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The chemical industry has been playing significant role in our day to day life. Almost each and every item we consume, there’s components of chemical, starting from toothpaste to using mosquito’s repellent liquid (Odomos, Good Knight) while sleeping, from eating home cooked food to drinking Pepsi or coke. Chemical is omnipresent.
With its essential role in other sectors, it is not surprising that the chemical sector is a vast and complex industry in nature too.
The global industry size is around US$ 4.60 tn whereas India contributes just US$ 0.14 forming 3% of total share. China’s role in world chemical industry has been crucial. With US$ 1.60 tn, china contributes around 35.0% followed by Europe with a share of 20% and US of ~15%. The China chemical industry was contributing ~18% to the global chemical market in 2008, which grew to ~35% in 2020.
Below chart shows how much potential India has in this sector!
Broadly, the chemical industry can be divided into four segments.
Raw Material & Feedstock:
Petrochemicals are derived from petroleum and natural gas and fossil fuels like coal or natural gas. Two most common classes of petrochemicals are olefins (ethylene, propylene and butadiene) aromatics (benzene, toluene, and xylenes)
Oil refineries produce olefins and aromatics by cracking of petroleum fractions, whereas chemical plants produce olefins by steam cracking of natural gas like ethane and propane, and aromatics are produced by catalytic reforming of naphtha.
Petrochemical derivative products can be made in a variety of ways:
- Directly from primary petrochemicals;
- Intermediate products which contain only carbon and hydrogen and
- Intermediates which incorporate chlorine, nitrogen or oxygen in the finished derivative.
In some cases, they are finished products; in others, more steps are needed to arrive at the desired composition.
Of all the processes used, one of the most important is polymerization. It is used in the production of plastics, fibers and synthetic rubber, the main finished petrochemical derivatives.
|Building Block/Petrochemical Derivatives||Chemicals|
|Olefins||Ethylene, Propylene & Butadiene|
|Aromatics||Benzene, Toluene, Ortho-xylene, Mixed Xylene, Paraxylene|
|Fiber Intermediaries||Acrylonitrile (ACN), Caprolactum, Mono Ethylene Glycol (MEG), Purified Terephthalic Acid (PTA)|
|Synthetic Fiber & Yarn||Polyester Filament Yarn (PFY), Nylon Filament Yarn (NFY), Nylon Industrial Yarn (NIY)|
|Other Petro-based chemicals||Butanol, Isopropanol (IPA), Phthalic Anhydride (PAN), Propylene Glycol (PG), Polyvinyl Acetate Resin, Vinyl Acetate Monomer (VAM) etc.|
Bulk Chemicals are high volume and low value products; they are produced to cater to a vast range of downstream industries. These can majorly be classified into three classes, alkali, organic and inorganic.
Alkali Chemicals – These chemicals are groups of chemicals with high Ph (7.0) and they are soluble in water, too.
Inorganic Chemicals – Inorganic chemicals are the chemicals which are not carbon based and are of mineral origin, these chemicals are used as intermediates for downstream industries.
Organic Chemicals – Organic chemicals are the chemicals which are carbon based. Organic chemicals have a significantly large contribution to the Indian chemical industry. We import majority of our requirement.
It is defined as “group of relatively high value, low volume chemicals known for their end use applications and/ or performance enhancing properties.”
In contrast to base or commodity chemicals, specialty chemicals are recognized for ‘what they do’ and not ‘what they are’.
Specialty chemicals provide the required ‘solution’ to meet the customer application needs.
It is a highly knowledge driven industry with raw materials cost (measured as percentage of net sales) much lower than for commodity chemicals.
Market Size of Speciality Chemicals in India
|Sub-Industry||Market Size (USD bn)||2014- 2019 CAGR||2019- 2025 CAGR|
|Dyes and Pigments||7.0||7.3%||10.0%|
|Personal Care Chemicals||1.0||15.5%||15.0%|
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Cheers. Happy Learning. Happy Investing.
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