Chemical Industry

DYES & DYE INTERMEDIATES / PIGMENTS/ OPTICLE BRIGHTNER

Dyestuff industry comprises of 3 key constituents, namely, dyestuffs, pigments and intermediates.  The value chain has intermediates as downstream products manufactured from petrochemicals; intermediates are further processed to obtain dyestuff and pigments.  Both dyestuffs and pigments are critical inputs to several industries such as Textile, Paper and Packaging, Leather, Food, Polymer, Coating, printing ink.

The Indian dye and dye intermediates market is expected to grow at a CAGR of 6.3% from 700,000 tonnes in FY`07 to 1,200,000 tonnes in FY`15 on account of strong growth in the end-use segments.  The main end use segments for these products are textiles, paper and leather industries which together account for – 88% of the total demand.

The dyes and dye intermediates market is fragmented with around 950 manufacturers with the top 5 players accounting for only around 30% of the market.  A high degree of consolidation is expected in this segment.  The main drivers for consolidation are the stringent environmental norms and awareness among customers increasing the cost of operations for small-scale players.  This industry is located mainly in Gujarat and Maharashtra. 

The important Dyes are  basic dyes, azo acid and direct dyes; disperse dyes, reactive dyes, sulphur dyes, vat dyes, organic pigments, naphthols and optical brighteners. 

This year India has exported mainly to Pakistan IR, Indonesia, China P.RP, Saudi Arabia and USA. 

The main drivers for Dyes are Reactive Blacks, Acid Blacks, Reactive Blues, Reactive yellows and Reactive reds.  The main drivers for Dye Intermediates are Xylidine, Vinyl Sulphone, Para Dichlorobenzene, Dichloroaniline and H-Acid.  For Pigments are Pigment Blue-15 ( Pathalocyanine Blue), Pigment Green 7   ( Pathalocyanine Green), Other Pigment Blue, Pigment Violet and other Pigment red.  For Optical Whitening Agents are Optical Whitening Agents and Other fluorescent Brightening Agents

Organic chemical is one of the important sectors of the Indian chemical industry. It has played a vital development role by providing chemicals and intermediates as inputs to other industrial sectors like paints, adhesives, pharmaceuticals, dye stuffs and intermediates, leather chemicals and pesticides. Global production of organic chemicals is around 400 Mn metric tones per annum (mmtpa). Production was just 15 Mn metric tonnes fifty years back. Major producers of organic chemicals are USA, Germany, UK, Japan, China and India. Few Latin American countries such as Brazil and Chile are increasing their presence in global organic chemicals market.

There are important numerous varieties of organic chemicals. The chart below shows select organic chemicals manufactured and exported from India. Availability of natural gas for use as feedstock is a critical part of the entire production process. Formaldehyde and acetic acid are important methanol derivatives and are used in numerous industrial applications. Phenol is an aromatic compound and derived from Cumene, a benzene and propylene derivative.

Major organic chemicals in India are methanol, acetic acid, formaldehyde and phenol.  These four chemicals constitute more than 60% of domestic capacity for organic chemicals.  Methanol has the maximum share accounting for 20% of the total domestic capacity followed by acetic acid and formaldehyde with 19% and 16% share respectively. 

This year India has exported mainly to USA, China P. Rep., UAE, Netherlands  and Germany.

The main drivers for organic chemicals are P-Xylene, Napthalene, benzene, Buta-1, 3 – Diene and Isoprene and Linear Alkylbenzene. 

ALCOHOL BASED INDUSTRY  (ORGANIC )

Sugarcane is the most efficient converter of solar energy.  Blessed with sunshine and favourable geographical conditions, India is today the largest producer of sugar in the world.  The sugar industry has provided Molasses and Alcohol and India have gainfully exploited these as renewable feedstocks to manufacture Alcohol Based Organic Chemicals.  Since last three decades, the Alcohol Based Industry is playing a significant role in the Country’s National Economy.

The main drivers for organic chemicals are P-Xylene, Napthalene, benzene, Buta-1, 3 – Diene and Isoprene and Linear Alkylbenzene. 
This year India has exported mainly to USA, China P. Rep., UAE, Netherlands  and Germany.

