Petrochemicals Global Trends & Opportunities for Investment in India A N JHA , Executive Director ( Petrochemical- Project ) Date: 5 th Oct ’2018
Structure of Presentation Petrochemicals Business- Environment scan Petrochemicals Global Trends Petrochemicals: Demand Supply Outlook Opportunity for Investments Conclusions 2
Petrochemical Business: Environment Scan India is one of the Fastest growing large Economy � Polymer Demand is growing at 1.5 times of GDP Lower per capita Polymer consumption base � 10 kg/capita compared to global average consumption of 35 kg/capita Regional imbalance, Polymer per capita Consumption � Eastern India : 3.4 Kg/Capita � Northern India : 5.7 Kg/Capita � Southern India : 7.6 Kg/Capita � Western India : 17.0 Kg/Capita Strong Govt. support to boost economy � Swachh Bharat to boost Water & sewage network, Hygiene and sanitation � 100 Smart cities � Digital India � Make in India/ Start-up India � 100% FDI in food retail and many more initiatives 3
Global Trends: Refinery- Petrochemicals Integration � Process Integration – Innovative design considering downstream � Utility Integration – Heat, Hydrogen, water, power, steam Nitrogen, Air etc. � Utilization of gas fuel - Utilization of Hydrogen, hydrocarbon present in gas fuel as feedstock � Crude to Chemicals / Petrochemical Refinery Refinery , Refinery & Crude to Refinery Aromatics & Aromatics Chemicals Olefins Petrochemical Intensity Petrochemical Intensity Petrochemical Intensity Petrochemical Intensity Index : 10% Index : 20% Index : 35-50% Index : 0%
Typical Global Refinery-Petrochemicals Integration model 5
Indian Polymer Growth Trend 30000 28403 25000 21230 21230 20000 19870 15000 KTA 8802 8838 10000 9531 7171 6544 7173 5299 5979 6011 5000 1963 1937 522 986 0 2011 2013 2015 2017 2025 2030 -1360 -5000 Production DEMAND IMPORTS Polymer demand (PE+PP) increased @ 10% CAGR during past 5 years “Opportunity for Investment in Polymers” 6 Source: ICIS Report, 2017
Indian Fibre Intermediates Growth Trend 16000 14647 14000 12000 10790 11705 10790 10000 8000 6784 7511 6345 KTA 5856 5154 6000 5167 3963 4314 3857 4000 1630 1204 1542 915 2000 1166 0 2011 2013 2015 2017 2025 2030 Production DEMAND IMPORTS Fibre Intermediates (PTA & MEG) demand increased @ 8% CAGR during past 5 years “Opportunity for Investment in Fibre” 7 Source: ICIS Report, 2017
India Supply Demand Scenario for Top Imported Petrochemicals S. Product Domestic Demand Imports in 2017 Value (Rs %CAGR No Production (KTA) (KTA) Crore) (2017-30)# (KTA) 1 PVC 1444 3085 1658 8804 7.2% 2 PX 3160 3780 1320 6749 5.6% 3 Styrene 0 669 672 4661 4.8% 4 PP 4707 4486 504 3092 8.7% 5 HDPE 2065 2075 460 3062 9.0% 6 LLDPE 1761 2105 388 2774 9.3% 7 Methanol 220 1902 1697 2603 5.1% 8 LDPE 305 591 311 2353 5.2% 9 Metallocene 0 274 274 2348 8.9% LLDPE 10 Polyether 57 266 218 2257 6.6% Polyols *Source: Import data from the website of Department of Commerce, Ministry of Commerce & Industry 8 # ICIS Report, 2017
India Supply Demand Scenario for Top Imported Petrochemicals S. Product Domestic Demand Imports in Value %CAGR No Production (KTA) (KTA) 2017 (KTA) (Rs. Crore) (2017-30)# 11 Polycarbonate 0 138 142 2143 4.5% 12 Methyl Diphenyl 0 146 146 1826 6.6% Diisocyanate (MDI) 13 MEG 1608 1985 434 1796 5.2% 14 Vinyl Chloride Monomer 995 1387 392 1771 7.8% (VCM) 15 Styrene Butadiene 143 297 169 1550 8.5% Rubber 16 Toluene 905 1285 385 1521 6.6% 17 Ethyl Vinyl Acetate (EVA) 1 159 160 1475 7.4% 18 Alpha Olefins 1 99 98 1417 6.1% 19 Phenol 35 283 253 1337 5.2% 20 Butyl Rubber 0 102 102 1320 9.0% 17,407 25,114 9,783 54,859 TOTAL * Net imports of Petrochemicals has increased from Rs.10,601 Crore in 2007-08 to Rs. 54,859 Crore in 2017 *Source: Import data from the website of Department of Commerce, Ministry of Commerce & Industry 9 # ICIS Report, 2017
