GOVERNMENT’S APPROACH TOWARDS SMALL SCALE CHEMICAL INDUSTRIES

Whether one likes it or not, the fact remains that the performance and growth of chemical industries in India, whether large, medium or small, depend to a considerable extent on the policy frame work of the government.

As a matter of fact, every chemical industry in the country has to carefully anticipate as to what would be the approach of the government regarding various issues while deciding its strategies for new projects, capacity expansion and setting up future targets.

While the government has withdrawn itself from several cumbersome procedures of the past, it still has a lot of work to do to provide long term clarity about its policy approaches towards small scale industries.

The government is not very clear as to what extent it would go to protect the interests of the small scale industries, in the face of competition from multi national companies in India and internationally.

With steadily increasing participation of multi national companies in Indian ventures and Indian units setting up projects abroad, the distinction between the Indian outfits and international outfits are becoming less in the case of several large units. However, the small and medium scale chemical projects largely remain Indian owned and therefore, are distinctly Indian in outlook.

The small scale industries are the worst hit due to Government’s recent liberalization policies involving free entry for the overseas players into India and significant reduction in the import duties. Many small scale enterprises have closed down in the last few years unable to stand the competition and due to lack of supportive policies from the government . The government is yet to carry out adequate study and investigation on the impact of its liberalization policies on small scale sector.

The government appears to have practically overlooked the contribution of small scale enterprises to the national growth as well as their requirements to survive and progress in the present conditions, though the Government continues to claim that it is supporting the concept of small scale sector.

The government should recognize and appreciate the role and relevance of small scale chemical industries, particularly in view of the lack of adequate investment capability amongst large percentage of entrepreneurs in India. There is particularly the need to encourage small capacity units in the case of chemical projects due to the comparatively low demand base for several products in India. Further, sustaining the overall growth and progress of the chemical industries can be achieved only by ensuring that the chemical industrial sector will have large and diversified base.To ensure such large and diversified base, growth of small scale industries are vitally important .

Apart from many other positive features, the one aspect about small scale industries that cannot be ignored is their potential for employment generation. In today’s Indian context, capacity creation and employment generation are equally important factors and the large number of skilled and technical manpower being generated by the Universities and technical institutions can be adequately absorbed in jobs only by setting up chain of small scale industries.

In several areas of operation, the small scale projects can be competitive even internationally, particularly in the case of speciality chemicals and custom synthesis/contract manufacture. The small scale projects can also be technologically intensive in such areas and can play a good complimentary role to the large capacity projects.

However, small scale projects certainly require pro active policies from the government and specific measures that would enable them to play the role that they are capable of.

Actually, India gained considerable expertise in setting and managing small scale chemical projects in the past and even several of the developing countries abroad wanted to emulate Indian models. Unfortunately, during the last one decade of liberalization era, the focus was on setting up medium and large projects creating a wrong impression that small scale units would be out of tune with the globalisation concept.

India seems to have lost the advantage it gained in the field of small scale industry over the years , when hundreds of young entrepreneurs and technocrats came forward to set up small scale ventures with understanding and support from the state financing institutions. It is unfortunate that such advantages are being wiped out in the hurry to emulate the models of growth of western countries.

Commercially available Tetra hydrofuran is stabilised to prevent accumulation of peroxide.

Product Application

Tetra hydrofuran is used primarily in the manufacture of Poly Tetra Methylene Ethene Glycol (PTMEG) and in solvent applications and as chemical intermediate.

PolyTHF is an important component in the production of elastic spandex fibers used for sportswear, swimsuits, underwear and outerwear fabrics.

This article discusses the following details :

• Indian Manufacturer
• Indian Imports
• Indian estimated demand
• Broad outline of manufacturing process
  • Alternate process routes
  • Process developed by BASF
  • Maleic anhydride hydrogenation
  • DuPont’s Technology
  • Technology Transfer
• Global Scenario
  • Global demand
  • Important global manufacturers
  • Profile of major manufacturers
  • Prognosis

This article discusses the application aspects and process technology, global scenario as well as Indian import trends for Triethylenediamine.

Product specification

Assay (By GC) 99.7% min (water free basis)

Application

TEDA belongs to a group of catalysts known as amine catalysts, which are needed to make polymer formation commercially practical by increasing the reaction speed of the starting components of a polyurethane foam formulation, isocyanate and polyol. This product is an essential catalyst in manufacturing of many high-grade polyurethane (PUR) foams.

