Transcript Polymer Business Plan FY 12-13

Shaping Growth of Petrochemicals
in India
Amit Chaturvedi
Reliance Industries Limited
Contents
India – The Growth Story
Growth Drivers
Indian Petrochemical Industry
Path Forward
Challenges
2
India - The Growth Story
3
GDP Growth
 60 years for the first US$ 1 trillion of GDP
 It is expected to take only 8 years for US$2 trillion, today India is 10th largest
economy in world
 Subsequent trillions in 5 and 4 years
4
India: On the path of economic recovery
• Economic recovery is underway
• Sharp slide in inflation to multiyear lows
• Reform momentum has picked up on the back of
• Measures to cut red tape
• Expected increase in infrastructure investment
• Deregulation of key parts of the economy
• Soft oil prices will help economic growth by
• Opportunity to reduce subsidy and fiscal deficit
• Raising real incomes and support consumption
• Easing current account pressures
• RBI slashed key lending rates (15-01-15)
• lagging indicator of the turnaround in the economy – Kicking the growth
Dependent on strong and sustained progress on reforms
5
Growth Drivers
6
Accelerated Urbanization
• Increasing urban share in population
– 2011
– 2021
– 2030
: 31%
: 35%
: 40%
• Number of cities with population >1 million to rise from 53 in 2011 to 75+
in 2021
Investment Required in Urban Infrastructure (excl Housing) 2012-30 ($ billion)
Miscellaneous
68.4
Waste Management
10.1
Traffic Infrastructure
20.4
Capacity Building
21.2
Storm Water Drains
39.8
Sewerage
50.6
Water Supply
66.9
Renewal & Redevelopment
85.2
Urban Transport
93.6
Total Investments >$ 860 bn
360.2
Urban Roads
0
100
200
300
400
7
Purchasing power continues to rise
Source: NCAER, Reliance Research
50% of India’s population is < 25 years of age and 65% is < 35 years old
8
Infrastructure
Road
In thousand kms
Air
1st
Airport
125 Airports
4689
400
2014
1950 - 51
1928
•
•
•
•
•
•
•
•
2014
India Second in Air Traffic Growth
Target ₹ 934 crore investments by AAI for FY15
15 additional airports to be constructed
Projects worth Rs 1.5 lakh crore cleared till
Water
13 major Ports
date
Projects worth Rs 2 lakh crore to be
2014
launched this year
1 Port
after Independence
1860 km of new road contracts awarded in
1st five months of FY15
Proposed to award over 23 km projects
daily (against 8.6 km)
1947
Govt. aims to complete construction of over
• Projects worth ₹4200 Cr awarded already
17 km road a day (against 11.67 km)
• Major ports to double capacity in next 5 years to
1600 MTPA
9
Retail and Packaging to fuel growth
Organized
Retail
470 Bn
27 Bn
2020
2013
Packaging
• Milk, snacks, poultry to drive packaged food
industry growth
• Expected annual growth rate of 15% per
annum
10
Housing and Water Supply & Sanitation
• Rapid urbanization
• Decline in population below poverty
line
• Focus on affordable housing
• Investment of ~US$ 80 Bn in coming
years to build 25 million houses
(shortage of houses in India)
• Water supply and sanitation a key
thrust area for the Govt
11
A day in the life of India: 2013 vs 2020
Average Daily Sales in India: 2013 & 2020
16438
6000
36400
41096
22100
79452
63014
36800
21918
19178
10600
10100
12
Indian Petrochemical Industry
13
2012/13
2011/12
2010/11
10000
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
1990-91
1984-85
1979-80
1978-79
1977-78
1976-77
1975-76
1974-75
KTs
1973-74
1972-73
1971-72
1970-71
1969-70
1968-69
1967-68
1966-67
3000
1965-66
4000
1964-65
5000
1963-64
6000
1962-63
7000
1961. First Indian cracker of Union Carbide
8000
1961-62
9000
1960-61
Our Journey to 10 MMT
Indian Polymer Consumption
Every yr
India is adding 1 MMT consumption per year
Every 2
yrs
Every 5 years 1 Mn Tons
2000
1st Mn Ton 30 years
1000
0
14
12th Five Year Plan Projections …
All Fig in KTs
Group
Product
Building Blocks
Butadiene
Comm Plastics
Surfactants
Consumption Growth
Capacity
Gap
Actual
Projected
2011-12 2016-17
11th Plan 12th Plan
124
470
During
During
2006/07-11/12 2011/12- 16/17
11th Plan
12th Plan
2.8%
30.5%
Actual Projected
2011-12 2016-17
11th Plan 12th Plan
295
528
Actual
Projected
2011-12
2016-17
12th Plan 12th Plan
171
58
Ethylene
3785
6805
7.0%
12.4%
3867
7087
82
282
Propylene
3700
4823
11.7%
5.4%
4117
4987
417
164
Styrene
496
647
4.1%
5.5%
0
0
-496
-647
Total
8105
12746
8.7%
9.5%
8279
12602
175
-143
LDPE
405
597
9.9%
8.1%
205
605
-200
8
LLDPE
1198
2076
13.7%
11.6%
835
1960
-363
-116
HDPE
1657
2573
10.9%
9.2%
1825
3090
168
517
PP
2993
5015
14.4%
10.9%
4140
4715
1147
-300
PVC
1925
3102
9.6%
10.0%
1330
1635
-595
-1467
PS
377
638
8.9%
11.1%
640
666
263
28
8555
14001
11.9%
10.4%
8975
12671
420
-1330
PBR
131
193
10.4%
8.1%
74
164
-57
-29
SBR
186
275
13.6%
8.2%
20
370
-166
95
NBR
31
47
5.3%
8.7%
20
40
-11
-7
Butyl
87
127
11.3%
7.9%
0
100
-87
-27
EPDM
27
79
11.0%
24.0%
10
90
-17
11
Total
462
721
11.4%
9.3%
124
764
-338
43
LAB
483
627
7.8%
5.4%
530
530
47
-97
EO
165
241
11.9%
7.9%
209
254
44
13
Total
648
868
8.8%
6.0%
739
784
91
-84
Total
Syn Rubbers
Consumption
12th Five Year Plan Projections Contd.
