Industry trends in global and Indian petrochemical market in 2024?   

The Indian economy presents an optimistic picture for the growth of the petrochemical industry in the country. With a wide range of applications, we have witnessed a surging adoption of petrochemical products across sectors like Textile, Pharmaceutical, construction, automotive, etc. In the future, petrochemical demand is expected to grow significantly, and the government’s push to make in India has boosted petrochemical capacities. The increasing focus on sustainability and decarbonization are key trends that demand proactive strategies for innovation across the value chain. The need for adapting carbon-neutral practices and showcasing supply chain resilience are critical factors that will define the success for the Indian petrochemical sector in the coming decades. 

Where does India stand in the global petrochemical market and how do you see petrochemical growth in India? 

India is a key player in the global petrochemical market and is showcasing rapid growth and increasing demand. Indian chemical and petrochemical sector continues to grow at a rate of 1.2-1.5 times the GDP. India has emerged as one of the fastest-growing petrochemical markets, accounting for more than 10% of the world's growth in petrochemicals. 

According to leading industry reports, the market size of the Chemicals & Petrochemicals sector in India is around US$ 215 billion; expected to grow to US$ 300 billion by 2025. The Indian petrochemical industry could see around US$ 144 billion (more than~ Rs. 10 lakh crore) worth of new projects as the country moves to bridge the gap between the shortage of domestic supply and increasing consumer demand. The country's strong economic development, coupled with significant infrastructure spending, serves as a catalyst for petrochemical growth. Megatrends of urbanization, rising income, and organized retail is propelling petrochemical demand in India. 

The company announced phase wise development of the petrochemicals division. Can you please share details with us? 

Nayara Energy has strategically planned the development of its petrochemical division in phases. We are in the process of setting up a 450 KTPA Polypropylene plant at our Vadinar Refinery in Gujarat, which includes a Propylene recovery unit and upgrades to the existing FCC Unit. This Polypropylene unit will leverage advanced technology for clean polypropylene production. 

Being tactically located in Western India, near the largest petrochemical consumption region, we at Nayara Energy ensure logistical competence for petrochemical exports and imports, paving the way for further growth and expansion in the sector. 

What is the current status of development of a new polypropylene plant? When is it scheduled for commissioning? How is this going to impact Nayara Energy’s position in the Indian petrochemical market? 

There has been significant progress made on the planned phase-1 execution of the Petrochemical project and we are on track to commence our maiden petrochemical journey in Q3 2024. The strategic positioning of our 20 MMTPA refinery in Western India, will further strengthen our position in the high-growth Indian petrochemical market. This project showcases our commitment to diversifying our product portfolio and driving sustainable growth within the petrochemical industry. 

What is the Capex for petrochemicals of Nayara Energy? What is the future expansion plan? 

We are on track to commission our maiden petrochemical plant consisting of a 450 KTPA Polypropylene Unit in FY 2025 at an investment of Rs. 6,000 crores. Already, as part of the project, two of the units have been revamped and deployed a new unit. The final unit is constructed and is ready to be commissioned. 

What market share Nayara Energy is looking at in the Indian petrochemical sector by 2030? 

With 450 KTPA Polypropylene capacity, Nayara Energy aims to achieve a formidable market share in the Indian PP market by supporting Government’s ‘Make-in-India’ initiative. 

What sort of sustainability and green measures are being incorporated while developing petrochemical complexes? 

The petrochemical industry is proactively addressing its environmental impact by integrating sustainable practices into the development of petrochemical complexes. Key measures include reducing carbon footprint through technologies like carbon capture and storage (CCS) during syngas production and utilizing renewable carbon sources like biomass to produce chemicals. Shifting to lower-carbon feedstocks such as hydrogen and scaling up bio-production with renewable energy further contributes to sustainability efforts. 

Additionally, maximizing material and energy efficiency, creating value from waste, and adopting a stewardship role to consider long-term environmental and social impacts are essential strategies. Embracing large-scale sustainable solutions and transparent reporting signifies the industry's commitment to balancing economic growth with environmental responsibility.  

With the rising importance of the circular economy, what steps is Nayara Energy taking to promote recycling and reduce the environmental impact of its petrochemical products?

Due to our sustainability commitment, Nayara Energy chose high-quality FFS packaging for Polypropylene packaging which is 100% recyclable as compared to prevailing Raffia packaging which is difficult to recycle.  

Several polyolefin players are looking to invest in plastic recycling, via pyrolysis however, the consistent and quality sources of plastic waste are a big challenge. Once reliable feed and technology solutions are available, Nayara will evaluate investment options in plastic recycling. 

What is the current refining capacity of Nayara Energy and what is the future plan? 

Currently, Nayara Energy contributes approximately 8% of India's refining output, showcasing its significant presence in the country's energy landscape. For the last five to six years, the company has achieved reasonably good growth both in the retail business, and the expansion to petrochemicals. 

The company is investing Rs, 4,000 crores in modernising the refinery to improve its lifespan and reliability by 2026.  Our Vadinar refinery is India's second-largest, single-site refinery with an annual capacity of 20 million metric tonnes (MMT) or 405,000 barrels per day (BPD). 

It is capable of processing some of the toughest crudes and yet produces high-quality Euro IV and Euro VI grade products. We can now produce high-quality Bharat Stage (BS-VI) compliant fuels that meet international standards. This brings us closer to the global emission standards. 

What are the key CSR initiatives planned by Nayara Energy for 2024-25? 

Nayara Energy is committed to corporate social responsibility (CSR) and has outlined several impactful initiatives to positively influence the communities it serves in the coming years. Driving inclusive growth and delivering value for all stakeholders is at the core of our beliefs. Through various sustainable development projects in areas of Health & Nutrition, Education & Skill Development, and Sustainable Livelihoods, Nayara Energy continues to play a pivotal role in improving the quality of life of the communities it operates in. 

Additionally, Nayara Energy's CSR efforts are focused on improving the quality of life for communities residing near its operations. By implementing various initiatives, the company strives to be among the most respected organizations in India, prioritizing the well-being of communities and the nation at large.