal. In the process, the cement capacity in India will be 301.6 million tonnes, up from 257 million tonnes in 2009-10. Capacity utilisation The industry's capacity utilisation currently hovers around 78 per cent, down from 87 percent last fiscal. It may fall to 77 per cent in 2011-12. Demand trend Factoring in the moderate 5 per cent increase in sales in the first half coupled with the average GDP growth estimate of 7.5 per cent in the next two years, the demand for cement may at best rise to about 9.5 per cent, said a company official. The fall in demand during the last few months has largely been due to the slowdown in the housing sector which accounts for about 65 per cent of cement consumption. Real estate companies had to go slow on projects as bank borrowings have turned costly. Demand for cement from sectors such as road, railways, ports and power projects is expected to improve with the Centre planning to invest about Rs 4,60,000 crore in the twelfth Plan (2012-17).

Company Region Capacity addition (million tonnes) Chettinad Cement South 2.2 Madras Cement South 2 Kaypee Group South 3.5

JSW Steel South 1.5 SAIL-JP Associates East 2

Birla Corp East 0.6 Century Textiles East 1.5 Jaypee Group North 1 Biral Corpo North 1.2

Mangalam Cement North 1.5 ABG West 3.3

JK Lakshmi Cement Central 0.5 Century Textiles Central 2.5

The cement industry is expected to add 23.3 million tonnes of capacity in 2011-12 with the southern region accounting for a lion's share of 9.2 million tonnes. The East is next with 4.1 million tonnes while the north will see 3.7 million tonnes being added. The western and central regions are not too far behind with 3.3 million tonnes and 3 million tonnes each.


PROGRESS OF INDIAN BIOTECH SECTOR From the Indian standpoint, the size of the biotech industry as of 2010 was about $3 billion and this is poised to grow five times more by 2015. Reforms in biotech regulations globally will enable domestic players to fiercely compete in the bio-generics market which is close to $70 billion (from drugs coming off patent) and this is likely to trigger more mergers & acquisitions. Demand drivers At present, Indias share in the global biotech segment is very small. However, due to several advantages, the country is likely to catapult its share to 15% by 2020. One of the key advantages is its bio-diversity. The country has one of the largest agriculture sectors in the world, and varied climatic zones that can help in research and development of different agri-biotech products applicable worldwide.

Global biotech market is close to $300 billion with several fragmented players. But massive consolidation drive has already begun due to dry discovery pipelines of incumbent pharma players. Sanofi taking over Genzyme for $20 billion is the most recent example. Though, at present, Indias share in the global biotech segment is very small, but by 2020 it is expected to increase substantially.

Structure of Indian biotech industry At present, segment broadly comprises of bio-generics, bio-pharma, contract research (CRAMS), bio-agriculture, bio-industrial and bio-informatics. Bio-pharma sector contributes about 60% of the total revenues. Also, the country is one of the largest vaccine producers in the world and key player in the affordable healthcare space.


PROGRESS OF INDIAN BIOTECH SECTOR Heterogeneous patient population, a large English speaking population, largest number of Food and Drug Administration approved plants outside the US are some of the advantages. In medicine, this field has become an integral part in diagnostics, gene therapy, clinical and contract research and trials, bioactive therapeutic, stem cell research, genetic engineering and in the development and production of new drugs for treating various life threatening diseases. Initiatives of the government There are several initiatives taken by central and state governments. Department of biotechnology has BIPP and SBIRI schemes in addition to several other funding avenues. State governments have set up their own venture capital to fund bright start-ups. Also, many philanthropic funding avenues such as Gates Foundation, TB Alliance, Wellcome-DBT Trust are likely to boost innovation. Plans of Evolva Biotech Evolva Biotech is a cutting edge synthetic biology company with diversified applications in many avenues that can improve human wellbeing. Evolvas Synthetic biology is all about creation of artificial pathways and organisms that does not occur presently. The companys business model rests on partnering innovative projects with key players in each of the domains. Evolvas drug pipeline has relevance to a number of diseases prevalent in this region. This includes a broad area from TB to Onychomychosis to Dengue and Malaria. Evolvas molecules have tremendous application here. Since there are no players in India in the synthetic biology segment, a lot of the competition has to come only from very developed countries like the US. This in a way puts Evolvas Indian operations ahead of the curve. We have recently announced our collaboration with Roche on novel cancer and anti-infective targets; with International Flavours and Fragrances (IFF) on bio-flavours.

