India needs to secure bigger chunks of land for the expansion of chemical industrial zones before we run out of them, says Vikram Shroff, Director, UPL Limited while sharing his vision for the industry.

Elaborating further, Shroff adds: “Presently the vision of most policymakers and corporations is limited to 40, 100 or 500 acres. Today to have any global scale plant that can compete with other nations, we need at least a couple of thousand acres to make a dedicated space for chemicals of choice to be globally competitive. Second the feedstock, all the raw material has to come from the local area. Thousands of acres of land allocated by the government, provided facilities, small towns around the plans to house the employees and having roads, ports nearby, besides the connectivity, railsiding, we will lose out.”

“After the onset of the pandemic, in order to attract Chinese investment, Indonesia allocated thousands of acres of land to Samsung in a matter of 3-4 weeks with direct involvement of the Prime Minister's Office (PMO). We need to think bigger and on a global scale. It can't be license raj and the way we used to be earlier. Brand India is doing well but when we look at our scale we are tiny even when compared to countries like Taiwan, Korea, and Switzerland. Switzerland does more exports than us. We need to look at countries such as Germany, South Korea, and Japan. In the last 30 years, South Korea has built global capacity. All the consumer based companies we see today started initially as chemical based,” says Shroff.

Shroff shared these insights at the E-conference, ‘Chemical Industry Outlook 2022’ organized by the Indian Chemical News on January 21, 2022.

On approach to chemical clusters and best practices, Shroff says, "The global chemical business is about US $5 trillion and out of it China stands at US $1.2 trillion, Japan at about US $800 billion, Germany and USA at about the same number. Now if we look at India, we need to take steps to become a US $800 billion or US $1 trillion chemical industry. As our GDP rises, the consumption of chemicals will grow as well. Chemicals are used on an everyday basis, whether it is the glasses you wear or the suit that has linings in it or color on your tie, is also a chemical. The government and policymakers need to realize that this industry is the backbone of all other industries.”

Talking about the role of sustainability, Shroff says, "UPL is ranked number one in sustainability globally. Isn't it good to see an Indian company ranked higher than other MNCs by Dow Jones? This is a prestigious thing. We have set up a University of Sustainable Technologies in India to help spread this. The next thing we have done is that we have set up a Center of Excellence for Safety with Gescom from Norway which again I think will help the Indian ecosystem economy to improve. When we talk about sustainability and global practices, please realize that while earlier these were seen as huge expenses and investments, today we get high lending and cheaper loans because of our high ESG rating. These things we did for goodness of our heart or the vision and now the world is rewarding us financially by giving us money cheaper. This is a positive thing for other industry members to learn and do. And the stock market, global investors or consumers will start rewarding us or punishing us based on our global sustainability initiatives.”

Though Shroff believes that India has got all the ingredients for a vibrant innovation ecosystem, he calls for increased collaborations between industry and academia.

“In R&D, collaborations are becoming easily available. Indian scientists and technocrats are everywhere. UPL is number one on patents filed in India on agrochemicals and specialty chemicals. Our company has more patents in India than any other company. Our R&D budget is close to Rs. 5,000 crore. It gives confidence that these things can be built by an Indian company that was small 30 years ago. Our scientists in India and innovations are top end. Whether it is IITs or other institutes, we have good talent. Industry should start sponsoring colleges and universities and nurture the talent," says Shroff.

On challenges before the Indian chemical sector, Shroff says, "Looking at challenges in India from a global competitive point of view, there is a dire need to address the land prices that are very high as compared to other places. We are competing with the real estate in the residential category for buying industrial land, putting us in a strategic backstep. Second challenge is the feedstock and infrastructure. I think there has to be a very clear emphasis on this. When we look at the other competing countries, we find that they provide far more advanced structure at very basic prices than what we get here. Next are chemical clusters. While the government is working on this, more emphasis should be put there and our industrial areas have to be very large scale than the current ones. It has to be in the pattern of Vietnam, Germany, and the USA. With every single point rise in the GDP, the chemical industry has to be much more. Without a robust chemical industry, we can't substitute or hold any kind of economic strength. Now today we are looking at land, second are ports, the speed of the ports and cost of power which I think is now coming under control. Lastly, labor and local infrastructure. All this needs to be done in a comprehensive manner.”

“Another area that calls for attention is education. We have a lot of premium institutes such as IITs and IICT, etc. that require funding at a bigger scale. We Indians spend on sending our children overseas for studies which is one of the biggest brain drains of foreign exchange. If the government has a five year comprehensive plan for uplifting our educational institutes, not only will we save our money but also allow us to come out with global technologies that are in house. Lastly, we need to be careful about our overall Brand India. We need to be fully environment compliant and provide attention to safety. Since there is a China plus one and India is very short internationally, if we are not conscientious and the government and industry don't collaborate to create an ecosystem of systematically manufacturing sectors,” concludes Shroff.