Triethylenediamine (TEDA) is used in the manufacture of al types of polyurethane foam including flexible slab stock, flexible molded, rigid, semi flexible and elastomeric. It is also used in polyurethane coating applications. The crystaline catalyst accelerates the reaction between water and Isocyanate and the Isocyanate and organic hydroxyl groups.

TEDA can also be used with a blowing co-catalyst. In rigid system it is frequently used with dimethylethanolamine (DMEA) catalyst.

TEDA is also used as catalyst for reaction of aromatic diamine with aromatic acid anhydride to manufacture polyimide, which is used for aerospace and electrical industries. It is also used as a raw material for manufacture of agrochemicals like herbicide and also in organic synthesis as acid absorber.

This article further discusses the following details :

• Use as catalyst in PU Flexible foams
• Global production capacity
• Global output
• Global producers
• Profile of a few major producers
• Consumption norm
• Global demand
• R & D efforts
• Technology development
• Imports in India

Cargil is teaming up with Ashland in a joint venture (JV) to develop and produce chemicals from plant-derived feedstocks. The first product will be propylene glycol (PG) produced from glycerine, a by-product of biodiesel.

The standalone 50:50 JV, as yet unnamed, will build its first production unit in Europe, at a site that is yet to be finalised. Output will be 65,000 metric tonnes per year of bio-PG.

The ready availability of glycerine, driven by the huge push into biodiesel as an alternative transport fuel, is spurring several developments in the area.

The Cargil/Ashland venture will use licensed and proprietary technologies in its quest for bio-based PG and other materials.

The aim, say the companies, is for the new joint venture .to become a leading global supplier of chemicals from renewable sources..

It will receive $80m to 100m in start-up funding from its parent companies

Ashland estimates global production of PG is 1.4 milion metric tonnes per year, with a growth rate of 3 to 7% per year.

Archer Daniels Midland (ADM), Huntsman and Dow Chemical are al close to commercialising glycerine to PG processes. ADM, for instance, is building a 100,000 metric tonne per year unit at Decatur, Ilinois, US. Another approach is to use the glycerine to make epoxy intermediate epichlorohydrin (ECH), replacing propylene as the feedstock.

Solvay and Spolchemie already have plants in operation in Europe, for instance, and Dow Chemical is building another plant in China after demonstrating the technology at its Stade site in Germany.

This article further discusses the following details:

• Propylene glycol process of Dow
• Propylene Glycol process of Huntsman

Contributed by:
Dr.Pradeep Dwivedi, Dr. Adarsh Agnihotri
Product Development Division & Research and Development Division
Organic India Pvt. Ltd., Lucknow, India
E mail: Pradeep@organicindia.com,adarsh@organicindia.com

Ashwagandha (Withania somnifera), also called winter cherry, comes from the roots of a shrub cultivated in India and North America.

Ayurvedic practitioners have been using it for thousands of years as a powerful rasayana (a tonic for greater vitality and longevity).

The herb has traditionally been used for calming the mind, relieving weakness, nervous exhaustion and arthritis and for building sexual energy. It is beneficial to people who do physical labor or exercise a lot to help the body adapt to physical stress. It has also been used for strengthening the female reproductive system

Ashwagandha contains flavonoids and many active ingredients of the withanolide class. Numerous studies over the past two decades indicate that it has anti-inflammatory, anti-tumor, anti-stress, antioxidant, mind-boosting and rejuvenating properties.

Withanolides are believed to account for the multiple medicinal applications of Ashwagandha. These molecules are steroidal and bear a resemblance, both in their action and appearance, to the active constituents of Asian ginseng (Panax ginseng) known as ginsenosides. Ashwagandha’s withanolides have been extensively studied in a variety of animal studies examining their effects on immune function and even cancer.

This article discusses the following details :

• Anti stress effect
• Antioxidant effect
• Supports cardiovascular health
• Nitric oxide production
• Memory enhancement
• Norman brain function
• Reduction of cancer cell growth
• Safety aspects
• Acknowledgements
• References

SKY ROCKETING SALARIES NOW REACHING ABSURD LEVEL

While addressing the meeting of the Confederation of Indian Industry on 24.5.2007,the Prime Minister of India asked the industries to reduce the excessive remuneration levels to senior executives. While one can only guess as to what is the immediate provocation for the Prime Minister to make these remarks about excessive salary levels and greed of the industries, there is genuine concern amongst the industries itself about the sky rocketing salary levels, which has now reached a level of absurdity.

