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May 03, 2012 02:00 AM

Development provides opportunity for PVC sector in India

Satnam Singh
Correspondent
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    MUMBAI, INDIA (May 3, 4 p.m. ET) — India's government is planning $1 trillion in infrastructure investment as part of its 12th Five Year Plan, creating opportunities for PVC in the construction sector.

    Warren Wilder, president of Reliance Industries Ltd.'s polymer & crackers business, called the government plan “a major growth opportunity for the domestic PVC industry.”

    About 50 percent of PVC products manufactured in India are consumed in areas like conveyance of potable water, irrigation, plasticulture and transport of sewerage. As a result, the PVC industry has to work with the government agencies to become partners in infrastructural development.

    One area where there's room to grow is in large-diameter pipe. To date, use of PVC in large diameter pipes has been limited.

    Domestic PVC capacity in India during the 12th Five Year Plan is expected to go up only marginally while PVC demand is likely to grow at an average annual rate of 10 percent during the same period. Imports will likely fill the gap, which may be “detrimental to the [domestic] industry's health in the medium term,” Wilder said.

    Quality has emerged as a major issue for PVC pipe, as a result of manufacturers using filler material.

    “Moreover, lowering of product quality by small processors [is] hurting the industry, and entry of fly-by-night operators in the PVC trade, leading [to] price debasing, is also cause of major concern,” said S.S. Naik, PVC business head at Reliance.

    Developing a mechanism to ensure standardized quality will go a long way in growth and development of the PVC pipe segment in India.

    Experts also pointed out that PVC industry has to look beyond pipe for growth. Noting that other major applications like profiles, medical goods and flexible packaging have not received the kind of focus they deserve.

    Attendees at the conference also called upon the domestic industry to launch a body like the Vinyl Institute or the European Council of Vinyl Manufacturers, which could play a key role in future growth.

    “There are several misconceptions and myths regarding use of PVC and environmental degradation. In fact, a major part of the users are misled with notions which are factually incorrect and have serious prejudices against PVC manufacturers as polluters when in reality it is just the opposite,” Wilder said.

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