The main drivers for export of Alcohol Base Chemicals are Monochloro Acetic Acid, their salts, Acetic Acid, beta Picoline ( 3-Methyl Pyridine), Styrene and Dibutyl Phthalate.  The main drivers for Aromatic Chemicals are Benzyl Alcohol, Phenyl Ethyl Alcohol, Diphenyl Oxide, Musk ambrette and Cinnamic Aldehyde etc..

This year India has exported mainly to USA, UK, UAE, Netherlands, Indonesia and Germany.

INORGANIC CHEMICALS:

The majority of Inorganic Chemicals are derived from materials in the Earth’s crust such as minerals, metals & salts.  The main drivers in Exports are Sulphuric Acid, Carbon Black, Phosphoric Acid, Antioxidants for Rubber, Sulphates, Chlorides etc..

The main drivers for Inorganic chemicals are Sulphuric Acid, Carbon Black, Phosphoric Acid, Anti-Oxidants for Rubber and other sulphate; peroxosulphates.

CHLOR ALKALI CHEMICALS (INORGANIC )

The chlor alkali industry forms a significant part of the Indian chemical industry.  The key chemicals in the chlor alkali industry are : 

• Caustic soda
• Chlorine (including liquid chlorine)
• Soda ash

Majority of soda ash is used in the glass industry which accounts for 45% of total consumption.  Chemicals and soaps and detergents are other major end uses, accounting for 25% and 11% of global soda ash consumption respectively.  Soda ash can also replace caustic soda in certain industries like pulp and paper, water treatment and certain sectors in chemicals.

The main drivers for the export of Alkali Chemicals are Flakes of Sodium hydroxide ( Caustic Soda), Disodium Carbonate Light ( Soda Ash), Sodium Hydroxide in Aqueous Solution ( Soda Lye) and other Disodium Carbonate.

This year India has exported mainly to UAE, Sri Lanka, USA Oman, Kenya and Bangladesh.

AGROCHEMICALS

The global agrochemical market was valued at US$51.2 BILLION IN 2009. Brazil witnessed robust growth in insecticides, while India and China drove sales of fungicides and herbicides. The major drivers of growth are  Insecticide, Fungicides, Cipermethrin technical grade, Pesticides, Herbicides and  anti-sprouting products etc..

Indian market trends

The Indian agrochemicals market grew at 11% in 2009, driven by greater awareness among farmers, increased consolidation of land holdings and the rising distribution reach of Indian companies.

PETROCHEMICALS & LUBRICANTS

It has estimated that there would be growth of 10-12% in the petrochemicals industry in 2010, mainly on account of growth in packaging and automotive industry.  Moreover, demand for PE and PP is forecasted to grow in double digits in 2010. 

The major petrochemical players in India include Reliance Industries, Gas Authority of India (GAIL), Haldia Petrochemicals and IOC.  Currently there are eight naphtha and gas cracker complexes, with a combined ethylene capacity of about 2.5 million tonnes per annum.  Of these, one million ton per annum ethylene capacity is gas based (40%) and the rest is naphtha based (60%). 

Domestic demand of petrochemical products followed global trends and grew at 25% during H1FY10 – with growth driven mainly from infrastructure, packaging and recovery in the automobile sector.  Polymers demand was higher by 25%, PVC by 36% and PP & PE by 28% and 15% respectively, during the half year ended September 2009.  Further PP demand grew from growth in containers, the demand drivers for PVC were pipes and fittings, footwear and PVC sheets.  PE demand got a boost from oil containers, electrical wires, cables co-extrusion and carrier bags.

Polymer prices also recovered significantly from their 2008 lows on signs in economic upturn.  Naphtha, Ethylene and Propylene prices more than doubled to around $ 680 per tonne, $ 750 per tonne and $ 800 per tonne respectively.  However, petrochemicals margins did not move up in the same way as prices, due to more than proportionate rise in feedstock prices. 

The Indian lubricant industry is the seventh largest lubricant market in the world and sixth largest automotive lubricant market.  The estimated lubricants market ( for the year 2008-09 ) in India in terms of sales is 1.75 MMT and in value terms it is Rs.11,375/- crores.  The quantity of    1.75 MMT includes lubricants produced by the organized sector; large, midsized as well small scale companies.  This does not include branded base oil, transformer oils as well as sizable amounts of re-refined and spurious lubricants sales produced  by un-organised sector.

