Thriving Chemical Sector: A Vital Link for Atmanirbhar Bharat

India

A Compelling Place for Business

Dharm Vahalia

Managing Director, South Asia, Ascend Performance Materials India Pvt. Ltd., Chennai We are committed to reducing our environmental footprint and have a goal of reducing our greenhouse gas emission by 80% by 2030. Furthermore, we see sustainability as being more than environmental responsibility. Our strategy has three pillars, which are empowering people, innovating solutions and operating without compromise.

Q. Ascend comes with a huge product portfolio; please share if all of those would be available to the Indian market?

We are focused on serving our customers in India by bringing products that promote growth in a socially and environmentally responsible manner.

Given the growth in electrification and e-mobility, our Starflam flame-retardant engineered materials and our Vydyne PA66 will be among the first products we will produce in Chennai. FPL (our recent acquisition in India) was already producing Starflam products, and we expect to bring more of that portfolio to the market. We will also introduce our HiDura (speciality polyamides) products to target a variety of highly engineered applications.

We also intend to expand our market offerings in performance chemicals and sustainable specialities (nitriles, amines, esters, acids and some niche specialities) that cater to a variety of industrial, pharmaceutical, agricultural and personal care applications.

Finally, we will augment our efforts to promote Acteev anti-microbial solutions that, I believe, will solve myriad hygiene and contamination-related issues in the medical and speciality textile segments.

Q. Please share with the readers as regards the production plans at the recently acquired FPL facility.

We will continue to serve FPL’s customer base with the same reliable service they have counted on for decades. We will also find new opportunities in the region and expand capacity (production, warehousing) and capabilities (product and application development) as needed to meet the demands.

Q. In the first phase of your setup, what market segments do you wish to address?

Our Starflam flame-retardant portfolio has been a big part of the production at the site. The product range has a variety of markets it serves, including mobility, appliances, electrical, infrastructure and electronics.

Very soon we will start making Vydyne PA66 compounds onsite that will cater to a broad array of applications in automotive, industrial and consumer segments.

To know more, please subscribe to PoLymers Communiqué at subscriptions@polymerscommunique.com “Our investment hypothesis in India is predicated on a steady expansion of the market at nearly 2 - 3x global demand growth in relevant chemistries and end-use applications. We also anticipate that rising discretionary income will lead to demand creation in value-added, more durable and highly engineered applications. Finally, India’s large domestic market supported by its unmatched demographic dividend particularly in terms of its young and energetic talent will make India a compelling place to do business for many years to come,” believes Dharm Vahalia, in dialogue with POLYMERS Communiqué.

India

a New Market Now

It must be said that marketing is a complex subject. But approach to markets in the ‘New India’ will require differentiators and out-of-the-box solutions, keeping the six strategic directions in mind. The next five years are likely to be the best India has ever seen; but one will have to grab this opportunity with insightful approaches.

Shailesh Sheth

Corporate Strategy Advisor, Management & Manufacturing Technology, Ahmedabad The consumption-led growth of the Indian economy contains many silent drivers of change within its fold. They have gone unnoticed so far. Today’s India is vastly different; today’s customers too are more demanding, more selective and more value conscious. Producers no longer drive the market. It is in fact markets (customers) drive the creation of capacities. Dynamics of this new consumerism have started to playout. Will Indian producers benefit or will this demand be satiated by imports? Just see what lack of batteries are doing to the market of electric vehicles or semi-conductors are doing to automobiles or, for that matter, high precision components are doing to capital goods. Thus, it is no longer going to be ‘more of the same’ market. Offering wider choice to the consumer is the key. If you don’t do it, your competitor will do and your growth will languish. So, looking at the Indian market with a traditional prism may be a recipe for failure. Let us examine some of these ‘hidden drivers’.

Saturated Urban

Markets

Urban India has been the spendthrift fellow of the family. They already possess all key products and consume all important services. They have no appetite for more. But they do yearn for status, brand or oneupmanship. Thus, the demand has shifted to lifestyle products.

It is the rural markets that are being empowered now. Direct benefit transfer, Jan Dhan bank accounts, MGNREGA scheme, massive drive to build roads and other infrastructure has put in the hands of the rural population much more disposable cash than ever before. Daimler selling one hundred luxury high-end Benz cars in a single day in Aurangabad is not a stray incident. Such stories are playing out across India, more to Class B and C cities, district centres and mandi villages. “This is ‘real’ India,” said Gopal Krishna Gokhale to Mahatma Gandhi upon his arrival from South Africa. In pure economic terms, these words proved to be prophetic. So rural is the way to go.

Spend, Rather than Save

The next-gen have not seen the weak economic conditions, shortages and demand curtailing taxation. These forced people to save, rather than spend. Future for them was uncertain and saving for the rainy day was the survival motto. But those fears and apprehensions have given way to optimism and security for post-retirement life and old age. Today’s younger generation wants to live (enjoy) life here and now. Not tomorrow and day after. They see their future, in a new India, very positively and, thus, are not driven by fear and insecurity. They want to enjoy what life has to offer. This is the main reason behind mushrooming of super markets and malls, even in smaller towns and overgrown villages. This will demand wide product choices and off-the-shelf delivery. Are your scales and logistics efficient enough? If not, the youngistan will go elsewhere.

