By Malini Hariharan
After years of waiting truck movement of petrochemicals from India to Pakistan has started paving the way for Indian companies to boost their exports.
Indian Oil Corp (IOC), which regularly exports polyethylene (PE) and polypropylene (PP) by rail to Pakistan, successfully sent its first consignment to Lahore last week from its petrochemical complex at Panipat, Haryana. Panipat is only about 400km from Lahore, a key polymer market in Pakistan.
IOC hopes to increase export volumes to 8,000-8,500 tonnes/month from 5,000-6,000 tonnes/month at present.
"Exporting via road is more cost-effective. Movement by rail is limited by the availability of wagons; we will now be able to send larger volumes," says a company source.
The start of road trade represents a big opportunity for Indian producers based in the north. Pakistan's polyolefins demand, estimated at around 300,000/year for PE and 300,000/year for PP, is entirely met by imports, mainly from the Middle East.
And given India's surplus in PP, Middle East producers are likely to face a challenge.
India is expected to export around 1m tonnes of PP in fiscal 2011-12. And the surplus will increase further after the commissioning of HPCL Mittal Energy Ltd's (HMEL) 440,000 tonnes/year plant in March or April 2012. HMEL's plant is located at Bhatinda, Punjab, near the border and Pakistan will be a main export market, says a source close to the company.
Besides polymers, IOC is also eyeing exports of other petrochemicals to Pakistan. The next product is likely to be purified terphthalic acid (PTA). Pakistan consumes about 500,000 of PTA of which 30% is met by imports.