Gujarat petrochemical industry is likely to contribute over 75 per cent of the total production of the country as against the current share of 62 per cent and also 15 per cent of the nation’s chemical exports, according to a joint report by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and PricewaterhouseCooper (PwC).
The study revealed that Gujarat accounts for more than 51 per cent of Indian production of major chemicals and has eight Chemical Product Clusters which are identified at Vadodara, Bharuch, Ahmedabad, Bhavnagar, Jamnagar, Mehsana, Anand, Valsad.
Gujarat has a total capacity of 1180 kilo tonnes per annum (KTPA) and the highest share of polymer capacity in the country. With 1230 KTPA of Ethylene capacity and 1475 KTPA of propylene capacity, the major driver for the state has been the availability of feedstock.
ASSOCHAM holds that the key concerns of the Indian chemical industry are small capacity of plants, higher input costs of raw materials, power, fuel etc. and lack of world class infrastructure specially roads, ports and power supply, lack of competitiveness, cost disadvantage and also stringent labour laws. A major concern is also the various free trade agreements, which India is signing with various countries and which are aimed at phasing out trade barriers. The industry feels unless the labour laws, power supply and infrastructure are improved, it would be very difficult to compete globally with rapidly declining duty differentials and appreciation in the value of rupee, the study states.
The study also emphasized that the strategies focus more on core competence including innovation in order to become a leading player in specialty products, besides improving its production processes and products by investing resources in the technology development. IT-enabled manufacturing processes will result in higher efficiency and the use IT to transact business will help the sector, where most of the products are commoditised. The good record of management expertise could be further leveraged with techniques such as good manufacturing practices, good laboratory practices, total quality management, total production management and risk management, the report suggests.
Further, the study recommends focus on R&D and its application, collaborative efforts in order to improve competitiveness in the chemical industry. For transforming ideas into new products, Indian chemical industry should leverage the potential of educational and research institutions to source intellectual as well as human capital.
