India is emerging as a preferred destination for specialty chemical manufacturing, thanks to its competitive production costs and adherence to stringent quality standards.

While there is a huge potential, the infrastructure related bottlenecks remain a huge challenge, believes Raj Tiwari, Chief Executive Officer, Speciality Chemicals, UPL. “Setting up a greenfield project is still not an easy task in India. Actual demand on the ground was never an issue but the industry's own issue with inventory has always been a challenge. Going forward, industry has to work 20% harder for us to differentiate as a key sector. While it is still difficult to match the cost offered by China, we can strengthen our efforts. I am sure we will soon witness a lot of joint ventures in India. Also, the availability of skilled manpower is not an issue even in tier 2 and tier 3 cities."

"Today the cost is not technology agnostic. It is not because of technology as you can buy it but it will add to the overall cost,” added Tiwari who spoke along with other leading experts at the second session of 4th edition of NextGen Chemical and Petrochemical Summit 2024 organized by the Indian Chemical News in Mumbai on July 11-12, 2024.   

At the session titled, ‘Specialty Chemicals: Invigorating Growth’, the leading experts from the sector emphasized the growing demand for specialty chemicals across various industries, from agriculture to pharmaceuticals, personal care to construction.

Girishkumar Kadam, Senior Vice President & Group Head, Corporate Sector Ratings, ICRA Limited who moderated the session expressed high optimism on the prospects of the industry. "Better demand and attractive pricing are driving the chemical companies forward. On the other hand, pricing pressures, decrease in operating margins by 500 basis points are a worrying factor."

Anurag Roy, CEO, Astec Lifesciences Limited exhorted the industry to take calculated risks. He cited digitalization and the right network besides right channels as key factors. "Bets have to be taken! At leadership level, allowing others to grow and also focus on sustainability and tractability. Companies must set ESG and carbon neutrality targets and put them in the public domain. We have to ensure collaborations, improve technology besides requiring government support for empowering industry.”

“We require the kind of plants with multiple products and interoperability of the operations. The industrial production of chlorine and caustic soda by electrolysis generates a sizable amount of hydrogen as a byproduct. No one in India is making chlorinated polyvinyl chloride (CPVC). We have the largest CPVC plant with 1 lakh tonnes capacity,” said Vijay Vasudeva, Senior Vice President & Head of Operations, Epigral Limited.

“Covid-19 was a bad time for the industry. By the time your new product innovation would reach the market, the process would evolve, making your discovery null and void. Understanding the culture and need for collaboration. We talk about China dumping products here in India but we can collaborate to bring down the cost. Not just collaborating on price but managing all the processes for the whole supply chain,” said Koshal Bisen, Head - Growth Office, Indofil Industries.

“Surfactant markets have a huge demand supply gap. Currently we mitigate it by addressing the problem with import of palm oil. We must focus on making it locally and diversifying the supply chain to address the visibility of cycles. There is also the need for integration of responsible care and uniform regulatory set up for all the products. On the question of innovation and collaborations, we have always tried to match the industry expectations,” said Erol Fernandes, Leader Business Creation Europe, Galaxy Surfactants Ltd.

“The specialty chemicals sector is marked by its diversity and the unique requirements of various end-use industries, from pharmaceuticals and agriculture to electronics and personal care. Traditional manufacturing processes, often rigid and capital-intensive, struggle to keep pace with rapid market changes and technological advancements. The plug and play model offers a solution by introducing modularity, flexibility, and digital integration into the production and supply chain processes. Companies can quickly adapt to market changes and technological advancements, maintaining a competitive edge. Flexible production processes reduce costs associated with changes and downtime, leading to more efficient operations,” said Virender Kumar, Group Marketing Head, Arete Group.

“Many global companies wanted to move out of China and explore countries like India. Many are looking at China+1. However, we still don’t have a scale in India to give competition to China. At the same time, the specialty chemicals industry is experiencing a wave of consolidation, driven by the need to achieve economies of scale, enhance R&D capabilities, and expand market reach. This trend is reshaping the landscape of the industry, with significant implications for companies, customers, and the broader market dynamics. We can see innovation of bio-friendly products,” said Raj Shroff, Founder, Aarayaa Advisory Services.

The Summit was supported by DCM Shriram Chemicals as principal partner, Somaiya Vidyavihar University as academia partner, Cadmatic as platinum partner and Andhra Pradesh Economic Development Board (APEDB), Govt. of Andhra Pradesh as state partner.

Gold partners for NextGen Chemicals & Petrochemicals were Epsilon Carbon, Forbes Marshall, Gharda Chemicals, Indofil Industries, Ingenero, IPCO, Jaaji Technologies, Moglix, PIP, Port of Antwerp - Bruges, RIECO and Re Sustainability. Associate Partners are: HPCL and Nuberg EPC.

Supporting partners included Aarayaa Advisory Services, Archroma, India Glycols and Tata Steel Special Economic Zone and industry association partners are: ACFI, AMAI, CropLife India, Gujarat Chemical Association and PMFAI.