It is said that software companies have started this trend of paying huge salaries to its employees , which have led to chain effect and have forced other industries and the government to hike the salary levels for its employees.

There appears to be no systematic analysis amongst the software companies to evaluate the performance of the individuals vis a vis their the salary levels, in tune with the cost of living index in India and the requirement of the employees. Obviously, the software companies make huge profits and therefore, they find it possible to pay huge salaries to the employees.

But , the software companies do not appear to have any long term salary plans and therefore perhaps think that they would pay so long as the going would be good , based on the overseas order scenario and the outsourcing business.

The difference of the software companies from other industries like chemical, automobile, steel and others is that the major investments in software companies are only in the construction of the buildings and creating communication facilities and the systems. On the other hand, the industries are set up at huge investment cost which they do so by raising large loans involving heavy long term interest commitments etc. Industries cannot operate on the basis of .open and shut approach. .

The software and outsourcing companies are sitting on very fragile ground and their future appears to be uncertain. With the excessive dependence on overseas orders , the falling value of dollar against rupee are already showing signs of eroding their income. With the professionals in China rapidly familiarizing themselves with English language and international communication, China would be a potential threat and a competitor for Indian software and outsourcing companies in the international market. With the well known capability of the industries in China to aggressively compete in the world market and offering goods and services at surprisingly low level, one is not sure as to what extent the Indian software companies are preparing themselves for the possible difficult days ahead of them.

There are organization these days, both in the software and other industries who go to the ridiculous extent of offering Rupees one lakh and more salary per month to boys and girls who are just in the twenties. Obviously, there is no rhyme or reason for such salary offers, which would do enormous harm in the long run both to the industry as well as the person who receive such fabulous pay packet at very young age. Obviously, such trend can not last long.

The young people themselves are often surprised to see the type of salary offers being made to them and wonder about the basis on which such offers are made and what would be expected of them in return.

Given such huge salary possibilities, many young persons themselves have now started expecting big pay packet , imagining that this would be the market rate and therefore, they should be paid. Industries including the software companies find that such young people switch over from one job to other based only on salary offers and make the jobs as a short term affair. The attrition in the industry has now reached an alarming level.

At the same time, the industries have drastically reduced the manpower requirement, since the overall salary outflow have to be kept within affordable limits. This is leading to loss of employment opportunities and jobs.

The government should be highly concerned about this situation and should think as to what would happen in the unfortunate event of the software companies, now on fragile grounds, losing their way in the global market. One hopes that when Prime minister said that the salary level must be brought down, he has thought about all these aspects and has not said it as a mere political talk to please the aam aadmi.

INDIAN FERTILISER UNITS UNDER STRAIN ALL THE TIME

Fertiliser industry in India is a victim of Indian government’s uncertain and confused policy and Indian government’s lack of clarity and consistency in approach. Some time back, theIndian government closed several public sector fertiliser units claiming that they were in hopeless conditions. Now, Indian government is talking of reviving these fertiliser units

Several natural gas based urea units produced excess of the capacity recently due to the request from the government but this has resulted in increasing the subsidy burden for the government, and large part of subsidy amount is yet to be paid to the units.

Meanwhile, there have been discussion during the last few years about revival of FACT in Kerala, India and one would not know as to when the revival plan would be implemented.

Gas-based urea units feel squeezed

At the Indian Government’s bidding, a large number of gas-based urea manufacturing units have produced in excess of their rated capacities during fiscal 2006-07. This has helped to rein in a severe bulge in the fertilizer subsidy bill, which would have ballooned since the overall urea production has been below capacity, resulting in higher imports.

Overall production has been lower than the aggregate installed urea capacity because of lower production by naphtha-based units.

Total domestic production of urea stood at 20,286.6 thousand metric tonnes in 2006-07 as against the total official capacity of 21,007.4 thousand metric tonnes, according to figures available with the Fertiliser Association of India (FAI).

This article further discusses the following details :

• Lack of funds
• Capacity and production level
• Revival programmes for fertilizer units
• Revival plan for FACT

HYDROCARBON RESERVES IN THE ARCTIC CIRCLE

There is sustained industry interest in the vast hydrocarbon reserves reckoned to be lying untapped within the Arctic Circle, as potential new sources of oil and gas.