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FERTILISER SUBSIDY RATIONALISATION PLANS FACING UNCERTAINTY

The Department of Fertilisers of Government of India had, on November 19, announced sharp cuts in subsidy rates on individual nutrients nitrogen (N), phosphorus (P), potash (P) and sulphur (S) that go into various non-urea fertilisers, with these effective from April 1, 2011 (i.e., the ensuing fiscal). Similarly, for muriate of potash (MOP, with 60 per cent K), the subsidy would fall from Rs 14,692 to Rs 12,831, just as it would for other fertilisers covered under the nutrient-based subsidy (NBS) regime instituted from the current fiscal. But with the hardening of international prices it looks certain that the proposed higher subsidy rates will not take effect from 2011-12 The NBS rates for the current fiscal were benchmarked to landed prices of urea (for N), DAP (for P), MOP (for K) sulphur (for S), which were taken at $310, $500, $370 and $190 a tonne, respectively. For arriving at the 2011-12 NBS rates, the benchmark global prices were assumed at lower levels of $280, $450, $350 and $125 a tonne. These rates were totally unrealistic vis--vis the prevailing international prices. Imported urea today will not land at below $ 400 a tonne, while it would be $620 for DAP, $420 for MOP and $220 for sulphur. If the concession rates are set way below these levels and companies are also not allowed to charge higher farm-gate prices, there will be no incentive to import. That could impact availability for the new kharif planting season. The situation could be serious in DAP, where not a single grain has been contracted so far.

The concession on N was slashed to Rs 20.111 a kg (from Rs 23.227), with these correspondingly being lowered from Rs 26.276 to Rs 20.304 for P, from Rs 24.487 to Rs 21.386 for K and from Rs 1.784 to Rs 1.175 for K. If the proposed subsidy rates were to be implemented from the coming fiscal, the concession payable to companies on di-ammonium phosphate (DAP) containing 18 per cent N and 46 per cent P would stand reduced from Rs 16,268 to Rs 12,960 a tonne.


FERTILISER SUBSIDY RATIONALISATION PLANS FACING UNCERTAINTY Keeping these in view, a Group of Ministers under the Union Finance Minister, is understood to have raised the benchmark prices for computing the NBS rates for 2011-12 to $350 a tonne for urea, $580 for DAP, $390 for MOP and $180 for sulphur. Based on the revised benchmark prices, the new NBS rates (which are yet to be notified) are likely to be Rs 27.366 a kg for N, Rs 29.372 for P, Rs 24.577 for K and Rs 1.69 for S. The subsidy on each tonne of DAP and MOP sold would, accordingly, work out to Rs 18,437 and Rs 14,746. These are higher than even the existing levels and would, in turn, translate into increased fertiliser subsidy outgo for the Centre. Fertiliser Subsidy Rates

01.04.2010 01.04.2011* 01.04.2011+ Di-Ammonium Phosphate 16,268 12,960 18,437

Mono-Ammonium Phosphate 16,219 12,770 18,284 Triple Super Phosphate 12,087 9,340 13,511

Muriate of Potash 14,692 12,831 14,746 Single Super Phosphate 4,400 3,378 4,885

16:20:0:13 9,203 7,431 10,473 20:20:0:13 10,133 8,236 11,567 23:23:0:0 9,901 8,083 11,348 23:23:0:0 11,386 9,295 13,050 28:28:0:0 13,861 11,316 15,887

10:26:26:0 15,521 12,850 16,763 12:32:16:0 15,114 12,332 16,615 14:28:14:0 14,037 11,495 15,496 14:35:14:0 15,877 12,916 17,552 15:15:15:0 11,099 9,270 12,197 15:15:15:9 11,259** 9,376 12,349 16:16:16:0 11,838 9,888 13,010 16:44:0:0 - 12,152 17,302

17:17:17:0 12,578 10,506 13,824 19:19:19:0 14,058 11,742 15,450 24:24:0:0 11,881** 9,700 13,617

Ammonium Sulphate 5,195 4,413 6,026

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KRAFT PAPER MILLS FACING DIFFICULT TIME The kraft paper mills in South India, which provide direct and indirect In view of the steep increase in the input costs, the industry body is also urging the Union Government to abolish customs duty of 5.2 percent and countervailing duty of 4 percent to help them keep their heads above water. There are about 100 kraft paper mills in South India, producing over 10 lakh tonnes of kraft paper, annually. The cost per tonne of imported raw material has increased from about Rs.9,700 to over Rs.16,400 i.e. 69 percent and the cost of raw material in the local markets has increased from Rs.6,200 to Rs.10,200 (64 percent) per tonne, during the last 12 months. Besides, the cost of chemicals, power and other input materials have also followed the suit. In addition, due to continuous power cuts, the financial cost has also gone by 3 percent, due to poor capacity utilization. While the mills across India have been forced to increase their product prices by Rs.7,000 to Rs.7,250 per tonne, the mills in the South have increased the prices only by Rs.3,500 to Rs.4,000 per tonne (from February 2010 to December 2010), about 20 percent of the price level that prevailed during October 2009, he said. But this trend cannot continue due to the adverse raw material market scenario. The mills are severely fighting against the odds and are driven to increase the Kraft paper price as stated above, in order to fund the procurement of the raw material, at the prices unforeseen. Since the indigenous procedure of fibre collection is not optimal, there is a severe shortage of raw material in the local market and hence, the Indian Kraft paper mills have to import raw material from other countries.

