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Chemical Sector India

December 2013



Table of Contents

I. Sector Overview

1. Sector Highlights

2. Main Indicators

3. Economic Linkages

4. Production

5. Production and Value Added

6. Costs and Prices

7. Bank Financing

8. FDI

9. Trade

10.Export

11.Import

12.Employment

13.Government Policy

14.Public Sector Undertakings

II. Chemicals

1. Subsector Highlights

2. Production

3. Apparent Consumption

4. Alkali

5. Inorganic Chemicals

6. Organic Chemicals

7. Pesticides

8. Dyes and Dyestuffs

9. Forecast

III.Petrochemicals

1. Subsector Highlights

2. Production

3. Polymers

4. Olefins

5. Aromatics

6. Fibre Intermediates

7. Synthetic Fibres

8. Forecast

IV.Main Players

1. Tata Chemicals

2. Tata Chemicals (cont’d)

3. UPL

4. BASF India

5. RIL

6. GAIL



I. Sector Overview

India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.

Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.

In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result

occurred. Unless otherwise stated, in charts throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.



Sector Highlights

The chemical and petrochemical sector is an important segment of India's economy, accounting for about 3-5% of the country's GDP

and 14-15% of the industrial activity according to different estimates. India's chemical industry was the 12th largest in the world in

terms of volume in 2011. In terms of export share, it is among the top 10 worldwide. Chemicals and petrochemical products account

for more than 10% of the country's exports.

Overview

Recent performance

Players

Challenges

Prior to the 2008 economic crisis, the chemical industry was among the fastest growing sectors in India. Highly connected with number of up-and down-stream productions, the industry was affected by the global slowdown. Nevertheless, the sector recovered quickly, with some segments remaining almost unaffected. It is the recent turbulence in the domestic economy that might slow-down the growth in the sector. Still, the demand has not shrunk substantially, while growing raw material costs have raised pressure on margins. Thus, companies are forced to optimise their production process.

The sector groups both small and large-scale enterprises. While the number of players in the chemicals subsector is huge,

petrochemicals production is generally a highly consolidated industry. Nevertheless, in all segments there are leaders, well-known

abroad with diversified structure and vertical integration that enables them to secure access to raw material.

Along with the need of technological modernisation of some of the facilities and the problematic access to cheap funding (as a result of

high domestic interest rates), a significant burden for the sector development is the lack of appropriate infrastructure in terms of

adequate facilities at ports and railway terminals and good pipeline and road connectivity. This makes the procuring of raw materials

more difficult and expensive.



Source:

Main Indicators

Chemical and Petrochemical Sector Key Indicators

CEIC, MOSPI

Product 2007 2008 2009 2010 2011 2012

Chemicals production (mn metric tonnes) 7.8 7.4 7.7 8.2 8.4 -

Petrochemical production (mn tonnes) 21.6 20.5 22.0 23.3 26.2 -

Chemical and petrochemical export,USD bn 18.7 20.0 20.5 26.2 32.8 32.7

Sector export, % total 11.4 10.8 11.4 10.4 10.7 10.9

Chemical and petrochemical import, USD bn 25.3 36.4 31.3 39.5 49.6 49.7

Sector imports, % total 10.1 12.0 10.9 10.7 10.1 10.1

GDP at market prices (current prices, INR tn) 49.9 56.3 64.8 78.0 89.7 100.2



Source:

Economic Linkages

Real GDP at factor costs

Industry and Manufacturing, constant prices

Agriculture, constant prices

Comments

MOSPI, Industry includes mining and quarrying, manufacturing, gas and water supply and construction

Industry accounted for 27% of India's GDP in 2012, keeping its

strong position in the country's economy, despite a lower-than-

average growth in the past couple of years. Manufacturing,

which includes chemical and petrochemical production,

accounted for about 56% of the industrial output and 15.1% of

the country's total product.

Agriculture, on which the development of agrochemicals

production is heavily dependent, had a 12% share in GDP.

39.0

41.6

45.2

49.4

52.4

55.1

9.3%

6.7%

8.6% 9.3%

6.2%

5.0%

2007 2008 2009 2010 2011 2012

GDP (INR tn) Change yoy, %

6.6 6.6 6.6

7.1

7.4 7.5

5.8%

0.1% 0.8%

7.9%

3.6%

1.9%

2007 2008 2009 2010 2011 2012

Agriculture (INR tr) Change yoy, %

11.2

11.7

12.8

13.9

14.4

14.7

6.3

6.6

7.3

8.0

8.2 8.3 9.7%

4.4%

9.2% 9.2%

3.5% 2.1%

10.3%

4.3%

11.3% 9.7%

2.7% 1.0%

2007 2008 2009 2010 2011 2012

Industry (INR tn) Manufacturing (INR tn)

Industry, yoy change, % Manufacturing, yoy change, %



Source:

Industrial Production Indices

Average annual industrial index (FY 2005=100)

CEIC

Monthly industrial index (FY 2005=100)

Comments

Although chemicals and chemical products manufacturing follows the overall path of development of India's industry, the pace of change is

much more moderate. Despite the strong deceleration of India's GDP in 2011 and 2012, the IPI in the sector remained almost unchanged in

the first year and returned on the upward path in the later.

In 2013, the chemical sector production continued to increase, reaching new monthly all-time high in Aug 2013. The index dropped to 140 in

Sep 2013, but still remained substantially above the 2012 level (127).

121 132 135 126 130 119 131 132 124 131 134 135 137 138 145 140

178 177 176 175 182 176 191 194 191 207 176 173 175 183 176 176

168 167 165 163 172 166 179 182 176 194 167 166 165 172 165 166

Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13

Chemicals and Chemical Products Manufacturing Total index

101 110 118 115 121 123 123 127

110 127

150 154 161 176 181 183

109 123

142 145 153 166 170 172

2005 2006 2007 2008 2009 2010 2011 2012

Chemicals and Chemical products Manufacturing Total index



Comments

Source:

Production and Added Value

The production structure of the chemical sector shows its high resource dependence. Inputs account for around 80% of the final output, with input prices having a strong direct impact on profit margins.

Operating in a closed and protected economy in the pre-liberalisation period of the early 1990s, India's chemical sector companies spent little on large-scale R&D and intellectual property development. The introduction of the product patent regime in 2005 and the need of modernisation and increase in value-added have pushed companies to invest more in R&D. Still India's chemicals sector spends 1-2% of the turnover on R&D, compared with 5-10% in developed countries.

Chemical sector output (thou tonnes) Chemical sector capital (INR bn)

CEIC, Times of India

2,894.0 2,823.6

3,540.8

459.2 565.7 617.9

2008 2009 2010

Total Output Net Value Added

1,16

9.6

1,15

2.3

1,24

4.8

1,39

0.2

1,43

5.5

1,76

5.9

1,53

8.8

1,52

8.8

1,72

8.1

2008 2009 2010

Fixed Capital Productive Capital Invested Capital



Source:

Cost and Prices

Compound annual growth rate of energy consumption,%

India has relatively low energy consumption per

capita. In 2010, it stood at 0.6 toe, compared with a

global average of 1.9 toe. Nonetheless the total

energy consumption in the country is in the global

top three, following China and the USA (2012).

