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Extracts from Nandini Chemical Journal, Mar 2011

CHEMICAL INDUSTRY IN INDIA AND CHINA|INDIAN BIOTECH|CARBON FIBRE|ETHYL SILICATE
Highlights of Some of the Articles

TALK OF THE MONTH : NEGLECT OF OBVIOUS PROJECT OPPORTUNITIES – WHY?
CHEMICAL INDUSTRIES IN INDIA AND CHINA COMPARED
GLOBAL OIL PRICE FLUCTUATION AND ITS IMPLICATION PROCEEDINGS OF THE BRAIN STORMING SESSION
NEED FOR COMPREHENSIVE NATURAL GAS POLICY
POWER PROJECTS TO FACE DELAYS IN GAS ALLOCATION
PROGRESS OF INDIAN BIOTECH SECTOR
THE KYOTO PROTOCOL EXPIRES IN 2012 NEED FOR GOVERNMENT STRATEGIES
CARBON FIBRE - INVESTMENT OPPORTUNITY
ETHYL SILICATE- PRODUCT PROFILE
DIETHYL SULPHATE – PRODUCT PROFILE
OTHER FEATURES
OTHER ARTICLES

TALK OF THE MONTH

NEGLECT OF OBVIOUS PROJECT OPPORTUNITIES – WHY?

There is no doubt that Indian chemical industry today is marked by sort of lethargic attitude and lack of enthusiasm for moving ahead. Truly, Indian chemical industry is foregoing it’s earlier advantages, when India could create large capacities in several areas of chemical sectors.

In the last few years, lackluster activities in new chemical projects in India have inevitably driven the Indian chemical industry much behind the developed countries and some countries in Asia and Middle East.

The above dismal scenario particularly becomes obvious, when one would see the neighbour country China creating huge capacities in chemical industries in multiple directions at astonishing pace.

It is particularly surprising that the government agencies do not appear to be concerned about such scenario and particularly the Union Ministry of Petrochemicals, Chemicals & Fertilisers appear to be least concerned.

In recent times, due to lack of adequate capacity creation for several basic chemicals, India is increasingly importing many of the bulk chemicals such as methanol, styrene, titanium dioxide, phenol, acetone etc.and the trend is likely to continue. What is particularly distressing is that there is no reasons or justification for such lethargic attitude and lack of enthusiasm amongst the chemical project promoters in India.

Certainly, the concerned ministry in Government of India and the different chemical industry associations have failed in their task of creating appropriate climate of growth and development for chemical industries in the country.

There appears to be some sort of fear and anxiety amongst the chemical project promoters in India, that India now lacks competitive strength to set up large chemical projects, since India has become vulnerable to international price fluctuations and supply uncertainty with regard to petroleum feedstock and natural gas. The precarious dependence of India for its requirement of coal on imports in large quantity have also created some sort of apprehension amongst the project promoters about futuristic energy scenario.

Government of India certainly has to explain its inability to chalk out the alternate feedstock and energy plans appropriate to the Indian needs and strength and it’s lack of efforts to create confidence amongst investors. If the Government of India can not take appropriate initiative to prepare such action plans, who else can do this?

While India certainly has problems due to inadequate crude oil and natural gas resources, there are many other options for India to promote investment in chemical projects. There are many obvious project opportunities, which are not being considered by the Indian investors, for whatever reasons.

These project opportunities include titanium dioxide, sea water magnesia, molasses based chemicals

CHEMICAL INDUSTRIES IN INDIA AND CHINA COMPARED

The desire to compare the chemical units in India and China largely arise from the fact that the opportunities for growth of chemical industries available for both the countries are huge. It is therefore, appropriate to compare and analyse as to how these two countries have exploited such opportunities in the recent past. From this point of view, many things could be said as to how India has missed the opportunities, while China has effectively utilized them.

While the strength and opportunities as well as weakness and threat facing the chemical industries in every region could be different due to combination of regional, cultural, geographical and political factors, the approach to the issues and attitude towards challenges in the particular prevailing conditions, make the difference between progress and lack of it between the regions.

