BCPL is setting up Butene-1 and HPG-2 plants at a cost of Rs. 386.75 Cr: Reep Hazarika, Managing Director, Brahmaputra Cracker and Polymer Limited

  • May 26, 2023

Brahmaputra Cracker and Polymer Limited (BCPL) is planning to increase its market share by a new capacity addition of 1,200 KTPA in the coming years. The company has embarked upon its way forward to increase its capacity by 140% from existing 280 KTPA in the first phase while further capacity addition will be carried out in the next phase 

BCPL recently celebrated its 16th anniversary. What are the key milestones achieved by the company in the last 16 years? 

BCPL celebrated its 16th Foundation Day on 8th January 2023 at BCPL Petrochemical Complex, Dibrugarh. It has been a very successful journey for this mega petrochemical plant in the NER (North Eastern Region) till date and it is contributing nearly around 3% of the total national polymer production. First and most important milestone achieved by BCPL was its commissioning on 2nd January, 2016 and the subsequent dedication to the nation by Prime Minister Narendra Modi on 5th February, 2016. 

From the operation point of view, BCPL achieved 100% production capacity in the 3rd year of operation and thereafter achieved its maiden profit. BCPL has always been in the forefront of digitisation by implementing SAP SE and allied digital machine tools for critical monitoring of systems in its operation to transform and take the company to newer heights. 

The many awards and recognitions have been bagged by BCPL like ISO 15001, ISO 14001, ISO 45001, NABL accreditation, FICCI Chemicals and Petrochemicals Award, Annual Greentech Environment/Safety/Energy award, Best Company award from Berkshire Media, Safety Award from National Safety Council of India, and many more. Whatever we have achieved so far is the outcome of the inspiration, efforts, and contributions of everyone associated directly or indirectly with the company. 

How did BCPL perform in FY 2022-23 and what is the expectation from FY 2023-24?

The last financial year was a mixed bag for BCPL in terms of polymer production and profitability. During FY 2022-23, the spiraling domestic gas prices in India along with lower polymer prices in the market had impacted the company financials. However, due to the various proactive actions taken by BCPL, the performance is expected to end on a positive note, although with reduced profits. 

BCPL has a positive outlook in the current polymer market in India for the FY 2023-24. It is estimated that India’s polymer demand will rise to 14.53 million tonnes in FY 2023-24 which is nearly 7% increase over previous year. 

It is also supported by Government of India initiatives like the Make in India, Atmanirbhar Bharat, Jal Jeevan Mission, etc. All these Govt. schemes will boost domestic production and reduce import of polymers and thereby ensure overall growth and development of the entire polymer industry – from raw materials to consumption. It is seen that from 1960 onwards, India’s petrochemical demand increased by 2-3 times every decade and demand is expected to grow to 30 million tonnes by 2030 and 60 million tonnes by 2040. 

What is the BCPL’s group refining/processing capacity per annum and what is your share nationally? How do you plan to increase your market share? 

The nameplate production capacity of BCPL is 280 KTPA of Linear Low-Density Polyethylene, High-Density Polyethylene and Polypropylene with a market share of nearly around 3% of total national polymer production. 

BCPL is planning to increase its market share by a new capacity addition of 1,200 KTPA in the coming years. BCPL is in active discussion with process licensors and EPC contractors along with feedstock suppliers like OIL and ONGC and others for additional natural gas supply. Also, BCPL is looking at various options for the additional Naphtha requirement. To achieve the set target within the timeline, BCPL has embarked upon its way forward to increase its capacity by 140% from existing 280 KTPA in the first phase while further capacity addition will be carried out in the next phase. 

How is the performance of BCPL’s Petrochemical complex at Lepetkata in Assam and what are your expansion plans? 

