April, 2013
Knowledge & Strategy Partner
Knowledge Paper
Theme:
“Opportunities in Engineering Plastics –
Automobile, Telecommunication,
Healthcare and other emerging areas”.
April, 2013
Knowledge & Strategy Partner
Knowledge Paper
Theme:
“Opportunities in Engineering Plastics –
Automobile, Telecommunication,
Healthcare and other emerging areas”.
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
Foreword
Manish Panchal
Practice Head - Chemical & Energy Tata Strategic Management Group
Manish.panchal@tsmg.com
Charu Kapoor
Engagement Manager - Chemicals Tata Strategic Management Group
charu.kapoor@tsmg.com
P S Singh
FICCI
prabhsharan.singh@ficci.com Head- Chemicals
This report attempts to provide reader an overview of the engineering plastics market, its growth prospects and challenges faced by industry today. We also recommend certain strategic initiatives for manufacturers and end users to bring about a transformation in the way it's perceived.
The engineering plastics industry has evolved significantly in the past decades with rapid increase in applications of high performing engineering resins with enhancing properties such as strength, high weather resistance, light weight and high workability.
Indian plastics industry has grown at ~10% per annum historically. It is approximated around 9MnTPA in FY12. Though the major share of the industry is held by commodity plastics, engineering plastics are a fast emerging segment with estimated demand of
~540,000 TPA in FY12 and growth rate of over 15%. This is primarily due to increasing awareness about the applications as well as the high growth of the end-use industries.
However, limited domestic production capacity and availability of raw materials is a challenge for the industry. Going forward the focus will be on balancing the demand- supply gap through investments in production capabilities and acquiring manufacturing expertise. Also, demand for innovative products will increase the R&D spend in the industry.
“Indian Engineering Plastics Industry has huge potential for growth, waiting to be tapped.
The domestic demand is rapidly increasing and is being fuelled by approx. 200 million Indian middle class consumers. The new National Manufacturing Policy has set the target of increasing the share of manufacturing in GDP to at least 25% by 2025 (from current 16%). These all are indications of the days of growth for this important sector. However for that to be possible, significant investments in capacity creation, R$D, Skill Development, infrastructure etc need to be created to enable the industry to realise its potential and be globally competitive. If that is not done, the market forces will play and it will get served through manufacturing done in other countries i.e, imports”
Table of Content
I. Executive summary. . . 01
II. Introduction. . . 02
III. Plastic Industry: Overview. . . 03
IV. Engineering Plastics . . . 06
1. Poly Carbonate (PC) . . . 06
2. Styrene Acrylonitrile (SAN) . . . 08
3. Acrylonitrile Butadiene Styrene (ABS) . . . 10
4. PolyAmide (PA) . . . 12
5. Others . . . 13
V. Engineering plastics demand drivers. . . 15
VI. Potential of Petrochemical Sector in Northern India with special focus on . . . 19
Downstream Plastic Industry" VII. Critical Success Factors and Strategic imperatives. . . 22
VIII.Conclusion . . . 23
IX. References . . . 24
X. About FICCI. . . 25
XI. About Tata Strategic . . . 26
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
Foreword
Manish Panchal
Practice Head - Chemical & Energy Tata Strategic Management Group
Manish.panchal@tsmg.com
Charu Kapoor
Engagement Manager - Chemicals Tata Strategic Management Group
charu.kapoor@tsmg.com
P S Singh
FICCI
prabhsharan.singh@ficci.com Head- Chemicals
This report attempts to provide reader an overview of the engineering plastics market, its growth prospects and challenges faced by industry today. We also recommend certain strategic initiatives for manufacturers and end users to bring about a transformation in the way it's perceived.
The engineering plastics industry has evolved significantly in the past decades with rapid increase in applications of high performing engineering resins with enhancing properties such as strength, high weather resistance, light weight and high workability.
Indian plastics industry has grown at ~10% per annum historically. It is approximated around 9MnTPA in FY12. Though the major share of the industry is held by commodity plastics, engineering plastics are a fast emerging segment with estimated demand of
~540,000 TPA in FY12 and growth rate of over 15%. This is primarily due to increasing awareness about the applications as well as the high growth of the end-use industries.
However, limited domestic production capacity and availability of raw materials is a challenge for the industry. Going forward the focus will be on balancing the demand- supply gap through investments in production capabilities and acquiring manufacturing expertise. Also, demand for innovative products will increase the R&D spend in the industry.
“Indian Engineering Plastics Industry has huge potential for growth, waiting to be tapped.
