Chemical Industry and Major Indian Companies

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Introduction

The chemical industry has been playing a significant role in our day-to-day life.

Almost each and every item we consume, there’s components of chemical, starting from toothpaste to using mosquito’s repellent liquid (Odomos, Good Knight) while sleeping, from eating home-cooked food to drinking Pepsi or coke. Chemical is omnipresent.   

With its essential role in other sectors, it is not surprising that the chemical sector is a vast and complex industry in nature too.

Chemistry icons doodle set | Drawing book pdf, Science doodles, Chemistry
Source: Google

Market Size of Chemical Industry

The global industry size is around US$ 4.60 tn whereas India contributes just US$ 0.14 forming 3% of the total share.

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China’s role in the world chemical industry has been crucial. With US$ 1.60 tn, China contributes around 35.0% followed by Europe with a share of 20% and the US of ~15%.

The China chemical industry was contributing ~18% to the global chemical market in 2008, which grew to ~35% in 2020.

Chemical Industry
Chemical Industry

 

The below chart shows how much potential India has in this sector!

Chemical Industry in India
Chemical Industry in India

 

Chemical Industry Segmentation

Broadly, the chemical industry can be divided into four segments.

Chemical Industry Segmentation
Chemical Industry Segmentation

 

Raw Material & Feedstock:

Petrochemicals are derived from petroleum and natural gas and fossil fuels like coal or natural gas.

The two most common classes of petrochemicals are olefins (ethylene, propylene, and butadiene) aromatics (benzene, toluene, and xylenes)

Oil refineries produce olefins and aromatics by cracking of petroleum fractions, whereas chemical plants produce olefins by steam cracking of natural gas like ethane and propane, and aromatics are produced by catalytic reforming of naphtha.

Petrochemical derivative products can be made in a variety of ways:

  1. Directly from primary petrochemicals;
  2. Intermediate products which contain only carbon and hydrogen and
  3. Intermediates that incorporate chlorine, nitrogen, or oxygen in the finished derivative.
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In some cases, they are finished products; in others, more steps are needed to arrive at the desired composition.

Of all the processes used, one of the most important is polymerization. It is used in the production of plastics, fibers, and synthetic rubber, the main finished petrochemical derivatives.

   
Building Block/Petrochemical Derivatives Chemicals
Olefins Ethylene, Propylene & Butadiene
Aromatics Benzene, Toluene, Ortho-xylene, Mixed Xylene, Paraxylene
Fiber Intermediaries Acrylonitrile (ACN), Caprolactum, Mono Ethylene Glycol (MEG), Purified Terephthalic Acid (PTA)
Synthetic Fiber & Yarn Polyester Filament Yarn (PFY), Nylon Filament Yarn (NFY), Nylon Industrial Yarn (NIY)
Other Petro-based chemicals Butanol, Isopropanol (IPA), Phthalic Anhydride (PAN), Propylene Glycol (PG), Polyvinyl Acetate Resin, Vinyl Acetate Monomer (VAM) etc.
   
Source – Research Gate
Source – PCPIR Rejuvenation Study, 2019

 

Bulk Chemicals

Bulk Chemicals are high volume and low-value products; they are produced to cater to a vast range of downstream industries. These can majorly be classified into three classes, alkali, organic and inorganic.

Alkali Chemicals – These chemicals are groups of chemicals with high Ph (7.0) and they are soluble in water, too.

Inorganic Chemicals – Inorganic chemicals are the chemicals that are not carbon-based and are of mineral origin, these chemicals are used as intermediates for downstream industries.

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Organic Chemicals – Organic chemicals are chemicals that are carbon-based. Organic chemicals have a significantly large contribution to the Indian chemical industry. We import the majority of our requirements.

Alkali Chemicals and Indian Companies

Inorganic Chemicals and Indian Companies

Organic Chemicals and Indian Companies

            Source – PCPIR Rejuvenation Study, 2019

 

Also Watch: Chemicals Sector Analysis by Vivek Mashrani

 

Specialty Chemicals and Indian Companies

It is defined as a “group of relatively high value, low volume chemicals known for their end-use applications and/or performance-enhancing properties.”

In contrast to base or commodity chemicals, specialty chemicals are recognized for ‘what they do’ and not ‘what they are’.

Specialty chemicals provide the required ‘solution’ to meet customer application needs.

It is a highly knowledge-driven industry with raw materials cost (measured as a percentage of net sales) much lower than for commodity chemicals.

 

Market Size of Speciality Chemicals in India

Sub-Industry Market Size (USD bn) 2014- 2019 CAGR 2019- 2025 CAGR
Agrochemicals 9.2 10.0% 12.0%
Flavors &Fragrances 1.4 14.2% 15.0%
Nutra Ingredients 1.0 19.0% 20.0%
Dyes and Pigments 7.0 7.3% 10.0%
Personal Care Chemicals 1.0 15.5% 15.0%
Surfactants 2.0 6.4% 11.0%
Textile Chemicals 1.8 10.4% 11.5%
Construction Chemicals 1.4 13.5% 15.0%
Polymer Additives 1.3 12.8% 10.0%
Water Chemicals 0.8 14.9% 15.0%


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