Indian Chemical Industry

ISSN: 2319-5894

Pharma Utility Volume 8, Issue 1- 2, 2014

http://www.pharmautility.com

Brief Report

Indian Chemical Industry: A Potential Chemical Hub for

Exploration at World Market

Authors: Amrit B Karmarkar*1

, Avinash D Deodhar1, Aditya A Holikar

2

Affiliations:

1. Director, InClinition, Dombivli East, Mumbai Area, India

2. Research Associate, InClinition, Dombivli East, Mumbai Area, India

Email: [email protected] Cellular: +91-8898904115

Introduction of Chemical Industry

Chemicals are the basic necessity of day to day life for creature to survive on earth. The

chemicals whether being natural or synthetic they are helpful to each and every creature for the

survival. Right from the food we eat, clothes we wear or the cars we drive all the things are

significantly based on the chemicals which helps to enhance the quality of life through various

new innovations. The use of chemicals is mentioned from the ancient time to the modern era. As

the development on earth started from the ancient era to modern era for the survival and the

enhancement of the chemicals, their forms and their uses changed. Development of synthetic

chemicals took place by setting up the chemical factory in countries and then export and import

of chemicals from country to country.

As the modern era is concern, the chemical industry has acquired the special attention by

Compound Annual Growth Rate (CAGR) at 5.9% for the revenue generation of $ 3,519 billion

till year 2010. It is expected to grow up to 8.1% generating $ 5,185 billion by 2015(Market Line

Report). The growth is observed due to new advancement of the chemical manufacturing units,

using modern technology and launching of the new products.

mailto:[email protected]

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Overview of Indian and Global Chemical Industry

The Chemical Industry is the central to the modern world economy with the typical sales GDP of

around 5-6%. The economic slow-down and recession was observed in the world from the year

2006-2009 due to which the attention of the global chemical industry was completely shifted

towards the eastern part of world. The Asia-Pacific market was wide open for industries to

manufacture and sale. In an around due to economic slow-down in allied countries the Asian

economies resulted in the growth for global chemical sales by 14%.

Due to the rise of the Asian Market for chemicals globally, India is emerging as focused

destination for supply of chemicals. In India Chemical Sector accounts for the 14% in overall

Index of Industrial Production (IIP). India is 3rd

largest producer of chemicals in Asia after China

and Japan. India accounts for approximately 7% of GDP by Chemical sector and its share in

National export is around 11%. Despite of its large size and its Export rate being significant,

contribution of India in Chemical Industry worldwide is less i.e. 3%.

History of Chemical Industry

The history of chemical manufacturing is the most interesting part wherein the facts of the

chemicals into the formation of big chemical industry took place. (See Table 1)

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Inventor Year Product Place

Joshua Ward 1736 Sulphuric acid

John Roebuck & Samuel

Garbett

1749 Sulphuric acid Prestopans, Scotland.

Charles Tennant 1799 Bleaching powder of

chlorine and slaked lime

St Rollox, Glasgow,

Scotland.

Nicolas Leblanc 1791 Sodium chloride Saint-Denis, France.

William Rosh, Wilson

and Bell

1816 Sodium chloride and

sodium sulfate (Leblanc

process)

River Tyne, Scotland.

Sir John Lawes 1840 Superphosphate of lime London, England.

Charles Goodyear

Thomas Hancock

1840 Vulcanization of Rubber Springfield, Massachusetts,

US.

London, England.

William Henry Perkin 1856 Aniline dye (first

synthetic dye)

London, England.

Friedrich Engelhorn

(BASF)

1865 Various Dyes. Ludwigshafen, Germany.

Ernest Solvay 1874 Sodium chloride

Sodium carbonate

Calcium carbonate

Charleroi, Belgium.

Friedrich Bayer 1899 Aspirin Leverkusen, Germany.

Wallace H Carothers 1930 Fibers, Nylon, Teflon,

Freon

(chlorofluorocarbon for

refrigerator)

Wilmington, Delaware, U.S.

John Rex Winfield 1941 Polyester Sutton, Surrey, England.

Table 1: History of Chemical Industry across the world

Segmentation of Chemicals

The development of the chemical manufacturing industry stated from the late 19th

century where

the quality and various different form of chemicals were prepared. These different forms of

chemicals were separated in the certain segments like Basic chemicals, Specialty chemicals,

pharmaceutical products, fertilizers and Agrochemicals.

http://en.wikipedia.org/wiki/Ludwigshafenhttp://en.wikipedia.org/wiki/Germany

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In all segments of chemicals can be done as follows:

1. Basic chemicals

The term basic chemicals constitute of organic and inorganic products (inclusive of

petrochemicals), plastic resins, synthetic fibers, man-made fibers, dyes and similar materials.