With the launch of the Energy Conservation Act

(2001) and National Action Plan on Climate Change

(NAPCC/2008) companies are required to make

regular review of energy consumption and to

undertake effective control on utilisation of energy.

According to Enerdata, the share of chemical

industry in the country's overall industrial energy

consumption has decreased between 1990-2009

from 9% to 8%.

Furthermore, after recording the highest growth in

1990-1994, the chemical industry is among the best

performers in the last two four-year periods, showing

a substantial drop in energy consumption growth.

With an increase of 7.7% it is well below the

manufacturing average.

The rising inflationary pressures in the past years,

however, were reflected in higher costs for the

chemical sector and also higher output prices.

Wholesale Price Index (FY2005=100)

CEIC, Enerdata, "Decomposition of Industrial Energy Consumption in Indian Manufacturing" Santosh Kumar Sahu, K. Narayanan

100

120

140

160

180

Apr

-09

Oct

-09

Apr

-10

Oct

-10

Apr

-11

Oct

-11

Apr

-12

Oct

-12

Apr

-13

Industrial Electirisity Chemicals Petrochemical Intermediates

Industries/Year 1990-94 1995-99 2000-04 2005-08

Aggregate Manufacturing 16.77 9.30 8.01 11.98

Chemicals 15.46 9.09 8.09 7.69

Diversified 12.87 5.57 5.64 18.63

Food&beverages 19.11 5.41 10.53 7.77

Machinery 18.84 9.43 5.43 9.10

Metals& maetal products 15.49 11.78 9.34 15.33

Miscellaneous manufacturing 18.08 5.46 4.88 7.52

Non-metalic mineral products 19.73 9.92 7.60 17.09

Textiles 15.86 6.49 3.92 7.84

Transport equipment 21.71 12.21 10.02 12.56



Source:

Bank Financing

Chemical sector credit stock as at end-Mar of the perspective year

Outstanding credit as at end-Mar of the respective year (INR bn)

Chemical and petrochemical sector share in total industrial credit

Reserve Bank of India

87 12

3 163 18

7 235 29

8 360 40

5 460 49

5 537

62

82 10

6

98

92 14

3

138

143

158

269

276

72

72

70

83

92

88

100

235

333

441 49

8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sep'13

Drugs and Pharmaceuticals Fertilisers Petrochemicals

559

626

756

857

1,07

9

1,27

0

1,59

2

1,71

5

14.9%

11.9%

20.8%

13.4%

25.9%

17.7%

25.4%

17.2%

2007 2008 2009 2010 2011 2012 2013 Sep'13

Chemical and petrochemical sector credit, INR bn

Annual change, %

8.0% 7.3% 7.2%

6.5% 6.7% 6.6% 7.1% 7.2%

2007 2008 2009 2010 2011 2012 2013 Sep'13



Source:

Foreign Direct Investments

FDI in chemical sector (excl. Fertilisers)* Sector-wise distribution of equity FDI (2000-Sep2013)

CEIC, Department of Industry Policy and Promotion * calendar years data

400

248

602

451 450

659

339

476

3.6%

1.3%

1.8% 1.7%

2.1%

2.4%

1.5%

3.8%

2006 2007 2008 2009 2010 2011 2012 Jul'13

Chemical sector FDI, USD mn

Chemical sector in Total FDI Inflow, %

Services Sector 19.0%

Construction development

11.0%

Telecommunications 6.0%

Computer software and

hardware 6.0%

Drugs and pharmaceutica

ls 6.0%

Chemicals 5.0%



Comments

Source:

Foreign Trade

Although India's total import of chemical and petrochemical products traditionally surpasses the value of exports, there is significant

divergence in trade balances among different product groups. India sells abroad colorants, synthetic fibres, aromatics and pesticides, as well

as some alkali, but is dependent on the import of organic chemicals and some polymers and olefins.

Net Export (USD bn) * Trade in Chemicals, % total trade *

CEIC, * Export/import analysis is based on trade statistics for the following product groups: HS28-29, HS31-34, HS36-40, HS54-55.

-3.2

-6.6

-16.

4

-10.

9

-13.

3

-16.

9

-17.

0

2006 2007 2008 2009 2010 2011 2012 12.2%

11.5%

10.8%

11.4%

10.4%

10.7% 10.9%

10.0% 10.1%

12.0%

10.9% 10.7%

10.1% 10.1%

2006 2007 2008 2009 2010 2011 2012

Export Import



Source:

Export

Export by product group in value terms (USD), 2012

Chemical and petrochemical export by main product groups, USD bn

Top export partners in value terms (USD), 2012

CEIC, Department of Commerce, EMIS Insight calculations

42.5%

18.1%

9.7%

7.8%

7.3%

6.8%

5.4%

14.9%

Organic Chemicals

Plastics

Rubber

Man Made Filaments

Colourants

Man Made Staple Fibers

Parfumery and cosmetics

Others

0.8

1.1

1.0 1.9

1.8

1.3

7.2

7.5

7.4 9.

1 11.7

12.1

1.3

1.3

1.4

1.7

1.9

2.1 2.8

2.5

2.8 4.

0 5.3

5.2

1.4

1.5

2.0

2.3

2.6

2.2

1.4

1.2

1.4

1.8

2.2

1.9

18.7 20.0 20.5

26.2

32.8 32.7

2007 2008 2009 2010 2011 2012

Inorganic Chemicals Organic Chemicals Colourants Plastics Man Made Filaments Man Made Staple Fibers Total

10.8%

6.7%

4.3%

4.1%

4.0%

3.7%

3.4%

2.5%

2.5%

USA

China

UAE

Germany

Turkey

Brazil

Indonesia

Singapore

UK



Source:

Import

Import by product group in value terms, 2012

Chemical and petrochemical import by main product groups, USD bn

Top import partners in value terms (USD), 2012

CEIC, Department of Commerce, EMIS Insight calculations

31.6%

19.3%

14.9%

10.6%

7.3%

1.5%

11.7%

Organic Chemicals

Plastics

Fertilizers

Inorganic Chemicals

Rubbers

Man Made Filaments

Others

2.8 4.7

3.4

3.8 5.8

5.3 8.

1

8.6

9.4 12

.6

14.4

15.7

4.6

12.0

6.0

6.2 9.

2

7.4

0.8

0.8

0.9

1.2

1.5

1.5 4.

1

4.5

5.5 7.6

8.4 9.6

1.5

1.6

1.8 2.9

3.9

3.6

25.3

36.4 31.3

39.5

49.6 49.7

2007 2008 2009 2010 2011 2012

Inorganic Chemicals Organic Chemicals Fertilizers Colourants Plastics Rubber Total

22.4%

8.9%

6.7%

6.1%

4.9%

3.2%

3.1%

3.0%

2.7%

2.4%

China

USA

Saudi Arabia

Korea

Germany

Thailand

Iran

Taiwan

Japan

Malaysia



Comments

Source:

Employment

Chemical production accounts for about 5.3% of the employment in the manufacturing sector, the share remaining relatively stable over the

past years.

