FocusStrong India PU sector buoys up Asia MDI, TDI, polyols demand

11 March 2011 04:52  [Source: ICIS news]

PU, which uses TDI, MDI and polyols as raw materials, has applications in the footwear, automotive, furniture and construction sectorsBy Ong Sheau Ling

New Delhi (ICIS)--India’s strong demand for toluene di-isocyanate (TDI), methylene di-p-phenylene isocyanate (MDI) and polyether polyols will likely persist in the next five years on the back of a buoyant downstream polyurethane (PU) sector, industry sources said on Friday.

This year, the south Asian country’s demand for PU for use in its footwear, automotive, furniture and construction sectors is expected to grow between 15-20%, they said at the sidelines of the PU Tech 2011 Exhibition and Conference in New Delhi, India.

The conference runs from 9-11 March.

India is the world’s second fastest growing economy. With an expanding middle class, increased urbanisation and significant infrastructure development projects underway, we are predicting a large spike in demand for MDI across the region,” said Nick Webster, vice president at US producer Huntsman PU.

The country currently has a low PU per capita ratio of only 0.25kg against 20kg in developed countries, industry sources said.

“We can see that in order for India to catch up, one can imagine the amount of demand it can generate,” said a local MDI supplier.

Recognising India’s potential as a strong MDI market, Huntsman is currently building a new PU system house at Pune, India, that is due to be completed in April 2012.

“Opportunities are everywhere for PU applications. We will see the Indian appetite for TDI, MDI and polyols to be bigger year on year,” said a northeast Asian isocyanates producer.

India’s strong automotive sector, with a projected demand growth of 20%, is among the main drivers of PU demand, industry sources said. PU has a wide range of automotive applications, including interior trim, seats, instrument panels, adhesives, elastomers, and cushions.

Foamers in India are multiplying in number, while existing producers eye capacity expansions, as their customer base widen with more international companies coming into the country to set up production bases, industry sources said.

“We are seeing more small foamers entering the market. That shows the growing market for PU,” said a northeast Asian isocyanates producer.

Existing local foamers are looking at expanding their capacities by 30-50% this year, with emphasis on producing more flexible foams, in which TDI and flexible polyether polyols slabstocks are the raw materials, industry sources said.

“Both our automotive and furniture customers are telling us that their [projected] orders this year [are] at least more than 15% [higher than] last year['s], so we are expanding together with our customers’ need,” said a south India-based foamer.

Meanwhile, a number of northeast Asian manufacturers of home appliances like refrigerators have set up operations in India since last year, expecting strong sales going forward as the country moves forward with industrialisation, sources said.

 “This is not a short-term trend and we are expecting more projects to come in[to India] within the next few years,” said the northeast Asian isocyanates producer, adding that investors see the country as a major manufacturing hub, “the next China”.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Ong Sheau Ling
+65 6780 4359

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