The domestic demand is rapidly increasing and is being fuelled by approx. 200 million Indian middle class consumers. The new National Manufacturing Policy has set the target of increasing the share of manufacturing in GDP to at least 25% by 2025 (from current 16%). These all are indications of the days of growth for this important sector. However for that to be possible, significant investments in capacity creation, R$D, Skill Development, infrastructure etc need to be created to enable the industry to realise its potential and be globally competitive. If that is not done, the market forces will play and it will get served through manufacturing done in other countries i.e, imports”
Table of Content
I. Executive summary. . . 01
II. Introduction. . . 02
III. Plastic Industry: Overview. . . 03
IV. Engineering Plastics . . . 06
1. Poly Carbonate (PC) . . . 06
2. Styrene Acrylonitrile (SAN) . . . 08
3. Acrylonitrile Butadiene Styrene (ABS) . . . 10
4. PolyAmide (PA) . . . 12
5. Others . . . 13
V. Engineering plastics demand drivers. . . 15
VI. Potential of Petrochemical Sector in Northern India with special focus on . . . 19
Downstream Plastic Industry" VII. Critical Success Factors and Strategic imperatives. . . 22
VIII.Conclusion . . . 23
IX. References . . . 24
X. About FICCI. . . 25
XI. About Tata Strategic . . . 26
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
Figure II 1: Per capita plastic products consumption (Kg/ person) . . . 02
Figure III 1: Global polymers consumption (%age share), FY12. . . 03
Figure III 2: Demand overview of plastics ('000 TPA), FY06-12 . . . 05
Figure IV 1: Polycarbonate Consumption, India ('000 TPA) . . . 07
Figure IV 2: Polycarbonate Import-Export scenario, India ('000 TPA). . . 08
Figure IV 3: SAN Demand Supply Scenario, India ('000 TPA) . . . 09
Figure IV 4: SAN Import-Export scenario, India ('000 TPA) . . . 09
Figure IV 5: ABS Demand Supply Scenario, India ('000 TPA) . . . 11
Figure IV 6: ABS Import-Export scenario, India ('000 TPA) . . . 11
Figure IV 7: PA Demand Supply Scenario, India ('000 TPA). . . 12
Figure IV 8: PA Import-Export scenario, India ('000 TPA) . . . 13
Figure IV 9: Engineering plastics market, India ('000 TPA). . . 14
Figure V 1: Packaging industry projection ($ Bn) . . . 15
Figure V 2: Passenger vehicles projection ($ Bn). . . 16
Figure V 3: Auto-component industry projection ($ Bn) . . . 16
Figure V 4: Electronics industry projection ($ Bn) . . . 17
Per Capita Consumption of Plastics (Comparison) . . . 19
List of Figures & Tables I. Executive Summary
Plastic industry is making significant contribution to the economic development and growth of various key sectors in the country which includes Automotive, Construction, Electronics, Healthcare, Textiles, and FMCG etc. Its demand has been growing rapidly at
~10% p.a. to reach 9MnTPA by FY12. Current low levels of per capita consumption (7 Kgs) along with increased growth in end use industries could propel the growth of plastics in India further.
Engineering plastics currently hold a relatively smaller share in the industry with demand of ~470,000 TPA in FY11. However, with better functional properties and growth in end- use industries, the demand for engineering plastics is expected to grow at ~14% to reach
~800,000 TPA by FY17. India is currently net importer of engineering plastics; however, with the announced plans of certain companies, the extent of imports is expected to go down significantly.
Indian engineering plastic industry suffers from lack of domestic production due to low technology capabilities and limited availability of raw materials. Going ahead huge investment is required in developing new manufacturing technologies to address environment concerns as well. Also, research needs to focus upon developing high quality materials with additional functional properties like inflammability etc. Increased awareness through help of industry groups and Government could help address some of these challenges.
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
Figure II 1: Per capita plastic products consumption (Kg/ person) . . . 02
Figure III 1: Global polymers consumption (%age share), FY12. . . 03
Figure III 2: Demand overview of plastics ('000 TPA), FY06-12 . . . 05
Figure IV 1: Polycarbonate Consumption, India ('000 TPA) . . . 07
Figure IV 2: Polycarbonate Import-Export scenario, India ('000 TPA). . . 08
Figure IV 3: SAN Demand Supply Scenario, India ('000 TPA) . . . 09
Figure IV 4: SAN Import-Export scenario, India ('000 TPA) . . . 09
Figure IV 5: ABS Demand Supply Scenario, India ('000 TPA) . . . 11
Figure IV 6: ABS Import-Export scenario, India ('000 TPA) . . . 11
Figure IV 7: PA Demand Supply Scenario, India ('000 TPA). . . 12
Figure IV 8: PA Import-Export scenario, India ('000 TPA) . . . 13
Figure IV 9: Engineering plastics market, India ('000 TPA). . . 14
Figure V 1: Packaging industry projection ($ Bn) . . . 15
Figure V 2: Passenger vehicles projection ($ Bn). . . 16
Figure V 3: Auto-component industry projection ($ Bn) . . . 16
Figure V 4: Electronics industry projection ($ Bn) . . . 17
Per Capita Consumption of Plastics (Comparison) . . . 19
List of Figures & Tables I. Executive Summary
Plastic industry is making significant contribution to the economic development and growth of various key sectors in the country which includes Automotive, Construction, Electronics, Healthcare, Textiles, and FMCG etc. Its demand has been growing rapidly at
~10% p.a. to reach 9MnTPA by FY12. Current low levels of per capita consumption (7 Kgs) along with increased growth in end use industries could propel the growth of plastics in India further.
Engineering plastics currently hold a relatively smaller share in the industry with demand of ~470,000 TPA in FY11. However, with better functional properties and growth in end- use industries, the demand for engineering plastics is expected to grow at ~14% to reach
~800,000 TPA by FY17. India is currently net importer of engineering plastics; however, with the announced plans of certain companies, the extent of imports is expected to go down significantly.
Indian engineering plastic industry suffers from lack of domestic production due to low technology capabilities and limited availability of raw materials. Going ahead huge investment is required in developing new manufacturing technologies to address environment concerns as well. Also, research needs to focus upon developing high quality materials with additional functional properties like inflammability etc. Increased awareness through help of industry groups and Government could help address some of these challenges.
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
II. Introduction
The chemical industry is critical for the economic development of any country. In FY12, Indian Chemical sector accounted for ~6% Indian GDP (estimated at market prices).
Indian Chemical sector is also a major exporter and accounted for ~9% of India's total export in FY12.
With Asia's increasing contribution to the global chemical industry, India emerges as one of the focus destinations for chemical companies worldwide. Chemical industry is critical for the economic development of any country as it offers products and solutions for virtually all sectors of economy. The chemical industry in India currently stands at ~USD 100 Bn and is expected to grow at ~11% p.a. over the next 5 years. Indian petrochemical industry which includes the end products like polymers, synthetic fibers, surfactants etc constitute ~20% i.e. ~USD 20 Bn market.