It is often said that strict government control on events and happenings that are enforced in China can not be done in India, due to the democratic set up prevailing in India. Many believe that several pro active policies could not be implemented in India by the government due to the protests, agitations and opposition from one segment or the other. Government of India can not handle such protests in the manner that are done in China. But are these reasons adequate justification for India’s lack of thrust and progress in chemical industries compared to China?

GLOBAL OIL PRICE FLUCTUATION AND ITS IMPLICATION
PROCEEDINGS OF THE BRAIN STORMING SESSION
ORGANISED BY
CHEMICAL INDUSTRIES ASSOCIATION, CHENNAI
AT CHENNAI ON 2ND MARCH 2011

Chemical Industries Association, a Chennai based apex body of chemical industries all over India organised a brain storming session on Crude oil price fluctuation and its implication at Chennai on 2nd March 2011.

The session was attended by 22 delegates from the cross section of industries including organizations such as Shasun Chemicals Ltd.,

Tube Investments India Ltd., Pure Chemicals Ltd., Thirumalai Chemicals Ltd. and others.

Mr.Swaminathan Venkataraman, Director, Nandini Consultancy (S) Pte. Ltd., Singapore and Dr.D.M.Mohunta, Consultant Technologist, presented papers on global crude oil price fluctuation and its implication. The presentations were aided with tables, charts and indepth analysis of the scenario.

Mr.P.K.N.Panicker, President, Chemical Industries Association and Mr.N.S.Venkataraman, Director, Nandini Consultancy Centre Pvt.Ltd., Chennai conducting the proceedings.

The highlights of proceedings of the brain storming session are provided below:

Price increase

The crude oil price increase in global market have not been due to any significant increase in cost of production of crude but the price has been dictated by the demand supply trends, regional unrest and related political developments. Therefore, the oil price is largely speculative and the trend would continue.

Increase in demand

During the last few years, the demand for crude has substantially increased in countries like China and India, which resulted in increase in global demand at the rate of around one million barrel per day. This steep increase has resulted in high capacity utilization of the crude oil industry with the demand level almost reaching the capacity level.

Tight supply scenario

There is not much scope for further increase in crude oil production capacity immediately, until major exploration efforts or new discoveries such as the recent discovery in Brazil would materialise and commence commercial operation.

Under the circumstances, there is bound to be tight supply situation for crude oil in the global market, which is likely to continue, until the production would increase by renewed exploration efforts and new discoveries of oil fields.

The politically sensitive OPEC countries such as Egypt, Venezuela, Libya, Nigeria, Iran, Iraq, produce substantial percentage of the world total crude oil requirements.

In the situation of tight supply, even any marginal short fall in production in the above regions would lead to huge increase in price of the crude. This appears to be an inevitable condition.

Falling confidence in US dollar

Apart from the demand supply scenario, the debt ridden conditions of the US economy and fall in the value of US dollar have resulted in loss of confidence in the stability of US dollar around the world. Therefore, the buyers and speculators are resorting to forward trading in a big way to protect the value of their money and investments and as a result of the huge forward trading not only the price of crude but also other products such as copper, platinum, gold, etc. are increasingly steeply.

Futuristic price scenario

Under the circumstances, the price of crude oil would go up in the near future. It is likely that the price would largely remain at around US$100 to US$120 per barrel, as any price above this level, would lead to severe economic recession once again, that will affect the global economy and the economy of OPEC countries as well.

Historical oil price fluctuation in recent times indicate that global economic recession has always been preceded by steep increase in crude oil price. In the past, when the crude oil price increased beyond the affordable level, consumers resisted the higher price, resulting in slowing down of global economy and consequent recession.

India’s predicament

At present, import of crude oil in India contributes to around 90% of the Indian requirement. With the near static production level of crude oil in India and increasing demand, Indian imports of crude oil would increase to around 95% of its Indian requirement by 2016.

In such circumstances, India is facing vulnerable and explosive crude oil scenario.

Indian options

The only option for India is to urgently develop an alternate energy model and reduce its dependence on import of crude oil as much as possible.

