Chemical and petrochemical industry
Chemical and petrochemical industry
Chemical and petrochemical industry
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Global Investors’ Meet - 2012Karnataka: chemical <strong>and</strong><strong>petrochemical</strong> industriesKarnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 1
India: contributing significantly to globalchemical <strong>and</strong> <strong>petrochemical</strong> industries"The Indian market for <strong>petrochemical</strong>s will increase four times in the next ten years. It willwitness a sustained double-digit growth rate.” ~ Mukesh Ambani, CMD, Reliance Industries►►►Global chemical market estimated at USD1.7 trillionWestern Europe is the largest chemicalproducing region followed by North America<strong>and</strong> AsiaIndia – ranks 12 th by volume of production► Current <strong>industry</strong> turnover ~INR 1478.4billion (~14% of total manufacturing outputof India)►<strong>Chemical</strong> Industry segments►►►►►►►Basic inorganic & organic chemical<strong>industry</strong> (Soda ash, caustic soda, liquidchlorine, calcium carbide, etc which areraw material for toothpaste, detergents,plastics, pharmaceuticals, etc.)Drugs & PharmaceuticalsPesticides & AgrochemicalsPetrochemicals (Ethylene, Propylene,Polypropylene, Benzene, Xylene, etc)Dyes & pigments (80% utilised bytextile <strong>industry</strong>)Fine & specialty chemicalsFertilizersCAGR of 8.7% in chemical productionmatches overall <strong>industry</strong> trendsSource: Department of <strong>Chemical</strong>s <strong>and</strong> Petrochemicals, GoIFastest growing chemical <strong>and</strong><strong>petrochemical</strong> products in IndiaProductsPetroleumrefineryproductsPerformancePlasticsSyntheticFibresDyes &DyestuffsCAGR (’05-’6 to ‘09-’10)5.73%7.88%8.08%2009-10Prodn149.7million MT172,000MT2,601,000MT8.78% 42,000 MTSource: Department of <strong>Chemical</strong>s <strong>and</strong> Petrochemicals, GoI<strong>Chemical</strong> Industry Value ChainStorage, Packaging, <strong>and</strong> DistributionRawMaterialsIntermediate‘BuildingBlock’SynthesisFunctional<strong>Chemical</strong>SynthesisValueaddition <strong>and</strong>processingFinishedintermediatebyproductsBusiness Support ServicesKarnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 2
Karnataka: showcasing potential inchemicals <strong>and</strong> <strong>petrochemical</strong>s► Mangalore Refinery <strong>and</strong> PetrochemicalsLimited (MRPL) is the state’s leading player,<strong>and</strong> public sector refinery► Manufacturing Facilities:► MRPL has capacity to process 11.82 millionmetric tonnes per annum500+ factories drive the chemical <strong>industry</strong> inthe StateOver 100 factories20-99 factories1-19 factories► 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 <strong>and</strong>Bangalore 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 <strong>and</strong><strong>petrochemical</strong>s <strong>industry</strong> development► Proposed units in MSEZ► Aromatics complex by ONGC Mangalore Petrochemicals Ltd (OMPL) producing para-xylene<strong>and</strong> benzene► Strategic crude oil storage facility by Indian Strategic Petroleum Reserves Ltd (ISPRL) at acost of US$ 208-million► Downstream <strong>petrochemical</strong> industries: methanol, propylene, benzene based; plastics,specialty chemicalsKarnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 3
Enabling investment in downstreamprocessing <strong>industry</strong>Products from MRPLProduction Vol. ( MMTPA)POLYPROPYLENE 0.44PETCOKE 0.9SULPHUR 0.2MIXED XYLENE 0.08BITUMEN 0.25LPG 0.3KERSOENE 0.34NAPTHA 0.89ATF 1.09MOTOR SPIRIT 1.19FUEL OIL 2.27DIESEL 5.28Products from OMPLProduction Vol.( MMTPA)PARA XYLENE 0.9BENZENE 0.27Liberalized policy framework facilitates investor-friendly environmentState IndustrialPolicy, 2009-14► Anchor unit subsidy & Investment promotion subsidy to MSMEs► Exemption from stamp duty <strong>and</strong> concessional registrationcharges► Refund of conversion fine <strong>and</strong> Special incentives forenterprises 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 dutyKarnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 4
Government policies <strong>and</strong> efforts: promotehealthy investment environmentCentral policy <strong>and</strong>incentives for unitsin Special EconomicZones (SEZs)► Duty free import/domestic procurement of goods fordevelopment, operation <strong>and</strong> maintenance of SEZ units► 100% Income Tax exemption on export income for SEZunits under Section 10AA of the Income Tax Act for first5 years, 50% for next 5 years thereafter <strong>and</strong> 50% of theploughed back export profit for next 5 years.► Exemption from minimum alternate tax under section115JB of the Income Tax Act.► External commercial borrowing by SEZ units upto US $500 million in a year without any maturity restrictionthrough recognized banking channels.► Exemption from Central Sales Tax.► Exemption from Service Tax.► Single window clearance for Central <strong>and</strong> State levelapprovals.