Petrochemicals : Investment Opportunities Based on the domestic Demand-Supply Scenario and future growth rate, opportunities exists for capacity enhancement of following products: � Olefins (Polyethylene + Polypropylene) � Poly-Vinyl Chloride (PVC) � Methanol � Styrene � Ethylene Glycol � Elastomers (SBR, Butyl Rubber etc.) � Speciality Chemicals (Polyols, Hydrocarbon Resins, MMA/PMMA etc) � Polyester Yarn/Fibre -- CP and Downstream � Olefins -Value added compoundings 10
Supply Demand Scenario-Major Products, KTPA S.No. Petrochemical Name Total Capacity Total Demand (Installed+Under Construction) Yr 2025 Yr 2030 Yr 2040 1 PE 7683 10,430 15,068 29,493 (HDPE+LLDPE+LDPE) 2 PP 8385 9440 13,335 22,734 3 PVC 1482 5885 7610 11,425 4 MEG 2400 3073 3740 5030 5 Acetic Acid 633 1320 1534 2022 6 SBR/PBR 470 803 1166 2172 7 Butyl Acylate 340 254 325 529 11
Requirement of C2” and C3” Monomers Year 2017 2025 C2” 6305 14520 Monomer Requirement 4836 7304 Existing/Projected Production - 170 C2”from Incremental Refining Capacity - 7046 Net Capacity Required C3” Year 2017 2025 4486 9440 Monomer Requirement 4707 7695 Existing/Projected Production - 440 C3”from Incremental Refining Capacity - 1305 Net Capacity Required The monomer requirement is based on demand of bulk polymers namely PVC, PE & MEG as per Petrochemical Perspective Plan-2040. 12
Cracker Capacity and Estimated Investment Parameter Yr 2025 Balance C2” required from Crackers 7046 Balance C3” required from Crackers 1305 Total Number of Crackers required 5 (@1500 KTPA C2” Capacity) 1,75,000 - 2,00,000 (100% Gas feed) Approximate Investment (Rs Cr) 2,00,000 - 2,25,000 (Dual feed) � The Crackers may be Gas based or Dual feed based. The choice of feedstock will depend on prevailing economics, feedstock availability, relative prices of feedstocks etc. � The feedstock availability from Refineries shall depend on capacity expansion projects implemented in future. � Beyond Yr 2025, In order to meet projected petrochemical demand of Yr 2040, on an average one Cracker of 1.5 MMTPA capacity is required every year. 13
Capital Investment Estimations of Olefin Production 14 Source ICIS
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Conclusions: Deficit in Indian Petrochemical Markets & sustained Growth Investment opportunity in olefins and speciality petrochemicals & chemicals- High Value - Mid term/ Long Term Investment opportunity in Deep downstream in Yarn/ Fibres and value added polymers . – Low cost - short term 16
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Petrochemicals : Japanese Investment in Neemrana, Gurgaon (India) & Others Company Products T S Tech Company Limited Resin based Automotive Products for Motorcycle, seats and other parts Roki Minda Company Pvt. Limited Automotive air intake system, carbon canister, Power steering fluids, filters Mitsui Prime advanced Composites India Automotive interior and exterior Private Limited components Mytex Polymers High performance engineered (Subsidiary of Mitsubishi chemical corporation, Japan) Polyolefin Sekisui DLJM Molding Pvt. Limited Automotive Interior components. Kingfa, Basell (Zylog), APPL, Hyundai, Automotive Compounders with Machino Polymer etc Homo/RCP/ICP Polymers (35 - 100 MFI) 18
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