Although the government estimates a huge employment potential in the sector in the medium-term (8mn-9mn new jobs in the next decade), it

also emphasises on the need of skilled workers and probable shortfall of 8,000 -10,000 chemical engineers. To secure the availability of

qualified experts, the government plans to set up state-of-the-art departments at local universities as well as vocational training and diploma

institutes.

Employment Companies in the chemicals sector

CEIC, India Chemical Industry Five Year Pan (2012-2016)

8,456 8,418

11,202

5.4% 5.3% 5.3%

2008 2009 2010

Number of companies Share in Manufacturing, %

581,053 588,756 629,881

5.1% 5.0% 5.0%

2008 2009 2010

Number of employed Share in Manufacturing,%



Source:

Government Policy

Foreign

Investment

Chemical sector projects could be 100% financed with FDI through the automatic route (i.e. without RBI approval of the

deal). Moreover, the manufacturing of most of the chemical products such as organic and inorganic, dyestuffs and

pesticides is licence-free.

An exception of the free production exists for several products, which are considered dangerous, namely hydrocyanic acid,

phosgene, isocynates, di-isocynates of hydrocarbons and their deliveries.

Prices

In an attempt to provide affordable fertilisers to farmers, the government controls the prices of several pesticides. Urea is

sold at statutory notified uniform sale price, and Phosphatic and Potassic fertilises are sold at indicative maximum retail

prices.

As of November 2012, the maximum retail price of urea has been marginally increased by INR 50 per metric tonne to INR

5,360 per metric tonne.

Assam Gas

Cracker

Project

To ensure feedstock availability, the government supports the Gas Cracker Project in Assam, Northeastern India. The

project was approved in April 2006 and is implemented by Brahmaputra Cracker and Polymer Ltd. The originally planned

project costs of INR 54.6bn was later revised to INR 89.2 bn. The financing would come as follows: a Capital Subsidy of

INR 46.90bn on fixed cost basis provided by Department of Chemicals and Petrochemicals; debt of INR 29.6bn and equity

INR 12.69bn. After several time and capital overruns the projects is expected to be completed in Dec 2013 and to generate

substantial employment, both direct as well as indirect, and to attract substantial investments in setting up of downstream

plastic processing industries.

Department of Chemicals and Petrochemicals, Federation of Indian Chambers of Commerce and Industry



Source:

Government Policy (cont'd)

Research and

Development

Assessing the need for constant modernisation of the sector in order to keep track with global industry development and

preserve competitiveness, in the Five-Year Plan 2012-2017 the government states that the current R&D investment levels

should reach levels of 4% of sales, which implies spending USD 12bn by 2017.

To support the process the Working Group on Chemicals for the formulation of the 12th Five-Year Plan suggests the

government to:

• set-up of chemical council for innovation with representatives from government, chemical companies, industry

associations and highly respected research and educational institutes.

• establish an autonomous USD 100mn chemical innovation fund and INR 5bn technology up-gradation fund.

• regional clusters and innovation centrеs in universities dedicated to chemical industry should be developed.

The total provisional Five-Year Plan Budget for the chemical sector development is INR5.75bn.

Responsible

Care Initiative

India's chemical sector has been tarnished with two major accidents in 1924 and 1984, in addition to misuse of chemicals.

In order to boost corporate social responsibility, the Responsible Care Initiative, first implemented in the early 1990s, was

lately revived. It includes adoption of operations standards on voluntary basis. Currently more than 100 companies have

joined the initiative, with 25 of them having passed the audit process and being allowed to use the Responsible Care logo

on their products. The change in attitude towards more social responsible production is usually shown by larger

companies, while the smaller ones are lagging behind. Therefore many critics think the voluntary initiatives would not be

enough for a sustainable long-term change and government interaction (economic incentives) might be needed.

Five-Year Plan, The Economic Times



Source:

Government Policy (cont'd)

Tax regime

As of early May 2013 India’s government raised customs duty on polymers from 5% to 7.5%. The action followed a long

standing requests from the industry. The tax hike affected duties on polyethylene (PE), polypropylene (PP), poly vinyl

chloride (PVC), polystyrene (PS) and ethyl vinyl acetate (EVA). The raw materials used for the production of these

polymers such as naphtha and ethylene still have a 5% duty Thus the higher customs duty on polymers should reflect in

better producers' margins. Taking into account the forecasted rising chemicals demand and the supply-demand gap for

many of the products, the higher duties would be easily passed on to end consumers.

The basic customs duty on most chemical feedstock is 2.5%. Import duty on most of the chemical products is at 7.5% ad

valorem. In general, the central excise duty rate for chemical sector is about 10%.

PCPIRs

Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) are specifically delineated investment regions in

India, created on a cluster-manner, thus combining manufacturing facilities with the associated services and infrastructure.

They could include one or more special economic zones, industrial parks, free trade and warehousing zones etc. , but at

least 40% of the designated area should be processing. The area of the investment regions is about 250 sq km. The state

government is responsible for providing power, water, road connectivity, as well as sewage linkages to the RCPIR. The

inner infrastructure is built and managed by a developer (public or private entity). The Cabinet Committee on Economic

Affairs has approved PCPIRs in Andhra Pradesh, Gujarat, Orissa and Tami Nadu. As of October 2013, the first three have

signed a Memorandum of Agreement with the local government and are at different stages of preparation.

Times of India; Ministry of Chemicals and Fertilisers



Source:

Public Sector Undertakings

Hindustan

Organic

Chemicals

HOC was set up in 1960 with main sphere of activity – manufacturing of chemicals/intermediates which are required for the

production of dyestuffs, rubbers, pesticides, drugs and pharmaceuticals, etc. The products manufactured include phenol,

acetone, formaldehyde, nitrobenzen and aniline among others. The company had sales of INR 5.6bn in 2012 (3% y/y

increase), produced 146,760 tonnes (67.4% of the planned) but ended up the year with net loss of INR 1.38bn as

compared with net loss of INR 0.78bn in 2011.

Hindustan

Insecticide

Ltd

HIL was founded in 1954. Its factory in Delhi produced DDT to meet the demand of National Malaria Eradication

Programme. Currently, HIL is the largest DDT producer in the world. It also has facilities for pesticides production.

The company ended up 2012 with net profit of INR 29.2mn (INR 16.1bn in 2011), sales of INR 2,744.8mn(6.7%y/y

increase) and exports of INR 0.2bn. Thus the accumulated loss has come down to INR 13.8mn vs INR 43mn in 2011.

Brahmaputra

Cracker and

Polymer Ltd

Petrochemical sector joint venture company between GAIL (70%), Oil India Limited (10%), Numaligarh Refinery Limited

(10%) and the government of Assam (10%). It was set up in January 2007 to implement the Assam Gas Cracker Project.

As at Mar 2013 the physical execution of the project was 91% (out of 97.9% planned), with 23.4% being achieved in

FY’13.

Companies data



II. Chemicals Subsector







Chemicals Subsector Highlights

Overview

After the decline registered in 2008, all chemical production segments have witnessed a recovery. The production of

alkali, which accounts for more than 70% of the subsector, has not only recovered to the pre-crisis levels, but

recorded an all-time high output in every year since 2009. Good performance is seen also in the dyestuffs and

pesticides segments, while the production of other inorganic chemicals and organic chemicals is yet to return to the

2007 levels.