Lubricant industry in India is broadly divided into 3 major markets sectors: Automotive, industrial and marine applications.  The ratio of automotive to industrial lubricants is approximately 63:37.

Major share of products wise is Auto Engine Oils, Auto Gear Oils, Auto Greases, Turbine Oils, Hydraulic & Circulating oils etc.

The major drivers of exports for petrochemicals are Reactive High speed dieses (HSD), Aviation Turbine Fuel, Fuel Oil, Petroleum Coke Calcined and Lubricating Oil.

The global lubricant market is about 45 million MT valued at 48 billion USD.  With global economy on recovery path, the industrial output is on growth mode.  This will lead to higher consumption of lubricants in various.

The lubricant consumption in India is about 1.75 million MT.  there are about 1200 manufacturers of various grades of lubricants & allied products in organized sector out of which about 1150 are in small & medium sector.  The estimated total installed capacity of these units is about 2.2 million MT and capacities are being continuously augmented.

The lubricants are mainly classified into automotive, industrial, marine, aviation, greases and other specialties.  The allied products are brake fluids, radiator coolants, electrical oils etc. The base oil & additives required to manufactured the lubricants  are produced in India as well are imported.  Some of the lubricants are being exported.  The lubricants produced in India meet all the required international standards and performance levels.

COSMETICS SECNARIO IN INDIA

The Indian Cosmetics Industry is undergoing rapid evolution and transition following liberalization.  It has matured considerably during the last decade.  Although economic slowdown all over the world had proved a major handicap for big players but it did not affect the overall growth in the industry which was estimated to be in the range of 15-20%.

With globalization, there have been changes in many areas viz. upgradation, competition, brand image etc. On the other hand, cosmeceuticals and naturals emerged favourite segments for the consumers.  Today, the industry is gearing up for a new phase in its growth, according to market analysts.

Cosmetics for the skin

Skincare creams & lotion, cleansing creams, moisturizing creams, foundation creams, vanishing creams, gel etc. Skin bleach creams, Antiperspirants, Deodorants, face powders, compact powders, talcum powders, face packs and masks, bath powders, lipsticks.

Cosmetics for the Hair

Cosmetics for the body

Cosmetics for the eyes

For Cosmetics, packaging turned out to be one of the key modes of differentiation during the year.  Companies used packaging both as a means towards off the fakes in grey market and as a USP to set a brand apart from the rest.  Bubble packs for shampoos, tamper-proff containers for hair-oils (parachute) were some of the innovations that worked.

India is now home to the biggest international players in this sector like Shiseido, Elizabeth, Arden and Pierre Cardin as well as direct selling firms Avon and Oriflame.  Recently another direct marketing firm Modicare, also launched a range of cosmetics and skin care products.

The current global market for herbal cosmetics is $ 1500 billion and is estimated to grow at the rate of 25% per anum.. In European Countries the natural skin care products have the highest market share of all product categories.  The German and the French herbal cosmetics markets are the fastest growing markets among the European countries. In  the personal care products market in India estimated to be worth USD 4 billion p.a.

Personal hygiene products (including bath and shower products, deodorants etc.), hair care, skin care, colour cosmetics and fragrances are key segments of the personal care market. In Asian markets, China and India are the maximum users of herbal cosmetic products. India the total ayurvedic products market is estimated to be Rs. 2500 crore per annum out which Rs. 450 crore is the market of natural herbal cosmetics.  The other coming market in Asia is the Malaysian herbal market with an annual turnover of Rs. 4.55 billion per year and is growing at a rate of 20% annually.

China is the largest exporters of herbal cosmetics in the world whereas India stands second in the global market share. Both the countries have a rich heritage and hence are the biggest exporters of herbal cosmetics.

The major drivers for Cosmetics are Non-Ionic W/N for retail sale, HCO Fatty Acid ( Including 12-Hydroxy Stearate) , Cream Face, Dentifrices in paste ( Tooth paste) and other beauty make-up preparation.

