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RESEARCH STUDY PITFALLS, STRATEGIES & BIG LEAP FORWARD OF CHINESE CHEMICAL INDUSTRY WHAT LESSONS FOR INDIA?

RESEARCH STUDY
PITFALLS, STRATEGIES & BIG LEAP FORWARD
OF CHINESE CHEMICAL INDUSTRY
WHAT LESSONS FOR INDIA?

Nandini Consultancy Centre ( www.nandinichemical.com), a renowned firm of Chemical engineers and Chemical business consultants based at Chennai and Singapore, has conducted an extensive and in-depth research with regard to the trends and happenings in chemical industry in China during the last two decades.
While chemical industry in China has grown by leaps and bounds in recent years, it has also faced multiple problems due to its lopsided policies and hasty capacity expansion schemes in the past. Realizing the mistakes, several corrective and pragmatic measures have been initiated by the government of China. It is likely that China would continue to gain increasing dominance amongst the chemical industry in the world in the coming years.
Indian chemical industry as well as Government of India has a lot to unlearn and learn from the experience of chemical industry in China.
This research report highlights the various issues faced by chemical industry in China and describes the strategies adopted to undo the mistakes and consolidate the gains.
Keeping in view the past and ongoing “experiments” in China, the research report recommends broad strategy for Indian chemical industry, so that it can occupy its rightful place in the global chemical industry.
This research report is a must read report for all stakeholders in Indian chemical industry including corporate planners, manufacturers, research bodies , consultants , trading houses and management students. Of course, the central and state governments need to consider the analysis and recommendations given in the report carefully to evolve it’s policy strategies for the coming years.
About the author:
Mr. Swaminathan Venkataraman is a chemical engineer and MBA from Indian Institute of Management, Ahmedabad (IIMA). Mr. Swaminathan Venkataraman is Director of Nandini Consultancy (S) Pte Ltd., Singapore.
The contents of the report are enclosed.
CONTENTS OF THE REPORT

I Introduction to China
•Relative size of china
•History of China
•Government
•Role of CCP in Government
•Political economy
•Reforms agenda
•State owned enterprises (SOE)
•China’s share of global gross domestic product (GDP) adjusted for
purchasing power parity (PPP) from 2010 to 2021
•China’s only 15% of the global economy but contributes 25 to 30% of
global growth
•China’s finances – Debt
•China’s finance-Forex reserves
•India-China compared – GDP growth

II Performance of Chinese chemical industries
•Performance of Chinese chemical industry
•Growth-Past trend
•Performance and growth -Recent trend
•Why growth likely to be sustained in future?

III Compulsions now faced by Chinese chemical industries
•Stress on rapid growth – Past policy
•Over capacity issues
•Case study for over capacity in China
oCase study : Methanol
oCase study : Calcium carbide
•China’s peculiar political structure
•Environmental issues
•Safety issues
•Accidents in 2016
•Explosion in chemical warehouse in Tianjin, China
•Public protests
•Issues relating to chemical parks
•Plant closures
•A few examples of plant closures in the past
o Case study – Petroleum refinery
o Case study – Caustic soda/PVC

IV Chemical industry leaders in China
(State owned enterprises and domestic private companies)

V Ownership Structure – SOEs, Domestic companies and Foreign
Companies
•Ownership structure of Chinese chemical industry
•Differences between chemical companies depending on ownership type
•Comparative performance
•Comparative cost position
•Sales and profit growth for different type of ownership
•Market share for different type of ownership
•Profit share for different type of ownership
•Surging performance of domestic private companies
•Discussions on comparative performance
•Statistics about utilization of foreign investment in China
•Narrowing gap between foreign and domestic private companies
•Approach of foreign companies
•Case study of foreign companies
•Trend towards mergers and acquisition

VI Overseas investment by Chinese companies

VII Government policy initiatives and supply side reform
•Back ground details
•Need for supply side reform
•Objective of supply side reform
•Strategies for supply side reform
•Chinese government policies – Basics of the taxes and duties policy
•Reality of supply side reform- Capacity reduction
•Reality of supply side reform – State owned enterprises

VIII Chemical parks & their relocation
•Overall scenario
•Number of key chemical industrial parks
•Objectives of consolidated chemical parks
•Relocation of hazardous chemical plants
•Shifting chemical parks – Case study
•Problems faced in relocating projects

IX How China tackles over capacity issue – Case studies
•Case study – Citric acid
•Strategies to overcome the challenge
•Case study – Coal based methanol projects
•Economics of coal based methanol projects – A challenge
•Pattern of application wise demand for methanol in China – Period: 2016
•Strategies to over come the challenge
•Case study-Coal based methanol projects-Methanol to olefin (MTO)

X Stress on unconventional chemical projects

•Use of conventional feedstock and technologies
•Impact of unconventional chemicals production
•Innovation in coal chemical industry
•Coal based chemical projects in China – Queries and suspicions
•Coal to gas projects
•Coal to olefin projects
•Coal to methanol projects
•Coal based methanol to aromatics projects
•Coal to ethanol projects
•Coal to ethylene glycol projects
•Coal based urea projects
•China’s first high-temperature Fischer-Tropsch facility to produce
hydrocarbons from coal
•Coal bed methane (CBM) projects
•Speciality chemical industry

XI. Future scenario in China
•Likely trend
•2017-2022 : Key period for transformation
•China will continue to be the centre of global growth
Further details please contact
Mr. Swaminathan Venkataraman,
Director
Nandini Consultancy (S) Pte Ltd.,
105,cecil Street,0601, The Octagon, Singapore,
Tel:+65-6827 4511, D:+65-6827 4510,Fax:+65-6827 9601
www.nandinichemical.com

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