The kraft paper mills in South India, which provide direct and indirect employment to over 3 lakh people are severely hit by not only the spiraling input costs, but also the shortage in raw materials. As a result, the mills would be forced to increase the selling price of the kraft paper, by Rs.2000 to Rs.3,000 per tonne.


SYNTHETIC SUBSTITUTES FOR COSTLY COMMODITIES The two main forms of synthetic rubber used by the industry are the Styrene Butadiene Rubber (SBR) and Poly Butadiene Rubber (PBR). The prices of these two products, made through crude refining, were at Rs.110 per kg and Rs.124 per kg respectively in the last quarter of the previous fiscal while natural rubber cost Rs.150 per kg during the same period. Synthetic vanillin Synthetic vanillin emerged as a popular choice among food companies ever since natural vanilla prices skyrocketed to Rs.3,500 per kg some years ago. Though natural vanilla prices have dropped below Rs.100 level now, the hold of synthetic vanillin is still strong. While natural vanillin is priced around Rs.30,000 per kg, the synthetic one is as cheap as Rs.800 to Rs.1,000 per kg. Though just a fourth of natural vanillin is needed for producing the same effect, the cost still works out to be higher. Moreover, the synthetic ones are user-friendly.

Skyrocketing commodity prices have spurred user industries to opt for cheaper synthetic substitutes.

Turmeric High turmeric prices have made natural curcumin (turmeric extract) expensive, leading to the development of synthetic substitutes. The cost of synthetic curcumin is 30 to 40% lower than the natural ones. Natural curcumin prices have shot up from $30 to 40 per kg to $180 per kg before dropping to around $125 per kg.

Synthetic rubber Rubber-based industries consumption of synthetic rubber has been increasing due to the sustained rise in the prices of natural rubber. The tyre industry used synthetic rubber instead of natural rubber in 27% of its total consumption in 2008-09 and the share of synthetic rubber has risen to 33% in 2010-11. Natural rubber prices, which were in the range of Rs.100-115 per kg in April 2008, have touched Rs.240 per kg this month.


INDIAS APPROACH TO PHASE OUT HFCs India is attempting a creative solution to the problem of phasing out the use of hydrofluorocarbons (HFC). At odds with the US and European Union, who want to see the substance included under the Montreal Protocol, India has suggested focusing on practical ways to address the issue rather than concentrating on which legal instrument to use. European Union and the US argue that the Kyoto Protocol, which sets binding emission cutting targets for industrialised countries, is not the right instrument to address the problem arising out of the use of HFCs as it is an ozone depleting substance. These countries would like HFCs to be listed under the Montreal Protocol, which is the international agreement to phase out the use of ozone depleting substances to protect the earths ozone layer. India doesnt agree with this position. As part of its efforts to craft a practical approach to phasing out these potent greenhouse gases, India will discuss the issue with China, South Africa and Brazil at the BASIC meet in New Delhi. India has suggested a four-fold approach to the phase out HFCs. This approach would go beyond the current discussion, which is focused on the appropriate international legal instrument. HFCs are chlorine-free substitutes, which were developed in the 1980s to replace ozone-depleting (and chlorine containing) gases such as CFCs and HCFCs. HFC is currently listed in the Kyoto Protocol as one of the greenhouse gases whose production needs to be limited to prevent global warming. Indias four-fold approach includes action at the multilateral level, through for example, new or modified international treaties and multilateral funds. Second, action at the bilateral level. Third, action at the national level, through autonomous actions, national-level regulations and incentives. Fourth, action at the industry to industry level, where there are enormous opportunities for technology development and co-operation, with US companies in particular. India is taking steps as part of its energy efficiency agenda through the Bureau of Energy Efficiency. The government is of the view that India could emerge as a technology supplier, through indigenous development and joint ventures, especially as the bulk of the incremental market will be in India. Government of India recognises that while HFCs provide a solution in terms of ozone depletion, it presents a problem from climate change perspective given the high global warming potential. Recognising the seriousness of the issue,

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RECENT TRENDS IN NANOTECHNOLOGY According to Prof George Whitesides of Harvard University, the latest nano technology research is in quantum dots, new catalysts, materials for energy storage and generation, super capacitors, grapheme, shaped nanoparticles, biologically derived nanoparticles (think of the ribosome - this year's Nobel Prize in chemistry - as a catalytic nanoparticle), and magnetic nanostructures for information storage. The great success of nanotechnology is of course in electronics. Rods of silicon, when reduced to nano size, show bizarre properties. These nano wires are so thin that current flow can be easily manipulated. They also act as heat absorbers. These properties make them very useful as sensors, even for measuring biological processes like infections . J Fraser Stoddart's lab at Northwestern University (TOI corresponded with him too) has combined gold nano particles with DNA strands to assemble different shapes. These hold the potential of being used for targeted delivery of drugs to chosen sites. Nanotubes are harder to break than steel, and are totally flexible. They are being investigated for data storage, because they function like semi-conductors, switching on and off at your command. Researchers at Rice University have tried to develop systems that could ultimately be used as tiny hard drives in cameras and PCs, making for even smaller top-end gadgets.

