India's largest private company and resin producer, Reliance Industries Ltd., said it will add 1.98 billion pounds of polypropylene capacity in 2008. Another major player in the Indian petrochemical industry, Indian Oil Corp. is expecting 2.87 billion pounds of polyolefins capacity to come on stream in 2009.
Abhijit Datey, with Reliance's plastics business, said the Mumbai-based conglomerate represents 70 percent of India's 1.2 billion-pound resin capacity. As the downstream processing industry develops, resin demand is growing at a fast pace, he said at Dewitt and Co. Inc.'s World Petrochemical Conference, held March 20-22 in Houston.
But the Indian plastics industry is lagging when compared with other Asian countries, especially China. The average size of an Indian processor's annual resin purchase is 374,786 pounds, about a quarter of its Chinese counterpart. But Datey said India is set to replicate China's growth model. In 2006, 3.09 billion pounds of processing capacity came on stream, including 200 plastic pipe lines representing 661.4 million pounds and 51 multilayer film lines totaling 132.3 million pounds.
India processed 14 percent more polyethylene in 2006 over 2005, 10 percent more PP and 28 percent more PVC. That growth will accelerate in the next five years, with estimates of 23 percent for PP, 17 percent for PE and 16 percent for PVC. By 2011, total resin demand in India will reach 2.8 billion pounds.
The country is a net exporter of PE and PP but a net importer of PVC. However, since demand growth is outpacing capacity buildup, polyolefins are estimated to be in short supply. For instance, India's per capita annual PVC consumption of 2 pounds is set to double in the next five years.
Processing capacity for packaging also is expected to double in the next five years, reaching 13,669 pounds by 2011.
With 15 production sites across the country, Reliance is building two special economic zones, modeling China's path: one near its Mumbai headquarters, the other a joint venture near Gurgaon between Reliance and the Haryana government. Reliance will invest $5 billion in that venture.
Reliance generates 2.8 percent of India's gross domestic product and more than 8 percent of its total exports. Annual sales are $19.9 billion, net profit $2 billion.