Today, petrochemical products permeate the entire spectrum of daily use items and cover almost every sphere of life like clothing, housing, construction, furniture, automobiles, household items, agriculture, horticulture, irrigation, packaging, medical appliances, electronics and electrical etc. These industries hence drive the demand growth of petrochemicals. Also, India offers strong opportunity for manufacturing of petrochemicals with its plan to increase the share of manufacturing in GDP from 16% to 25% by 2022. The increasing demographic dividend, urbanization, growing income levels all support a strong case of increase in both demand and supply of petrochemicals in India.
Plastics are the major product that account for bulk of the Indian petrochemical industry.
Current low per capita consumption level of plastic products as compared to developed countries per capita consumption suggests that India offers a huge opportunity over long term (Refer Figure II 1).
Figure II 1: Per capita plastic products consumption (Kg/ person)
III. Plastic Industry: Overview
A wide variety of plastics raw materials are produced to meet the material needs of different sectors of the economy. These materials are broadly categorized as commodity, engineering and specialty plastics. Commodity plastics account for bulk of the petrochemicals industry. They are commonly used as thermoplastics for high volume products like polythene bags, food packaging, wire insulations etc.
Engineering plastics exhibit superior mechanical and thermal properties in a wide range of conditions as compared to more commonly used commodity plastics. Examples of engineering plastics include Poly-Carbonates (PC), Acrylonitrile Butadiene Styrene (ABS), Styrene Acrylonitrile (SAN), Poly-Amide (PA), Poly-Butylene Terephthalate (PBT) among others.
Globally, demand of plastics is estimated at ~220 Million tonnes in FY12 with commodity plastics like Polyethylene (PE), Polypropylene (PP), Polyvinyl Chloride (PVC) accounting for bulk of the demand while engineering plastics like Styrenics (PS/EPS & SAN/ABS) and others (PA/PBT) accounting for rest of the demand.
Figure -: Global polymers consumption (%age share), FY12
95
65
46
7
USA Europe China India
Source : FICCI, Deutsch e Bank, Research by Tata Strategic Source : Industry reports, Research by Tata Strategic
36%
25% 18%
9% 12%
Polyethylene Polypropylene Polyvinyl Chloride
Styrenics Others
Conference on Plastics and Petrochemicals Conference on Plastics and Petrochemicals
II. Introduction
The chemical industry is critical for the economic development of any country. In FY12, Indian Chemical sector accounted for ~6% Indian GDP (estimated at market prices).
Indian Chemical sector is also a major exporter and accounted for ~9% of India's total export in FY12.
With Asia's increasing contribution to the global chemical industry, India emerges as one of the focus destinations for chemical companies worldwide. Chemical industry is critical for the economic development of any country as it offers products and solutions for virtually all sectors of economy. The chemical industry in India currently stands at ~USD 100 Bn and is expected to grow at ~11% p.a. over the next 5 years. Indian petrochemical industry which includes the end products like polymers, synthetic fibers, surfactants etc constitute ~20% i.e. ~USD 20 Bn market.
Today, petrochemical products permeate the entire spectrum of daily use items and cover almost every sphere of life like clothing, housing, construction, furniture, automobiles, household items, agriculture, horticulture, irrigation, packaging, medical appliances, electronics and electrical etc. These industries hence drive the demand growth of petrochemicals. Also, India offers strong opportunity for manufacturing of petrochemicals with its plan to increase the share of manufacturing in GDP from 16% to 25% by 2022. The increasing demographic dividend, urbanization, growing income levels all support a strong case of increase in both demand and supply of petrochemicals in India.
Plastics are the major product that account for bulk of the Indian petrochemical industry.
Current low per capita consumption level of plastic products as compared to developed countries per capita consumption suggests that India offers a huge opportunity over long term (Refer Figure II 1).
Figure II 1: Per capita plastic products consumption (Kg/ person)
III. Plastic Industry: Overview
A wide variety of plastics raw materials are produced to meet the material needs of different sectors of the economy. These materials are broadly categorized as commodity, engineering and specialty plastics. Commodity plastics account for bulk of the petrochemicals industry. They are commonly used as thermoplastics for high volume products like polythene bags, food packaging, wire insulations etc.
Engineering plastics exhibit superior mechanical and thermal properties in a wide range of conditions as compared to more commonly used commodity plastics. Examples of engineering plastics include Poly-Carbonates (PC), Acrylonitrile Butadiene Styrene (ABS), Styrene Acrylonitrile (SAN), Poly-Amide (PA), Poly-Butylene Terephthalate (PBT) among others.
Globally, demand of plastics is estimated at ~220 Million tonnes in FY12 with commodity plastics like Polyethylene (PE), Polypropylene (PP), Polyvinyl Chloride (PVC) accounting for bulk of the demand while engineering plastics like Styrenics (PS/EPS & SAN/ABS) and others (PA/PBT) accounting for rest of the demand.
Figure -: Global polymers consumption (%age share), FY12
95
65
46
7
USA Europe China India
Source : FICCI, Deutsch e Bank, Research by Tata Strategic Source : Industry reports, Research by Tata Strategic
36%
25%
18%
9%
12%
Polyethylene Polypropylene Polyvinyl Chloride
Styrenics Others
Conference on Plastics and Petrochemicals
Conference on Plastics and Petrochemicals
Polyethylene (PE) is the largest volume plastic raw-material used by the industry. There are three broad types of PE, viz: Low-density Polyethylene (LDPE), High-density Polyethylene (HDPE) and Linear Low-density Polyethylene (LLDPE). All these are derived from Ethylene with small amount of co-monomers used in the production of HDPE &
LLDPE. Global capacity of PE was ~91 million tonnes in FY10 and is expected to increase to ~109 million tonnes by FY15. The demand is estimated to increase at 5.7% from ~71 million tonnes in FY10 to reach ~95 million tonnes by FY15.
Polypropylene (PP) is the second largest and fastest growing commodity plastics. Global capacity in FY10 was ~60 million tonnes and estimated demand was ~49 million tonnes.
