Maulik Mehta, CEO & Executive Director, Deepak Nitrite
A key growth driver will also be Deepak Nitrite's state-of-the-art Research and Technology Centre which will combine its laboratories with world class scale up facilities that will double up as operations excellence initiatives
Major global trends in the chemicals sector and its implications on India?
India’s chemicals industry has been a global outperformer in demand growth and shareholder wealth creation for a decade. Its strong starting point could make it the next chemicals manufacturing hub. India’s infrastructure costs, across construction, material, and machinery, are up to 70% lower than other global chemicals manufacturing hubs. India’s material costs are 4.5 times lower versus Germany and 3 times lower versus Saudi Arabia.
Rising domestic consumption: India is expected to account for more than 20% of incremental global consumption of chemicals over the next two decades. Domestic demand is expected to rise from US $170 billion to US $180 billion in 2021 to US $850 billion to US $1,000 billion by 2040. The growing demand for bio-friendly products globally could benefit India, as it is among the leading producers of many chemicals that are used in such products.
Abundant availability in petrochemicals: India possesses abundant feedstock for higher carbon building blocks (C4, C6, and C8). Consequently, its combined surplus production of butadiene (C4) and benzene (C6). Allied companies are better suited to focus on products where feedstock is easily available in the merchant market.
Challenges: The Russia-Ukraine crisis continues to disrupt the global oil and essential chemicals availability. Hence, there is sustained volatility and fluctuation in crude and countries around the world have to evaluate new sourcing trades and patterns. While it has world class refining capacities, India remains unusually vulnerable due to its outsized dependence on crude oil imports.
With an eye on meeting the climate control and G20 challenges, the environmental regularity keeps eco-conscious responsible chemistry companies like Deepak Group to ensure our operations have no adverse impact on the environment. Global economies are unstable with Europe, China, and the US grappling with inflation and the consequent fluctuations in exchange rates challenge us to conduct smart hedging and fiscal management.
This is a double-edged knife. While the western world has been seeking an option to de-risk from its dependency on China, India’s appetite for Chinese imports has been increasing every year including the last. In fact, one of the largest foreign account surpluses that China has is with India. Reducing dependency on China requires long term planning and infrastructure buildouts which must include material movement and storage to minimize the value leakage between production and consumption.
Key milestones achieved by Deepak Group during FY 2022-23? Plans for FY 2023-24 and what are the growth drivers?
Deepak Group’s Phenol Acetone plant, the largest private investment in PCPIR region at Dahej, Gujarat achieved a milestone of 1 Million Metric Ton Phenol production in 4.5 years.
Our debottlenecking exercises at our plants of DNL in Dahej, Roha, TCD, Hyderabad and Nandesari Unit enabled us to expand the existing capacity.
Many new projects were also initiated to significantly expand Deepak’s market share in existing product portfolios, upstream integration as well as new process platforms. FY24 will see some of these projects get commissioned with order books tied up in advance.
A key growth driver will also be our state-of-the-art Research and Technology Centre which will combine its laboratories with world class scale up facilities that will double up as operations excellence initiatives.
Initiatives for enhancing process safety across all processes to make operation intrinsically safe. How are you collaborating with business partners to imbibe ESG practices in their operations to ensure a sustainable supply chain?
Deepak Group is working with key customers and third-party support to prioritize Scope 1 and Scope 2 initiatives for improvement in the carbon and water footprint at all its existing and forthcoming plants. These include yield improvement, multi fuel boilers, more efficient separation methods which use less energy and processes that improve atom efficiency. These will help catapult the company’s holistic ratings for ESG.
Major CSR initiatives being undertaken by Deepak Group in FY2022-23 and plans for FY 2023-24?
Deepak Foundation, the CSR extension of Deepak Group, conducts a number of programmes focussed on education, healthcare, skill-development among women and infrastructure support, for the communities in villages around the plant sites. Deepak Foundation also offers NGO consultancy partnership and support to CSR projects supported by other companies.
Deepak Group is partnering with the Central Government Mission to end TB by 2025. In this regard, we have launched ‘Nidaan’ mobile health van for sample collection and diagnostic services for TB, Anaemia, x-ray, and eye check-ups for free to communities in villages.
To enable education for all, Deepak Group supports Sankul education centre for visually and physically challenged children at Vadodara. The centre also offers rehabilitation and palliative care to cancer patients.
Vadodara Centre for Prevention of Cruelty to Animal, a hospital and rehabilitation centre for stray animals operates its facilities at Chapad, Vadodara, supported by Deepak Group which is also building new shelter rooms and operative services at the centre and started mobile-animal care clinic to offer rescue and treatment services at doorstep.
Empowering women by infusing entrepreneurial spirit, Deepak Foundation conducts Women empowerment training and handholding services like organic soaps and edible condiments manufacturing and sale. Aimed to support, sustain and revive the indigenous craft of ‘Sujni’, Deepak Foundation partners to support artisans and handicrafts at a centre in Bharuch.
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