8
Page 1 Karnataka: Chemicals and Petrochemicals Profile Karnataka: chemical and petrochemical industries Global Investors’ Meet - 2012
Page 1Karnataka: Chemicals and Petrochemicals Profile
Karnataka: chemical and petrochemical industries
Global Investors’ Meet - 2012
Page 2Karnataka: Chemicals and Petrochemicals Profile
Finished intermediate byproducts
Value addition and processing
India: contributing significantly to global chemical and petrochemical industries"The Indian market for petrochemicals will increase four times in the next ten years. It willwitness a sustained double-digit growth rate.” ~ Mukesh Ambani, CMD, Reliance Industries
Products CAGR (’05-’6 to ‘09-’10)
2009-10Prodn
Petroleumrefinery products
5.73% 149.7million MT
Performance Plastics 7.88% 172,000
MT
Synthetic Fibres 8.08% 2,601,000
MT
Dyes & Dyestuffs 8.78% 42,000 MT
Fastest growing chemical and petrochemical products in India
CAGR of 8.7% in chemical production matches overall industry trends
Source: Department of Chemicals and Petrochemicals, GoI
► Global chemical market estimated at USD 1.7 trillion
► Western Europe is the largest chemical producing region followed by North America and Asia
► India – ranks 12th by volume of production
► Current industry turnover ~INR 1478.4 billion (~14% of total manufacturing output of India)
► Chemical Industry segments
► Basic inorganic & organic chemical industry (Soda ash, caustic soda, liquid chlorine, calcium carbide, etc which are raw material for toothpaste, detergents, plastics, pharmaceuticals, etc.)
► Drugs & Pharmaceuticals
► Pesticides & Agrochemicals
► Petrochemicals (Ethylene, Propylene, Polypropylene, Benzene, Xylene, etc)
► Dyes & pigments (80% utilised by textile industry)
► Fine & specialty chemicals
► FertilizersSource: Department of Chemicals and Petrochemicals, GoI
Functional Chemical Synthesis
Intermediate ‘Building
Block’ Synthesis
Raw Materials
Storage, Packaging, and Distribution
Business Support Services
Chemical Industry Value Chain
Page 3Karnataka: Chemicals and Petrochemicals Profile
Karnataka: showcasing potential in chemicals and petrochemicals► Mangalore Refinery and Petrochemicals
Limited (MRPL) is the state’s leading player,and public sector refinery
► Manufacturing Facilities:
► MRPL has capacity to process 11.82 millionmetric tonnes per annum
► Only Refinery in India to have 2Hydrocrackers producing Premium Diesel(High Cetane)
► Only Refinery in India to have 2 CCRsproducing Unleaded Petrol of High Octane
► Pipelines: 6 lines from refinery to coastalterminal at New Mangalore Port, with 362-kmPetronet pipeline between Mangalore andBangalore transporting 76,806 kls ofNaphtha, Petrol, Kerosene, ATF, Diesel
► Presence of a dedicated Petrochemical SEZ inMangalore
► Proposed total area: 3,985 acres in DakshinKannada, with 1,800 acres alreadypossessed
► 1,453 acres dedicated to petroleum andpetrochemicals industry development
500+ factories drive the chemical industry in the State
Over 100 factories20-99 factories1-19 factories
► Proposed units in MSEZ
► Aromatics complex by ONGC Mangalore Petrochemicals Ltd (OMPL) producing para-xyleneand benzene
► Strategic crude oil storage facility by Indian Strategic Petroleum Reserves Ltd (ISPRL) at acost of US$ 208-million
► Downstream petrochemical industries: methanol, propylene, benzene based; plastics,specialty chemicals
Page 4Karnataka: Chemicals and Petrochemicals Profile
Enabling investment in downstream processing industryProducts from MRPL Production Vol. ( MMTPA)
POLYPROPYLENE 0.44
PETCOKE 0.9
SULPHUR 0.2
MIXED XYLENE 0.08
BITUMEN 0.25
LPG 0.3
KERSOENE 0.34
NAPTHA 0.89
ATF 1.09
MOTOR SPIRIT 1.19
FUEL OIL 2.27
DIESEL 5.28
Products from OMPL Production Vol.( MMTPA)
PARA XYLENE 0.9
BENZENE 0.27
► Anchor unit subsidy & Investment promotion subsidy to MSMEs► Exemption from stamp duty and concessional registration
charges► Refund of conversion fine and Special incentives for
enterprises coming up in low HDI districts► Exemption from entry tax & Incentives for export oriented units► Exemption of APMC cess & Subsidy for setting up of ETPs► Interest free loan on VAT for large & mega projects► Exemption from electricity duty
State Industrial Policy, 2009-14
Liberalized policy framework facilitates investor-friendly environment
Page 5Karnataka: Chemicals and Petrochemicals Profile
Government policies and efforts: promote healthy investment environment
► Single Point Clearance by Unit Approval Committee headed by the Development Commissioner, SEZ
► All industrial units and other establishments in the SEZs will be declared Public Utility Service under the provisions of the Industrial Dispute Act, 1947
► 50% Exemption of Stamp Duty and Registration fees► Exemption of Electricity Duty or Taxes► Exemption of 1% Labour Welfare Cess on construction
cost► Exemption from any other State taxes, cess, duties or
levies as may be notified by the State Government
Karnataka State Policy for Special Economic Zones Act, 2009
► Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
► 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
► Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
► External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
► Exemption from Central Sales Tax. ► Exemption from Service Tax. ► Single window clearance for Central and State level
approvals. ► Exemption from State sales tax and other levies as
extended by the respective State Governments.