Consumption
Consumption Growth
Capacity
Gap
Actual
Projected
2011-12 2016-17
11th Plan 12th Plan
During
During
2006/07-11/12 2011/12- 16/17
11th Plan
12th Plan
Actual Projected
2011-12 2016-17
11th Plan 12th Plan
Actual Projected
2011-12
2016-17
12th Plan 12th Plan
All Fig in KTs
Group
Product
Solvents and Int
Benzene
595
935
3.1%
9.5%
1235
2110
640
1175
Toluene
440
650
9.3%
8.1%
270
270
-170
-380
Mixed Xylenes
88
130
15.5%
8.0%
90
90
2
-40
Ortho Xylenes
266
379
1.5%
7.4%
420
420
154
41
Phenol
212
288
4.8%
6.3%
74
374
-138
86
ACN
125
181
0.8%
7.6%
40
40
-85
-141
Total
1726
2563
4.7%
8.2%
2129
3304
403
742
PX
2306
4576
7.0%
14.7%
2477
5201
171
624
PTA
4350
7992
8.1%
12.9%
3850
7130
-500
-862
MEG
1836
3024
13.7%
10.5%
1300
3024
-536
0
PET
542
1319
25.5%
19.5%
814
2310
272
991
Total
9034
16911
9.5%
13.4%
8441
17664
-592
753
PSF
1100
1600
6.8%
7.8%
1400
2000
300
400
PFY
2100
3500
10.6%
10.8%
3000
5216
900
1716
NFY
56
71
11.8%
4.9%
32
32
-24
-39
NIY
113
125
2.9%
2.0%
74
74
-39
-51
PIY
36
68
-
13.6%
21
68
-15
0
3405
5364
9.2%
9.5%
4527
7390
1122
2026
Fibre Intermediates
Synthetic Fibres
Total
12th Plan: New capacity  Job Creation
Group
Cap addition in
12th Plan KTs
Building Blocks
4058
Comm Plastics
3696
Syn Rubbers
640
Surfactants
51
Solvents and Int
1175
Fibre Intermediates
8687
Syn Fibres
2863
Total
21170
App 21 MMT capacity planned. This will create > 1.5 million direct and
indirect jobs in petrochemicals and downstream processing
Path Forward
18
India’s per capita consumption one of the lowest
120
Per capita Polymer Consumption (kgs)
106.3
100
80
67.2
60
40
20
19 Kgs
in 2022
42.6
49.6
55.7
58.4
33.9
25.6
8
0
^ Asia denotes average of developing SE Asian countries
A catch-up to the levels of other Asian countries to lead to several
decades of high growth- Big opportunity
19
Make in India
To further unlock potential
for petrochemical industry
• To boost to share of manufacturing
in GDP
• Leading to higher growth and job
creation
• Thrust sectors where India will grow
• Chemicals
• Automobiles
• Pharma
• Textiles
• IT
• Ports
• Railways
• Aviation
• Food processing
• Electronics
20
Specialty chemicals – key to nation building
Auto & transportation
Agri & Food Security
Agrochemicals
Infrastructure & Construction
Specialty Polymers
Municipal & Industrial
Water
Water treatment
chemicals
Construction chemicals
Textile
Textile chemicals
21
Challenges
22
Challenges to be addressed
FTAs
Sustainability
Manpower
availability
WTO
Technology
Competition
from feedstock
advantaged
regions like
ME, US shale
gas
Petrochemical industry – potential to be unlocked & unleashed
23
Thank You
24