Page 165 - CW E-Magazine (4-6-2024)

Special Report Special Report

Unfounded apprehensions about chemical measures from time to time in tune with are not adequately aware of the techno- projects, particularly for bulk chemi-
cals such as methanol, nitric acid,
the developing trend.
logy developments happening that may
industries Units have also become sick due change the picture in future. ammonia, ethylene/propylene etc., this
is not so in the case of several specia-
n recent times, the import of chemi- jects inherently have to teething problems while originally A postmortem of the sick indus- lity chemicals, particularly those which
cals and polymers have been steadily an element of risk N.S. VENKATARAMAN commissioning the projects. In most of tries would clearly indicate the fact that have low demand.
Iincreasing, in line with growing and uncertainty due to Director such cases, the teething problems could sickness does not happen overnight,
Indian demand. The increasing demand environmental factors, Nandini Consultancy Centre have been overcome, but it is found in but it is a gradual process, providing It is seen that many domestic com-
in the Indian market should have been market change possi- Chennai many cases that the project promoters adequate warning to the managers about panies are not keen to spend time and
preceded by capacity creation for the bilities and price fl uc- Email: nsvenkatchennai@gmail.com are unable to spend resources to sus- the impending disaster. In most cases, resources in developing process tech-
production of these chemicals in India, tuation of feedstock. introduced Insolvency and Bankruptcy tain the unit and identify the correc- the issues could have been anticipated nology and carrying out pilot plant
but this has not happened and therefore, Investment in chemical industries is Code (IBC) and created the National tions required in process parameters in and avoided, if the managers have kept studies to optimise the technology
increase in import have become inevi- considered a calculated risk, in contrast Company Law Tribunal (NCLT) to appropriate way. Sickness have also themselves updated with developments parameters, fearing that it may become
table. to investment in other sectors such as quickly resolve the sickness issues in happened due to price fl uctuation of with regard to the technology, markets a prolonged and time consuming affair.
electronics, automotives, textiles, engi- industries and revive the sick units to feedstock or dumping of imported pro- etc. A discerning observer of chemical The practice of collaboration and co-
There are several bulk chemicals neering, real estate and others. Further, the extent possible. ducts at low prices in the Indian market. industry will conclude that there are operation to develop technologies is
such as L-Lysine, methyl methacry- there is a counterproductive campaign no inherent problems in the chemical conspicuous by its absence. CSIR labs,
late and polymers such as polyacetal, by the so-called environmental activists The NCLT approved a record 269 There have also been cases where industry that cause sickness, but that largely funded by government, are also
polycarbonate and others, which are who are not well versed with the recent Resolution Plans under the IBC in the project cost estimation have been it often happens due to inadequacy of not meeting the technology needs of the
imported in large quantity with nil pro- technology developments and practices FY2024, surpassing the FY2023 record less than what really had to be incurred project managers, lack of planning and chemical industries.
duction in India. Such import happen in the chemical industry. Their view is of 189 cases, but the rise in average while implementing the project due to lack of dynamism needed to tackle
not only in the case of bulk chemicals that any chemical industry is hazardous, duration of the resolution process has reasons such as delay in implementa- complex situations as they develop. Not for all and sundry:
and polymers, but also in several spe- and causes environmental pollution. In caused worries. The number of Corpo- tion and consequent cost escalation, etc. A number of project promoters,
ciality chemicals including pharmaceu- such a scenario, there is a public per- rate Insolvency Resolution Processes One of the most important factors in Excessive dependence on technology particularly the start-ups, seek to set
tical intermediates. While everyone is ception that chemical industry could (CIRPs) closed through liquidation deciding the project capacity is the imports up projects without any sort of work
aware of this scenario and Government pose safety risks and should be avoided orders continued to outpace those yield- market and a demand-supply assessment Several prospective projects could experience in the particular sector of
of India has been urging the chemical to the extent possible. ing a resolution plan, The number of needs to be carried out before deciding not be implemented in India in recent the chemical industry where they plan
industry to build manufacturing capa- cases admitted in CIRP so far is 7,325. the capacity of the project. A market years due to want of proven process to venture. Work experience is very
city and have introduced proactive The recent incidents leading to clo- In this, the number of chemical com- study covering Indian and global technology from domestic source. In important before promoting chemical
measures to facilitate capacity build up, sure of Sterlite Copper unit and stop- panies is not large. This clearly proves markets is a very critical factor, where the such cases, the technology have to be projects. Given the high mortality rate
a big change for better in the chemical page of production at the Coromandel that chemical industries need not be recommendation on capacity has to be necessarily obtained from abroad. of start-ups, it is important to under-
manufacturing climate has not taken International unit (both in Tamil Nadu) considered as sickness-prone. based on multiple and inter-linked fac- stand this aspect of work experience.
place in India so far. This is a cause for only indicate such trend, though tors, after clearly working out the risk Considering the proposed capacity
concern. experts in chemical industry are of Reasons for sickness in chemical factors and mitigation prospects. Many of the project in India, it is often seen No one should venture into s chemi-
the fi rm view that both are thoroughly industry projects are seen to have suffered due that the technology fees demanded by cal project without adequate exposure
It is high time that careful analysis unjustifi ed, counterproductive and A careful study of the sickness level to poor quality of market study and the overseas organisations are pro- and experience in the industry, at least
should be made as to why such manu- should have been avoided. and sickness pattern in the chemical inaccurate assessment of the emerging hibitively high and unaffordable for for a few years.
facturing capacity build up in chemical and allied industries, including those scenario. It is seen that market study is projects of intended capacity in India.
industry is lagging in India, in spite of Losses and closures in the medium and small scale sector, being carried out sometimes by agencies While technology licensing organisa- Project promoters should not learn
growing demand, availability of feed- It is true that a few chemical indus- reveal that they have been largely due that have no domain experience and tions are available abroad for several at the cost of the project!
stock in several cases, and investment trial units have suffered losses and have to issues either in the project conceiving
no more being a constraint due to the been forced to close down operations. stage before implementation, lack of
willingness of fi nancing institutions to However, the number of such closures forward planning by managers, or lack Missed a copy !!!
extend loans and enthusiasm shown by are not alarmingly high, compared of adequate expertise on the part of the For Digital Edition of this month’s issue & all other past issues
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164 Chemical Weekly June 4, 2024 Chemical Weekly June 4, 2024 165

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