Petrochemicals sector needs $14b, says Meswani

The downstream petrochemical processing industry will require an investment of over $14 billion in the next seven years to meet the burgeoning growth of domestic petrochemical industry.

This was disclosed by Nikhil Meswani, executive director, Reliance Industries here today at Chemtech 2005, an international conference being held in the city.

Meswani in his presentation said that by 2012, total Indian polymer consumption will rise to 27 million tonne. This will include export of finished goods and plastic articles of 12 million tonne.

The growth of polymer industry globally has a strong correlation with GDP growth. Growing at about 1.6 times of global gross domestic product (GDP) growth rate, the industry is expected to touch 200 million tonne and $200 billion by 2010, accounting for nearly 0.5 per cent of global gross domestic product .

The polymer industry is also expected to grow faster as the GDP growth in India picks up. The industry has been growing at an impressive rate of around 15 per cent and is one of the fastest growing industry in the country.

"Emergence of a new and young consuming class, swelling to the tune of half a billion by 2007, is expected to increase domestic consumption manifold. Moreover, with 60 per cent of the population below the age of 40, enjoying above average purchasing power, growth of consumer goods is expected to touch new peaks in the years to come. Home market is therefore the principal opportunity for the polymer industry and can be easily a market of 15 million tonne by 2012", he indicated.

In spite of 15 per cent growth of the industry, current per capita consumption of polymers in India is low at just 4 kilos compared with 20 kilos globally and 24 kilos in China.

He pointed out that in order to achieve the target by 2012, there is a need "to have a total paradigm shift, consolidation of small fragmented processing capacities in India is the need of the hour."

Meswani opined that "the Indian downstream industry has to undergo metamorphosis to achieve the consumption target".

To achieve these target, an additional 42,000 processing machines are needed with an investment of $ 14 billion to consume 27 million tonnes of polymers.

These investments will also include many processing and manufacturing industries which are expected to shift from high cost countries like US and European Union to India.