Due to its versatile property profile, global demand is expected to grow @ 6.1% reaching
~66 million tonnes by FY15 with capacity increasing to ~75 million tonnes.
Polyvinyl Chloride (PVC) is the oldest variety of commodity plastics. By composition, the product has nearly 50% Chlorine embedded in its molecular structure which is supplied primarily by the Chlor-Alkali industry where Chlorine is a co-product. Global demand of PVC in FY10 stood at ~35 million tonnes with an installed capacity of ~46 million tonnes.
Demand is estimated to increase at ~4.6% to reach ~44 million tonnes with capacity increasing to ~55 million tonnes by FY15.
Global demand for Polystyrene (PS) and other Styrenics like Styrene- Acrylonitrile (SAN) and Acrylonitrile-Butadiene-Styrene (ABS) was ~18 million tonnes during FY10. Due to its wide ranging usages in consumer electronics, appliances and automotives, both ABS and SAN had been witnessing healthy growth. It is estimated that by FY15, global demand for Styrenics would reach ~22 million tonnes.
Others include products like Polyethylene Terephthalate (PET) which is Thermoplastic polyester widely used for production of beverage bottles. It is also used for flexible packaging film due to its high clarity, low permeability and excellent printability. Global demand for PET resin is estimated to be ~15.3 million tonnes and is likely to reach ~20.6 million tonnes by FY15. Current production capacity of ~19 million tonnes is expected to reach ~27 million tonnes by FY15.
Plastics industry is one of the fastest growing industries in India. It has expanded at ~10%
p.a. over the last six years to reach ~9 MnTPA (million tonnes per annum) in FY12 from ~5 MnTPA in FY06. (Refer Figure III 2).
Polyethylene (PE) is the most largely used plastic raw-material by Indian industry. Its demand has grown at 10% p.a. in last 6 years to reach ~3.2 MnTPA in FY12. Polypropylene (PP) is the second largest with consumption growing from 1.5 MnTPA in FY06 to 2.9 MnTPA in FY12 at a growth rate of 12% p.a.
Polyvinyl Chloride (PVC) demand has grown at 10% p.a. from 1.2 MnTPA to 2.1 MnTPA in FY12. PVC is mainly required by the infrastructure sector in the form of pipes, profiles, floorings and cables. Poly-Styrene (PS) has observed a slower growth rate of 6% p.a. to reach ~280,000 TPA in FY12, while other (PC/ ABS etc.) have grown at a higher growth rate of 12% p.a. from 190,000 TPA to 380,000 TPA in FY12.
Figure III 2: Demand overview of plastics ('000 TPA), FY06-12
Source: Govt. of India Statistics, Analysis by Tata Strategic
0 1500 3000 4500 6000 7500 9000 10500
2006 2012
PE PP PVC PS Others
5,000
9,000
12%
10% 12%
10%
Conference on Plastics and Petrochemicals
Conference on Plastics and Petrochemicals
Polyethylene (PE) is the largest volume plastic raw-material used by the industry. There are three broad types of PE, viz: Low-density Polyethylene (LDPE), High-density Polyethylene (HDPE) and Linear Low-density Polyethylene (LLDPE). All these are derived from Ethylene with small amount of co-monomers used in the production of HDPE &
LLDPE. Global capacity of PE was ~91 million tonnes in FY10 and is expected to increase to ~109 million tonnes by FY15. The demand is estimated to increase at 5.7% from ~71 million tonnes in FY10 to reach ~95 million tonnes by FY15.
Polypropylene (PP) is the second largest and fastest growing commodity plastics. Global capacity in FY10 was ~60 million tonnes and estimated demand was ~49 million tonnes.
Due to its versatile property profile, global demand is expected to grow @ 6.1% reaching
~66 million tonnes by FY15 with capacity increasing to ~75 million tonnes.
Polyvinyl Chloride (PVC) is the oldest variety of commodity plastics. By composition, the product has nearly 50% Chlorine embedded in its molecular structure which is supplied primarily by the Chlor-Alkali industry where Chlorine is a co-product. Global demand of PVC in FY10 stood at ~35 million tonnes with an installed capacity of ~46 million tonnes.
Demand is estimated to increase at ~4.6% to reach ~44 million tonnes with capacity increasing to ~55 million tonnes by FY15.
Global demand for Polystyrene (PS) and other Styrenics like Styrene- Acrylonitrile (SAN) and Acrylonitrile-Butadiene-Styrene (ABS) was ~18 million tonnes during FY10. Due to its wide ranging usages in consumer electronics, appliances and automotives, both ABS and SAN had been witnessing healthy growth. It is estimated that by FY15, global demand for Styrenics would reach ~22 million tonnes.
Others include products like Polyethylene Terephthalate (PET) which is Thermoplastic polyester widely used for production of beverage bottles. It is also used for flexible packaging film due to its high clarity, low permeability and excellent printability. Global demand for PET resin is estimated to be ~15.3 million tonnes and is likely to reach ~20.6 million tonnes by FY15. Current production capacity of ~19 million tonnes is expected to reach ~27 million tonnes by FY15.
Plastics industry is one of the fastest growing industries in India. It has expanded at ~10%
p.a. over the last six years to reach ~9 MnTPA (million tonnes per annum) in FY12 from ~5 MnTPA in FY06. (Refer Figure III 2).
Polyethylene (PE) is the most largely used plastic raw-material by Indian industry. Its demand has grown at 10% p.a. in last 6 years to reach ~3.2 MnTPA in FY12. Polypropylene (PP) is the second largest with consumption growing from 1.5 MnTPA in FY06 to 2.9 MnTPA in FY12 at a growth rate of 12% p.a.