Nanotechnology is predicted to be a $2.6 trillion market by 2014. Forty countries, including the US, China, most of Europe and India are investing in it as a key to global economic competitiveness. The most common commercial use of nanoparticles is to make coatings (self-cleaning windows, pollutant absorbing paint), bodycare products and electronics.


NANOSHEET TECH MAY OFFER MEGA ENERGY GAINS " Of the many possible applications of these new nanosheets, perhaps the most important are as thermoelectric materials," he said in a statement about the findings. He said the materials could for example be made into devices that generate electricity from waste heat lost from places like gas, oil or coal-fired power plants, which lose between 50 and 70 percent of the energy they produce in waste heat.

A novel way of splitting materials into sheets just one atom thick could lead to new electronic and energy storage technologies. An international team of researchers said they had invented a versatile way to create one atom thick "nanosheets" from a range of layered materials, similar to the graphite used in pencils, using ultrasonic pulses and common solvents. The new method is simple, cheap, fast, and could be scaled up to work on an industrial scale, the scientists said in a report of their work published in the journal Science.

"Because of its extraordinary electronic properties graphene has been getting all the attention...as physicists hope that it might one day compete with silicon in electronics," said Valeria Nicolosi, of Britain's Oxford University, who led the study with Jonathan Coleman of Ireland's Trinity College Dublin. Coleman said the new materials this team had created which include Boron Nitride, Molybdenum disulfide, and Bismuth telluride have chemical and electronic properties which make them suitable for use in new electronic devices, super-strong composite materials and energy generation and storage.


NANOSHEET TECH MAY OFFER MEGA ENERGY GAINS "The development of efficient thermoelectric devices would allow some of this waste heat to be recycled cheaply and easily," Coleman said. These new materials could also be used in next generation batteries known as "super capacitors," which can deliver energy thousands of times faster than standard batteries and could vastly improve technologies such as electric cars.

***** A single water molecule is less than a nanometre wide, while some of the littlest bugs are 200 nanometres. Working with a specific block co-polymer, a University of Buffalo team has synthesized a new kind of nanomembrane containing pores about 55 nm wide, large enough for water to slip through, but too small for bacteria, reports the journal Nano Letters.

Nano solution for safe water A new nanotechnology is likely to make drinking water a lot more safer and keep infections at bay by filtering out deadly bugs at the source. Both water molecules and bugs are so tiny that they are measured by the nanometre, 100,000 times thinner than a human hair.But at the microscopic level, the two actually differ greatly in size.

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THE KYOTO PROTOCOL EXPIRES IN 2012 NEED FOR GOVERNMENT STRATEGIES

Since lighting accounts for 22 percent of Indias total electricity use, replacing incandescent lamps would make a significant dent in energy consumption. However, CFL penetration in India is very low, less than 5 to 10 per cent in households primarily because of the initial cost barrier. CFL lamps cost 8 to 10 times more . Carbon credits & CFL costs Bureau Of Energy Efficiency has been putting out several press releases touting BLY project as the worlds largest carbon credit project (expecting to accrue four million credits). This post-2012 risk combined with the complexity of programmatic CDM (pCDM) (UN has significant monitoring and verification requirements for pCDM under which BLY has registered this scheme) presents significant hurdles and creates uncertainty regarding timing, volume and probability of delivery. Lamp duration, replacement cost According to the BEEs own current estimates, it will take at least 5 to 6 years to recover initial cost of CFL bulbs (earning some returns only from the seventh year onwards), assuming CFL lamps last that long. CFLs may not last that long due to various reasons, including power fluctuations in the grid etc. CFL bulbs typically last for 6,000 to 10,000 hours or 2 to 3 years for energy savings required under the scheme. The project makes no provision for cost of replacement bulbs; in effect, two-three bulbs would be needed for 4 to 6 years, by the time the cost of the first bulb alone would be recovered. Also ignored are costs of damaged bulbs and what happens if a bulb is defective? It is also necessary to consider why LED lamps excluded by the scheme when a 5W LED consumes less than 50 per cent of the energy consumed by a CFL bulb (14.6 Kwh vs 32.12 Kwh per annum for a 11W CFL).

CFL lamps Every few months, Bureau of Energy Efficiency announces implementation of the Bachat Lamp Yojana (BLY). The BLY promises to save India `17 billion or 400 MW of energy by replacing incandescent lights that waste 95 per cent electricity with compact fluorescent light (CFL) lamps.

It remains unclear whether carbon credits will exist after 2012 when Kyoto Protocol expires.


