By: Rahul Koul
Last updated : August 04, 2022 9:33 am
Driven by improved ease of doing business, strong infrastructural capabilities, services and entrepreneurial spirit, Industry’s growth story is very robust and sustainable. Industry requires both short and mid-term tactical strategy and a long term plan.
Rise in demand from end-user industries such as food processing, personal care and home care is driving development of different segments in India’s specialty chemicals market. The specialty chemicals companies are expanding their capacities to cater to rising demand from domestic and overseas. Experts specifically highlight the fact that the global companies dependent on China now seeking to de-risk their supply chains will open significant growth opportunities for Indian specialty chemical business.
Specialty chemicals are a base for excellence in so many areas but the sector hasn’t really received adequate attention, feels Rupark Sarswat, Chief Executive Officer, India Glycols Limited.
“We don’t see any planning or necessary execution at the government level specifically for the specialty chemicals. Infrastructural issues, be it ports, transportation of chemicals, roads, besides regulatory and environmental challenges remain. Another thing missing from the country perspective is that we are yet to create a cohesive ecosystem. Therefore, for us to win, we need to have a research ecosystem, regulatory system and other aspects. It has to be done in tandem with a clear strategy. It is about creating knowledge on a sustainable basis in terms of products, applications,” said Sarswat.
“What holds us back is the lack of culture of innovation as we are reluctant to invest and put our efforts. Therefore, It has a long way to go in terms of excellence. We may have a lot more ISO certifications than what Japan has but it hasn’t done any good in terms of quality comparatively. For specialty chemicals, we need to think long-term,” Sarswat added further.
Sarswat spoke along with other industry experts on the opportunities, challenges and roadmap for specialty chemicals at the ‘NextGen Chemicals & Petrochemicals Summit 2022’ organized by Indian Chemical News on July 21, 2022. The panel discussion at the inaugural session themed, ‘Specialty Chemicals: On Fast Track’ was moderated by Pravin Prashant, Editor, Indian Chemical News.
According to Radhesh R Welling, Managing Director, Navin Fluorine International, there are tremendous opportunities in terms of services, be it manufacturing or research based services.
“To convert these opportunities, it is important to have a clear point of view on where to play and how to win. Companies must do a clear assessment of what is their play: Is it the technology arbitrage or the cost arbitrage? Then you need to orient your business systems accordingly. Clear point of view followed by developing a set of capabilities accordingly, technology including chemistry plus engineering, projects, operations etc. It would help the companies to identify, convert and execute the set of opportunities that we can really go after. And the third one is scale. It is very critical that we really focus on the value chains that we want to own and gradually build a business where the customers in both upstream and downstream areas come to us for the services,” said Welling.
“In terms of managing the input cost specifically for raw materials, we will require both short and midterm tactical strategy and long term plan. To build the organization and bring in the agility to identify and implement the initiatives quickly. Some of the initiatives could be in the form of partnerships and how quickly we are able to identify opportunities and more importantly implement it. I am extremely encouraged by what is happening in the sector. In a decade or so I see a lot of chemical companies coming from India and becoming billion plus dollar global organizations. Time is right for the Indian chemical companies,” added Welling.
“India is placed exceptionally well in the global arena. The stability witnessed during the Covid-19 pandemic has showcased our potential to the world. That gives me humongous confidence in terms of how the chemical industry is moving forward. Few years back, chemical was not a great word, either in the industry or the stock market. Today everybody is looking at specialty chemicals. One of the key drivers behind this boom is the resilience, hunger to contribute, entrepreneurial boom,” said Yogesh Kalra, Head-Global Business Creation, Galaxy Surfactants Limited.
“Indians are known for capitalizing on opportunities. During the pandemic, we showed our best capabilities despite the limitations. Home and personal care industry has been doing exceptionally well not only in India but outside India as well. The stable environment in the country has helped it to advance the industry. The domestic demand definitely across segments including chemicals is growing rapidly. And of course this is coupled with the typical challenges such as China plus one issue, the global players want to de-risk and visit India. Before Covid-19, it was all about China but now things are moving fast. We are gearing up in terms of size, scale, innovation, creativity. In India, one of the best things happening is digital payments. We are ready to grow in terms of innovation, scale and size. While we can’t build raw materials and intermediates overnight, we have become an important destination. We will eventually become a location that is being looked at positively by suppliers. There used to be a time when Indian companies had to approach global players but now it is vice versa,” added Kalra.
Anand Gopaladesikan Managing Director-India & Vice President-Polymer, Asia, Wacker Chemie is very confident about the rise in demand of specialty chemicals.
“Industry’s growth story is very robust and sustainable, driven by improved ease of doing business, strong infrastructural capabilities, services and entrepreneurial spirit. Every company is keen to invest in India but for the few challenges such as supply factor and intermediate chemicals. At a broader level, it is an open secret. There is a need for 70 intermediate chemical plants. The supply chain, cost factor, knowledge and cost effectiveness are other key factors,” mentioned Gopaladesikan.
“We have a strong will to collaborate with the Indian companies and that has to be in a way which is highly capital intensive. The government’s willpower to dedicate the feedstock for the specialty chemicals will help the players to strengthen the exports. A lot more collaborations are needed between the multinationals and the domestic companies with potential synergies and areas of overlap. Government run cracker plants could supply the intermediates to the industry. On the challenge side, the technologies are with MNCs and thus they also need to be assured that they would return back what their global shareholders would demand,” added Gopaladesikan.
Well attended virtual mega event, NextGen Chemicals & Petrochemicals Summit 2022 was supported by the leading names of the industry. While the Platinum Partner was Elliot Group, the Regulatory Knowledge Partner was GPC. The Gold Partners of the event included Ingenero, Premier Tech, Carbanio and Deepak Chemicals. Among the Associate Partners were PIP and Huntsman. The Industry Partners of the event included AMAI, Croplife India, and ACFI.