Polyvinyl Chloride (PVC) demand has grown at 10% p.a. from 1.2 MnTPA to 2.1 MnTPA in FY12. PVC is mainly required by the infrastructure sector in the form of pipes, profiles, floorings and cables. Poly-Styrene (PS) has observed a slower growth rate of 6% p.a. to reach ~280,000 TPA in FY12, while other (PC/ ABS etc.) have grown at a higher growth rate of 12% p.a. from 190,000 TPA to 380,000 TPA in FY12.
Figure III 2: Demand overview of plastics ('000 TPA), FY06-12
Source: Govt. of India Statistics, Analysis by Tata Strategic
0 1500 3000 4500 6000 7500 9000 10500
2006 2012
PE PP PVC PS Others
5,000
9,000
12%
10%
12%
10%
Conference on Plastics and Petrochemicals
Engineering plastics exhibit better mechanical and/or thermal properties than the more widely used commodity plastics. The term usually refers to thermoplastic materials (Polymers that becomes pliable or moldable above a specific temperature, and returns to a solid state upon cooling) rather than thermosetting ones (Polymers that are irreversibly cured).
Engineering plastics are largely used for smaller objects or low-volume applications (such as mechanical parts), rather than for bulk and high-volume ends (like containers and packaging). Examples of engineering plastics include acrylonitrile butadiene styrene (ABS) which offers high heat and chemical resistance and finds application in automotives, buildings, construction, electronics etc. in the form of car bumpers, dashboard trim and Lego bricks etc. Polycarbonate (PC) is a high performing engineering resin which has grown phenomenally due to its applications in optical media industry.
Styrene Acrylonitrile (SAN) has high weather resistance and stress crack resistance and is used in automotives, appliances etc. Polyamides (nylons) are also engineering plastics and are widely used for skis and ski boots.
Engineering plastics have gradually replaced traditional engineering materials such as wood or metal in many applications. With better properties like lower weight and higher strength, engineering plastics are much easier to manufacture, especially in complicated shapes.
The demand and applications and import / export trends of various engineering plastics are as follows -
Polycarbonate is a high performance engineering resin which demonstrated phenomenal growth of ~20% p.a. during 1990s largely due to its use in optical media applications (production of CDs and DVDs). Today, polycarbonate applications have developed extensively into many different areas with reduction in demand from optical media applications which were superseded by other technologies, such as digital files, and higher internet bandwidth allowing the downloading of music and movies.
a. Demand and applications
PC consumption in India stood at ~130,000 TPA in FY11, growing at almost 27% p.a. since FY07. The steady growth has been a result of growth in end use
1. Poly Carbonate (PC)
Conference on Plastics and Petrochemicals
sectors. Polycarbonate finds application in sheets/film, automotive (window and non-window), housewares, electronics/electrical appliances, medical equipment, ophthalmic, construction, sports, recreational, packaging etc. As blends, it finds usage as auto-body in Europe and USA. In India, the largest end use sector is optical media, which makes up over 45 percent of the region's polycarbonate demand.
Currently, despite the sizeable domestic demand, there is no domestic production of polycarbonate, so all material for domestic consumption is imported. There are a number of potential Cumene/Phenol projects being contemplated in the country, which have prompted consideration of associated Bisphenol-A (BPA) and polycarbonate capacity.
There are a few compounding units of polycarbonate as well such as SABIC Innovative Plastics, Rhodia (PI industries Ltd.) and Malibu Plastics Ltd.
It is estimated that PC demand would register a growth of 9-10 percent over the next five years, despite an average contraction in optical media demand of 4-5 percent over the same period. As automotive production increases with both domestic and foreign investment, the Automotive (non-window) market would drive the demand of PC in the future (Refer Figure).
IV. Engineering Plastics
Figure IV 1: Polycarbonate Consumption, India ('000 TPA)
Source : Industry reports, Research by Tata Strategic 50
130
210
FY07 FY11 FY17
Consumption CAGR
%
8%
27%
As there is no domestic producer of PC, entire domestic demand is met through imports.
India imported ~133,000 tonnes of PC in FY11. Thailand, Spain and Singapore were the major sources of import.
Conference on Plastics and Petrochemicals
Engineering plastics exhibit better mechanical and/or thermal properties than the more widely used commodity plastics. The term usually refers to thermoplastic materials (Polymers that becomes pliable or moldable above a specific temperature, and returns to a solid state upon cooling) rather than thermosetting ones (Polymers that are irreversibly cured).
Engineering plastics are largely used for smaller objects or low-volume applications (such as mechanical parts), rather than for bulk and high-volume ends (like containers and packaging). Examples of engineering plastics include acrylonitrile butadiene styrene (ABS) which offers high heat and chemical resistance and finds application in automotives, buildings, construction, electronics etc. in the form of car bumpers, dashboard trim and Lego bricks etc. Polycarbonate (PC) is a high performing engineering resin which has grown phenomenally due to its applications in optical media industry.
Styrene Acrylonitrile (SAN) has high weather resistance and stress crack resistance and is used in automotives, appliances etc. Polyamides (nylons) are also engineering plastics and are widely used for skis and ski boots.
Engineering plastics have gradually replaced traditional engineering materials such as wood or metal in many applications. With better properties like lower weight and higher strength, engineering plastics are much easier to manufacture, especially in complicated shapes.
The demand and applications and import / export trends of various engineering plastics are as follows -
Polycarbonate is a high performance engineering resin which demonstrated phenomenal growth of ~20% p.a. during 1990s largely due to its use in optical media applications (production of CDs and DVDs). Today, polycarbonate applications have developed extensively into many different areas with reduction in demand from optical media applications which were superseded by other technologies, such as digital files, and higher internet bandwidth allowing the downloading of music and movies.
a. Demand and applications
PC consumption in India stood at ~130,000 TPA in FY11, growing at almost 27% p.a. since FY07. The steady growth has been a result of growth in end use
1. Poly Carbonate (PC)
Conference on Plastics and Petrochemicals
sectors. Polycarbonate finds application in sheets/film, automotive (window and non-window), housewares, electronics/electrical appliances, medical equipment, ophthalmic, construction, sports, recreational, packaging etc. As blends, it finds usage as auto-body in Europe and USA. In India, the largest end use sector is optical media, which makes up over 45 percent of the region's polycarbonate demand.
