The Indian petrochemical industry would have to increase its production capacity tenfold in order to meet higher demand by 2050, according to Kamal Nanavaty, president of India's Chemicals and Petrochemicals Manufacturers' Association (CPMA).
Nanavaty spoke at the CPMA - Argus Petrochemical Online Forum on 25 August.
It is estimated that India's consumption will double every nine years, at the current 8 pc/yr growth rate. Nanavaty highlighted that Indian polymer demand growth has historically been higher than India's GDP growth and the trend is expected to hold this year.
To meet this demand the industry would have to be more forward looking and decide if it should continue expanding its capacities in the current scattered manner or take on a clustered approach, which is something that the Indian government has been pushing for.
Petrochemical producers would also need to watch their assets closely as current manufacturing units may become sub-optimal or outdated in the next 30 years.
Chemical clusters integrated with refineries and petrochemical sites would also be crucial for Indian petrochemical producers as it would reduce capital expenditure by 20-30pc and cut operating costs by 10-20pc. This would allow domestic producers to see stronger margins and compete with imports more aggressively and put India on the path to becoming more self-reliant.
Nanavaty also stressed the importance of focusing on circularity and sustainability while emphasizing the need for a more holistic manufacturing policy that focuses on the development of waste land instead of cultivable land for the construction of new petrochemical plants. Producers should also focus on CO2 capture, zero discharge plants and improving plastic recycling facilities.
Plastic demand took a hit in the first half of this year when India was rocked by a surge in Covid-19 infections. But the situation has since improved and demand has started to recover as restrictions eased, allowing more downstream activity. Capacity additions are expected in the fourth quarter of this year with the start-up of Hindustan Petroleum-Mittal Energy's 800,000 t/yr LLDPE/HDPE swing unit, 450,000 t/yr HDPE plant and 500,000 t/yr PP plant in Bathinda.
Argus on 20 August assessed LDPE film at $1,460-1,480/t cfr India and LLDPE film at $1,150-1,170/t cfr India. HDPE film and PP raffia were assessed at $1,200-1,220/t and $1,330-1,350/t respectively, on the same basis.