CARBON FIBRE

INVESTMENT OPPORTUNITY Many different grades of carbon fibre are available, with differing properties, which can be used for specific applications. The different composites include

Carbon fibres reinforced Plastics / Carbon fibres reinforced thermo plastics

Composite of Carbon fibre in a carbon matrix Carbon fibre reinforced ceramic

Classification of carbon fibre Carbon fibres are classified into the following two categories:

Regular or small tow (RT) Large tow (LT)

Regular Tow and Large Tow are distinguished by number of filaments and the tensile modulus of the fiber. Regular Tow and Large Tow are used in accordance with the requirement of specific characteristic of the product.

Carbon fibre is a long, thin strand of material, about 0.005 to 0.010 mm in diameter and composed mostly of carbon atoms.

The carbon fibre composites are formed combining carbon fibres with a resin matrix (examples include epoxy. polyester, themoplastic, vinyl ester, phenolic types etc). The carbon fibre is the primary load carrier and the resin matrix supports the fibres and transfers the load between fibres. Several thousand carbon fibres are twisted together to form a yarn, which may be used by itself or woven into a fabric. The yarn or fabric is combined with epoxy resin and wound or molded into shape to form various composite materials.


CARBON FIBRE - INVESTMENT OPPORTUNITY Type of carbon fibre Carbon fibers are manufactured by treating organic fibers (precursors) with heat and tension, leading to a highly ordered carbon structure. The precursors include rayon-base fibers, polyacrylonitrile (PAN), and pitch.

PAN based carbon fibre PITCH based carbon fibre Rayon based carbon fibre

Application A variety of commercial applications have emerged including commercial aircraft, sporting goods and industrial applications. Aerospace / Defense Carbon fibre is key constituent in advanced composite materials, which are used in demanding aerospace applications. It provides better maneuver ability to the aircraft. The important parts where carbon fibre is used include the following Aircraft brakes Brakes become lighter and have better heat dissipation due to the excellent thermal conductivity. It is increasingly being used in the brakes of aircraft. Compared with conventional steel discs, carbon fibre brakes last four times longer and offer high braking performance. Braking performance is not diminished even after repeated braking. Aircraft wings (Rotary wings, Fixed wings) - Rocket nozzles and Missile Heat Shields -

Excellent resistance to thermal shock Artificial satellite

Increased payloads are possible due to weight reduction. Higher antennae can be made due to the high stiffness property


CARBON FIBRE - INVESTMENT OPPORTUNITY Sports goods Carbon fibre is being used in the brakes of formula one and other motor sport brakes and clutches in high performance road cars. The extreme surface of hardness of carbon fibre also ensures that the brake discs are unsusceptible to solid and liquid road salts as well as to corrosion and rust. Sports goods provides better performance from lighter yet stiffer sports items such as

Rackets (Tennis Rackets, Badminton Rackets, Squash Rackets) Golf goods (Golf Club Shafts, Club Heads, Face Plate etc) Fishing rods Boats Bicycles Racing cars.

Medical Carbon fibre provides the advantage of inertness and biocompatibility as well as absence of tissue reactions Due to properties of carbon fibre composites, orthopaedic implant failures can be eliminated, as it is more resistant to fatigue than metal and is elastic to allow some movement. Use of carbon fibre in medical application include

Implants of bone plates and hip joints (internal fixation of fracture Orthopeadic implant)

Cardiovascular (e.g. artificial heart valve), Ligament replacements, Medical equipment such as wheel chairs, parts of body scanners, x-ray

tables etc. Process outline Carbon fibres are typically produced by spinning and then thermally carbonizing one of the precursor fibers Depending on the type of precursor and the processing method, the finished carbon fibre will have different micro structure and therefore different properties.


CARBON FIBRE - INVESTMENT OPPORTUNITY Around 90 percent of all commercial carbon fibres are produced by the thermal conversion of PAN precursor fibers. Commercially available PAN fibers are used as precursors to produce carbon fibres in large tow counts, having up to 24k filaments. Indian Import Around 3 metric tonnes Indian Export Nil Indian manufacturer Kemrock Industries and Exports Ltd Vadodara based, Kemrock Industries and Exports Ltd. (KIEL) inaugurated a carbon fibre plant the first in the country in May,2010 . However, the plant is still reported to be under trial run. Global demand supply scenario Global Installed Capacity

Type Capacity in tonnes per annum

PAN carbon fibre 41546 Pitch carbon fibre 1074 Total 42620

Global demand 33060 metric tones per annum Demand drivers Aerospace is a key market. The new supersized passenger jets, the Airbus A380 and the Boeing 787, both use significant quantities of epoxy resin impregnated with carbon fiber, or carbon fiber-reinforced plastic (CFRP), as a primary structural material. Growth in demand for carbon fiber will also be driven by use in small to medium-sized jet passenger planes. For example, Mitsubishi Heavy Industries plans to use CFRP for the main wings and tail assembly of the Mitsubishi Regional Jet (MRJ), now in the pipeline and expected to reach the market in 2013. Consumption by other manufacturing industries is growing even faster, by about 15% per year.