Currently, despite the sizeable domestic demand, there is no domestic production of polycarbonate, so all material for domestic consumption is imported. There are a number of potential Cumene/Phenol projects being contemplated in the country, which have prompted consideration of associated Bisphenol-A (BPA) and polycarbonate capacity.
There are a few compounding units of polycarbonate as well such as SABIC Innovative Plastics, Rhodia (PI industries Ltd.) and Malibu Plastics Ltd.
It is estimated that PC demand would register a growth of 9-10 percent over the next five years, despite an average contraction in optical media demand of 4-5 percent over the same period. As automotive production increases with both domestic and foreign investment, the Automotive (non-window) market would drive the demand of PC in the future (Refer Figure).
IV. Engineering Plastics
Figure IV 1: Polycarbonate Consumption, India ('000 TPA)
Source : Industry reports, Research by Tata Strategic 50
130
210
FY07 FY11 FY17
Consumption CAGR
%
8%
27%
As there is no domestic producer of PC, entire domestic demand is met through imports.
India imported ~133,000 tonnes of PC in FY11. Thailand, Spain and Singapore were the major sources of import.
Conference on Plastics and Petrochemicals
2. Styrene Acrylonitrile (SAN)
Styrene and Acrylonitrile monomers are copolymerized to form a random, amorphous copolymer called styrene Acrylonitrile or SAN that has improved weather ability, stress crack resistance, and barrier properties. SAN copolymer generally contains 70 to 80% styrene and 30 to 20% Acrylonitrile. This combination provides higher strength, rigidity, and chemical resistance than polystyrene, but it is not quite as clear as crystal polystyrene and its appearance tends to yellow more quickly.
SAN has a high clarity with high heat resistance and good chemical resistance besides good dimensional stability and food contact acceptability.
a. Demand and applications
SAN finds its application in Electrical/Electronic appliances, Automotive, General Purpose Containers, Household Goods, Cosmetics and Compounding with ABS, Acrylics, etc.
The demand for SAN has grown at ~20% p.a. during FY07-FY11 from 40,000 TPA to 83,000 TPA in FY11. The production has also grown in sync with the demand for SAN. It grew from ~36,000 TPA in FY07 to ~78,000 TPA in FY11.
The demand in the past was mostly driven by usage of SAN as feedstock for ABS manufacturing and also because of its usage by end use industries like packaging, medical instruments, utensils, house ware items and automotive applications.
The processors are same for SAN and ABS. Current capacity in India is 120 KT.
The major producer of SAN in India is INEOS ABS (formerly Lanxess, Bayer)
Conference on Plastics and Petrochemicals
with 80,000 metric tonnes of capacity, and Bhansali Polymer with current capacity of 40,000 metric tonnes. By 12th five year plan it is expected that Ineos is likely to increase their capacity to 200 KT and Bhansali Polymers to 80 KT.
The country's market is characterized by good demand of SAN grades, with a focus on consumer and industrial applications. The demand is expected to reach close to 142 MT by the end of 12th five year plan with a growth envisaged close to 9%. (Refer Figure).
Source : Industry reports, Research by Tata Strategic 52
133
2 3
FY07 FY11
Imports Exports
Figure -2: Polycarbonate Import-Export scenario, India (‘000 TPA)IV
Source : Industry reports, Research by Tata Strategic 40
83
142
36
78
182
FY07 FY11 FY17
Consumption Production
%
20% Consumption CAGR
9%
Figure -3: SAN Demand Supply Scenario, India (‘000 TPA) IV
Source : Industry reports, Research by Tata Strategic 4.3
5
0 0
FY07 FY11
Imports Exports
Figure -4: SAN Import-Export scenario, India (‘000 TPA) IV
The import/ export of SAN are minimal at 5,000 TPA in FY11. Korea is the largest SAN supplier to India with 54% of total imports supply. Other major suppliers are Singapore and Thailand. (Refer Figure).
Conference on Plastics and Petrochemicals
2. Styrene Acrylonitrile (SAN)
Styrene and Acrylonitrile monomers are copolymerized to form a random, amorphous copolymer called styrene Acrylonitrile or SAN that has improved weather ability, stress crack resistance, and barrier properties. SAN copolymer generally contains 70 to 80% styrene and 30 to 20% Acrylonitrile. This combination provides higher strength, rigidity, and chemical resistance than polystyrene, but it is not quite as clear as crystal polystyrene and its appearance tends to yellow more quickly.
SAN has a high clarity with high heat resistance and good chemical resistance besides good dimensional stability and food contact acceptability.
a. Demand and applications
SAN finds its application in Electrical/Electronic appliances, Automotive, General Purpose Containers, Household Goods, Cosmetics and Compounding with ABS, Acrylics, etc.
The demand for SAN has grown at ~20% p.a. during FY07-FY11 from 40,000 TPA to 83,000 TPA in FY11. The production has also grown in sync with the demand for SAN. It grew from ~36,000 TPA in FY07 to ~78,000 TPA in FY11.
The demand in the past was mostly driven by usage of SAN as feedstock for ABS manufacturing and also because of its usage by end use industries like packaging, medical instruments, utensils, house ware items and automotive applications.
The processors are same for SAN and ABS. Current capacity in India is 120 KT.
The major producer of SAN in India is INEOS ABS (formerly Lanxess, Bayer)
Conference on Plastics and Petrochemicals
with 80,000 metric tonnes of capacity, and Bhansali Polymer with current capacity of 40,000 metric tonnes. By 12th five year plan it is expected that Ineos is likely to increase their capacity to 200 KT and Bhansali Polymers to 80 KT.
