By Malini Hariharan (Malini is now joint blogger for Asian Chemical Connections)

It pays to have a domestic focus and Reliance Industries has shown this again in its results for the first half of fiscal 2009-10.

Its petrochemicals division delivered Rs43bn in earnings before interest and taxes (EBIT), a 23.8% growth over the same period last year. The company attributed this to higher margins on improved domestic realisation. The concentration on India helped the company maintain nearly 100% utilisation and hold inventory at low levels.

The Indian market often gets lost in the larger Asian/global picture which is very much dominated by China. But this market has been seeing steady demand growth since last year and it is one of the few markets to have expanded despite the economic crisis.

Reliance estimated PP demand growth at 28% in the last six months; PE at 15%; PVC at 36% and polyester at 15%. Packaging, infrastructure and auto sectors were the key drivers.

The company anticipated a stable margin environment in 2010 as India is expected to keep growing. It also emphasised that it would continue its ‘predominantly domestic market orientation in order to sustain high operating rates’ – a plan that will no doubt be helped, in the case of PP, by hefty anti dumping duties imposed on imports from Saudi Arabia, Singapore and Oman. A second investigation on PP imports from South Korea, Taiwan and the US is due to be launched soon and there have also been reports of producers asking for an investigation into PE imports.

Expanding the domestic focus will not be easy. India is oversupplied in PP and likely to remain so for another couple of years despite the high demand growth numbers. PE would also be oversupplied once Indian Oil Corp starts its new cracker complex.

IOC expects to achieve mechanical completion of the cracker by the end of this month and start commissioning activity in December. The derivative plants (PE, PP and MEG) are likely to start at end-March or early April.

This is the schedule on paper. But given the many project delays around the world, don’t be too surprised if this one also slips.

PREVIOUS POST

Caution is the name of the game

03/11/2009

By Malini Hariharan (Malini is now joint blogger for Asian Chemical Connections)...

Learn more
NEXT POST

Some Very Crude Perceptions

05/11/2009

Source of picture: www.prisonplanet.com     Misleading perceptions can...

Learn more
More posts
Global polyethylene demand boom likely, increasing the sustainability challenge
15/06/2021

By John Richardson IT FEELS LIKE several lifetimes ago. If you recall, way back in November-December...

Read
The pandemic, climate change, plastic waste and the great divide: the world in 2025
13/06/2021

By John Richardson NOBODY SHOULD be surprised that the developing world has fallen behind in the bat...

Read
Developing world vaccine and financing crises threaten years of depressed growth
10/06/2021

By John Richardson MANY OF US are very familiar with the feeling of sitting at home, waiting to hear...

Read
Inflation pressures build on prolonged supply chain disruptions
08/06/2021

By John Richardson OK, I MAY have got this wrong. Inflation could be a bigger problem than I envisag...

Read
China polyolefins: key signals to monitor on whether 2021 slowdown is reversing
06/06/2021

  By John Richardson IT REALLY IS EXTRAORDINARY how commentators continue to use year-on-year c...

Read
Boom in petrochemicals demand guaranteed but we must grow sustainably
03/06/2021

  By John Richardson ONE OF THE GREATEST achievements of the last 30 years has been the fall in...

Read
Booming internet sales point towards strong 2021-2025 LLDPE demand growth
01/06/2021

    By John Richardson ONLINE SALES accounted for 19% of all retail sales in seven industr...

Read
We can solve the plastic waste crisis but we don’t have much time
27/05/2021

Here is another personal plea about the scale of the plastic waste challenge our industry confronts....

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more