Central policy and incentives for units in Special Economic Zones (SEZs)
100% FDI is permissible in the chemical & petrochemical industry (except for few sensitive industry segments)
Page 6Karnataka: Chemicals and Petrochemicals Profile
Chemical and petrochemical industry: agrowing investment focus for state
Karnataka’s chemical industry of increasing interest to investors
Key Players Industry Focus Logos
Mangalore Refinery & Petrochemicals Ltd
Market cap of US$ 2,236-million; Annual refining capacity:11.82-million MT; Oil and gas refining facilities
BASF Chemicals, plastics, performance and nutrition products
Mangalore Chemicals & Fertilizers Ltd.
Urea, Di-Ammonium Phosphate, Muriate of Potash, Granulated Fertilizers, Soil Conditioners and Specialty Fertilizers
Somu Group
Petrchemicals and Solvents, Industrial chemicals, plasticizers, acids, specialty solvents, pharma and agro intermediates, nutraceuticals and herbal extracts
United Phosporous Agro chemicals, industry specialty chemicals (caustic chlorine, white phosphorous
NOCIL Rubber chemicals
Major investments received during GIM 2010 (in INR cr)
Mangalore Refinery & Petrochemicals Ltd 15798 Oil refinery (Dakshin Kannada)
Zuari Fertilizers & Chemicals 4565 Urea (Belgaum)
Akzon Nobel India Ltd 253 Paints and varnishes (Mysore)
Page 7Karnataka: Chemicals and Petrochemicals Profile
Investment Opportunities
Infrastructure
ManufacturingEducation, R & D
Investment Opportunities
Special Economic ZonesTransport Hubs
Petrochemical Industrial Parks
Logistics Parks
Para Xylene based industriesBenzene basedC3 ChainC4 ChainMethanol based
Eco-friendly technologies and productsResearch and development centersDedicated courses, ITI’s and collegesto support the industry through skilldevelopment
► Intermediate petrochemical unitsPropylene-based: Acrylonitrile, Oxo-AlcoholP-Xylene-based: Purified Terepthalic Acid,Polyethylene Terephthalate, PolyesterStaple Fibre, Polyester Filament Yarn/Partially OrientedO-Xylene-based: Phthalic AcidBenzene-based: Nylon Filament Yarn/Nylon Industrial Yarn, Cyclohexane,Caprolactum, Adipic Acid, Polyamide,Linear Alkyl Benzene, AnilinePropylene and Benzene-based: Cumene,Phenol and Acetone, Bis Phenol A,Acrylonitrile Butadiene Styrene, Styrene-Acrylonitrile, Poly Methyl Methacrylate,PolycarbonateSyn Gas I: Methanol, Acetic AcidMethanol-based formaldehyde
Indicative investment areas in intermediate and downstream industries based on available raw material
► Downstream petrochemical units:Synthetic & technical textiles, garments andapparelsSpeciality chemicals, coatings, adhesives,sealants, rubber chemicals, Pesticides,DyesPlastics and plastic productsBulk drugs and APIAgro-chemicals and organic chemicals
Page 8Karnataka: Chemicals and Petrochemicals Profile
Key Contacts
Principal Secretary to Government of KarnatakaCommerce & Industries Department# 106, 1st Floor, Vikasa SoudhaDr. Ambedkar Veedhi,Bangalore 560 001, India.Email : [email protected]
_________________________________________________________________________________
Commissioner for Industrial Development and Director of Industries & Commerce2nd Floor, Khanija BhavanNo.49, Race Course Road, Bangalore – 560 001Email : [email protected] us at : http://www.karnatakaindustry.gov.in
_________________________________________________________________________________
Karnataka Udyog MitraManaging Director, Karnataka Udyog Mitra,3rd Floor, Khanija Bhavan (South Wing), No.49, Race Course Road,Bangalore – 560 001Ph : 91-80-2228 2392, 2228 5659; 2238 1232, 2228 6632Fax : 91-80-2226 6063Email : [email protected] us at : www.kumbangalore.com
_____________________________________________________________________________________
Mangalore SEZ Ltd.Managing Director & CEONo. 16, Pravana Park, 3rd Floor,Infantry Road,Bangalore – 560 001Ph : 91-80-2286 7552, 22867553Fax : 91-80-22867551