This would be possible only by developing alternate fuels such as algae based fuel and jatropha based biofuel, that are appropriate to the Indian conditions..

Unfortunately, Indian jatropha oil industry is in doldrums today.

While several multinational companies are investing millions of US dollars in developing technology for algae based fuel in advanced countries, little efforts have been initiated in India so far. Countries like Denmark are working towards achieving “a state of non oil dependent economy”.

The concern

The brain storming session expressed concern about the Indian crude oil scenario and expressed anxiety about the Government of India not paying adequate attention to research and development efforts for developing technology, that would pave way for commercial exploitation of algae based fuel and jatropha based biofuel which are appropriate to the country.

The brain storming session also expressed concern that in the budget for the year 2011-2012, even Rs.1000 crores have not been allotted for carrying out time bound research and development efforts on algae and jatropha biofuel, in dedicated R & D centres created for the purpose. It was pointed out that the Indian scientists and technologists have the knowledge level and capability to develop algae based and jatropha based biofuel appropriate to the need, if they would be given the opportunity and encouragement by Government of India.

NEED FOR COMPREHENSIVE NATURAL GAS POLICY

In its judgment on the Ambani dispute, the Supreme Court has said that the Government of India must come out with a comprehensive policy on natural gas.

Companies that discover oil enjoy a tax holiday but the same is not true for gas. When companies drill, they find either oil or gas or both. It seems unfair that those who discover oil get a tax benefit and those who discover gas do not.

This article discusses the following topics in detailed manner.

  • Allocation policy lack logic
  • Need for natural gas grid
  • Role of regulator
  • Tariff
POWER PROJECTS TO FACE DELAYS IN GAS ALLOCATION

The Government of India plans to further prune the list of power projects identified for priority allocation of domestic gas in the wake of perceived shortage in production, especially from Reliance Industries’ Krishna-Godavari D6 block.

The move could impact the fortunes of 10 power projects – including those of the biggest players in the sector like Reliance Power, Torrent, Lanco, GMR and GSPC – which featured in the priority list of the power ministry last year.

All these companies have committed to complete their respective projects in record time, by the end of 11th Plan, to get allocation of domestic gas.

This article discusses the following topics in detailed manner.

  • Project of priority list companies
  • Reliance Industries Ltd
  • RVK Energy
  • Panduranga project
  • Torrent Power
PROGRESS OF INDIAN BIOTECH SECTOR

Global biotech market is close to $300 billion with several fragmented players. But massive consolidation drive has already begun due to dry discovery pipelines of incumbent pharma players.

Sanofi taking over Genzyme for $20 billion is the most recent example.

Though, at present, India’s share in the global biotech segment is very small, but by 2020 it is expected to increase substantially.

This article discusses the following details :

  • Structure of Indian Biotech Industry
  • Demand drivers
  • Initiatives of the government
  • Plans of Evolva Biotech
THE KYOTO PROTOCOL EXPIRES IN 2012 - NEED FOR GOVERNMENT STRATEGIES

It remains unclear whether carbon credits will exist after 2012 when Kyoto Protocol expires.

This article discusses the following details :

  • CFL Lamps
  • Carbon credits & CFL costs
  • Lamp duration, replacement cost
  • Prognosis
CARBON FIBRE - INVESTMENT OPPORTUNITY

Many different grades of carbon fibre are available, with differing properties, which can be used for specific applications.

The different composites include

  • Carbon fibres reinforced Plastics / Carbon fibres reinforced thermo plastics
  • Composite of Carbon fibre in a carbon matrix
  • Carbon fibre reinforced ceramic

This article focus on application and end use markets, process outline, Indian trade data, Indian manufacturers, global demand and supply scenario, prognosis.

