Petrochemicals Global Trends & Opportunities for Investment in - - PowerPoint PPT Presentation

Petrochemicals Global Trends & Opportunities for Investment in India

Date: 5th Oct ’2018

A N JHA , Executive Director ( Petrochemical- Project )

Structure of Presentation

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Petrochemicals Business- Environment scan Petrochemicals Global Trends Petrochemicals: Demand Supply Outlook Opportunity for Investments Conclusions

Petrochemical Business: Environment Scan

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India is one of the Fastest growing large Economy Polymer Demand is growing at 1.5 times of GDP Lower per capita Polymer consumption base 10 kg/capita compared to global average consumption of 35 kg/capita Regional imbalance, Polymer per capita Consumption Eastern India : 3.4 Kg/Capita Northern India : 5.7 Kg/Capita Southern India : 7.6 Kg/Capita Western India : 17.0 Kg/Capita Strong Govt. support to boost economy Swachh Bharat to boost Water & sewage network, Hygiene and sanitation 100 Smart cities Digital India Make in India/ Start-up India 100% FDI in food retail and many more initiatives

Process Integration – Innovative design considering downstream Utility Integration – Heat, Hydrogen, water, power, steam Nitrogen, Air etc. Utilization of gas fuel - Utilization of Hydrogen, hydrocarbon present in gas fuel as feedstock Crude to Chemicals / Petrochemical Refinery

Refinery

Refinery & Aromatics Refinery , Aromatics & Olefins Crude to Chemicals

Petrochemical Intensity Index : 20% Petrochemical Intensity Index : 35-50% Petrochemical Intensity Index : 10% Petrochemical Intensity Index : 0%

Global Trends: Refinery- Petrochemicals Integration

Typical Global Refinery-Petrochemicals Integration model

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Indian Polymer Growth Trend

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Polymer demand (PE+PP) increased @ 10% CAGR during past 5 years

“Opportunity for Investment in Polymers”

Source: ICIS Report, 2017 5299 6011 6544 8838 21230 21230 5979 7171 8802 9531 19870 28403 522 986 1963 1937

• 1360

7173

• 5000

5000 10000 15000 20000 25000 30000 2011 2013 2015 2017 2025 2030 Production DEMAND IMPORTS

KTA

Indian Fibre Intermediates Growth Trend

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“Opportunity for Investment in Fibre”

Source: ICIS Report, 2017 3963 4314 5154 6345 10790 10790 5167 5856 6784 7511 11705 14647 1204 1542 1630 1166 915 3857

2000 4000 6000 8000 10000 12000 14000 16000 2011 2013 2015 2017 2025 2030 Production DEMAND IMPORTS

KTA

Fibre Intermediates (PTA & MEG) demand increased @ 8% CAGR during past 5 years

India Supply Demand Scenario for Top Imported Petrochemicals

S. No Product Domestic Production (KTA) Demand (KTA) Imports in 2017 (KTA) Value (Rs Crore) %CAGR (2017-30)# 1 PVC 1444 3085 1658 8804 7.2% 2 PX 3160 3780 1320 6749 5.6% 3 Styrene 669 672 4661 4.8% 4 PP 4707 4486 504 3092 8.7% 5 HDPE 2065 2075 460 3062 9.0% 6 LLDPE 1761 2105 388 2774 9.3% 7 Methanol 220 1902 1697 2603 5.1% 8 LDPE 305 591 311 2353 5.2% 9 Metallocene LLDPE 274 274 2348 8.9% 10 Polyether Polyols 57 266 218 2257 6.6%

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*Source: Import data from the website of Department of Commerce, Ministry of Commerce & Industry # ICIS Report, 2017

India Supply Demand Scenario for Top Imported Petrochemicals

S. No Product Domestic Production (KTA) Demand (KTA) Imports in 2017 (KTA) Value (Rs. Crore) %CAGR (2017-30)# 11 Polycarbonate 138 142 2143 4.5% 12 Methyl Diphenyl Diisocyanate (MDI) 146 146 1826 6.6% 13 MEG 1608 1985 434 1796 5.2% 14 Vinyl Chloride Monomer (VCM) 995 1387 392 1771 7.8% 15 Styrene Butadiene Rubber 143 297 169 1550 8.5% 16 Toluene 905 1285 385 1521 6.6% 17 Ethyl Vinyl Acetate (EVA) 1 159 160 1475 7.4% 18 Alpha Olefins 1 99 98 1417 6.1% 19 Phenol 35 283 253 1337 5.2% 20 Butyl Rubber 102 102 1320 9.0% TOTAL 17,407 25,114 9,783 54,859

