STM BM B GROUP 13 - Chemical Industry

7/27/2019 STM BM B GROUP 13 - Chemical Industry

1/16

INDIAN CHEMICAL INDUSTRY REPORT

Group 13

B12076 Ashish Choudhary

B12089 Krunal KapadiyaB12102 Radhesh Agarwal

B12115 Shubhrit Arora

FB12004 Gopal Gandikota


2/16

Indian Industry in the Global Context

Traditional dominance of triad regions (EU, US & Japan) challenged byfeedstock availability and price; electric power costs; labor costs;differential growth; and environmental pressures.

Global Industry moving eastwards in line with shift in key user industries.Share of Asia in global chemical industry has risen from 31% to 45%.

New rules of the game: Product innovation, New Business Models andEnergy conservation.


3/16

Indian Chemical Industry At a glance

Market Size& Growth

Valued at US$ 108 billion with past 5-yr CAGR of 12.8% Poised to reach US$ 224 billion by 2017 at projected CAGR of 11%

Growing 3 times faster than global growth figure

Significance

8th largest chemical industry in the world, third in Asia by value

Accounts for 7% of Indias GDP, 13% of total industrial output

Constitutes 11% of total Indian exports

Comprises only 3% of global chemicals market by value 2nd largest producer of agrochemicals in Asia

Provides critical inputs to numerous downstream industries

Key features

3 main segments Basic Chemicals, Specialty Chemicals, Agrochemicals

Highly fragmented with more than 40000 players (SSI, medium and large sized )

Employs 1.1 million workforce

Consumes a third of its own output Key user industries are Agriculture, Automotive, Construction, Consumer Durables, Food

Processing, FMCG, Paper & Pulp, Plastics, Primary Metals, Rubber and Textiles.

Key Players: Asian Paints, GHCL, Jubilant, Rallis, RCF, Reliance, Tata Chemicals, Akzo Nobel,BASF, Bayer, Dow Chem, Dupont, Kansai Paints, Monsanto and Syngenta


4/16

Industry segments and sub-segments


5/16

Firm Concentration


6/16

Porters 5 Forces Scan


7/16

PESTEL Analysis

Political

GovernmentPolicies

Regime change

Industry Lobbying

InternationalInfluence

Trade Policies

Wars and Conflict

Economic

Domestic Economy

InternationalEconomy

International Trade

and related issues Taxation &

Purchasing Power

Industry specificfactors

Natural Conditions

Social

Demographic

Lifestyle trends

BrandPreferences


8/16

PESTEL Analysis [contd.]

Technological

TechnologicalAdvancements

R&D

Technologyaccess

Licensing,patents and IPissues

Environmental

EnvironmentLegislation

Environmental

Activism

Legal

NewLegislations


9/16

VRIO Analysis of the industry


10/16

SWOT Analysis

Strengths

Diversified manufacturing base

Vibrant downstream industries in different segments

Strong presence in some export market segments Large and growing domestic market

Endowed with good raw material component sources withincountry

Being a tropical country, facilitates open storage of bulk

chemicals Mature financial markets

Strong R&D base and quality human resources


11/16

SWOT Analysis [contd.]

Weaknesses

Very high cost and poor quality of electricity

Very high cost of finance, compared to global peers

Poor supporting infrastructure Fragmented Nature of Industry

Low R&D levels

Locational disadvantages from key markets

Poor capacity utilization


12/16

SWOT Analysis [contd.]Opportunities

Markets in developed countries are opening up

User industries shifting eastwards

Global success stories in agro-chemicals and dyestuffs

Proximity to Middle-East opens up potential for value-addition in

petrochemicals Per-Capita Consumption being low, offers significant potential for

growth of domestic market

Technology and R&D competencies to utilize renewable resources

Can leverage competencies in Specialty Chemicals to scale globally

Innovations in Green Chemistry


13/16

SWOT Analysis [contd.]

Threats

High input costs

Reduction in import tariffs and removal of quantitativerestrictions

Dumping from other countries

Generic orientation

Quality mismatch with global standards

Occupational Safety and Environmental regulation is not

yet world-class

Environmental Concerns


14/16

Suggested Strategies for the Industry

Selectively compete in chosen segments and aim for worlddomination

Strengthen technological and process competence(increase use of automation and IT)

Creating supply chain integration with end-customers

Adherence to environmental norms (esp. energy reduction,recycling and waste disposal)

Collaboration at firm-level, cluster-level, and cross-borderfor knowledge sharing and improving competitiveness

Consolidation for scale economies and supply chainefficiencies


15/16

Suggested Strategies for the Industry [contd.]

Increased industry-academia linkages and cooperation

More focus on brand building and export promotion

Setting up of exclusive commercial zones such as Chemical

Parks for leveraging common infrastructure and

encouraging larger-scale plants De-reservation of categories meant only for SSI sector

Increasing per-capita consumption of chemicals in domestic

market


16/16

Thank you.

STM BM B GROUP 13 - Chemical Industry

Documents