Problems

The trade liberalisation in India since 2000 had a negative effect on the chemical sector. The sharp reduction of import duties has resulted in increased imports and dumping of cheaper products from other countries. Most affected are the producers of soda ash and caustic soda.

Other problem is the strong dependence of pesticides and fertilisers on agriculture. In 2012, the unstable monsoon and drought in many regions affected the growth of the country's agriculture sector.

Moreover, the agrochemicals segment is suffering from low capacity utilisation along with insufficient investment in R&D.

Market

Segmentation

Despite the on-going process of consolidation, most of the manufacturers still operate on a small scale compared to

global peers. There is room for further consolidation especially with respect to the organic chemicals industry.

Prospects

With low per capita paper consumption in India as against global average consumption, there is a good opportunity

for paper chemicals business in India.

The same is true for the agrichemicals. Pesticide consumption in the country is 0.6kg per hectare vs. global average

of 3-10kg per hectare. Restricted consumption is due to low purchasing power in the agricultural zones, but also to

unawareness of the existing products and difficult accessibility.



Source:

Production

Production of main chemical groups (thou tonnes) State-wise chemicals production

CEIC

5,269 5,443 5,442 5,602 5,981 6,113

602 609 513

518

572 574

1,545 1,552

1,254 1,280

1,342 1,396 85

102

105 104

111 120

33 117

110 149

164 171

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2006 2007 2008 2009 2010 2011

Dyes and Duestuffs Pesticides Organics Inorganics Alkali

Gujarat 51.44%

Maharashtra 7.51%

Uttar Pradesh 7.47% Tamil Nadu

6.03%

Punjab 4.34%

Rajasthan 4.23%

Madhya Pradesh 3.80%

Andhra Pradesh 3.65%

Others 11.54%



Comments

Source:

Apparent Consumption

The apparent consumption is calculated as the sum of production plus imports minus exports.

On aggregated level there is a strong tendency towards higher import quantities, which covers lower domestic production and provide resources for rising export.

Organic chemicals consumption increased at a CAGR of 13.5% in the years 2006-2011. While domestic production shrank from 1.5mn tonnes in 2006 to 1.4mn in 2011, imports increased by 15% and equaled 50% of the domestic output.

Regarding inorganic chemicals, the consumption rose at a compound rate of 8.4% in 2006-2011, as produced volumes remained almost unchanged and imports increased by almost 10%.

Organic chemicals (thou tonnes) Inorganic chemicals (thou tonnes)

CEIC, EMIS Insight calculations

3,19

2 3,76

0

3,80

7

5,32

1 5,87

5

6,00

6 2006 2007 2008 2009 2010 2011

4,81

8

4,21

6

3,07

8

5,28

0

2,35

4

7,21

4

2006 2007 2008 2009 2010 2011



Source:

Alkali

Production, thou tonnes

Output by main product groups, thou tonnes

Installed Capacity, thou tonnes

Comments

CEIC

Developing at a CAGR of 2.% in 2004-2011, alkali production

represents about 73% of the total chemicals production in

India.

With 7mn tonnes capacity Indian alkali sector has a 4% share

of the world market.

With adequate salt resources, India has sufficient capacity to

meet caustic soda and chlorine demand.

The main competitor in the segment is China – with enormous

scale of production and lower costs.

5,272

5,475

5,269

5,443

5,442

5,602

5,981

6,113

2004

2005

2006

2007

2008

2009

2010

2011 Product 2006 2007 2008 2009 2010 2011

Alkali 7,072 7,490 7,490 7,677 7,698 7,698

Soda Ash 2,651 - 2,952 2,951 2,951 2,951

Caustic Soda 2,561 - 2,647 2,690 2,712 2,712

Liquid Soda 1,860 - 1,891 2,036 2,035 2,035

2,07

8

2,00

2

1,98

9

2,05

8

2,29

9

2,41

1

1,91

4

2,05

1

2,05

0

2,10

4

2,17

8

2,21

6

1,27

7

1,38

7

1,40

3

1,44

0

1,50

4

1,48

6

2006 2007 2008 2009 2010 2011

Soda Ash Caustic Soda Liquid Chlorine



Source:

Soda Ash

Wholesale Price Index (FY 2005=100)

Following the global dynamics, domestic soda ash

prices began to increase in 2011, continued into

2012 and stabilised in 2013. The dynamics were

result of both energy costs increases and distortions

in the soda ash supply with insufficient capacities in

some regions and over-capacities in Europe and

China. The short-term forecasts are for continuing

price rise.

India's soda ash demand rose by 12% in 2012. The

local market expanded strongly in H1, but witnessed

overcapacity in the later half.

Despite the trade measures introduced in India in

2012, low-cost soda ash imports from Europe and

China continued increasing, with domestic players

losing market position.

Due to the expected expansion of the flat and

container glass manufacturing in India in the coming

years (incl. through new plants), along with forecast

overall economic uptick and logical detergent and

chemical sectors growth, soda ash demand in India

is anticipated to grow 6% through 2016.

Soda Ash domestic consumption

CEIC

100

120

140

160

180

200

Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13

Caustic Soda & Soda Ash

Glass 26.0%

Detergent 37.0%

Others 37.0%



Source:

Inorganic Chemicals




Comments

CEIC

India's other inorganic chemicals production has been growing

at a CAGR of 8% in the five years prior the crisis. The

production dropped in 2008-2009, but started to recover in

2010 and stayed on the rise in 2011.

Inorganic chemicals hold almost 7% of the total chemicals

production.

Carbon black accounts for almost 80% of the segment output

and 60% of the market in terms of capacity.

508

544

602

609

513

518

572

574

2004

2005

2006

2007

2008

2009

2010

2011Product 2006 2007 2008 2009 2010 2011

Inorganic

Chemicals 749 716 716 674 814 818

Calcium Carbide 142 - 145 112 112 112

Carbon Black 455 - 455 463 603 607

Titanium Dioxide 108 - 76 76 76 76

Others 43 - 40 23 23 23

92

97

67

22 45

66

422

427

371

219

452

448

63

59

53

61

64

52

25

25

21

15

11

8

2006 2007 2008 2009 2010 2011

Calcium Carbide Carbon Black Titanium Dioxide Other



Source:

Organic Chemicals




Comments

CEIC

Annual methanol consumption is estimated at 1.5mn tonnes, the demand for the chemical growing at an annual average rate of 10%. In 2012-2017 no substantial change in the dynamics is expected, with official forecasts for the end-period demand at 2.5mn tonnes per annum. The insufficient current domestic production of about 0.4mn tonnes would drive imports up to cover the demand.

Similarly, acetic acid local production accounts for only 30% of the demand (0.6mn tonnes). Consumption is expected to reach 1mn tonnes by 2017.

Acetic alhydride demand is fully covered by domestic production.

Ethyl Acetate capacity was raised in the past years, resulting in higher production, while a decline was recorded in acetaldehyde capacity and output.

