APIC ’10: 'This century belongs to Asia' - Reliance CEO

14 May 2010 11:50  [Source: ICIS news]

By Joseph Chang

MUMBAI (ICIS news)--Asia’s booming economies will make the region the overwhelming force in global chemical industry growth in this century, Reliance Industries's CEO, Mukesh Ambani, said on Friday.

“This century belongs to Asia. Increasing per capita income among the 2.5bn people in China and India will generate huge demand for goods and services for an extended period of time,” said Ambani in his keynote address at the Asia Petrochemical Industry Conference (APIC) in Mumbai.

“Billions of people are impatient to realise unrealised aspirations. And this will result in a jump in demand for petrochemicals and chemicals,” he added.

Even basic polymers are growing at double-digit percentage rates in India. For example, consumption of polyvinyl chloride (PVC) grew by 25% in the country in 2009, Ambani pointed out.

“Consumption will increase, but there will be frugality. So our job in the chemical industry is to maximise value,” he said.

The industry had an opportunity to improve the quality of billions of lives with cheaper and sustainable building materials, energy-efficient lighting, clean water and electrical goods, the CEO noted.

And India would be a hub for chemicals and manufactured products in the next decade, he added.

The burgeoning demand from Asia would create the need for larger worldscale  chemical projects, noted Ambani.

“Growth in Asia will necessitate super-sized assets. $5-10bn (€4-8bn) projects will become routine,” he said.

The global chemical industry would also face challenges from unprecedented financial volatility as well as high energy prices, said Ambani.

“We grew up thinking the US and Europe were the most stable economies. But in the last five years, we’ve seen the US housing crisis and European sovereign debt crisis impact global markets,” he said.

On energy prices, Ambani said crude oil would likely stay above the $70/bbl mark “for the foreseeable future, creating the need for the petrochemical industry to “keep reinventing itself.”

“We must adopt innovation as a way of life and inject new vibrancy in petrochemicals and chemicals by integrating technology, feedstock and markets,” said Ambani.

“This means bio-polymers, bio-chemicals, biofuels, and electronic chemicals,” he added.

Government-subsidised feedstocks cannot create long-term competitiveness, said Ambani.

“These subsidies are a burden on the next generation and cannot create a sustainable competitive advantage in our industry,” he said.

($1 = €0.80)

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By: Joseph Chang
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