CARBON FIBRE - INVESTMENT OPPORTUNITY Toho Tenax estimates demand from these sectors growing, driven primarily by the growth of applications such as increasingly large wind-turbine blades and pressure vessels such as those used in compressed natural gas tanks. Cars are another promising area. CFRP drive shafts, spoilers and hoods are already used in the automotive industry, but principally in luxury models because of cost factors. However, they are likely to find their way into standard models as stricter fuel economy regulations push the need for weight reduction. Use of CFRP in sporting gear such as golf-club shafts and tennis racquets growing by 5% per year, according to Toho Tenax. Growth in demand: 10 to 12% per annum Global manufacturers include the following :

Name of the Company Location Tonnes per annum Asia

Toray Industries, Inc Ehim, Japan 4700 Toho Carbon Fibres (Toho Tenax) Japan 4300 Mitsubishi Rayon Grafil Inc Japan 3,200 Zoltek Hungary 800 Formosa Plastics Mailiao, Yunlin, Taiwan 1850 Mitsubishi Chemical Japan 500 China Worldbest Group (CWG) and Anhui Bengbu Corduroy Group Co. Ltd. and CWG holds a share of 90%.

Bengbu, China 200

Nippon Graphite Japan 120 15,670

America Toray Carbon Fibres America, Inc Decatur, AL, USA (Recently

expanded the capacity from 1,800 tonnes per annum to 3,600 tonnes per annum.

3,600

Toho Carbon Fibres Menlo Park, California, USA 3400 Mitsubishi Rayon Grafil Inc U.S 1,500 Zoltek USA 3200 Hexcel USA 2300 Cytec Greenville, South

Carolina,US. 2539

Carbon Fibre Technology LLC (CFT) 50%-50% Joint Venture between SGL and Aldila Inc.(San Diego/California)

Evanston, Wyoming, USA 1000

Ballard Material Products USA 91 17450

Europe Toray Carbon Fibres America, Inc France (SOFICAR) 2600 Toho Carbon Fibres / Toho Fibres Germany, Europe 1900 SGL Inverness,Scotland, UK 5000 Total 9500


CARBON FIBRE - INVESTMENT OPPORTUNITY Carbon fibre market share

Cytec15%

Others5%Hexel

25%

Toray42%

Toho13%

Toray Industries Toray Industries says that its Toray Advanced Materials Korea subsidiary will build a carbon fiber plant at TAKs manufacturing site at Gumi, Korea. The plant, which will require an investment of won63 billion ($57 million), will have production capacity for 2,200 metric tonnes per year. Construction is expected to begin early this year and the plant is due to onstream in January 2013. The new plant will produce standard modulus carbon fiber used in industrial and sporting goods applications. TAK established a dedicated carbon fiber sales and marketing unit in January 2010 as part of efforts to develop and tap into the growing demand for carbon fiber in Korea. Toray announced that it would resume work on a previously expansion of the companys carbon fiber production facility at Masaki, Japan. The expansion, through the construction of a new production line, will add 1,000 metric tonnes per year of capacity for special small tow carbon fibers, and it will involve an investment of about 16 billion ($194 million). Toray expects the additional production line to be on stream in September 2012. Toray originally announced the expansion in 2008, and the new production line had been due to start operating in July 2009. The additional production line in Japan will increase Torays carbon fiber production capacity to a total of 18,900 metric tonnes peryear, and the Masaki plant will account for 8,300 metric tonnes peryear of that figure.


CARBON FIBRE - INVESTMENT OPPORTUNITY Toray signed an agreement with aerospace company EADS to supply carbon fiber prepregs, primarily to Airbus, through 2025. Toray in April 2010 established a Torayca Reinforced Plastics department aimed at expanding the companys carbon fiber reinforced thermoplastic compounds business. Torayca is Torays carbon fiber brand. Mitsubishi Rayon,Japan Mitsubishi Rayon made a move in July 2010, resuming construction of a carbon fiber plant at Otake, Japan. Construction had been halted temporarily in March 2009 due to the severe business environment and the downturn in the carbon fiber market. The plant, which had originally been due onstream in the fourth quarter of 2009, is now expected to start up in the second quarter of 2011. Mitsubishi Rayon will invest 12 billion for the project and the plant will have capacity to produce 2,700 metric tonnes per year of carbon fiber. New Projects Under Planning / Implementation

Name of the company Tonnes per annum Kingfa Sei & Tech Co. Ltd., China 2000

Sichuan Xinwanxing (Group) Ceramics Co Ltd,China

1000

Jilin Petrochemical,China 100 China Composites Shenying Carbon Fiber

Co Ltd, China 10000

Zhongfu,China 2000

Important suppliers for aerospace industries US-based aerospace materials firm Cytec Industries which, with compatriot Hexcel and Japan-based Toray is one of the three main suppliers of carbon fiber composites to the aerospace market, expects aircraft build rates in 2009 to plateau. Cytec was recently awarded a seven-year, $750m (594.8m) contract to supply carbon fiber composites to Lockheed Martin for the US Air Force's F-22A and the F-35 fighter jets. The F-35, also known as the Joint Strike Fighter, has the potential to be the largest defense program over the next decade.