1,506

1,545

1,545

1,552

1,254

1,280

1,342

1,396

2004

2005

2006

2007

2008

2009

2010

2011Product 2006 2007 2008 2009 2010 2011

Organic Chemicals 1,889 1,940 1,940 1,978 2,011 2,026

Acetic Acid 349 - 351 301 301 301

Methanol 385 - 385 473 496 496

Formaldehyde 312 - 315 389 389 390

Ethyl Acetate 131 - 132 118 118 140

Others 713 - 757 697 707 698

288 31

6

203

146

156

161

396

352

238

331 37

0

360

235

243

232 26

0

267

264

164

182

108

59

32 65

88

91

93

104

115 16

7

539

551

488

439

434

445

2006 2007 2008 2009 2010 2011

Acetic Acid Methanol Formaldehyde

Acetaldehyde Ethyl Acetate Other



Source:

Pesticides




Comments

CEIC, Government of India, Economic Survey 2012-2013;

The agrochemical segment accounts for 3.5% of the total chemicals market in India. Insecticides form the largest sub-segment, holding 55% of the crop protection market. The development is largely dependent on rice and cotton. Herbicides are the largest growing segment (20% of the total crop protection chemicals market).

Despite the quick development of the pesticides segment in the past several years, the current situation is not optimistic, as the industry is characterised by over-capacity and low capacity utilisation (below 60%), as well as unsustainable levels of production. Moreover there is a lack of investments in R&D and the formulation market is highly fragmented.

94

82

85

102

105

104

111

120

2004

2005

2006

2007

2008

2009

2010

2011 Product 2006 2007 2008 2009 2010 2011

Pesticides and Insecticides 145 146 146 164 168 174

Endosulphan 9.9 - 9.9 14.2 14.2 14.2

Monocrotophos 14.0 - 14.0 10.4 12.8 12.8

Acephate 9.2 - 9.2 9.8 11.0 11.0

Chlorpyriphos 9.1 - 9.1 11.7 11.7 12.3

Mancozab 20.7 - 20.7 42.8 42.8 42.8

Others 82.5 - 74.5 69.6 69.8 76.5

5 5 5 6

10

10

5 5 4 6 5

9 8

11

10

12 14

16

23 27

35

31

26

44

44

54

51

49

55

42

2006 2007 2008 2009 2010 2011

Monocrotophos Cypermethrin Acephate Mancozab Other



Source:

Pesticides (cont’d)

Insecticides, fungicides, herbicides trade (thou tonnes) *

Total agrochemicals sales worldwide amounted to USD 53.73bn in 2012, recording a 7% y/y increase. Crop protection chemicals accounted for more than 80% of the total. Asia is the second largest market with share of about 16%.

India is the second largest pesticide producer in Asia and among the top five on the global market. At the same time, the country has a relatively low pesticides consumption compared to other economies. The per acre crop protection chemical usage in India was estimated at 800 grams compared to 16 kg per acre in the US. The demand for pesticides was estimated at 58,368 tonnes in 2011 and according to the Ministry of State for Agriculture will decline to 54,685 tonnes in 2013.

The consumption pattern of pesticides in India differs from the rest of the world. On the domestic market insecticides account for 76% of the consumption, whereas demand on the global market is mostly directed towards herbicides and fungicides.

In 2011, India's Agriculture Minister acknowledged that almost 70 pesticides that are prohibited in other countries are still used in India, mainly due to their low price.

India is net exporter of pesticides, with about 50% of the production being sold abroad.

Pesticide consumption (kg/ha)

Comments

Indian Chemical Industry Five-Year Plan 2012-2017, International Trade Centre, The Economic Times, International New York Times;

* calendar years data

16.6

13.4

10.8

4.5

3.0

0.6

Republic ofKorea

Italy Japan USA Europe India

110 14

3 160

155

206

215

-24

-32

-35

-50

-63

-62

2007 2008 2009 2010 2011 2012

Export Import



Source:

Dyes and Dyestuffs




Comments

CEIC

Dyes and Dyestuff production is one of the most developed

segments, having linkages with various forward and backward

industries. Production meets more than 95% of domestic

demand. Most of the consumption (about 70%) comes from the

textile sector.

About 2/3 of the production is exported.

India's share of the global market is estimated at approximately

7%.

28

30

33

117

110

149

164

171

2004

2005

2006

2007

2008

2009

2010

2011 Product 2006 2007 2008 2009 2010 2011

Dyes and Dyestuffs 53 55 55 191 220 248

Acid Direct Dyes 0.2 - - 24 26 26

Disperse Dyes 6 - - 37 37 55

Organic Pigment

Colours 11 - - 13 13 23

Pigment Emulsion 6 - - 5 5 5

Reactive Dyes 6 - - 74 103 103

Others 14 - - 53 54 38

0

8 8 12

16

13

1

22

23

25

29

29

0 5 6 8 10

10 16

26

14 18

22

20

1

41

41

63

65 77

13

17

18 23

23

21

2006 2007 2008 2009 2010 2011

Acid Direct Dyes Fast Colour BasesOptical Whitening Agents Organic Pigment ColoursReactive Dyes Other



Source:

Forecast

Targeted segment expansion in 12th Five-Year Plan (2012-2017)

The 12th Five-Year Plan includes official forecasts

and set targets for the development of the chemical

sector. They are as follows:

Organic Chemicals - Demand for basic organic

chemicals has a potential to grow at 10% y/y to

reach 5mn tonnes by 2017. To cater to this demand

and move towards self-sufficiency, the organic

chemical industry must reach a growth of 10-12% y/y

during the plan period.

Pesticides - the segment is expected to grow at 12-

13% y/y with domestic demand increasing by 8-9%

y/y and export demand growing at 15-16% y/y.

Based on the export potential and potential for

increased penetration in the domestic market, the

Indian agrochemical industry targets a size of

USD7.7bn by FY 2017.

Colorants – exports are projected to grow to USD

4.9bn by 2017. Driven by robust exports growth, the

Indian colorants industry has set a target to grow

from the present USD 3bn to USD7.5bn by 2017.

The targets imply that the industry must grow at a

rate of 12% y/y over the plan period.

Indian Chemical Industry Five-Year Plan 2012-2017

8%

12%

12%

12%

12%

13%

Alkali ChemicalIndustry

Colorants Pesticides OrganicChemicals

SpecialtyChemicals



III. Petrochemicals Subsector







Petrochemicals Production Highlights

Subsector

overview

Total petrochemicals production expanded at a rate of 5.2% in the five years to 2008. It witnessed a 5% drop in 2008, followed by a recovery and significantly higher annual growth of 7-12% in the period thereafter.

Polymers and synthetic fibres account for 60% and 30% of major petrochemicals production, respectively, and are 23% and 10% of all petrol-based products in India.

With 6.6 kg per capita plastic consumption India lags behind other developing countries like China (36.7 kg) and Brazil (24.6kg) and remains far behind developed countries like US (67.3kg)

Problems

Due to recent adverse investment climate, interest in investment in this sector has subsided. Official analysis

concludes that large scale capacity established in the Middle East on the back of subsidised feedstock, along with

high domestic energy cost coupled with high internal transaction costs have resulted in reduced interest in India’s

petrochemicals production in the past years.

