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PETROCHEMICALS

Archit Shah A -36

Narayan Pawar A - 31

Shoeib Shaikh B - 49

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CHARACTERISTICS OF INDIAN

PETROCHEMICAL INDUSTRY

Represents 2% of world market

Does business worth USD 30 billion

Rate of growth of the Indian petrochemical industry is

10% Profit incurred is around 14%

Wide variety of products

Basic components are petrochemicals, inorganicchemicals and fertilizers

TheIndian states of Gujarat, Maharashtra, West Bengaland Andhra Pradesh have the largest concentration ofchemical and petrochemical units

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Demand and Future

1980s and 1990s saw some rapid growths forIndian petrochemical industry.

Grew at an annual rate of 13 to 14% since late 90s

Sectors having high demand

Healthcare

Food preservation

Hardware Transportation

Equipments in office

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TOP PETROCHEMICAL COMPANIES

IN INDIA

Reliance Industries Limited

Gas Authority ofIndia Limited

Indian Petrochemicals Corporation Limited Grasim Industries Limited

Indo Rama Synthetics Limited

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KEY SEGMENTS

Polymers

Polyester Intermediates

Aromatics

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SWOT OF PETROCHEMICAL

INDUSTRY

STRENGTHS

-Large and very fast growing Indian market

-Huge trained talent pool

-Competitive labor cost

WEAKNESSES

-Insufficient basic infrastructure-Prevalence and use of old technology

-Synthetic fiber industry is unorganized andoperates in small clusters

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PETROCHEMICAL INDUSTRY

CHALLENGES

High cost of energy and feedstock and the

impact on demand

The transformation in the kinetics ofcompetition in manufacturing

Increase in the cost of project

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Problems faced by the India petrochemical

industry

The manufacturing units mostly use obsoleteformat of technology and are not able produceoptimally

There is a necessity for the modernization ofequipments

Excise duty on synthetic fiber should berationalized

Prevention of reservation on Small Scale Units

The industry should have access to the primaryamenities of infrastructure

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BRIC EMERGING

America NO 1 (about 11.02 % )

Chinese No 2 (about 9.5% )

Emerging BRIC countries (about 19%)

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DEALS IN PETROCHEMICAL INDUSTRY

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DEALS IN CHEMICAL INDUSRTY

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VOLUME OF M & A

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FEW DEALS

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DISTINCTIVE CHARACTERISTICS

high tech

R&D-oriented industry

Receives 12 percent of patents granted annually.

produces over 70,000 different products.

Few industries exhibit such diversity and

complexity

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CHARACTERISTICS SIGNIFICANT FOR M&A

many distinctive segments

a number of which overlap with the oil and

other energy industries . Some of segments are from pharmaceuticals

and life-science products.

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Why becomes object of Takeover

R&D performs a key role R&D discoveries often are not in the firm's core

businesses

new products may require time to fit into organizationeffectiveness

may fail to achieve significant economies of scope.

will negatively impact sales and profitability

causing vulnerability to takeovers.

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Reasons For M & A

technological change,

globalization of markets,

favorable financial

economic environments.

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RISKY BUSINESS

Size

Complexity

geographical location

require huge investment

most important parameter is time.

time = risk. Time changes the nature of risk

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RIL

India's largest business house RIL

total revenues of Rs 80,000 crore (US$ 16.8

billion) net profit Rs 12,300 cr

exports of Rs 11,900 cr.

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DIVERSIFICATION

financial services - Reliance Capital Limited

Insurance - Reliance General Insurance

Power R power Telecom - Rcom

Infocom - Reliance Infocom

Infrastructure - Reliance Industries

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R Power

2nd Largest Player in Power

sector

Current Capacity -20950

MW

capacity addition Plan

10,000Mw/yr

2017 35000 Mw

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R Com

leading CDMA & GSM

Service providers in

India

2nd largest Telecomplayer

Market Capitalization

around $30 billion.

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R Infra

India's largest private

sector enterprise inpower utility

Largest Infrastructure

company of india.

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CONCLUSION