Reliance Industries Ltd. of India is working in its home country to keep up with polymer demand that's expected to remain in a double-digit range for at least five more years.
Although Mumbai-based Reliance has added more than 2 billion pounds of polypropylene capacity in recent years, that is only keeping pace with India's polymer demand, which averaged almost 11 percent growth from 2005-10 and will continue at a 10.5 percent clip from 2010-15, said Kamal Nanavaty, president of the firm's cracker and polymers sector.
Nanavaty spoke at the World Petrochemical Conference, hosted by Chemical Market Associates Inc., March 24-25 in Houston.
Gross domestic product growth almost 9 percent from 2005-10 and expected to be an even 9 percent from 2010-15 is lifting the economic fortunes of the 1.2 billion-strong Indian nation. By 2025, Nanavaty said, India's urban middle class is expected to number 400 million more than the U.S. population.
Growth drivers for India's plastics market include packaging for processed food and the fast-food industry, Nanavaty added. Popular applications include multilayer films, biaxially oriented PP film and shrink and stretch wrap. Indian infrastructure spending also could create 2.6 billion pounds of polymer demand by 2010 and 9.2 billion pounds of polymer demand by 2020.
Infrastructure is a $15 billion opportunity for us, he said.
U.S. companies also are benefiting by growing their sales in India at an average of 40 percent per year. Nanavaty cited the example of auto parts supplier Visteon Corp., based in the Detroit suburb of Van Buren Township, which entered India in 1999 with two injection molding machines and 100 employees. The company now has annual sales of more than $100 million there.
Reliance continues to dominate the Indian polymers market with a 70 percent market share, well ahead of Haldia Petrochemicals Ltd. of Calcutta, India, which ranks second with 13 percent. Reliance also ranks as the world's largest maker of polyester fiber and yarn, and is No. 4 worldwide in prouction of PP and polyester feedstock paraxylene.
The Indian government also is looking to assist Reliance and other petrochemical firms by investing in six different regions of the country to develop petrochemical production and boost manufacturing.
Nanavaty declined to comment on Reliance's pursuit of LyondellBasell Industries AF SCA, the Rotterdam, Netherlands-based firm that ranks as the world's largest polyolefins maker.
Reliance reportedly had bid $14.5 billion for LyondellBasell, but the firms could not reach an agreement. LyondellBasell now plans to exit bankruptcy April 30.
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