Feedstock

Regarding resource availability, India has three cracker complexes based on naphtha and another three based on

gas, with total ethylene capacity of 2.9mn tonnes. More naphtha resources are expected from the upgrade of exiting

refinery projects and new green field facilities. The gas resources will be expanded with the completion of the gas

cracker project in Assam. Nevertheless, the new projects are progressing slowly and the sector development is

deterred by the lack of low-cost feedstock.

Installed

capacity

Although capacities for production of major petrochemicals like ethylene are enough to cover the local consumption

and have increased over the last couple of years, they are still below those of major competitors such as China,

which hurts India’s competitiveness in global perspective.

India’s manufacturing capacity of polymer products is estimated to reach 12 mn tonnes per annum in 2017.



Source:

Production

Production of main petrochemicals groups (thou tonnes) State-wise petrochemical production

CEIC

Gujarat 61.9%

Maharashtra 14.8%

West Bengal 10.7%

Uttar Pradesh 4.2%

Tamil Nadu 2.5%

Haryana 1.7%

Others 4.3%

2,250 2,524 2,343 2,600 2,791 2,697

5,183 5,303 5,061 4,792 5,292 6,211

556 585

551 618 639

623 3,437 3,111

3,051 3,885

4,098

4,461

4,995 5,211 4,740

4,579

4,837

6,098

3,447 3,489

3,476 3,596

3,654

3,969

21,084 21,594 20,520

21,982 23,282

26,204

0

5,000

10,000

15,000

20,000

25,000

30,000

2006 2007 2008 2009 2010 2011

Aromatics Olefins Fibre Intermediates

Intermediates Polymers Synthetic Fibres

Total



Source:

Polymers




Comments

CEIC, Times of India

Polymers are the largest segment in the petrochemical sector

in India, accounting for about 70% of the production. The

output expanded by approximately 18% in the five years to

2008. The decline in 2008-2009 was followed by quick recovery

in 2010 and in 2011 the segment reached the highest

production in the past decade.

Goldman Sachs calculations showed that polymer demand has

been increasing in India by 10.3% over FY09-13.

4,776

4,768

5,183

5,306

5,060

4,791

5,292

6,211

2004

2005

2006

2007

2008

2009

2010

2011Product 2006 2007 2008 2009 2010 2011

Polymers 5,187 5,777 5,720 6,130 7,406 7,450

Polypropylene 1,860 - 2,035 2,076 2,676 2,676

Poly Vinyl Chloride 985 - 1,105 1,279 1,279 1,279

772

837

817

683 89

7 1,03

3

958

974

942

856

887 1,

119

2,00

1

1,97

8

1,77

1

1,61

7

1,68

4 2,20

9

926

998

1,05

1

1,11

0

1,27

8

1,29

6

526

516

480

526

546

554

2006 2007 2008 2009 2010 2011

Linear Low Density Polyethylene High Density Polyethylene

Polypropylene Poly Vinyl Chloride

Others



Source:

PE, PP and PVC

Comments

Poly Ethylene trade * (thou tonnes)

Polypropylene trade* (thou tonnes)

PVC trade* (thou tonnes)

International Trade Centre, ICIS; * calendar years data

Among the polymers, PVC consumption in India was estimated to be 2.25mn tonnes in FY12-13, expanding by about 13% y/y, compared with modest 3% y/y growth in FY’11-12. PVC is one of the major products where capacity growth had been significantly lagging behind demand growth, which resulted in substantial import. Imports rose by 33% in the past five years and by more than 40% yoy in 2012, when there was no capacity addition.

In the mid-term demand is expected to continue outpacing local production, due to strong infrastructure investment and focus on land irrigation expansion, where PVC pipes are needed.

On the other hand, PP production capacities cover not only domestic demand, but also exports, as India is net exporter of polypropylene. PP accounts for approximately 7% of the petrochemical market in the country. The PP consumption in 2012 was estimated at 3.3 mn tonnes (13% y/y increase).

212

357

744

808

742

-201

-474

-433

-385

-488

2008

2009

2010

2011

2012

Import Export

7.8

6.5

8.3

26.6

14.9

-376

-676

-831

-833

-1,181

2008

2009

2010

2011

2012

Import Export

157

49

92

291

220

-602

-1,030

-1,436

-1,047

-1,550

2008

2009

2010

2011

2012

Import Export



Source:

Olefins




Comments

CEIC, The National Petrochemicals Committee of FICCI

Olefins are the major building blocks of the petrochemical industry. They represent 23% of the sectoral production and 25% of the installed capacities.

Ethylene capacity reached 3.78 MMT in 2011 and is expected to reach 6.5 MMT by 2016.

Propylene capacity was 2.88 MMT in 2011 and is forecasted to reach 5.3 MMT by 2016.

While the capacities of ethylene and propylene are enough to cater for domestic consumption, the supply-demand gap for styrene is significant (estimated at 496,000 tonnes in 2011).

Butadiene availability is also enough to cover local demand.

4,668

4,671

4,995

5,211

4,740

4,579

4,837

6,098

2004

2005

2006

2007

2008

2009

2010

2011 2006 2008 2009 2010 2011

Olefins 4,475 5,387 5,659 6,964 6,964

Ethylene 2,613 2,841 2,983 3,783 3,783

Propylene 1,581 2,270 2,381 2,886 2,886

Butadiene 281 276 295 295 295

2,68

3

2,81

0

2,63

9

2,51

5

2,66

5

3,32

0

2,08

9

2,15

7

1,88

7

1,85

9

1,93

0 2,52

8

223

244

214

205

242

250

2006 2007 2008 2009 2010 2011

Ethylene Propylene Butadiene



Source:

Aromatics




Comments

CEIC

Aromatics followed a strong growth path, increasing at a CAGR

of 7% in 2004-2011. A marginal contraction in production was

witnessed only in 2008. In 2011 the output rose 8.6% y/y.

Paraxylene accounts for almost 2/3 of the installed capacity

and production.

Domestic demand for benzene has increased steadily and is

estimated at approximately 600 thou tonnes per annum. The

capacity installation has followed the rise in demand, so that

local needs are comfortably covered by production.

2,451

2,537

3,447

3,489

3,476

3,596

3,654

3,969

2004

2005

2006

2007

2008

2009

2010

2011 2006 2008 2009 2010 2011

Aromatics 3,528 4,327 4,213 4,340 4,343

Benzene 768 1,111 1,149 1,279 1,282

Paraxylene 2,086 2,296 2,218 2,218 2,218

886

867

880

823 94

5

1,00

2

1,92

5

2,13

7

2,15

5

2,22

3

2,13

7

2,39

4

636

485

441 55

0

572

573

2006 2007 2008 2009 2010 2011

Paraxylene Benzene Other



Source:

Fibre Intermediates




Comments

CEIC

Accounting for about 17% of petrochemical production and

installed capacity, fibre intermediates increased at a CAGR of

6.6% in the period 2004-2011.

The segment production started to decline on annual basis in

2007, dropped further in 2008, before recovering in 2009 and

2010. In 2011 the fibre intermediates output reached its highest

ever level.

