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The chlor-alkali industry mainly consists of the production of three key products – caustic soda, soda ash, and chlorine. Together, the alkali chemicals comprised 74% of the total chemicals production in FY10. These chemicals find their usefulness in a number of industrial applications covering textiles, chemicals, paper, PVC, water treatment, alumina, soaps & detergents, glass, chlorinated paraffin wax, and many others. According to Alkali Manufacturers’ Association of India (AMAI), the Indian chlor-alkali market was estimated at around USD 1.9 billion in FY2010, vis-à-vis global market size of USD 48 billion. http://www.bharatbook.com/detail.asp?id=218933&rt=Report-on-Indian-Chlor-Alkali-Industry.html Caustic soda and chlorine are produced together in the ratio of 1:0.88 (also known as Electrochemical Unit or ECU) through electrolysis of salt, whereas, soda ash is produced using a different process. On account of their co-production, the market dynamics for caustic soda and chlorine are heavily influenced by each other. Internationally, it is chlorine based, whereas, in India, it is influenced by caustic soda. On the other hand, soda ash is mainly available in two forms – light soda ash and dense soda ash. Light soda ash has a share of 70%, while dense soda ash has a share of 30% in total soda ash production. industry analysis reports Caustic soda finds its application mainly in alumina, textiles, paper, organics, inorganics, soaps & detergents, etc. The segment has grown at a CAGR of 5.64% from FY06 to FY11, with prices averaging about Rs. 20 per kg during FY11. On the other hand, soda ash is extensively used in the production of glass, soap & detergents, chemicals, silicates, and others. The segment registered a CAGR of 4.74% over the period from FY06 to FY11, with prices ranging around Rs. 18.60 per kg in FY11. Indian caustic soda capacity stood at 3.25 Mn metric tons per annum (MTPA), while domestic production was 2.46 Mn MTPA in FY11. The key players in caustic soda segment include Gujarat Alkalies & Chemicals Ltd. (GACL), and Aditya Birla Group – through its entities Grasim Ltd., Aditya Birla Chemicals (India) Ltd. (ABCIL), Aditya Birla Nuvo Ltd. (ABNL), and Chloro Chemicals Division of Kanoria Chemicals (acquired by ABCIL in May 2011). Soda ash capacity in India is around 3.16 Mn MTPA, and production was estimated at 2.42 Mn MTPA. The domestic soda ash industry is highly consolidated with six players – Tata Chemicals Ltd, Gujarat Heavy Chemicals Ltd. (GHCL), Nirma Ltd., Saurashtra Chemicals Ltd. (acquired by Nirma Chemical Works), DCW Ltd., and Tuticorin Alkali Chemicals and Fertilisers Ltd. Many Indian soda ash manufacturers have international presence such as Tata Chemicals in UK, Kenya, and US, Nirma in US, and GHCL in Romania. The US based facilities of Tata Chemicals and Nirma are based on natural soda ash production which is relatively less expensive as compared to the synthetic process. In the domestic industry, over the next 3-5 years, soda ash capacity utilization alongside production is estimated to rise in order to effectively cater to the spike in domestic demand. In 2010, the global economy recovered from the recessionary levels of 2008. Despite steep decline in 2009, the world economy managed to grow at a modest pace in 2010. The principal cornerstones of economic revival were witnessed in nations such as China, and India, while the developed world struggled to ward off recessionary fears. On similar lines, the global demand in the chlor-alkali industry is largely influenced by strong growth in similar developing economies, as opposed to the already saturated advanced markets. Though capacity utilization levels in FY11 are lower than those of FY06, the imminent rise in domestic consumption triggered by improved demand from end-user segments is likely to induce manufacturers to scale up production. The government has levied an anti-dumping duty on caustic soda imports from various countries, at a rate corresponding to the difference between a reference rate that is in the range of USD 366-379 per dry metric tonne (DMT) and the landed cost of caustic soda. At the same time, government is also planning to impose anti-dumping duty on imports of soda ash from various countries. The prime concern troubling the industry is the tremendous increase in input prices of industrial salt, coal, coke, and power, which are key inputs in production. However, due to strong demand from key consuming segments, manufacturers are able to pass on the increase in input costs by raising prices to protect their margins. This, coupled with recent anti-dumping measures undertaken by GoI, has led to domestic prices hardening in the near term. CARE Research expects the two segments – caustic soda and soda ash, to register sound growth performance in the next five years on the back of demand from key end-use segments and overall economic growth. The tightness in demand, alongside anti-dumping duties, will enable prices to remain buoyant in the near term, thereby benefiting the producers. However, the recent surge in primary input prices is likely to continue to remain a concern for the industry. For more information kindly visit : Report on Indian Chlor - Alkali Industry Or Contact us at : Bharat Book Bureau Tel: +91 22 27578668 / +91 22 27579438 Fax: +91 22 27579131 Email: info@bharatbook.com Website: www.bharatbook.com Follow us on twitter: http://twitter.com/#!/Sandhya3B
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Report on Indian Chlor - Alkali Industry
