India’s Polypropylene market capacity to grow 5155,000 tpa by 2017

Polypropylene demand in India grew from 1535000 tpa in 2006 to 3072000 tpa in 2012, at a CAGR of 12.3%. As per Indian Petro Group, production capacity more than doubled during this period to reach 4190000 tpa in 2012 from 1945000 tons in 2006. Domestic production of PP kept pace with demand, increasing from 1844000 tons in 2006 to 3692000 tons in 2012 (CAGR of 12.3%). Production exceeds demand in the Indian PP market and India exported over 800000 tons of PP in 2011 and 2012. India imports about 250000 tons of PP every year in spite of production exceeding demand as imported PP is cheaper than domestic PP in some cases. In 2012-13, RIL continued to dominate the Indian market with a share of 64%. Four companies- RIL, HPL, HPCL (HMEL) and IOCL - are the major producers of Polypropylene in India. ONGC (OPaL), MRPL and BCPL (Brahmaputra Cracker and Polymer Ltd) are expected to join this elite club when their petrochemical (PP) plants are completed. Capacity additions by major players will increase production substantially over the next 5 years. Capacity is expected to reach 5155000 tpa by 2017. Overall domestic PP production is forecast to grow at a CAGR of about 6.1%. We expect robust demand growth over the next five years and rate of growth of demand will be 10.3% per annum. As production fails to keep pace with demand, we expect exports to peak at around 900000 tons in 2013 and 2014 before declining steeply during the period 2015-17. By 2018, India could become a net importer of PP in the absence of any new large capacity additions. Polypropylene is consumed by a large number of small and medium sized manufacturers to make finished products. In recent years, manufacturing of finished polypropylene products has experienced rapid growth and has generated significant wealth for investors and entrepreneurs. It remains one of the fastest growing sectors in India and around the world. PP is the second most widely traded polymer in the world after polyethylene. Global demand for polymers has reached about 218 mln tons and the share of polypropylene in total polymer consumption is about 25%. PP is used in a host of applications across sectors such as automobiles, FMCG, textile, agriculture, housing, health-care, electronics and infrastructure due to its versatility, ease of manufacturing, cost efficiency and affordability. PP is used for a variety of end-uses: PP is used to make Raffia used in carpets, packaging material and geotextiles Biaxially Oriented Polypropylene (BOPP) films are used in a variety of applications including flexible packaging, pressure sensitive tape, printing and lamination, stationary items, cable wrap and insulation PP homo polymers are used for Injection molding to make components for automobiles, appliances, furniture, industrial products and a host of other products PP ICP (Impact copolymers) are used to manufacture pipes, films, injection molding (caps, batteries, pails, automotive and other components) and for thermoforming TQPP (Tubular Quenched PP) film is used in the textile industry, food industry, footwear, utensils, packaging of snacks and bakery foods PP Random copolymer (RCP) is used to make heat seal films, blow molded bottles and injection molded parts.