Page 175 - CW E-Magazine (25-3-2025)

India Chemical Industry Outlook Conference 2025

materials on geopolitically sensitive Rs. 20,000-crore allocation for private India to see if we can trade with different
regions, including the Middle East, sector R&D in the recent Union Budget, partners on a more balanced basis; the
Russia and China. as also the recent initiative by the gov- idea is to have roughly one-third each
ernment to create a portal that connects of total trade coming from Asia, Europe
He also lamented the lack of suffi - academic R&D capacity from about 50 and US. Countries that have their
cient integration to capture margin institutes, with the industry, in order to options so balanced will be best placed.”
across a value chain, resulting in lack foster collaborations.
of competitiveness. As an example he Having said that, Mr. Mensik
pointed to the value chain that begins In conclusion, Mr. Kotecha noted pointed out that China is the only part
with benzene, through to para-dichloro- that the demand growth trajectory for of the world where every part of the
benzene (PDCB), polyphenylene sul- India’s chemical industry is a given. value chain is present.
phide (PPS) resin, PPS compounds, “However, production growth is not so
and automobile OEMs. “All four steps certain.” “Europe’s politicians seem to have
happen in China in a range of less than heard our challenges and a key
1,000-km. In other countries, logistics Closer relationship between Europe programme to reduce energy costs and
and trade barriers take away 30-50% of and India reinvigorate industry manufacturing
the fi nal product value,” he stated. Marco Mensik, Director General, has been unveiled,” he added.
CEFIC, the European chemicals associa-
Similar ineffi ciencies exist across tion, pointed to the opportunity for ‘India has a problem with time’
many products in India with dispersed increased economic ties between Europe In a discussion on China’s ascen-
value chains. “This will need to be and India, adding that currently India dency to market leadership in chemi-
addressed in partnerships, not individu- ranks at seventh place in terms of trade cals, Mr. Sheng Hong, Partner at Mc-
ally,” he added. in chemicals for Europe. Kinsey’s Shanghai offi ce, attributed
the country’s rise to strong domestic &
Besides, the ineffi cient logistics and He noted that the new focus of the export demand, scale of new capacity
infrastructure inadequacies, Mr. Kotecha European Commission (EC) is on stra- builds, fundamental competitiveness,
pointed to inadequate R&D invest- tegic independence. A review of the effi cient capex management, and steady
ments as a point of concern, which is trade in goods spanning 160 tariff codes incremental improvements through
stalling fundamental innovations and in which Europe was found to depen- innovation, not just government support
leading to commoditization of even so- dent on China to the extent of more than and doles.
called speciality products. He stressed 70%, exposed many vulnerabilities, of
the need for collaborative and partner- which just one is active pharmaceutical Giving the example of the polyester
ship-led operating models for R&D. ingredients (API)s. The vulnerability industry, he noted that in 2001, domes-
“The old molecule-synthesis focused here to supply chain disruptions came tic demand was 11-mt, but capacity was
R&D model is no longer relevant.” home in the immediate aftermath of the 15-mtpa; by 2006, while demand had
pandemic, and the plan is not to have increased to 22-mt, capacity had soared
In this context, he welcomed the a repeat of this. “The EC is out here in to 36-mtpa; which rose further to
40-mtpa in 2011. “Private companies
believe the investment is valid if it based
on fundamental competitiveness. Pro-
ducers innovated on polyester process
technology to scale up polymerisation
line, and small incremental innovations
gave strengths.”

China’s producers, he added, are
also very effi cient when it comes to
capex, which enables plants to be set
up half the time and half the cost of a
similar plant in the US. “India has a
problem of time, and the ecosystem has

Chemical Weekly March 25, 2025 175

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