CARBON FIBRE - INVESTMENT OPPORTUNITY Cytec regularly competes with Hexcel and Toray for large supplier contracts. In May 2008, Hexcel was awarded a $4bn contract by Airbus to supply carbon fiber composite materials for its entire line of A350 aircraft until 2025. The A350 passenger jet is made up of 60% composite material. Prognosis Carbon fibre is a vital product of strategic importance. The demand for the product is likely to go up steadily in the coming years, in view of the variety of applications of the product. The project proposal should consider carbon fibre of various grades based on strategic marketing plans.

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ETHYL SILICATE- PRODUCT PROFILE Appearance: Colourless transparent liquid Odour With irritating smell Chemical formula Si (OC2 H5) 4 CAS Number: 78-10-4 . Solubility Insoluble in water, soluble in ethanol slightly soluble in benzene. Boiling Point: 168.1 deg.C Density( 20)g/cm3: 0.929-0.934 Specific Gravity at 20 deg. C 0.930-0.940 Stability The product is stable and incompatible with strong oxidizing agents, water, alkalies, mineral acids Specification Monomer content 96% min Silica Content by wt. as SiO2 28 Iron 0-5ppm Acidity (as HCl)


ETHYL SILICATE- PRODUCT PROFILE Use in paint sector Zinc-ethyl silicate primer is prepared from zinc dust pigments and an intimate mixture of ethyl silicate, monoethanolamine and zinc chromate. Zinc-rich inorganic coatings based on ethyl silicate give corrosion protection, chemical resistance, heat resistance, abrasion resistance, welding and cutting properties. Zinc ethyl silicate are used for the protection of steel against corrosion under severe exposing conditions such as underground, marine atmosphere, industrial atmosphere, nuclear power plants, high temperature etc. Use in investment casting When properly hydrolyzed, ethyl silicate produces fine particles of silica, which can act as a binder to adhere refractory into ceramic shapes or provide corrosion-resistant coatings in combination with zinc dust. Ethyl silicate (alcohol-based and chemically set), is used as binder in investment casting to hold the refractory material in place. Import / export Imports for the year 2009-2010 : 160 tonnes per annum Exports for the year 2009-2010 : Negligible quantity Indian producers Ethyl silicate is presently produced by Dr. Khan Technology Consultants,Mumbai. Dr. Khan Industrial Consultant manufactures ethyl silicate from the basic raw material namely silicon ingot and SiCl4 is produced as in-process chemical and consumed fully in the production of ethyl silicate. Metkem Silicon in Tamil Nadu stopped production of ethyl silicate. Indian production Indian production of ethyl silicate 1200 tonnes per annum


ETHYL SILICATE- PRODUCT PROFILE Indian demand Total demand for ethyl silicate including paint and investment casting

1500 tonnes per annum Global scenario Ethyl silicate is manufactured mostly by integrated process with metallurgical silicon as starting material. Silbond is the worlds leading supplier of ethyl silicate.Silbond was formed through the 1994 buyout of AkzoNobels ethyl silicate manufacturing operations in Weston. In 2011 Q2 Investment Partners (Bloomfield Hills, MI) has acquired Silbond. Silbon, USA uses the direct process for production of ethyl silicate from silicon metal and ethyl alcohol. The silicon tetrachloride method is inherently prone to trace metal contamination and process variability. This is why Silbond produces ethyl silicate using the direct method. The company claims that it has the longest continuously running direct process plant in the world. The product is completely chlorine free and Silbond Condensed, is pure enough for most applications, Process The process of manufacture involves chlorination of silicon metal to SiCl4 followed by the reaction of SiCl4 with alcohol to produce ethyl silicate Silicon ingot is chlorinated to obtain SiCl4. SiCl4 is reacted with ethyl alcohol to produce ethyl silicate. The integrated process is represented by the following reactions Si + 2Cl2 SiCl4 SiCl4 + 4C2H5OH Si(O C2H5)4 + 4HCl

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DIETHYL SULPHATE PRODUCT PROFILE Appearance Colourless, oily liquid. Darkens with age. Chemical Formula C4H10O4S CAS No.: 64-67-5 Assay 99.00% min. Application * Dyes and dye intermediates (like Diethyl Meta Amino Phenol (DEMAP), Pigment of violet-23 etc.) * Leather (As a fat liquoring composition) * Pharmaceutical Industry (for manufacturing bulk drugs like Norfloxacin, Nalidixic acid, Barbituric acid etc.) * As an ethylating agent (As a very versatile and safe ethylating agent in the manufacture of aromatic and aliphatic ethers, amines, amides, esters and imides for dyestuff, starch and sugar, pharmaceutical and flavour synthesis) * Coatings * Personal care products * Detergents * Insecticides (As a stabilizer in the manufacturing of organophosphorous insecticides) * Textiles (For manufacturing cationic and anionic softeners and quaternary textile finishing compounds) * Miscellaneous (in the manufacturing of anti-corrosion agents, colour-fixing agents, pyrimidine derivatives for explosives and in fiber finish. Import