2,851

2,963

3,437

3,111

3,051

3,885

4,098

4,461

2004

2005

2006

2007

2008

2009

2010

2011 2006 2008 2009 2010 2011

Fibre Intermediates 4,181 5,354 4,774 4,954 4,954

Purified Terephthalic

Acid 2,998 3,073 3,873 3,753 3,753

Mono Ethylene Glycol 733 820 740 1,040 1,040

2,37

9

2,05

9

2,15

4

2,98

5

3,19

1

3,30

8

1,05

8

1,05

2

897

900

907 1,

153

2006 2007 2008 2009 2010 2011

Purified Terephthalic Acid Other



Source:

Synthetic Fibres




Comments

CEIC

With synthetic fibres production being concentrated in Asia and

namely in India and China, the segment weathered the crisis

quite well. India's production declined slightly in 2008 but

quickly returned to growth and reached an all-time high level in

2010. The output declined by 3.4% y/y in 2011.

Domestic availability of raw material has been a unique

advantage for the Indian polyester industry. China's import

dependence reached 64% in the boom years.

1,875

1,906

2,250

2,524

2,343

2,600

2,791

2,697

2004

2005

2006

2007

2008

2009

2010

2011 2006 2007 2008 2009 2010 2011

Synthetic Fibres 3,246 3,431 3,461 2,970 3,013 3,213

Polyester Filament

Yarn 1,877 - 1,848 1,548 1,592 1,791

Polyester Staple

Fibre 1,057 - 1,266 1,174 1,174 1,174

1,19

4

1,35

0

1,26

2

1,34

5

1,49

6

785 91

9

843 98

0

1,03

6

272

255

239

275

258

2006 2007 2008 2009 2010

Polyester Filament Yarn Polyester Staple Fibre Other



Source:

Forecast

Olefins, thou tonnes

Polymers, thou tonnes

Fibres, thou tonnes

Aromatics, thou tonnes

Report of the Sub-group on Petrochemicals I

Olefins FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017

Ethylene 3,785 6,805 3,867 7,087 82 282

Propylene 3,700 4,823 4,117 4,987 417 95

Butadiene 124 470 295 528 171 58

Styrene 496 647 0 0 -496 -647

Demand Capacity Gap

Fibers FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017

Purified Terephthalic

Acid 4,350 7,992 3,850 7,130 -500 -826

Mono Ethylene

Glycol 1,836 3,024 1,300 2,000 -536 -1,024

Polyester Filament

Yarn 1,973 3,500 2,582 5,216 609 2,276

Polyester Staple

Fibre 1,214 1,600 1,334 2,000 120 400

Demand Capacity Gap

Aromatics FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017

Paraxylene 2,306 4,576 2,477 5,201 171 624

Benzene 590 935 1,235 2,110 645 1,175

Toluene 440 650 270 270 -170 -380

Demand Capacity Gap

Polymers FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017

LLDPE 1,198 2,076 835 1,960 -363 -116

HDPE 1,657 2,573 1,825 3,090 168 517

PP 2,993 5,015 4,140 4,715 1,147 -300

PVC 2,087 3,102 1,330 1,635 -757 1,467



IV. Main Players







Highlights

Source:

Tata Chemicals

Financial performance (INR bn)

Other indicators

Tata Chemicals was established in 1939 and is part of the

USD 100bn Tata Group. The company operates broadly in

three sectors – living essentials, industry essentials and

farm essentials through the production and distribution of

chemicals, crop nutrition and consumer products.

Tata Chemicals Limited (TCL) is currently the second

largest producer of soda ash in the world with

manufacturing facilities in India, the UK, Kenya and the

USA. The company is India’s leading crop nutrients

producer with its own manufacturing of urea and phosphatic

fertilisers and a leading player in the crop protection

business through its subsidiary Rallis. TCL is the pioneer

and India’s market leader in the branded, iodised salt

segment and Tata Salt has been recognised as India’s

leading food brand for more than five years.

Along with its operations in India, Tata has three units

abroad – Tata Chemicals North America, Tata Chemicals

Europe and Tata Chemicals Magadi Ltd, managed under a

single holding company.

As at 31 March 2013, the company had 43 subsidiaries (5

in India and 38 abroad).

The company’s profits for the financial 2013 were adversely

affected due to impairment of assets and goodwill at Tata

Consulting Engineers Ltd (TCEL) to the amount of INR

4.84bn.

Company data

2008 2009 2010 2011 2012

EBITDA margin 16% 19% 17% 15% 17%

Fixed Assets Cover 5% 6% 6% 6% 3%

EPS 27.59 25.61 26.10 32.88 15.72

Net debt/EBITDA 2.40 1.98 2.34 2.36 3.02

Return on invested capital 10% 10% 10% 10% 6%

Market Capitalisation

(INR bn) 33.29 79.82 87.16 88.31 82.13

126.

5 94.5

109.

0

136.

6

147.

2

20.0

18.4

18.6

22.8

21.6

6.1

6.5

8.4

6.4

4.0

-6.5%

7.8%

28.3%

-23.3%

-37.8%

2008 2009 2010 2011 2012

Turnover EBITDA Profit after tax PAT yoy change



Source:

Tata Chemicals (cont’d)

Domestic chemicals market, 2012

Segment-wise revenue breakup, 2012

Product-wise revenue breakup, 2012

Geographical revenue breakup, 2012

Company data

In 2012, Tata Chemicals’ production of soda ash at Mithapur

was 693,396 tonnes compared with 690,181 tonnes in 2011.

The company also achieved its highest ever sales on the Indian

market of 691,372 tonnes of soda ash.

Tata Chemicals holds about 50% of the local sodium

bicarbonate market, reaching all-time high production of 86,724

tonnes in 2012 compared to the 80,285 tonnes produced in

2011. Soda Ash 39%

Complex Fertilisers 23%

Urea 10% Vacuum Salt

6%

Cement 2%

Other Income 4%

Others 16%

Chemicals 50%

Fertilisers 37%

Other Agro Inputs 12%

Others 1%

Asia 67%

America 18%

Europe 11%

Africa 4%



Highlights

Source:

UPL


Other indicators

UPL, formerly known as United Phosphorus Limited,

is a global company operating in the sectors of

generic crop protection, chemicals and seeds

production. The company is headquartered in

Mumbai.

UPL is among the top ten agrichemicals producers in

the world. The company is the world’s largest

producer of Mancozeb, aluminium phosphide,

Devrinol, Cypermethrin and Monocrotophos.

As at 31 March 2013, UPL operated through 88 global

subsidiaries in 41 countries with a sales presence in

120 countries. The company had manufacturing units

in 23 countries, of which nine in India, three in France,

two in Argentina and one each in Vietnam, Colombia,

the Netherlands, Italy, Spain and China.

UPL is listed on both stock exchanges in India – BSE

and NSE, and the group has a market capitalisation of

around USD 2.5bn.

In July 2012, UPL acquired a 100% in the Dutch

company Agrochem, engaged in the production of

crop protection products. The deal provided UPL with

improved market presence on the European

agrichemicals market.