BCPL’s performance has been excellent in terms of polymer production and profitability, and it has a market share of over 90% in the NER. BCPL is well positioned to export polymers to the neighbouring ASEAN and BBN countries. Free trade agreements (FTAs) of the SAARC (SAFTA) and Govt of India Initiative for water transport and Economic Cooperation (BIMSTEC) is boosting economic integration not only in Southeast Asia but also between India and Bangladesh. Being amongst the largest importer of polymer, Bangladesh is giving a viable opportunity for BCPL to establish its footprint in the international polymer market. 

The Northeast of India is endowed with huge untapped natural resources and is acknowledged as the eastern gateway of India’s Look-East Policy. In this context, BCPL has set up its top priority to utilize more natural gas available in the region to produce additional polymers by increasing its capacity. 

What role BCPL sees for itself in the Hydrocarbon Vision 2030 for North East India? 

BCPL is downstream of the hydrocarbon sector as an end user of natural gas as well as the marketing and distribution of products derived from natural gas. It is expected that there will be surplus natural gas for the petrochemical industry in the NER once the natural gas production touches around 15.3 MMSCMD by 2029-30 as envisaged in the HC vision 2030 along with the commissioning of the natural gas grid of IGGL. With increasing natural gas availability in the region, BCPL has prepared a road map for its expansion in the near future to align with HC vision 2030. 

What is the scope of downstream plastic industries in North East India? 

Presently BCPL is selling approximately 38 KT per annum of polymer in the Northeast and the figure is expected to increase with the setting up of more downstream industries. BCPL is offering special incentives to the downstream industries of North East (NE) and promoting the Tinsukia Plastic Park by offering special incentives to the units being set up in the park. Brands like Milton, Supreme, and HUL are using BCPL polymers and have large set-ups in the North East. Overall the polymer scenario of NE looks very promising.

Capex investment made in FY 2022-23 and projects where investment was made? What is the plan for FY 2023-24?

At present BCPL is setting up two value addition plants viz. Butene-1 and HPG-2 at a cost of Rs. 386.75 crore. During the year, the company incurred capex of approximately Rs. 60 crore for the same. In addition, BCPL is incurring Capex for upgradation/modernization of various capital equipment of the existing petrochemical complex.

The Capex for 2023-24 will be incurred for balance work of the ongoing Butene-1 and HPG-2 project, construction of a multi-product storage facility at Haldia and procurement of other capital equipment.

What is your plan for the development of alternate technologies for the production of biodegradable plastics? 

Biodegradable polymers (BDPs) or biodegradable plastics refer to polymeric materials that are ‘capable of undergoing decomposition into carbon dioxide, methane, water, inorganic compounds or biomass in which the predominant mechanism is the enzymatic action of microorganisms that can be measured by standardized tests, in a specified period, reflecting available disposal condition. Recently, significant progress has been made in the development of biodegradable plastics, largely from renewable natural resources to produce biodegradable materials with similar functionality to that of oil-based polymers. 

Biodegradable polymers will play a greater role in the packaging sector in the future. However, cost of production and raw materials availability is one of the major concerns. Also, disposal issues also exist since it is unsuitable for landfill due to their potential to release methane under anaerobic conditions. BCPL is closely watching the progress of biodegradable polymers technologies and allied support systems and is hopeful to get suitable solutions soon to address the current concerns.

 What are your plans for automation and digitalization at BCPL?

Digital transformation is one of the core initiatives being undertaken by BCPL to increase asset utilization through higher manufacturing efficiency, including the efficiencies of all sites and integrated value chains. It is only possible by using advanced digital methods to create our own brand in the market and transform operations faster than the competitor. 

BCPL is a digitally driven company with all operations covered through DCS to meet the present requirement as well as the future needs and thereby ensuring the safety of people and the environment. BCPL is considering advanced control algorithms in DCS in order to further improve productivity with minimum human interface in all the complex operations in near future. 

Management Information System is another area BCPL is focusing to integrate all processes for better decision-making and ease of access to all information. BCPL has identified the next level of automation in its bagging unit for better customer management with proper planning and timely execution to save time and increase work effectiveness considerably. This technological transformation will also entail creation of a new work culture in the organisation. 

