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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