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* Net imports of Petrochemicals has increased from Rs.10,601 Crore in 2007-08 to Rs. 54,859 Crore in 2017

*Source: Import data from the website of Department of Commerce, Ministry of Commerce & Industry # ICIS Report, 2017

Petrochemicals : Investment Opportunities

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Based on the domestic Demand-Supply Scenario and future growth rate,

• pportunities exists for capacity enhancement of following products:

Olefins (Polyethylene + Polypropylene) Poly-Vinyl Chloride (PVC) Methanol

• Styrene
• Ethylene Glycol
• Elastomers (SBR, Butyl Rubber etc.)
• Speciality Chemicals (Polyols, Hydrocarbon Resins, MMA/PMMA etc)
• Polyester Yarn/Fibre -- CP and Downstream

Olefins -Value added compoundings

Supply Demand Scenario-Major Products, KTPA

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S.No.

Petrochemical Name Total Capacity (Installed+Under Construction) Total Demand Yr 2025 Yr 2030 Yr 2040

1

PE (HDPE+LLDPE+LDPE) 7683 10,430 15,068 29,493

2

PP 8385 9440 13,335 22,734

3

PVC 1482 5885 7610 11,425

4

MEG 2400 3073 3740 5030

5

Acetic Acid 633 1320 1534 2022

6

SBR/PBR 470 803 1166 2172

7

Butyl Acylate 340 254 325 529

Requirement of C2” and C3” Monomers

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C2”

Year 2017 2025 Monomer Requirement

6305 14520

Existing/Projected Production

4836 7304

C2”from Incremental Refining Capacity

• 170

Net Capacity Required

• 7046

C3”

Year 2017 2025 Monomer Requirement

4486 9440

Existing/Projected Production

4707 7695

C3”from Incremental Refining Capacity

• 440

Net Capacity Required

• 1305

The monomer requirement is based on demand of bulk polymers namely PVC, PE & MEG as per Petrochemical Perspective Plan-2040.

Cracker Capacity and Estimated Investment

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Parameter Yr 2025 Balance C2” required from Crackers 7046 Balance C3” required from Crackers 1305 Total Number

• f

Crackers required (@1500 KTPA C2” Capacity) 5 Approximate Investment (Rs Cr) 1,75,000 - 2,00,000 (100% Gas feed) 2,00,000 - 2,25,000 (Dual feed) The Crackers may be Gas based or Dual feed based. The choice of feedstock will depend on prevailing economics, feedstock availability, relative prices of feedstocks etc. The feedstock availability from Refineries shall depend on capacity expansion projects implemented in future. Beyond Yr 2025, In order to meet projected petrochemical demand of Yr 2040, on an average one Cracker of 1.5 MMTPA capacity is required every year.

Capital Investment Estimations of Olefin Production

14 Source ICIS

• !

"

• #

Strategy for Investment in Petrochemicals

Conclusions:

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Deficit in Indian Petrochemical Markets & sustained Growth Investment

• pportunity

in

• lefins

and speciality petrochemicals & chemicals- High Value - Mid term/ Long Term Investment opportunity in Deep downstream in Yarn/ Fibres and value added polymers . – Low cost - short term

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Petrochemicals : Japanese Investment in Neemrana, Gurgaon (India) & Others

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Company Products

T S Tech Company Limited Resin based Automotive Products for Motorcycle, seats and other parts Roki Minda Company Pvt. Limited Automotive air intake system, carbon canister, Power steering fluids, filters Mitsui Prime advanced Composites India Private Limited Automotive interior and exterior components Mytex Polymers

(Subsidiary of Mitsubishi chemical corporation, Japan)

High performance engineered Polyolefin Sekisui DLJM Molding Pvt. Limited Automotive Interior components. Kingfa, Basell (Zylog), APPL, Hyundai, Machino Polymer etc Automotive Compounders with Homo/RCP/ICP Polymers (35 - 100 MFI)