To know more, please subscribe to Polymers Communiqué at subscriptions@polymerscommunique.com

Today’s younger generation wants to live (enjoy) life here and now. Not tomorrow and day after. They see their future, in a new India, very positively and, thus, are not driven by fear and insecurity. This is the main reason behind mushrooming of super markets and malls, even in smaller towns and overgrown villages. This will demand wide product choices and off-the-shelf delivery. Are your scales and logistics efficient enough?

Thriving Chemical Sector

A Vital Link for Atmanirbhar Bharat

There are so many norms that the government is bringing in to make sure that the Indian industries follow world standards and are ready to play at the global scale. Proactive steps by the industries / clusters in ensuring these are followed not only on paper, but in spirit will make the industry more trustworthy, the environment greener, stakeholders more collaborative and, finally, the sector more growing.

Chintan R. Joshi

Kaushalya Reputation and Brand Consultancy, Mumbai The recently released Annual Report 2021-22 by the Ministry of Chemicals and Petrochemicals outlines the Vision 2024 of the Ministry to establish the Indian chemicals and petrochemicals sector as a leading hub that will contribute significantly to India’s growth story by reducing import dependency, attracting investment in manufacturing quality products and using cutting-edge technology in specified clusters with the focus on sustainability in the manufacturing sector. The vision is very well articulated and attempts to underline the thriving chemical sector as a vital link towards making Atmanirbhar Bharat (Self-reliant India).

The chemical sector is the main contributor to the growth of industrial and agriculture sectors in any economy. In addition to this, it is the basic industry in which other

downstream segments like textiles, paper, adhesives, healthcare, medical devices, polymers, automotive and construction can grow and contribute effectively to the overall success of any economy.

The current pandemic challenges have made it absolutely clear that India needs to develop more indigenous capabilities to protect, support and grow the chemicals and speciality chemical sector in India. Only then will India be able to build a sustainable and growing ecosystem of interdependent industry clusters that will help ‘Make in India’ for captive consumption and the world. In the vision document of the Ministry, there are few key attributes that if dwelled deeper would lead us to opportunities where the industries can look for growth and investments. And these attributes are backed by committed efforts of the Government of India from all aspects. These steps have opened up a lot of opportunities for domestic as well as international players to profitably invest in the sector.

The Government of India has announced PLI schemes for 14 sectors, including the chemical sector, with an outlay of INR 1.97 lakh crores; and investment in any of these sectors, will need a stable and strong chemical sector. The PLI scheme was launched in 2021 for investment to the tune of INR 18,000 crores over the next five years period for the chemical sector. All these steps, coupled with enabling policy frameworks, have opened up the sector for more investments and will take India towards self-reliance.

With the Vision 2024 document of the Government, some attributes will help the industry prepare itself for the opportunities as well as support the industry in moving towards progressive and sustainable development.

Benchmarking will help us understand if we

have domestic

capacities available for key raw materials,

steps to enhance their

competitiveness and the

opportunity to reduce the import of materials that

can be sourced

domestically.

Reduction in Import Dependency

India largely is a net importer of key raw materials for downstream industries and the same is valid for the chemical sector. During the last couple of years, the government has taken an important step to move the industry towards standardisation and have begun implementing globally accepted standard codes. While there may be teething problems in getting all the organised as well as unorganised players in the sector on board to maintain the standards in paper and spirits, the chemical sector must adapt it sooner to make the industry competitive from a world-class product standards perspective. Another step the government has taken consciously since 2019 is to get the import data component for each element; this will help India as a country to benchmark its domestic capabilities. This benchmarking will help us understand if we have domestic capacities available for key raw materials, steps to enhance their competitiveness and the opportunity to reduce the import of materials that can be sourced domestically. And finally, this step will ensure that we have only the priority chemical products imported from various countries and take policy steps towards creating domestic capacities and invite investments in those segments.

Within the larger chemical and petrochemicals sector, the speciality chemicals sector, which is a knowledge-based sector, has immense opportunity to not only reduce import dependency for the chemical sector, but the larger manufacturing sector as well. While the government has announced setting up PCPIRs and recently announced dedicated plastic parks and medical devices parks that will help increase domestic capacities as well as capabilities, the government will also have to be collaborative, agile and constructive in its approach such that these announcements are materialised in a finite time. The government has announced setting up of 9 such plastic parks across India that will ensure the upgradation of the domestic plastic processing ecosystem with all the required facilities available within these dedicated parks.

Indian businesses have an immediate opportunity to upscale themselves from sustainability and a larger ESG perspective that will open up the flow of sustainable business growth as the world looks for an alternative or addition to China.

Quality Products

As the government is working towards standardising and improving the policy frameworks comprehensively, the industry needs to focus on improving the quality of the products it is

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