These basic chemicals plays significant role of exporting the organic and inorganic chemicals

and intermediate chemicals.

Indian Scenario

Indian basic chemical Sector produces majority of 6 chemicals i.e. Methanol, Aniline, Alkyl

amines and its derivatives like Acetic acid, Formaldehyde, Phenol. The Inorganic chemicals

having day to day applications are Caustic soda, Soda ash, Sodium Carbonate, Calcium

Carbonate, Liquid ammonia are exported.

Comparison with China

China has the production and export rate of 48.3% in the field of Basic chemicals which is much

higher than that of the India which is 35%. China has acquired the market of basic chemicals due

to their high production and low rate of export.

2. Specialty chemicals

The Specialty chemicals are the groups of relative high value, low volume chemicals known for

performance enhancing properties. It comprises of additives, paints, coatings, soaps and

detergents, fragrances, flavors, oilfield chemicals, paper and rubber processing additives and

catalyst. The specialty chemicals are prepared from the basic chemicals and sold on their basic

functions.

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Indian Scenario

Specialty chemicals sector is fast growing at substantial rate and also has various investment

offers. This will create the high rate of employment and significantly boost the economy of

country.


As per the Market Line report the Specialty chemicals share of china is 24.2% compare to

Indias 24.7%. To increase the productivity, employment of the talented pool of the chemicals

engineers are required. The basic infrastructure with modern technology should be established.

3. Pharmaceutical chemicals

The Pharmaceutical chemicals are the medically Active Pharmaceutical Ingredients and dosage

forms. The demand for the Pharmaceutical products is increasing tremendously day by day

globally to get cure from various diseases.

Indian Scenario

India is the key player in the exporting of the pharmaceutical chemicals. India is considered to be

the major source of the supplying the raw materials, and finished products. In the terms of

production of supply India is the 3rd

largest in terms of volume. India markets finished product,

process development, drug formulation, dosage form manufacture and marketing has established

properly and few companies has attended the International standards so the process of growth

has been fast. (JZ Med. Inc April 2012)


China shares the production of the pharmaceutical chemicals of around 21.5%. Compare to

China, Indias production is 25.3% (Market Line Report). Though the China is highest API

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producer and acquires the largest exporter of the API is less recognized as that of the India.

Comparing the China and India the pharmaceuticals products are still slow growing.

4. Agrochemicals and fertilizers

Agriculture is the import sector for the growth of the economy of the country. The

Agrochemicals and fertilizers are vital for the nutritional security of country. Agrochemicals and

fertilizers segment for the chemical fertilizers, herbicides, insecticides, pesticides and other

substances used in field of agriculture.

Indian Scenario

India is the 4th

largest producer of the agrochemicals and fertilizers and it is also supplied to

other parts of the world. The Three categories of the Companies exist in India providing the

Agrochemicals and Fertilizers i.e. Multinational, Indian Companies and Small Scale Industry.


The share of the China in Agrochemicals and fertilizers segment is low up to 6% compare to that

if Indias 15%. The development of the Agricultural products and production of the fertilizers

was the due to the global marketing and various involvements of the Multi-national companies

creating the platform for the high productivity of crops.

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Factors Influencing the Growth of Chemical Industry

Setting up the Training center for the new talented pool of chemical engineers.

To learn the art of developing the high quality, low cost manufacturing from lab scale to

ton scale.

Increase the R&D investment to enter the world of innovators.

Install the latest facilities and technologies to fast and large production to meet the

demand of export.

Tax Reduction and other incentives to be provided for flourishing the production rate of

industry.

Development of SEZ and world class infrastructure along with improved facilities of

transportation by railways, roadways and ports.

Conclusion

India has made a considerable progress in the field of the Chemical Industry over the past few

decades. The implementation of the fiscal and financial incentives and ventures have emerged

the industry as the power house of Indian economy. As the favorable infrastructure and

supportive regulatory framework with world class facilities provided to industries, the CAGR

will reach 15% i.e. $ 290 billion by the end of 2017.

How to cite this article:

Karmarkar AB, Deodhar AD, Holikar AA.Indian Chemical Industry: A Potential Chemical Hub

for Exploration at World Market. Pharma Utility. 8(1-2), 2014.

Indian Chemical Industry

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