APIC ’16: India petchems to be driven by infrastructure

SINGAPORE (ICIS)–India’s petrochemicals demand will be primarily driven by massive new infrastructure developments in the coming years following recent reforms and initiatives by the government to boost the economy, a senior industry official said on Thursday.

“With the economy looking good and political stability being there, we will see a lot of infrastructure growth and this will pull in demand for the entire petrochemicals industry,” said Kamal Nanavaty, the vice president of the Chemicals & Petrochemicals Manufacturers’ Association (CPMA) of India.

“Textiles, agrochemicals, paints, plastics, everything is just booming,” Nanavaty told ICIS on the sidelines of the 2016 Asian Petrochemical Industry Conference (APIC) being held in Singapore on 19-20 May.

In India the petrochemicals industry saw double-digit growth on average last year, with the demand for polyolefins seeing growth at close to 20%,

The demand for polypropylene grew by 18% year on year to 4.15m tonnes in 2015 while that for PVC is around 10% higher from the previous year, he said.

“Every segment in the industry had higher growth than the national GDP growth which was around 7%,” he added.

Historically, demand growth for petrochemicals was higher than the national GDP except in the last two or three years, but this is set to improve dramatically over the next few years, Nanavaty said.

“We lacked growth compared to China because China opened up many years before India opened up, but obviously now the push [for growth] is happening,” he said.

The International Monetary Fund (IMF) projected a 7.3 per cent GDP growth for India in the fiscal year 2015-16, and 7.5 per cent in 2016-17.

According to the IMF, India, along with some other Asian markets is posed to register a robust growth.

India also leads the World Bank Growth Forecast, with forecasts emerging that Indian growth figures will stand out, amid a gloomy outlook among most developing countries

India’s ethylene capacity is expected to grow to 7.2m tonnes/year in 2016-2017 from 5.76m tonnes/year in 2015-2016, boosted by Reliance Industries’ new 1.4m tonne/year cracker, according to Nanavaty.

However, India could soon face a shortage of propylene because of the start-up of new downstream polypropylene (PP) units such as Indian Oil Corp’s 700,000 tonnes/year unit at Paradip, which is due to come on stream by 2017, as well as Opal’s new 340,000 tonnes/year plant at Dahej in Gujarat, he said

Top image: Indian parliament house (Source: ddp USA/REX/Shutterstock)

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

Interview article by Nurluqman Suratman