Page 130 - CW E-Magazine (16-1-2024)

Point of View

has been for two main reasons: the financial bonanza that accrues when turning the land into real estate for residential or commercial
development; and the reality that it has become too dangerous to operate plants in close proximity to large population clusters.

There was a hope that the massive 50-mtpa refinery planned for the State jointly by the three Indian refinery majors – first at Ratnagiri –
would spur the revival of chemical/petrochemical investments. But the project has become mired in the complex politics of the State,
despite being able to rope in two major international oil producers – Saudi Aramco and ADNOC, the national oil companies (NOCs) of
Saudi Arabia and Abu Dhabi, respectively. Nearly 10 years since the project was first proposed even the location is yet to be finalised,
and the NOCs have since plonked their monies on projects in China, where local and national authorities have rolled out the red carpet,
and in their home countries.

But for its sheer importance, every effort must still be made to fructify the project, as the business case is very much there. Notwith-
standing all the talk on green growth and decarbonisation, India will continue to need new refining capacity for several decades to come,
as it seeks to become more prosperous, and with a much larger emphasis on manufacturing to provide much-needed jobs to the millions
entering the workforce year-on-year. A large refinery, integrated downstream into petrochemicals, will afford fabulous opportunities to
valorize many streams that come from a barrel of crude. One has only to look at the value-addition Reliance Industries is able to carry out
at its Jamnagar refinery to get an idea of the possibilities.

It is not too late for Maharashtra to make up for lost ground as an investment destination for chemicals. It still has all of the strengths
that once made it a chemicals powerhouse – growing demand from high growth industrial sectors (automotives, coatings, textiles, etc.),
high quality manpower, and financial muscle.

Odisha
Odisha is blessed with excellent ports, a strategic geographical location to serve eastern markets, sizeable mineral resources in it and in
the surrounding areas, the presence of sizeable refining capacity thanks to Indian Oil Corporation (IOC), and availability of skilled talent (the
prestigious Institute of Chemical Technology, Mumbai, has a satellite campus in Bhubaneshwar, thanks, in part, to the benevolence of IOC).

IOC has identified petrochemicals as a clear business opportunity and is slowly, but surely, ramping up its presence in this business.
It can play a catalytic role in driving the development of a broad-based chemical industry in and around Paradip by forging partnerships
with chemical companies focused on development of fine and speciality chemicals, agrochemicals, pharmaceuticals and the like.

Tamil Nadu
TN had an early start in the development of India’s chemical industry, but has since been overtaken in considerable measure. The Manali
and Ennore areas, near Chennai, as well as the Cuddalore-Puducherry belt further south, area do have sizeable chemical manufacturing
activity, but, of late, there has been little or no growth in chemical output in the State, stymied, in large measure by the lack of access to
feedstock. With the Chennai refinery of IOC (earlier known as Madras Refineries) ramping up capacity, the improved availability of gas
(as LNG) at the Ennore import facility, and emergence of sizeable clusters for automotive and electronics manufacturing nearby, there are
reasons to be optimistic of the prospects for chemical manufacture in TN.

Today, much of the chemicals needed to serve markets such as coatings, plastics, home & personal care, etc. in TN, are ferried from
the western India, and producing at least some locally will have advantages. TN also boasts of excellent education infrastructure, right
up to the highest academic levels, and there is no shortage of skilled scientists and engineers.

Vital industry – and the bureaucracy should know this
One of the important factors that has driven chemical units to go to Gujarat has been the welcome attitude of the State’s bureaucracy,
which has a long history of dealing with the chemical industry and, at least in some measure, realises its importance to economic activity.
This cannot be said for most other States, where the bureaucracy continues to view the industry with suspicion and makes it feel less
welcome. This must change.

The role of the chemical industry as a catalyst of industrial activity, and of modern living, needs to be relentlessly communicated to
decision makers by the many associations that claim to speak for the chemical industry. The key message has to be that the industry
is vital, and it is neither sensible nor sustainable to put all of it in one part of the country, however attractive it may be at the moment.
Ravi Raghavan

130 Chemical Weekly January 16, 2024

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