FOCUS ON APPROPRIATE PROJECT OPPORTUNITIES
The chemical industries in India still have not effectively identified a strategy for its growth, appropriate to the Indian conditions. The Indian industrial houses are still blindly following the pattern of growth of the developed countries, which create more problems in the long run than it solves for India.
In the increasingly competitive global environment and with rapid lifting of restriction on imports and trade for one country to another, it is certainly not appropriate to set up projects on which India has no particular strength, even if there would be large demand in India.
One immediate example is the setting up of large isopropyl alcohol project in western India, which is based on propylene as the raw material. Obviously, the international prices of propylene would be lower than the propylene available in India at any time, since propylene is a petrochemical that can be produced at lower cost in other parts of the world where there would be lower feedstock costs. Possibly, such isopropyl alcohol project is being planned keeping the Indian market alone in view, which cannot be a sound strategy. Like several other petrochemical projects such as Bisphenol A, Styrene, Oxo-alcohol, this Isopropyl alcohol unit put up in the past, also face problems due to import dumping.
Aspects such as demand level in India and ready know-how availability from abroad cannot be the justification anymore for setting up projects.
A bold and strong strategy for project identification and implementation has to be thought of urgently to sustain the growth of Indian chemical industries. Unfortunately, this is not happening due to gap in Indian technology or non-availability of suitable technology from overseas sources. A few examples of such missed opportunities where Indian industries reveal lack of dynamism are cited below :
L-Lysine HCL : L-Lysine HCl is a cane molasses based project, extensively used as cattle feed additive and pharmaceutical intermediate all over the world. This product is not presently produced in India. Indian requirements are entirely met by imports and the demand is steadily going up in India. No project is presently being set up for L-Lysine in India, obviously due to lack of technology and inadequate efforts and confidence level to develop technology in India. A global size L-Lysine project from India can make a mark in the international market.
Sea Water Magnesia : With the demand for sea water magnesia/dead burnt magnesite steadily going up in India and with the quality of Indian dead burnt magnesite not found adequate by refractory unit, due to declining quality of magnesite reserves in India, the import of DBM and sea water Magnesia increasing. The raw material for sea water Magnesia is only sea water and there is no constraint in its availability.
Earlier, a sea water magnesia plant was set up near Vishakapatnam in Andhra Pradesh by Birla Group with much fanfare, but it collapsed even before commercial commissioning. The project appears to have failed largely due to the uneconomic capacity as well as some gaps in technology which could have been sorted out by running the plant for a few months. Unfortunately, the management panicked and gave up the project without taking adequate remedial steps and sold the equipment piece meal.
The failure of this project does not in any way reflect on the appropriateness of the Sea Water Magnesia project in India. This is a case of inadequate technology efforts from Indian sources and excessive dependence abroad for technology.
Acetone : Acetone is presently produced in India by petrochemical route from Cumene, when both acetone and phenol are produced as co products. Therefore, the production of acetone depends on the production of phenol, which in turn depends on the demand supply scenario for phenol.
While the demand for acetone is going up, it is not possible for the Indian units to increase the production of acetone, since it means an increase in the production of phenol as well. Obviously, an ideal solution would be to produce acetone from ethylalcohol on which there is no technology constraint. Considering the large level of import of acetone in India and international supply scenario for acetone, acetone project from ethyl alcohol of globally competitive size can very will be considered.
Titania Slag : Titania Slag can be the starting material for the production of Titanium Dioxide pigment by both sulphate process as well as Chloride process. Titania Slag is produced from Ilmenite and the Indian deposits of Ilmenite is more than 150 million tonnes, which is around 12% of the total world reserves. The global demand for Titania slag is over one million tonnes and there is no production of Titania slag in India. Obviously, no careful study of this opportunity has been made in India by Indian project promoters.
Many other examples of missed project opportunities in India can be readily suggested.
The problem appears to be the lack of confidence of Indian industries to think on original lines and move in unexplored areas with confidence. With efforts on research and development being so little and with so much of dependence on developed countries for acquisition of technology, it is not surprising that such impressive project opportunities are being ignored, even as the industries are driving themselves on beaten track and looking for technology suppliers all over the globe.
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News and Views 
June 2005