Period Quantity in tonnes April 2006 to March 2007 3639 April 2007 to March 2008 1579 April 2008 to March 2009 3217 April 2009 to March 2010 1013

April 2010 to June 2010: 364 tonnes


DIETHYL SULPHATE PRODUCT PROFILE Pattern of country wise imports: For the period of April 2009 to March 2010

Korea RP 7%

Italy 4%

Japan 3%

Germany 1%

Denmark 12%

China Prp 73%

Exports

Period Quantity in tonnes April 2006 to March 2007 1296 April 2007 to March 2008 3240 April 2008 to March 2009 1534 April 2009 to March 2010 2053

April 2010 to June 2010: 788 tonnes Pattern of country wise export : For the period of April 2009 to March 2010

Korea rp 2%

Spain 2%

Saudi Arabia 3%

U K 13%

U S A 25%

Others2%

Japan 9%

Italy 4%

Indonesia 1%

China p rp 39%


DIETHYL SULPHATE PRODUCT PROFILE Indian manufacturers Indian producers include the following :

Name of the company Location

Industrial Solvents and Chemicals Gujarat Dharamsi Morarji Maharashtra Guljag Industries Rajasthan

Indian production Production 6500 tonnes per annum No new project under planning/implementation in India. Demand supply scenario Diethyl sulphate is predominantly used as an ethylating agent in the manufacture of aromatic and aliphatic ethers, amines, amides, esters and imides for dyestuff, pharmaceutical and flavour synthesis. The Pharmaceutical and Dyestuff industry represent the major sector of applications for Diethyl sulphate. In such sectors, the product is used as ethylating and sulphonating agent. Indian demand (Period April 2010 to March 2011)

8000 tonnes per annum Growth rate in demand 6% to 7% per annum Projected demand supply scenario

(in tonnes per annum)

Period Demand Supply Gap in supply 2010-2011 8000 6285 1715 2015-2016 11250 6285 4965

Global demand supply scenario Global demand Around 200,000 metric tonnes per annum Global growth rate in demand 2 to 3% per annum


DIETHYL SULPHATE PRODUCT PROFILE Global manufacturers

Name of the Producer Location Tedia Company Inc OH, USA

Dow Chemical company Texas, USA West Virginia, USA

Coyne Chemical USA

Chem-Impex International, Inc. IL, USA

Merck Schuchardt OH (Subsidiary of Merck KgaA)

Hohenbrunn, Germany

Process outline DES can be produced by alternate process: Process from Ethyl Alcohol and Chloro sulphonic acid The reaction between ethyl alcohol and chlorosulphonic acid produces Diethyl sulphate with ethylhydrogen sulphate and diethyl ether as by products 2C2H5OH + ClSO3H (C2H5)2SO4 + HCl + H2O The reaction is carried out by heating the reactants on a water bath (80 deg C). The resulting reaction mixture is then distilled at low pressure (10 to 15 mm of Hg) at a maximum temperature of 190 deg C to give Diethyl sulphate at 90% yield. In view of highly poisonous nature of diethyl sulphate vapors, the distillation step is carried out with extreme care and in cery special type of equipment. Process from Ethyl alcohol and Sulphuric acid Diethyl sulphate, was traditionally prepared from ethyl alcohol and sulphuric acid. The method employed was to distill a mixture of about 2-4 parts by weight of sulphuric acid with one part by weight of ethyl alcohol. The distillate separates into two layers, the upper of which is aqueous alcohol and the lower crude diethyl sulphate as a yellow liquid. Diethyl sulphate has been made by dropping a mixture of ethyl alcohol and concentrated sulphuric acid on to sodium sulphate at 55 to 65 deg.C, or by heating ethyl alcohol with an alkali metal chlorosulphonate. Prognosis

The demand level for the diethyl sulphate is likely to go up steadily in the coming years both in the Indian and the global market.


CHLOROFORM - INDIAN AND GLOBAL SCENARIO Appearance Clear liquid Alternate name Trichloromethane Chemical formula CHCl3 Regulations Chloroform has been identified as a hazardous waste by US based EPA and disposal of this waste is regulated under the Federal Resource Conservation and Recovery Act (RCRA) (EPA 1988a, 1989b). EPA has issued a toxicological review of Chloroform, concluding that small exposures to the chemical are not likely to cause cancer. The US Food and Drug Administration (FDA) banned chloroform for use in drug, cosmetic and food packaging products in 1976. This ruling did not include drug products that contain chloroform in residual amount, resulting from its use as a

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