Overall PVC production forecast to grow at CAGR of 6.6% over the next 5 years in India

20-Mar-14

PVC demand in India grew from 1131,000 tpa in 2006 to 1980,000 tpa in 2012, at a CAGR of 9.8%. Production capacity increased at an annual compounded growth rate of just 4%, from 1085,000 tpa in 2006 to 1370,000 tpa in 2012. Production has lagged demand in the Indian PVC market and India imports about 42-43% of PVC consumed annually. India imported about 750-1000 KT of PVC during the last two years and the share of imports in total consumption is expected to exceed 50% in the next five years. As per ResearchandMarkets, overall domestic PVC production is forecast to grow at a CAGR of about 6.6% over the next 5 years. We expect robust demand growth over the next five years and rate of growth of demand will be close to 11% per annum. As production fails to keep pace with demand, we expect imports to keep rising over the foreseeable future. By 2018, India could import about 50-60% of PVC consumed in the absence of any new large capacity additions. Five companies- RIL, Finolex, Chemplast, DCW and Shriram - are the major producers of PVC resin and related products in India. Vivanta Enterprises Ltd, a New Delhi-based company is setting up a plant of 220,000 tpa capacity to make suspension-grade PVC. The plant is expected to become operational over the next year.