SOAPS DETERGENTS

The soap and detergent industry covers  laundry and toilet soaps and synthetic detergents in the form of liquids, powders and bars. These are consumer products and their quality, price, marketing and distribution network determines the success of the units in the sector. The industry has developed both in the small scale sector and organized sector. The manufacture of detergents and toilet soaps has been deli censed 

The Indian personal care market is estimated to be worth US$ 4 Billion (approx. Rs. 20,000 crore) this includes Bath and Shower products, Hair Care, Skin Care, Cosmetics, Fragrances and Deodorants. Bar Soaps also has grown at a growth rate of 5% per anum over the last 5 years and stands at market size of US$ 1.5 billion (approx Rs. 7500 crores).

The overall Indian personal care market has the potential to grow at 15-16% per annum and thereby double to US$ 8 billion (approx 40,000 crore) by 2012.

ESSENTIAL OILS AND PERFUMES

Global turnover of Essential Oil Industry business is estimated to around US$14 billion.  In this turnover India’s share is just about 10% though potential is much more.  Based on population ratio, the potential is estimated to be 18%.  The lack of coordination is responsible for not exploiting the potential to the full extent.  There are 400,000 plant species of both aromatic and medicinal plants known to the scientists.  Of these about 2000 species come from nearly 60 botanical families of essential oils.  Total production of essential oils in the world is over 100,000 tones.  India’s share is estimated to be about 15%.  This is almost stagnant for quite sometime due to a variety of reasons.

Aromatherapy is one of the more popular natural therapies across the globe Essential Oils, which are extracted from flowers, fruits, roots, resins and leaves are some of the earliest recorded medicines.

More than 300 essential oils are in use today.  Essential oils contain on average 100 chemical components and have myriad functions.  Some are antibacterial, antiseptic or digestive while others are antidepressant.

The major drivers for Essential oils and perfumes are Other Mint oils, Peppermint Oil ( Mentha Piperita), Perfumes and Perfumery Compounds, Other perfumes and Toilet Waters and Synthetic Perfumery compounds.

FLAVOURS AND FRAGRANCES:

The flavour industry emerged during mid nineteen century to crater to the processed food-manufacturing unit that grew during that time.  The flavour rials into three distinct categories.  Natural Flavours.

Flavour ingredients added are normally found either in the same food item or in other foods, but make the product acceptable when added.

Natural Flavours are products made using some of different single compounds of natural origin.  There are about 2000 different products in this category.  These natural chemical compound materials are separated by physical process from mixtures by distillation, extraction or solidification.

Artificial flavours are non-identical flavour ingredients that are discovered by scientist and researchers.  These substances not naturally presents in foodstuffs.  If at any future date the chemical is identified in any natural food product than it is reclassified as nature-identical.  Artificial flavours discovered are about 200 numbers and are prohibited in use till it is proved to be completely harmless for human consumption through a series of evaluation and clinical testing.  

The Flavour market and products in India is valued at about Rs.1600/- million.  It is growing fast ahead at  10% per annum.  The flavour market in India still consists of predominantly the first generation or simple flavour, low priced and comprised of mostly natural ingredients.  Import seems to constitute 40-50% of the total usage value.  Indian consumers is expected to continue to seek value for money and the flavours market still needs to create high-value new generation products at affordable cost.  This is a challenge to the creativity and innovation of the flavour segment.

The flavour & fragrance segments have experienced a great deal of restructuring during the past decade as a result of acquisitions, mergers, diversifications and joint-ventures.   This year India has exported mainly to UAE, Nigeria, USA, Sri Lanka and Malaysia.

CASTOR OIL

Total area under castor crop in India for the year 2009-10 is 7.40 lakh hectares. It has decreased by 10%% as compared to previous year.

Estimated total production of castor seeds in India for the year 2009-10 is 9.34 lakh tones. It has decreased by 4% as compared to previous year

Average yield for the year 2009-10 is 1261 kg/hectare is against 1180 kg/hectare during the year 2008-09. It has increased by 7% as compared to previous year

The global castor derivatives market is estimated to be over US $ 800 million, is highly dependent on India. India’s exports of Castor oil  during 1009-2010 is estimated at Rs.2178 Crores.

Castor Oil is not a commodity but a specialized technical industrial oil having valuable properties. Addition of Castor oil and its derivatives in various formulations has great significance for improving the performance of final products.  The use of such additives is small in terms of quantity, but gives significant  performance improvements.

Castor oil has all the potential to serve as a raw material for manufacturers conventionally produced through the petrochemical route. In fact, castor oil derivatives are considered superior since they are from renewable sources, biodegradable and eco-friendly.