BMI's Executive Summary

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Industry Overview

The Indian chemicals industry started developing after the country's independence in 1947. The industry has since become a major contributor to the economic and industrial development of the country. The industry is characterised by fragmentation, with the top-10 players contributing only 38% of sales and 45% of profit. Growing at the rate of more than 10% annually, the Indian Chemical Industry ranks 12th in the world and accounts for 13% of total exports from India. Accounting for 2% of global output, it is currently valued at about INR1.5bn with expectations that it reaches more than INR4bn by the year 2010.

Company Developments

Essar Chemicals, part of the Essar Group, and French chemical company Arkema announced the signing of an MoU to study the feasibility of a 50:50 joint venture in India for the production and commercialisation of acrylic acid and esters. Sherwin-Williams Co., the largest US paint retailer, agreed to buy Nitco Paints for an undisclosed consideration to enter the Indian market. Nitco Paints is a privately owned manufacturer and distributor based in Mumbai with sales of about US$18mn. Gujarat Alkalies and Chemicals Ltd (GACL) and the second largest global chemical giant, Dow Chemicals, have decided to ‘synergise' their efforts in the state and are in the process of giving this agreement a shape for long-lasting co-operation. The two companies would set up a 50:50 joint venture for a proposed chemical plant at Dahej in Gujarat or enter into a product sharing and marketing agreement.

Projects And Expansions

The Gujarat Government announced that it was likely to divest this year its entire 40% holding in State-owned Gujarat Alkalies and Chemicals Ltd (GACL). Among the potential suitors reported to be interested in buying the State Government's 40 per cent holding in GACL were the Reliance Group's Indian Petrochemicals Corporation (IPCL), the Aditya Birla group and Tata Chemicals. Tata Chemicals Ltd, the country's largest soda ash and edible salt maker, announced that it planned to broaden its business canvas by entering into the manufacture of bio-fuels and distribution of fresh fruits and vegetables. The company planned to set up its first bio-ethanol plant in Maharashtra at a cost of INR400-500mn with a capacity of 30 kilolitres per day.

Industry Outlook

The plastics industry is increasing at a rate of 14% per annum, and consumption is expected to be more than 12mn tonnes per annum (tpa) by 2010. Further, according to India's Union Minister for chemicals, fertiliser and steel, the demand for fertiliser is forecast to rise to 35.9mn tonnes by 2010. As such, the government plans to restart eight public sector fertiliser plants in the next two years.

Contents

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Chapter 1 - Executive Summary

Industry Overview

Advantage India

Company Developments

Global Expansion Plans

Indian Chemicals Industry SWOT

Chapter 2 - Market Overview

Opening Up Of Economy Drives Growth

Increasing FDI

Chapter 3 - Market Structure

Basic Chemicals

Inorganic Chemicals

Organic Chemicals

Fine And Speciality Chemicals

Paints And Varnishes

Adhesives

Dyes & Dye Intermediates

Knowledge Chemicals

Agrochemicals

Biotechnology

Table: Consumption of Biotech Products

Major Indicators

Table: Indian Chemicals Industry Statistics

Capacity

Capacity Utilisation

International Trade

Industry Characteristics

Significant Position In Manufacturing Sector

Table: Industry Characteristics Matrix

Business Environment

Infrastructural Bottlenecks

Chapter 4 - Industry Trends And Developments

MoU Between Indian And US Chemicals Associations

Contract Research And Manufacturing Services

Company News

Impact Of 2006-2007 Budget

Introduction Of Value Added Tax

Projects And Expansions

Mergers, Acquisitions And Finance

Chapter 5 - Industry Forecast Scenario

Table: Indian Chemicals Industry – Historical Data & Forecasts

Chapter 6 - Macroeconomic Forecast

Mild Slowdown

Table: GDP And Population

Chapter 7 - Company Monitor

IFFCO

Gujarat Narmada Valley Fertilisers Company

Ciba Specialty Chemicals (India)

Clariant Chemicals India

Bayer CropScience (Formerly Bayer India)

Rallis

ICI India

BASF India

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Chemicals & Petrochemicals Industry

Cross checks

Competitive Landscape for Asia Chemicals: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.