Chemplast Sanmar has sought the Ministry of Environment and Forest's clearance for increasing the production capacity of its PVC resin plant at Cuddalore from 170,000 TPA to 226,000 TPA. The company earlier appointed Business Consulting Group (BCG) to assess the domestic suspension of PVC market. The survey indicated that the future demand for PVC in India is expected to grow at the rate of 11 percent or more.

At a macroeconomics level, the per capita PVC consumption in India is low i.e. 0.69 kg as compared to about 1.6 kg in China and on average 4 kg globally indicating the potential growth opportunity for PVC in India.

The survey also indicated that there had been no structural changes ( either inter polymer substitution or elimination of demand drivers), which would depress demand. It is assumed that no significant inter polymer substitution would have taken place in past few years as HDPE is the nearest competing material and the prices of HDPE have been about 10-15 higher than PVC.

Moreover, the demand for PVC is also expected to continue in future. In pipes sector, which accounts for 50% of resin consumption, government investment in water services will continue, as a number of smaller towns do not have adequate drinking water facilities.

Therefore, looking at the demand for PVC and proponent's experience in the sector, the expansion of the PVC plant is justified. The company argues that the productive assets installed has the cpapcity to produce 226,000 TPA and underutilisation is not in the interest of the nations.

Chemplast Sanmar had set up a plant to produce 170,000 TPA PVC resin at Cuddalore with Ineos Vinyls, UK providing the technology. The plant was commissioned in September 2009.