Encourage use of ethanol as feedstock instead of burning it as fuel: Yogesh Kothari, President, ICC

First of all, I am very happy that a strong stable Government has come at the centre which is giving lots of positive vibes to all the Indian industries. We are expecting policies which could help growth in various sectors and industries. 

 

Presently, the size of chemical industry is around $ 136 billion and is approximately 7% of India’s GDP. Indian chemical industry has tremendous potential to grow atleast by double digit. The growth is mainly expected because of domestic consumption as well as potential in exports.

 

To revive the Indian manufacturing sector, Government needs to focus a lot on the availability of feedstock which is the main issue that needs to be addressed at the earliest. How to get the feedstock at competitive prices to users needs to be studied by Government along with associations such as Indian Chemical Council (ICC). Out of the several feed stocks which chemical industry uses, large number of them are from imported sources. 

 

Ethyl alcohol is a feedstock which is available in India and has helped in establishing large number of chemical plants manufacturing products based on ethyl alcohol. These products are in reality green chemicals as well as import substitutive and giving lot of encouragement to small scale and medium scale chemical companies. It also helps sugarcane producers since ethyl alcohol is based on molasses which is waste coming out of sugar industry.

 

The Government is of course encouraging ethyl alcohol with fuel blending programme. However this is going against the interest of alcohol based chemical industry. The benefits of this appears to be going to sugar manufacturers and not to the sugar cane farmers.

 

The second most important area which needs focus on the Government are the infrastructure facilities which are available today and which needs to be expanded as well as improved for long term interest of chemical industries. Availability of water, connectivity by roads and railways, proper drainage systems and proper environmental treatment facilities in various industrial zones. Housing on industrial zones needs lot of attention to attract the talent needed for efficient operations of the manufacturing facilities.

 

The concept of Petroleum, Chemicals and Petrochemical Investment Region (PCPIR) has been existing for some time and Dahej in Gujarat has done reasonably well. However it still needs further attention and improvement.

 

Chemical industry is facing shortage of skilled manpower and Government needs to establish expeditiously Skill Development Council for Indian chemical industry.

 

National Chemical Policy which is developed and drafted along with the Indian chemical industry needs to be notified and implemented as soon as possible.

 

Responsible Care initiative has been taken up by ICC with a major objective to change the outlook of the chemical industry. To change the perception of chemical industry in the eye of various stakeholders, Responsible Care initiative needs lot of encouragement from various state bodies and central government. Responsible Care has various Codes of Practice viz. Process Safety Code, Pollution Prevention Code, Employee Health and Safety Code, Community Awareness and Emergency Response Code, Distribution Code and Product Stewardship Code.

 

Inverted duties on many products have become critical for Indian chemical industry. In many cases raw material attracts more duty than finished product. ICC has already submitted list of such cases and this need to be reversed during the budget.

 

Lot of free trade agreements (FTAs), which are signed with many countries, have affected chemical business adversely. Government needs to relook on these FTAs wherever India’s concern are not taken care off.

 

Anti-dumping Cell in Government is understaffed causing delays in settling the anti-dumping issues. This Cell needs to be strengthened to avoid undue delay in imposing anti-dumping duty.

 

From the point of the oncoming Budget, accelerated depreciation for investing in plant and machinery to adopt green chemistry should be thought of. R&D in chemical industry should continue to be encouraged. To make chemicals manufactured in India more competitive, renewable feedstocks such as ethyl alcohol should be encouraged to be used instead of burning them as fuels.
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Yogesh Kothari is the President of Indian Chemical Council (ICC), and CMD, Alkyl Amines Chemicals Ltd