The country's market is characterized by good demand of SAN grades, with a focus on consumer and industrial applications. The demand is expected to reach close to 142 MT by the end of 12th five year plan with a growth envisaged close to 9%. (Refer Figure).
Source : Industry reports, Research by Tata Strategic 52
133
2 3
FY07 FY11
Imports Exports
Figure -2: Polycarbonate Import-Export scenario, India (‘000 TPA)IV
Source : Industry reports, Research by Tata Strategic 40
83
142
36
78
182
FY07 FY11 FY17
Consumption Production
%
20%
Consumption CAGR
9%
Figure -3: SAN Demand Supply Scenario, India (‘000 TPA) IV
Source : Industry reports, Research by Tata Strategic 4.3
5
0 0
FY07 FY11
Imports Exports
Figure -4: SAN Import-Export scenario, India (‘000 TPA) IV
The import/ export of SAN are minimal at 5,000 TPA in FY11. Korea is the largest SAN supplier to India with 54% of total imports supply. Other major suppliers are Singapore and Thailand. (Refer Figure).
Conference on Plastics and Petrochemicals
3. Acrylonitrile Butadiene Styrene (ABS)
ABS resins are well-established, high volume, amorphous engineering thermoplastics, which offer an excellent balance of heat, chemical and impact resistance with superior processing versatility. ABS has a relatively mature market with average annual growth rates of 5-6% over the last 20 years.
It is derived from Acrylonitrile, butadiene, and styrene either as graft polymer or SAN on Polybutadiene or as a blend of ABS plus SAN. Composition of the constituent monomers can be varied in order to alter the properties of the final resin. The advantage of ABS is that this material combines the strength and rigidity of Acrylonitrile and styrene polymers with the toughness of the Poly-Butadiene rubber.
Resistance and Toughness are the most important mechanical properties of this product.
a. Demand and applications
ABS finds its application in Buildings /Construction , Transportation, Electronics/Electrical , Appliances ,Alloys and other application like medical ,toys and recreational. ABS demand is expected to grow strongly, across all segments given rapid industrialization and growth of the auto sector. There is likely to be good growth and consumers will benefit from strong competition for the available business.
Current ABS capacity in India is ~120 KT. The major producer of ABS in India is INEOS ABS (formerly Lanxess, Bayer) and Bhansali Polymer. India is expected to see double-digit growth rates through the next five years, averaging around 10% per year. The country's market is characterized by high demand in pre- colored ABS and SAN grades, with a focus on consumer and industrial applications. The largest segments in this region are the transportation, appliance and electronics/electrical segments.
The current demand is met by ~85 KT of domestic production and ~45 KT through imports. The demand is expected to reach around ~200 KT by the end of 12th five year with a growth close to 9%. (Refer Figure).
Conference on Plastics and Petrochemicals
b. Imports and exports
India imported about 35,000 TPA of ABS in FY11 to meet the shortfall in domestic production capacity. The import level in FY11 registered more than the 190% increase over FY07 import levels of 12,000 TPA. This can be attributed to the production growth rate not able to match the demand rate since FY07. South Korea accounts for ~70% of the imports of ABS to India.
Other major sources of import are Malaysia and China.
Figure IV-5: ABS Demand Supply Scenario, India ('000 TPA)
Source : Industry reports, Research by Tata Strategic 90
120
200
76 85
280
FY07 FY11 FY17
Consumption Production
%
7% Consumption CAGR
9%
Source : Industry reports, Research by Tata Strategic 12
35
2
5
FY07 FY11
Imports Exports
Figure -6-: ABS Import-Export scenario, India ('000 TPA)IV
Conference on Plastics and Petrochemicals
3. Acrylonitrile Butadiene Styrene (ABS)
ABS resins are well-established, high volume, amorphous engineering thermoplastics, which offer an excellent balance of heat, chemical and impact resistance with superior processing versatility. ABS has a relatively mature market with average annual growth rates of 5-6% over the last 20 years.
It is derived from Acrylonitrile, butadiene, and styrene either as graft polymer or SAN on Polybutadiene or as a blend of ABS plus SAN. Composition of the constituent monomers can be varied in order to alter the properties of the final resin. The advantage of ABS is that this material combines the strength and rigidity of Acrylonitrile and styrene polymers with the toughness of the Poly-Butadiene rubber.
Resistance and Toughness are the most important mechanical properties of this product.
a. Demand and applications
ABS finds its application in Buildings /Construction , Transportation, Electronics/Electrical , Appliances ,Alloys and other application like medical ,toys and recreational. ABS demand is expected to grow strongly, across all segments given rapid industrialization and growth of the auto sector. There is likely to be good growth and consumers will benefit from strong competition for the available business.
Current ABS capacity in India is ~120 KT. The major producer of ABS in India is INEOS ABS (formerly Lanxess, Bayer) and Bhansali Polymer. India is expected to see double-digit growth rates through the next five years, averaging around 10% per year. The country's market is characterized by high demand in pre- colored ABS and SAN grades, with a focus on consumer and industrial applications. The largest segments in this region are the transportation, appliance and electronics/electrical segments.
The current demand is met by ~85 KT of domestic production and ~45 KT through imports. The demand is expected to reach around ~200 KT by the end of 12th five year with a growth close to 9%. (Refer Figure).
Conference on Plastics and Petrochemicals
b. Imports and exports
India imported about 35,000 TPA of ABS in FY11 to meet the shortfall in domestic production capacity. The import level in FY11 registered more than the 190% increase over FY07 import levels of 12,000 TPA. This can be attributed to the production growth rate not able to match the demand rate since FY07. South Korea accounts for ~70% of the imports of ABS to India.
Other major sources of import are Malaysia and China.