ETHYL SILICATE- PRODUCT PROFILE
Appearance Colourless transparent liquid
Odour With irritating smell
Chemical formula Si (OC2 H5) 4
CAS Number 78-10-4
Solubility Insoluble in water, soluble in ethanol, slightly soluble in benzene
Boiling Point 168.1 deg.C
Density(ρ 20)g/cm3 0.929-0.934
Specific Gravity at 20 deg. C 0.930-0.940

Stability

The product is stable and incompatible with strong oxidizing agents, water, alkalies, mineral acids

This article discusses the following details :

  • Specification
  • Application
  • Import export details
  • Indian producers
  • Indian production
  • Indian demand
  • Global scenario
  • Process
DIETHYL SULPHATE – PRODUCT PROFILE
Appearance Colourless, oily liquid. Darkens with age
Chemical Formula C4H10O4S
CAS No. 64-67-5
Assay 99.00% min.

This article discusses the following details :

  • Application
  • Indian annual import details
  • Pattern of countrywise imports
  • Indian annual export details
  • Pattern of countrywise exports
  • Indian manufacturers
  • Indian production level
  • Demand supply scenario
  • Projected demand supply scenario
  • Global demand supply scenario
    • Global demand
    • Global growth rate in demand
    • Global manufacturers
  • Process outline
  • Prognosis
OTHER FEATURES

CHLOROFORM - INDIAN AND GLOBAL SCENARIO

Appearance Clear liquid
Alternate name Trichloromethane
Chemical formula CHCl3

Regulations

Chloroform has been identified as a hazardous waste by US based EPA and disposal of this waste is regulated under the Federal Resource Conservation and Recovery Act (RCRA) (EPA 1988a, 1989b). EPA has issued a toxicological review of Chloroform, concluding that small exposures to the chemical are not likely to cause cancer.

It’s use as intermediate in the preparation of dyes and pesticides have been largely discontinued in several advanced countries.

This article discusses the following details :

  • Montreal protocol
  • Grades
  • Specification
  • Application
  • Sectorwise potential application
  • Indian scenario
    • Indian manufacturers
    • Indian production
    • Annual imports
    • Countrywise imports
    • Annual exports
    • Countrywise exports
    • Demand supply scenario
    • Pattern of sectorwise demand
    • Projected demand supply scenario
  • Global scenario
    • Global demand
    • Global manufacturers
    • Plant closures
    • Global consumption by 2015
    • Anti dumping duty in China
  • Prognosis

NEWS ROUND UP

The recent developments on the following products/events are discussed:

INTERNATIONAL

  • HPV chemicals to be monitored in USA
  • Plant safety legislations in EU

INDIA

  • Ban on export of milk powder, casein products
  • Dependence of sugar mills on byproducts

CHINA NEWS

The recent developments on the following products/events are updated :

  • Scrap tire recycling
  • Electronic grade hydrofluoric acid
  • ADC blowing agent

TECHNOLOGY DEVELOPMENTS

The recent development on New insect repellent cream is highlighted

AGRO CHEMICAL PAGE

The recent development on EU monitors pesticide content is highlighted

PHARMA PAGE

The recent developments on the following products/events are highlighted:

  • Chinese and Italian Drug Units Under Scanner
  • Flu vaccine
  • US Pharmacopeia launches free, online medicines compendium
  • Important of global pharma M & As on Indian contract R & D
  • Two controversial `medicines’ banned

ENERGY PAGE

The recent developments on the following products/events are discussed:

  • Extraction of oil using Solar Energy-Experimental Project In USA
  • Indian wind energy potential estimated at 48,000 MW
  • BHP acquires shale gas assets
  • BHEL to make green photovoltaic cells

PRICE DETAILS

Global price trends on the following products are provided :

  • Propylene
  • Oxo alcohols
OTHER ARTICLES
  • Indian Budget Ignores Impending Energy Crisis
  • Dupont And Dow Corning Announce R&D Plans In China
  • Indian crude oil output trend
  • Status of ONGC's G1-CS15 field in Andhra Pradesh
  • Need for comprehensive natural gas policy
  • Need for natural gas pipeline grid
  • Capacity addition in cement industry
  • Fertiliser subsidy rationalisation plans-Facing undertainty
  • Kraft paper mills facing difficult time
  • Synthetic substitute for costly commodities
  • India's approach to phase out HFCs
  • Recent trend sin Nanotechnology
  • Nanosheet tech may offer mega energy gains
  • Increasing demand for lithium carbonate
  • Global rare earth crisis
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