20-03-2012, 03:48 PM
chemical industry
Article_Chemical_Industry_Outlook_2011_final.pdf (Size: 46.16 KB / Downloads: 57)
The Indian chemical industry forms the backbone of the industrial and agricultural
development of India and provides raw materials, intermediates and building blocks
for several downstream industries like pharmaceuticals, construction, paints and
coatings, automobiles, tyres among others. Specialty chemicals are an indispensable
part of everything that surrounds us – the houses we live in, the offices we work in,
the cars and the vehicles we ride, the food we eat and so on…
This implies that the potential for the Indian specialty chemicals industry would be
triggered by a strong domestic demand supported by the large rising middle class
household consumption and increase in discretionary spending by these households.
Also the current levels of penetration of goods in India is rather low, an increase in
consumption of the goods by the end user industries will boost the growth of the
specialty chemicals industry as well. All such industries like construction, automotive,
tyre and agrochemicals are growing at very healthy rates currently.
Key demand drivers
As Indian economy is witnessing a very high growth rate in all segments particularly
driven by a burgeoning middle class, fiscal stimuli by the government and increased
spending on infrastructure, there will be an in - tandem growth in segments like
automobiles, plastics, pharmaceuticals, construction, food processing, domestic and
industrial appliances among others. This would trigger a high demand for basic
chemicals, specialty chemicals and advanced intermediates from the chemical
industry.
India is also becoming an export hub for specialty chemicals and knowledge chemicals.
The re-engineering capabilities and the lower cost of production make India a
favorable destination for sourcing activities from companies all over the world.
Challenges
In India, a significant part of the chemical industry is unorganized and fragmented in
nature and is small scale in operations. Most Indian companies lack a global platform
for production, distribution and are ill - equipped to serve the needs of a global
market. Lack of innovation is another key parameter that hinders the growth of the
Indian chemical industry. Additionally, rise in the prices of crude oil in the recent
past, cost of power and the fluctuation in the exchange rates have also hampered the
volume of exports.