Company data

2008 2009 2010 2011 2012

EPS 9.88 11.40 12.45 12.03 17.12

EBITDA

margin 19.8% 18.8% 20.5% 19.0% 19.0%

PAT margin 8.8% 9.3% 10.0% 7.7% 8.0%

ROCE 16.6% 15.1% 15.3% 14.5% 14.8%

Market

capitalisation

(INR bn)

42.97 65.69 69.46 60.03 51.87

49.7

54.9

59.0

77.6

92.9

9.9

10.3

12.1

14.8

17.6

4.4

5.1 5.9

6.0

7.4

69.8%

17.1% 15.2%

1.7%

23.3%

2008 2009 2010 2011 2012

Revenue EBITDA Profit after tax PAT, yoy change



Highlights

Source:

BASF India


Other indicators

BASF entered the Indian market as an independent manufacturing company in 1943. Initially, the firm was involved in the production of expandable polystyrene, but the portfolio expanded over the years.

Currently, BASF India specialises in the production of polymers, agrichemicals, textile chemicals, performance plastics, automotive and coil coatings, construction chemicals and others.

BASF has nine production sites and two R&D centres in India.

The company is in the process of building a new chemical production site at Dahej, Gujarat. The project, worth INR 10bn, will include a hub for polyurethanes manufacturing and will also house production facilities for care chemicals and polymer dispersions for the coatings and paper businesses. The production is planned to start in Q1/2014.

In 2012, BASF India has shut down the expandable polystyrene production due to strong competition along with high overcapacities and low margins.

Despite the turbulent market in 2012, BASF operations remained stable, with a sales increase of 12% year-on-year in in the financial 2012-2013.

In April-June 2013, unaudited financial results showed a 21% increase in net profit and 5% higher revenue from operations.

The company’s shares are listed on BSE and the National Stock Exchange of India (NSE).

Company data

12.4

14.7

31.2

35.2

39.4

0.7

1.0

1.2

1.0

1.1

15.5%

41.1%

21.7%

-14.4%

13.2%

2008 2009 2010 2011 2012

Sales Profit after tax Profit, yoy change

2008 2009 2010 2011 2012

Equity capital (INR bn) 3.9 8.7 9.7 10.5 11.4

Exports (INR bn) 0.6 0.6 2.3 2.2 2.7

EPS 24.35 25.00 27.22 23.30 26

ROCE 30.2 26.5 16.3 13.6 13.5

Number of Shareholders 25,606 44,184 42,963 41,556 40,843

Number of Employees 858 1 224 1 790 2 012 2 076



Highlights

Source:

Reliance Industries Limited


Other indicators

Reliance Industries Limited (RIL) is part of Reliance

Group, founded in 1977 through an IPO. The

company’s development followed a backward vertical

integration path, thus expanding from the textile

sphere into the production of polyester, fibre

intermediates, plastics, petroleum refining and oil and

gas exploration.

Reliance is a global leader in the polyester yarn and

fibre production and among the top ten manufacturers

of several other petrochemicals.

The company holds 28% of the domestic PVC market,

63% of the PP market, and has shares of 18% in

HDPE, 37% in LLDPE and 42% in LDPE in 2012.

RIL announced the setting up of a Refinery Off-Gas

Cracker (ROGC) at its Jamnagar location. The facility

will have installed capacity of 1.4 MMTPA of ethylene

and 0.2 MMTPA of propylene. Products from the

cracker will be used for the new downstream

petrochemical facilities being built at the same

location.

RIL is listed on the Bombay Stock Exchange (BSE)

and the National Stock Exchange of India (NSE).

Company data

2008 2009 2010 2011 2012

Total Assets (INR bn) 2,457.0 2,510.1 2,847.2 2,951.5 3,185.1

Market Capitalisation (INR bn) 2,397.2 3,513.2 3,429.8 2,447.6 2,498.0

EPS 49.7 49.7 62.0 61.2 64.8

ROCE 20.3% 13.9% 13.2% 11.6% 11.2%

Net profit margin 10.5% 8.1% 7.8% 5.9% 5.7%

Debt/Equity ratio 0.63 0.46 0.44 0.41 0.40

Number of Employees 24,679 23,356 22,661 23,166 23,519

1,46

3

2,00

4 2,58

7

3,39

8 3,71

1

1,48

4 2,02

9 2,58

7

3,46

0 3,79

1

153

162

203

200

210

-21.3%

6.1%

24.9%

-1.2%

4.8%

2008 2009 2010 2011 2012

Operation Revenue Total IncomeNet Profit Profit, y/y change



Highlights

Source:

GAIL


Standalone production (tonnes)

GAIL was founded in 1984 as a state-owned company, aimed at creating gas sector infrastructure. The firm entered the petrochemicals market in 1999 and the petrochemical business turned into one of its core activities.

Petrochemicals represent about 8% of the GAIL’s turnover and a quarter of its profit before tax.

The company holds 20% of the domestic petrochemicals market.

GAIL is the market leader in North India and runs the only HDPE/LLDPE plant in the region.

The company started a joint venture – Brahmaputra Cracker and Polymer Ltd, which is setting up a 280,000 TPA polymer plant in Assam.

GAIL owns a 17% in 1.1 MMTPA ethylene generation plant (OPaL) led by ONGC.

The company has a 32.5% share in another joint venture RGPPL. The entity operates one of the largest gas-powered generation facilities in the country and is building a 5 MMTPA liquefied natural gas terminal.

As at 31 March 2013, the polymer production capacity of GAIL was 0.41mn tonnes per annum. The company plans further expansion of the installed capacity through opening a new HDPE/LLDPE 500KTA plant in Pata, which is expected to become operational in the financial 2014.

GAIL is listed on the Bombay Stock Exchange and the National Stock Exchange of India.

Company data

253.

6 274.

9 356.

7 447.

4 517.

4

42.8

48.2

58.0

63.5

65.6

28.3

33.3

40.2

44.4

43.7

17.7%

20.8%

10.5%

-1.6%

2008 2009 2010 2011 2012

Sales Profit before tax

Profit after tax Profit, y/y change

2008 2009 2010 2011 2012

HDPE/LLDPE 420,108 417,147 416,396 446,041 441,051

Ethylene 431,580 429,992 428,444 457,080 448,534



Contact:

Corporate Headquarters

Nestor House

Playhouse Yard

London EC4V 5EX

UK

Voice: +44 207 779 8471

Fax: +44 207 779 8224

Americas Headquarters

225 Park Avenue South

New York, New York 10003

US

Voice: +1 212 610 2900

Fax: +1 212 610 2950

Asia Headquarters

Eucharistic Congress Bldg. No.

III

4th Floor, 5 Convent Street

Mumbai 400 001

India

Voice: +91 22 22881123

Fax: +91 22 22881137

Disclaimer:

The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness

of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional

Investor PLC take no responsibility for decisions made on the basis of these opinions.

Any redistribution of this information is strictly prohibited. Copyright © 2014 EMIS, all rights reserved. A Euromoney Institutional Investor company.

About EMIS Insight

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and profiles of the leading sector companies provided by locally-based analysts.

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