chemcareers india specialist presentation
TRANSCRIPT
INDIAN ECONOMY
India’s GDP – US $ 1.53 trillion 10th largest in terms of market exchange rate In terms of purchasing power parity (PPP)
4th Largest US $ 4.06 trillion
Agriculture – 16.1% of GDP Industry – 28.6% of GDP Service sector – 55.3% of GDP
2010 per capita income US $ 1,265 in terms of market exchange rate US $ 3,339 in terms of PPP
GDP growth 8.8% during 2003 – 08 GDP growth 8.5% (2010-11)
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SIZE OF INDIAN CHEMICAL INDUSTRY
12th largest in terms of volume
3rd largest in Asia
Industry size - US $ 76 billion in 2009-2010
5% of india’s GDP
Expected to grow at 10% - double the growth rate of the global industry
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Chemical clusters in India
CHEMICAL CLUSTERS ARE CONCENTRATED IN THE WEST
States Share of production
Gujarat 53%
Maharashtra 9%
Madhya Pradesh
5%
Uttar Pradesh 6%
Tamil Nadu 6%
Punjab 4%
Others 17%
Jamnagar,
Thane, Pune , Chiplun
Ahmedabad
Hyderabad
Vadodara
Cochin
Haldia
Bangalore
NCR
Chennai
Bharuch, Hazira, Vapi
BaddiDera Bassi Panipat
Nagda
Vishakhapatnam, Kakinada
Cuddalore, Pondicherry
MangaloreSource: Working Group of Chemicals, Planning Commission (11th Five Year Plan)
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CHARACTERISTICS OF INDIAN CHEMICAL INDUSTRY
High domestic demand potential, as the Indian markets develop and per capita consumption levels increase;
High degree of fragmentation and small scale of operations;
Limited emphasis on exports due to domestic market focus and smaller scale of operations;
Low cost competitiveness as compared to other countries due to high cost of feedstock & power, taxation structure and cost of capital;
Low focus on R&D despite initiatives to innovate processes to synthesize products cost effectively
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TRANSFORMING INDIAN CHEMICAL INDUSTRY
Large petrochemical capacities
Trend towards outsourcing of different chemical intermediates to India
Domestic companies moving up the value chain
Stringent environmental laws and practices leading to shifting of plants to India
Speciality 21.47%
Knowledge 30.69%
Basic 47.84%
Basic
Speciality
Knowledge
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SEGMENTS OF INDIAN CHEMICAL INDUSTRY
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Segment Share of market
Market growth
Market segments
Organic Chemicals Inorganic Chemicals
Basic 48% 8.82%
Petrochemicals – Basic (Ethylene, Propylene etc)
Fertilizers
Petrochemicals – Polymers Chlor Alkali
Other organic chemicals – Benzene based, alcohol based, others
Other inorganic chemicals
Specialty 21% 10.00%
Paints and varnishes
Dyes and Intermediates
Textile Chemicals
Others
Knowledge 31% 11.60%
Pharmaceuticals
Biotechnology
Agrochemicals
THE INDIAN CHEMICAL INDUSTRY - THREE KEY SEGMENTS
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Source : Annual Report of respective Companies.
SL no Top ten companies Revenue (US $ billion )
1 Reliance Industries 52.79
2 IFFCO 3.58
3 Tata Chemicals 1.32
4 National Fertilizers Ltd. 1.23
5 RCF 1.17
6 JBF Industries 0.76
7 Indo Rama Synthetics 0.59
8 Finolex Industries 0.42
9 Aarti Industries 0.31
10 Guj Alkalies & Chemicals 0.30
TOP TEN BASIC CHEMICAL COMPANIES
FERTILIZER INDUSTRY SNAPSHOT
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Investment US $ 5.53 bn
Number of plants Total 128 of whichUrea – 31 (28 operational)Complex fertilizers – 19 (including 11 dap plants)SSP – 66Others (amm. Sulphate etc) -12
Capacity (2009-10) N – 12.05 million tonnesP – 5.63 million tonnes
Production of fertilizer nutrients (2009-10)
N – 11.90 million tonnesP – 4.32 million tonnesK – imported
Stagnation in indigenous capacity, production Steep rise in costs of imported raw materials and intermediates
Source for Tonnage : Annual Report 2009-10, Department of Fertilizers, Government of India
INDIAN SPECIALITY CHEMICALS : OVERVIEW
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Source : Tata Strategic Management Group, ISP Estimates
At an estimated $16.25 Bn India’s Specialty Chemicals Market represented roughly 4% of the Global Market in 2008
PHARMACEUTICAL INDUSTRY IN INDIA
Size of pharmaceutical industry in India.
Projected growth - 11.6% per annumUS $ 20 billion domestic market by 2015US $ 30 bilion domestic market by 2020
Acute therapy Value contribution – 71%Growth - 16.3%
Chronic therapy - 18.7% growth
US $ bn
Domestic 12.94
Exports 8.79
Total 21.73
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Source : Dept of Pharmaceuticals, Govt. of India
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High GDP growth rates, rising population numbers and, as a result, a growing middle class are the drivers of India's pharmaceutical market.
Strong and well developed chemistry R&D and manufacturing infrastructure
Majority of the Indian firms comply with cGMP standards and India has the largest number of US FDA approved manufacturing sites (about 80) outside the US.
India’s cost arbitrage: Manufacturing costs are 30-40% lower, labour costs are 1/7th of US, production costs are 40-50% lower while R&D costs are 20-30% lower when compared to other developed nations
Over USD 50 bn and 2 bn Euro worth of patented drugs will go off patent in US and Europe by the end of year 2010, which would encourage more outsourcing activity to India.
Offer value added services including data management, biostatistics etc.
Pharma in India: Key Strengths
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Price regulation: The NPPA (National Pharma Pricing Authority), decides the various pricing parameters and sets prices of different drugs, which leads to lower profitability for the companies.
Continuous rise in R&D expenditure (from 2% to nearly 8-10%) increases pressure on the industry to enhance productivity
Shortfall of over 800 trained professionals per annum for the pharma industry owing to the burgeoning growth of the sector and the increasing focus on R&D.
India is not yet a part of the eco system of academic research, VC community, key opinion leaders
Inadequate strength in early discovery Low risk appetite – VC & PE funding availability
Pharma in India: Weaknesses
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Source : Annual Report of respective Companies.
Sl No Top ten companies Revenue(US $ Bn)
1 Cipla 1.31
2 Ranbaxy Laboratories 1.20
3 Dr. Reddy's Laboratories 1.10
4 Lupin Labs 0.95
5 Aurobindo Pharma 0.88
6 United Phosphorus 0.65
7 Cadila Healthcare 0.46
8 Bayer CropScience 0.46
9 Glaxo Smithkline 0.45
10 Sun Pharmaceuticals 0.41
LEADING INDIAN COMPANIES IN KNOWLEDGE CHEMICALS SECTOR- 2010-11
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Top Pharmaceutical companies in India
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INDIAN AGROCHEMICALS INDUSTRY
Domestic market : > US $ 1 billion
Exports :> US$ 0.5 billion
Market share of multinationals : 50% +
The balance is shared between
Basic manufacturing company
Formulators / repackers / marketing companies
Source : The Third India Chemical Industry Outlook Conference
India and the future
• By 2050- 61% of Indian population in working group (15-59 yrs)= 900 m
• 18 % of world’s working age population• 1 in 6 persons of global workforce will be an
Indian• India could have the second largest economy in
the world (larger than the US) of $36 trillion, and a per capita income of about $22,000 by 2039
Mashelkar, 2010