► Exemption from State sales tax <strong>and</strong> other levies asextended by the respective State Governments.Karnataka StatePolicy for SpecialEconomic ZonesAct, 2009►►►►►►Single Point Clearance by Unit Approval Committeeheaded by the Development Commissioner, SEZAll industrial units <strong>and</strong> other establishments in the SEZswill be declared Public Utility Service under theprovisions of the Industrial Dispute Act, 194750% Exemption of Stamp Duty <strong>and</strong> Registration feesExemption of Electricity Duty or TaxesExemption of 1% Labour Welfare Cess on constructioncostExemption from any other State taxes, cess, duties orlevies as may be notified by the State Government100% FDI is permissible in the chemical & <strong>petrochemical</strong> <strong>industry</strong> (except for fewsensitive <strong>industry</strong> segments)Karnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 5
<strong>Chemical</strong> <strong>and</strong> <strong>petrochemical</strong> <strong>industry</strong>: agrowing investment focus for stateKarnataka’s chemical <strong>industry</strong> of increasing interest to investorsMajor investments received during GIM 2010 (in INR cr)Mangalore Refinery & Petrochemicals Ltd 15798 Oil refinery (Dakshin Kannada)Zuari Fertilizers & <strong>Chemical</strong>s 4565 Urea (Belgaum)Akzon Nobel India Ltd 253 Paints <strong>and</strong> varnishes (Mysore)Key Players Industry Focus LogosMangalore Refinery& PetrochemicalsLtdBASFMangalore<strong>Chemical</strong>s &Fertilizers Ltd.Somu GroupUnited PhosporousNOCILMarket cap of US$ 2,236-million; Annual refiningcapacity:11.82-million MT; Oil <strong>and</strong> gas refiningfacilities<strong>Chemical</strong>s, plastics, performance <strong>and</strong> nutritionproductsUrea, Di-Ammonium Phosphate, Muriate of Potash,Granulated Fertilizers, Soil Conditioners <strong>and</strong>Specialty FertilizersPetrchemicals <strong>and</strong> Solvents, Industrial chemicals,plasticizers, acids, specialty solvents, pharma <strong>and</strong>agro intermediates, nutraceuticals <strong>and</strong> herbalextractsAgro chemicals, <strong>industry</strong> specialty chemicals(caustic chlorine, white phosphorousRubber chemicalsKarnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 6
Investment OpportunitiesEducation, R & DInfrastructureInvestmentOpportunities• Special Economic Zones• Transport Hubs• PetrochemicalIndustrial Parks• Logistics ParksManufacturing• Eco-friendly technologies <strong>and</strong> products• Research <strong>and</strong> development centers• Dedicated courses, ITI’s <strong>and</strong> collegesto support the <strong>industry</strong> through skilldevelopment• Para Xylene based industries• Benzene based• C3 Chain• C4 Chain• Methanol basedIndicative investment areas in intermediate <strong>and</strong> downstream industries based onavailable raw material► Intermediate <strong>petrochemical</strong> units• Propylene-based: Acrylonitrile, Oxo-Alcohol• P-Xylene-based: Purified Terepthalic Acid,Polyethylene Terephthalate, PolyesterStaple Fibre, Polyester Filament Yarn/Partially Oriented• O-Xylene-based: Phthalic Acid• Benzene-based: Nylon Filament Yarn/Nylon Industrial Yarn, Cyclohexane,Caprolactum, Adipic Acid, Polyamide,Linear Alkyl Benzene, Aniline• Propylene <strong>and</strong> Benzene-based: Cumene,Phenol <strong>and</strong> Acetone, Bis Phenol A,Acrylonitrile Butadiene Styrene, Styrene-Acrylonitrile, Poly Methyl Methacrylate,Polycarbonate• Syn Gas I: Methanol, Acetic Acid• Methanol-based formaldehyde► Downstream <strong>petrochemical</strong> units:• Synthetic & technical textiles, garments <strong>and</strong>apparels• Speciality chemicals, coatings, adhesives,sealants, rubber chemicals, Pesticides,Dyes• Plastics <strong>and</strong> plastic products• Bulk drugs <strong>and</strong> API• Agro-chemicals <strong>and</strong> organic chemicalsKarnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 7
Key ContactsPrincipal Secretary to Government of KarnatakaCommerce & Industries Department# 106, 1st Floor, Vikasa SoudhaDr. Ambedkar Veedhi,Bangalore 560 001, India.Email : prs_ci@karnataka.gov.in_________________________________________________________________________________Commissioner for Industrial Development <strong>and</strong> Director ofIndustries & Commerce2nd Floor, Khanija BhavanNo.49, Race Course Road, Bangalore – 560 001Email : commissioner@karnataka<strong>industry</strong>.gov.inVisit us at : http://www.karnataka<strong>industry</strong>.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 : md@kumbangalore.comVisit us at : www.kumbangalore.com_____________________________________________________________________________________Mangalore SEZ Ltd.Managing Director & CEONo. 16, Pravana Park, 3 rd Floor,Infantry Road,Bangalore – 560 001Ph : 91-80-2286 7552, 22867553Fax : 91-80-22867551Karnataka: <strong>Chemical</strong>s <strong>and</strong> Petrochemicals ProfilePage 8
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