How is BCPL striking a balance between environment-friendly policies and sustainable growth? 

While focusing on growth, BCPL is simultaneously considering various Clean Technology Scenarios (CTS) to curb air and water pollution and at the same time reduce CO2 emission. To reduce CO2 emission, BCPL is in active discussion with OIL for CCS of pure CO2. BCPL is also reprocessing high calorific value waste in cement industries to take care of the environment under guidance from the central and state pollution control board. BCPL is also exploring diversification into green energy sectors as a future progress engine as part of sustainable growth and retrofitting existing plants with latest technologies for lower CO2 emissions. 

What is your marketing strategy for Petrochemicals? 

Marketing of BCPL polymers is being done by GAIL through a marketing agreement. However, BCPL has ensured that the prices of BCPL polymer in NE has been kept competitive vis a vis competitors and other locations. In this regard, BCPL is offering special incentives to the downstream industries of NE and promoting the Tinsukia plastic park by offering special discounts to the units being set up in the park. 

CSR initiatives to be undertaken by the company in FY 2023-24? 

BCPL entered the CSR regime from FY 2020-21 and continues its endeavor to contribute to the well-being of the communities and society through various environmental and social measures to promote inclusive growth. The CSR projects are being implemented around Health & Nutrition, Promotion of Education, Swachhata and Sanitization Projects, Projects on Skill Enhancement and Alternative Livelihood Promotion & Sustainable Development and Rural Development, etc. However, a major part of the funds is being allocated to Health & Nutrition considering the recent global pandemic situation. 

Where do you see BCPL in the next 5 years?

The plastic industry is one of the fastest growing industries in India. It has expanded at around 8% CAGR over the last five years and is expected to grow at around 5-7.5% in the next 5 years owing to increased demand of polymers backed by high population growth, increasing disposable income and lack of better substitutes for such products. With increasing per capita consumption of polymers in NER, there is a tremendous scope for the growth of the polymer industry. 

Considering the last 5 years’ performance, BCPL has made significant contributions to the national economy and has been able to achieve its mission by establishing a remarkable presence in the north-east region in the petrochemical sector with a market share of over 90%. 

With the completion of the envisaged capacity expansion projects along with diversification and digitalization, BCPL is confident of soaring to newer heights in terms of customer satisfaction, visibility, profitability, safety, sustainability, etc. in the next 5 years. 

When are you planning to achieve Net Carbon Zero and how are you planning to achieve it?

Prime Minister Narendra Modi has set India’s long-term goal of reaching net-zero by 2070 at the Glasgow summit. India is the world's fourth biggest emitter of carbon dioxide after China, the US, and the EU. In line with our promoter GAIL’s target, BCPL has also set 2045 as the timeline for achieving net zero carbon emission. India emitted 1.9 tonnes of CO2 per head of population in 2019, compared with 15.5 tonnes for the US and 12.5 tonnes for Russia in the same period. 

To achieve net zero, BCPL has identified three main areas which will help to build long term resilience, greater trust and a better tomorrow. First and foremost, improvement in process operations to the next level by adding new climate reliant technologies which will not only reduce carbon footprint but also make us align with the best national and international benchmark index. Energy mix is a part of net neutrality for BCPL where more and more energy will be utilized from non-fossil sources like green hydrogen, green methanol and solar energy etc. in a requisite proposition in the future to reduce carbon footprint. 

Secondly, BCPL is in active consideration of Carbon Capture & Sequestration (CCS) which is a proven emissions reduction solution, permanently removing CO2 from the atmosphere. In this direction, BCPL and OIL are joining hands and are in discussion to utilize CO2 in Enhanced Oil Recovery (EOR) in the oil fields in the coming days. 

Thirdly, BCPL is also embarking upon nature-based offsetting of carbon as a part of de-carbonization with mass greenbelt development. Even though it is a time consuming process and a large area is required for plantation, it is a grassroot level visible program for achieving net zero. 

BCPL is also proactively looking at all other feasible options available to achieve the same with the targeted time.