Mumbai: Tata Strategic Management Group, the largest Indian-owned management consulting firm, today published the 2016 ‘India Chem’ handbook as knowledge and strategic partner for FICCI’s 9th India Chem International Conference 2016. The handbook was released by Shri. Ananth Kumar Minister of Chemicals & Fertilizers, Government of India.
The handbook is a source of knowledge and information on the current scenario of the Indian chemical industry, along with an analysis of key sub-segments such as bulk chemicals, specialty chemicals, intermediates, agrochemicals, petrochemicals and fertilizers.
Today, at a domestic market size of ~USD 147 billion the Indian industry accounts for approximately 3 % of the global chemical market. It is highly diversified with more than 80,000 chemicals and currently accounts for 15% of India’s manufacturing GDP which makes it very crucial for the economic development of the country. The handbook details the demand-supply scenario over the next 5 years and also the key growth drivers.
Commenting on the 2016 handbook, Mr. Raju Bhinge, Chief Executive Officer, Tata Strategic Management
Group said, “The Indian chemical industry is a vital component of the Indian economy and has the potential to grow to a size of USD 226 billion by FY20 through a series of concerted efforts. This aspirational growth scenario places greater emphasis on the specialty, pharmaceutical and biotech segments. In order to realize the true potential, Industry, Government and Regulatory bodies need to work in tandem”.
The current low per capita consumption across industries and segments and strong growth outlook for the major end use segments are the key growth drivers for this industry. With initiatives like ”Make In India” program gaining steam, investments, innovation and infrastructure are going to be the major thrust areas for chemical industry. GST reform will also give a boost to the chemical industry by lowering the transaction cost and avoiding cascading effect on taxes. Initiatives like setting up a fully functional single window system for all clearances (SWIFT), reforming labour laws, easing the land acquisition rules coupled with ‘Make in India’ and GST, are expected to propel Indian chemical industry forward.
Mr. Manish Panchal, Senior Practice Head – Chemical & Energy, Tata Strategic Management Group, said, “Based on recent TATA Strategic Leader’s speak survey, Indian chemical industry leaders are optimistic about the Indian economy and business prospects, with several expressing their desire to invest in India as their preferred choice. Boosting infrastructure and creation of integrated chemical parks can go a long way in propelling growth. ”.
The handbook also highlights other critical challenges like domestic availability, allocation and pricing of key feed-stocks which are leading to high dependence on intermediates and reducing competitiveness of Indian downstream industry. On the other side significant capacity additions in the Middle East and the USA could further erode margins for Indian players. TATA Strategic recommends that players need to adopt strategies which include alternate feed-stocks, competitive value change position, investing in R&D and focus on productivity improvement.
Mr. Charu Kapoor, Principal – Chemicals Practice added “There are several intermediates and import substitute products that are about to reach world scale economic size. This can be a big boost for chemical industry to Make in India”
Tata Strategic Management Group has identified the key imperatives for Government and Regulatory bodies in the handbook. For example Government should promote the cluster based approach, speed up standardization for end use industries and improve value chain economics to further enhance the competitiveness of domestic manufacturing.
