Huntsman to scale up India capacities

By Malini Hariharan

US chemical producer Huntsman plans to rapidly expand capacities and sales in India, a country that has caught the attention of global majors.

The blog caught up with the company’s President and CEO Peter Huntsman in Mumbai yesterday.

“In every one of our businesses, except titanium dioxide, we will be spending money to build or buy in India,” Huntsman said. “In textile effects, we will be doubling capacity in three years and we will also expand the Laffans facility,” he added.

US-based Huntsman recently completed the acquisition of India’s Laffans Petrochemical, which has a 60,000 tonne/year ethylene oxide (EO) derivatives facility at Ankleshwar in Gujarat state.

“We will first bring Laffans to the same standards as other Huntsman facilities, which should be easy, and we will then look at expansion,” Huntsman said.

He added that details of the expansion were not yet firmed up but the ambition was to complete it in two years.

The company’s other major expansion will be in Baroda, Gujarat, where it plans to spend $10m (€7m) to raise its dyes capacity by 80,000 tonnes/year.

“Some of the dyes produced elsewhere will move to India and we will also be producing some new products,” Huntsman said.

Production would be targeted at the Indian market first and then exports. Huntsman acquired the Baroda facility from India’s MetroChem Industries in 2009.

Earlier this year, the company announced plans to build a $10m polyurethane (PU) systems house in Pune, India, by April 2012.

However, Huntsman ruled out an Indian investment in methyl di-p-phenylene isocyanate (MDI) in the near future.

“The Indian market is not large enough to support a worldscale MDI plant,” Huntsman said.

“We are going to start with a systems house, bringing MDI from the US and China. We hope we will be the first to produce MDI locally, but we need to build the end-use markets first,” he pointed out.

As well as adding capacities, the company has budgeted $10m for an office complex in Mumbai, which will also house a technical support centre and laboratory.

Huntsman said he expects sales from India, currently $400m, to grow at 10%/year, while sales should double every five years.

He also expects sales from China to grow at more than 10%/year from the current $1.2bn.

“In the next five to seven years, Asia-Pacific will account for one-third of our sales,” Huntsman said.

“Two years ago Europe was our single largest market. Within three years it will be North America, followed by Asia, Europe and Latin America,” he added.

Huntsman posted sales of $9.25bn in 2010.

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