India’s Plastics and Chemicals Sectors Grow/India Is Home to Massive Petrochemical Plants

Several of the world’s largest polymers companies have major operations in India. These include Momentive Performance Materials which was formerly GE Advanced Materials (GE was an early leader in the offshoring of engineering work to India), Bayer and BASF. Much of plastics production in India is PVC pipe and plastic films.

The Indian plastics industry posted strong growth in recent years. Although current plastic consumption is relatively low, both domestic consumption and exports of plastics have good long-term prospects.

The production of plastics in India may seem odd to a casual observer. After all, India is known to be the center of intellectual offshoring, such as engineering and software design, while China is thought of as the center for offshoring of heavier industries such as chemicals and plastics. However, India’s notable success in creating new jobs and attracting customers and investments from offshore is causing significant growth in the number of people who are achieving middle class status as their family incomes expand. In addition, India has long been home to several vast industrial conglomerates, including firms within Tata Group and Reliance Industries. The growing household affluence is creating increased demand for packaged consumer goods that offer greater convenience, such as processed and fast foods. At the same time, the construction industry has been growing. The demand for plastic packaging of all types is rising, along with plastics for building materials. Another unique aspect in the comparison of China’s and India’s plastics industries is that as China focuses on producing higher end, value-added products, India has a golden opportunity to step into the void for low value needs such as simple plastics processing.

India is enjoying a relatively healthy automobile manufacturing industry as well. The automotive sector relies to a growing extent on plastic components. Eventually, India may become a serious exporter of goods with plastic components. Meanwhile, relaxed government regulations make it possible for foreign companies to own a controlling interest in a plastics sector business based in India, thus attracting new foreign investments.

In addition to plastics, chemicals producers in India are enjoying growing business. India’s chemical output includes commodity chemicals, pharmaceuticals, petrochemicals, dyes and specialty chemicals. In fact, the pharmaceuticals industry, for both generic and for branded drugs, is booming, creating serious competition to more established manufacturers in Europe, the U.S. and Japan.

The nation’s rapidly evolving agricultural industry is receiving support from India’s Agricultural Ministry to create a major sector that produces pesticides, fertilizers and other agrichemicals. The flourishing consumer sector and growing personal income are creating demand for many chemical-based products, including personal care items such as cosmetics and household cleaners.

The Indian government is planning six chemical “estates” or investment regions which will each have an anchor refinery or a cracker with downstream plants as well as plastics processing units. In the private sector, India’s largest chemicals producer, Reliance Industries Ltd., invested $6 billion to double its Jamnagar refinery and construct two 500,000 ton-per-year PP plants. This is one of the most innovative (and largest) petrochemical facilities in the world, featuring an integrated refinery, petrochemicals manufacturing, internal power plants and a port in one complex. Meanwhile, Indian Oil Corp. controls many of India’s top refineries.

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