India's 10% Growth in Petrochemicals to Attract $25 Billion Through 2012

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Researched by Industrial Info Resources (Sugar Land, Texas)--Driven by India's national petrochemicals industry policy, the production of ethylene will increase from 2.7 million tons per annum (TPA) to 6.9 million TPA during the 11th five-year plan (2007-12). The policy aims to increase investments in the sector and capture a slice of the resurgent Asian demand in polymers through additions to capacity and production, by ensuring availability of feedstock at internationally competitive prices, creating infrastructure, rationalizing tariffs and taxes and promoting exports.

Based on current prices, downstream petrochemical production is expected to increase from $3.75 billion/$4.5 billion to $7.5 billion/$8.75 billion through 2012. The policy aims to increase the competitiveness and polymer-absorption capacity of the domestic downstream plastic-processing industry by modernizing the technology to free it from structural restraints.

The aim is to increase domestic demand and per-capita consumption of plastics and synthetic fibers from the current 4 kilograms and 1.6 kilograms, respectively, to about 12 kilograms and 4 kilograms by 2011. Targeted growth areas include: modern farming through plasticulture, packaging for processed foods and consumer nondurables, better performing plastics for autos and consumer durables, infrastructure development through cost-effective plastics, and innovative products for telecommunications and information technology services sector. The shift is toward the development of value-added, quality petrochemical products at globally competitive prices.

The policy also aims to achieve environmentally sustainable growth through innovative methods of plastic waste management and recycling and the development of bio - photodegradable polymers and plastics.

The petrochemicals industry anticipates total investment of $25 billion through 2011 with the downstream sector taking $12.5 billion. Major domestic companies, such as ONGC, RIL, IOC and Essar, are pushing through projects ranging from exploration to refineries to international manufacturing projects. With a growth rate of 10% per annum, the industry has attracted the investment and joint-venture interest of global oil and petrochemical majors.

Petroleum, Chemical, Petrochemical Investment Regions are being set up to give focus to the policy and will receive funding of up to $2.5 billion from the central government.

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