Encompassing an area of some 26,000 Sq. k.metre on top of the world, the Arctic Circle is home to no fewer than 18 oil and gas basins, which overlaps the dominions of no less than six countries. According to the latest estimates from the US Geological Survey,the Arctic circle is reckoned to contain as much as 25% of the world’s remaining hydrocarbon resource.

But, questions still remain about ultimate recovery calculations and how best to get the future gas dominated production to market.

With al five host governments - Russia, Canada, Greenland, Norway and the US .broadly in favour. of exploration in their Arctic sectors by international and national operators, access to opportunities shows every likelihood of continuing to be .relatively open..

The Arctic, as a composite region, is still open to all.

Courtesy:Asian Oil & Gas, March/April 2007

Reserves, like the region’s geography, are vast to be sure. But just how vast a supply source the polar continental shelf (CCS) will ultimately represent has come under fresh scrutiny following release of a report by Wood Mackenzie and Fugro Robertson.The report calculates the Arctic’s future potential to be .significantly less. than previous reckonings and of a mix that suggests .much less oil and more gas. than once thought.

According to the study, the Arctic basins has resource volumes totaling 233 bilion boe, with a further 166 bilion boe classed .yet to find..

Though it may be hard to see a possible 400 bilion boe addition to the global hydrocarbon resource base, the view expressed by WoodMac at the time of the report’s publication is that some 85% of the discovered resource and 74% of exploration potential of the remote region is gas, the chemistry of which makes it ’much harder’ and more costly to transport to market.

This article further discusses the following details :

• Lack of Infrastructure
• Basins with potential reserves
• Evacuation route for the pipeline
• Challenges facing the pipeline project
• The long term prospects
• Cutting edge technology

GLOBAL BIO DIESEL INDUSTRY AT THE CROSS ROADS

Bio-diesel production around the world has been sing relentlessly in recent years.

Global bio-diesel production is forecast to reach 7.9 million metric tonnes in 2007, marking an increase of 46 per cent from 5.4 million metric tonnes produced in 2006 and 3 million metric tonnes in 2005, American Soyabean Association (ASA) has said in its latest report.

Of this, European production is expected to reach 4.72 million metric tonnes, up 19 per cent from 2006, while US production capacity is forecast at 2.5 million tones in 2007 compared to 775,000 metric tonnes in 2006.

Currently, 105 plants are in production and 77 under construction around the world.

Clearly, European bio-diesel production growth has slowed down from the high 30 to 40 per cent witnessed between 2002 and 2005, while US capacities have expanded three times between last year and this year.

In Europe, Germany was the largest bio-diesel producer in 2006 and increased is volume to 2.2 million metric tonnes (1.5 million metric tones)

Brazil will reportedly introduce an obligatory two percent bio-diesel content in diesel fuel in January 2008 and increase it to five per cent by 2013, although this obligation may be brought forward to 2010.

This article further discusses the following details:

• Impact of EU directives
• Oilseed prices
• Tax on Biodiesel
• EU Targets Biofuels
• Biofule from wood chips
• Biodiesel from plastic
• Jatropha as agri crop mooted
• 50% subsidy for jatropha saplings in Tamil Nadu

• Flyash-An effective plant nutrient
• Gas supply to Europe from Russia-Alternative Trans Caspian pipelines
• Anti Dumping Page
• US Court puts limits on Patents
• Whither Global LNG Industry?
• Global carbon trading market – Excerpt from Report of World Bank
• Fluorine coatings industry in China
• China News
• News Round Up – International/India
• ONGC to probe losses
• Safety and Accident page
• Ethanol projects in Maharashtra
• Technology Development-International
• Information on Chemical of your choice-Ask for the chemical facts free page
• Growth profile of Indian Biotech sector
• Bioethanol Use in Japan
• Pharma Page-International/India
• Agri Biotech Research Efforts of ICRISAT
• Agro Chemical Page
• Environmental page
• Energy Page
• New projects – International
• Business Opportunities
• Price Details – International
• Directory of Chemical Industries in China – Manufacturers, Trading Houses and Promotional Organisations- Part XL
• Chemicals Imported at Chennai Port during the month of March 2007