Figure IV-5: ABS Demand Supply Scenario, India ('000 TPA)
Source : Industry reports, Research by Tata Strategic 90
120
200
76 85
280
FY07 FY11 FY17
Consumption Production
%
7%
Consumption CAGR
9%
Source : Industry reports, Research by Tata Strategic 12
35
2
5
FY07 FY11
Imports Exports
Figure -6-: ABS Import-Export scenario, India ('000 TPA)IV
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4. PolyAmide (PA)
Polyamides are polymers containing monomers of amides joined by peptide bonds.
They can occur both naturally and artificially, like wool and silk, and can be made artificially through step-growth polymerization or solid-phase synthesis like nylons, aramids, and sodium poly (aspartate). Polyamides are commonly used in textiles, automotives, carpet and sportswear due to their extreme durability and strength.
a. Demand and applications
PA demand is largely driven by automotive sector. PA also acts as a substitute for metals because of its lower weight and better suitable properties in automotives. The other end -use industries for PA are E&E, Consumer durable and Construction.
The demand for polyamides has grown at over 13% since FY06 in India. The demand stood at 50,000 TPA in FY06 and grew at ~14% p.a. to reach 85,000 TPA by FY11.
Total installed PA production capacity in India is ~16,000 TPA in FY11. GSFC is the single largest producer with 7,000 TPA capacity plant at Surat. Other companies are SRF at Manali, Century Enka at Pune and JCT at Hoshiarpur.
Together the three of them have a capacity of 9,000 TPA. GSFC has announced a capacity expansion to increase its total PA production capacity to 22,000 TPA by adding another 15,000 TPA to its existing plant at Surat.
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5. Others
Apart from PC, SAN, ABS and Polyamide, Polybutylene terephthalate (PBT) and poly- acetol are major types of engineering plastics.
Polybutylene terephthalate (PBT) is used as an insulator in the electrical and electronics industries. It is resistant to solvents, shrinks very little during forming, is mechanically strong, heat-resistant up to 150 °C (or 200 °C with glass-fiber reinforcement) and can be treated with flame retardants to make it noncombustible.
The demand for polybutylene terephthalate stood at ~13 TPA in FY11 and is expected to grow further at 13% to reach ~26 TPA by FY17.
Poly-acetol is used in precision parts requiring high stiffness, low friction and excellent dimensional stability but has limited demand in India.
Figure IV-7: PA Demand Supply Scenario, India ('000 TPA)
b. Imports and exports
The lower production levels have resulted in imports playing a key role to meet the demand. The suppliers of PA are diversified and no single country accounts for more than 12% of the total imports by India. Russia and Korea are the two largest suppliers, each accounting for 12% of total imports. They are closely followed by Germany and Taiwan, each accounting for 11% of total imports in FY11.
Figure IV-8 -: PA Import-Export scenario, India ('000 TPA)
Source : Industry reports, Research by Tata Strategic 50
85
168
13 16
31
FY07 FY11 FY17
Consumption Production
%
14%
Consumption CAGR
12%
Source : Industry reports, Research by Tata Strategic
Imports Exports
27
73
3.7 5.3
FY07 FY11
Conference on Plastics and Petrochemicals
4. PolyAmide (PA)
Polyamides are polymers containing monomers of amides joined by peptide bonds.
They can occur both naturally and artificially, like wool and silk, and can be made artificially through step-growth polymerization or solid-phase synthesis like nylons, aramids, and sodium poly (aspartate). Polyamides are commonly used in textiles, automotives, carpet and sportswear due to their extreme durability and strength.
a. Demand and applications
PA demand is largely driven by automotive sector. PA also acts as a substitute for metals because of its lower weight and better suitable properties in automotives. The other end -use industries for PA are E&E, Consumer durable and Construction.
The demand for polyamides has grown at over 13% since FY06 in India. The demand stood at 50,000 TPA in FY06 and grew at ~14% p.a. to reach 85,000 TPA by FY11.
Total installed PA production capacity in India is ~16,000 TPA in FY11. GSFC is the single largest producer with 7,000 TPA capacity plant at Surat. Other companies are SRF at Manali, Century Enka at Pune and JCT at Hoshiarpur.
Together the three of them have a capacity of 9,000 TPA. GSFC has announced a capacity expansion to increase its total PA production capacity to 22,000 TPA by adding another 15,000 TPA to its existing plant at Surat.
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5. Others
Apart from PC, SAN, ABS and Polyamide, Polybutylene terephthalate (PBT) and poly- acetol are major types of engineering plastics.
Polybutylene terephthalate (PBT) is used as an insulator in the electrical and electronics industries. It is resistant to solvents, shrinks very little during forming, is mechanically strong, heat-resistant up to 150 °C (or 200 °C with glass-fiber reinforcement) and can be treated with flame retardants to make it noncombustible.
The demand for polybutylene terephthalate stood at ~13 TPA in FY11 and is expected to grow further at 13% to reach ~26 TPA by FY17.
Poly-acetol is used in precision parts requiring high stiffness, low friction and excellent dimensional stability but has limited demand in India.
Figure IV-7: PA Demand Supply Scenario, India ('000 TPA)
b. Imports and exports
The lower production levels have resulted in imports playing a key role to meet the demand. The suppliers of PA are diversified and no single country accounts for more than 12% of the total imports by India. Russia and Korea are the two largest suppliers, each accounting for 12% of total imports. They are closely followed by Germany and Taiwan, each accounting for 11% of total imports in FY11.
Figure IV-8 -: PA Import-Export scenario, India ('000 TPA)
Source : Industry reports, Research by Tata Strategic 50
85
168
13 16
31
FY07 FY11 FY17
Consumption Production
%
14%
Consumption CAGR
12%
Source : Industry reports, Research by Tata Strategic
Imports Exports
27
73
3.7 5.3
FY07 FY11
