Chemical Industry in India Under the Hood of India's Chemical Industry
India is one of the most important destinations for chemical companies. In such a scenario, Prasad Chandran, Chairman and Head-South Asia, BASF India talks to PROCESS India about the Indian market and its growth in the coming future.
PROCESS: We are almost at the end of the year 2012. How has this year been for chemical and specialty chemical sector?
PRASAD CHANDRAN: While oil prices remained at high level throughout the year, prices of petrochemicals have shown a downward trend. This has been largely influenced by the weak EU economies and volatility in the United States.
The Indian market started on a slow note in the beginning of 2012 but showed signs of recovery in the second half of the year. These included industries like: automotive and paints & coatings to name a few. Overall, petrochemicals sales showed growth of 10-12 per cent as compared to last year.
Specialty chemicals industry continued to face the limitations of feedstock availability. With the overall slowdown in the Indian economy and its resultant impact on the end-user industries, specialty chemicals witnessed moderate growth.
The Chemical Industry Awakens
PROCESS: How do you see the growth of Indian chemical and specialty chemical sector in India?
CHANDRAN: The opportunities for the chemical industry in India are manifold. Today, India is the third largest market for chemicals in Asia and is expected to grow further. With increasing purchasing power for all groups of the population, consumers want to buy longer lasting goods and goods that improve their quality of life and status.
This offers tremendous scope for innovations from the chemical industry. Hence the demand for chemicals in India is founded on a strong domestic demand rather than on exports. Further, the Government has also been placing great emphasis on the opening up of the manufacturing sector in India. In the Draft National Manufacturing Policy, which is a recent development, the Government
has spelled out its desire to improve the contribution of manufacturing sector into the overall GDP growth rate of India – it is estimated to grow from current 16 per cent to 25 per cent by 2022.
This, coupled with an awakening among industry players will provide a major fillip to the growth of the Indian chemical industry. Valued at USD 108 billion in 2011, the sector is poised to grow at a CAGR of 9 per cent per annum.