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STAUS OF INDIAN CAUSTIC SODA INDUSTRY -ITS PROBLEMS AND THE GROWTH

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STAUS OF INDIAN CAUSTIC SODA INDUSTRY -ITS PROBLEMS AND THE GROWTH Powered By Docstoc
					                                             AMAI




  AMAI AWARD -2009
        FOR
BEST MANAGED PLANT

          B.S.Gilra, President
Alkali Manufacturers' Association of India

 AMAI AWARD FUNCTION
       New Delhi, 30th April, 2010
                  CONTENTS
                                                           AMAI


This Presentation will Cover:-

      Introduction of AMAI
      Global vis-à-vis Indian Alkali Industry
      Size and Turnover of Indian Alkali Industry
      Overview of Indian Caustic Soda Industry
      Strengths & Challenges of Indian Caustic Soda Industry
      Overview of Indian Soda Ash Industry
      Strengths & Challenges of Indian Soda Ash Industry
      Introduction and Association of Sir Shriram and Darbari
       Seth with Alkali Industry
      Introduction of Judges on the Panel
      Evaluation Criteria & Declaration of Awards
                                                                  2
                      AMAI




INRODUCTION OF AMAI




                             3
            AMAI-ORGANIZATION
                                              AMAI



 Alkali Manufacturers’ Association of India was
  established in 1960.

 An Apex Body representing over 43 Caustic Soda
  and Soda Ash Plants through 35 Companies.

 Affiliated locally with CII, FICCI and ICC and
  globally with World Chlorine Council, The
  Chlorine Institute, USA and Euro Chlor
  representing European Chlorine Industry.
                                                     4
    AMAI MISSION STATEMENT
                                                 AMAI



                       MISSION
“Represent the Indian Chlor-Alkali industry nationally
and globally and facilitate the industry’s commitment
to technological and economic growth, and continuous
improvement in protecting human health and
environment, guided by sound science, technology and
risk management principles. AMAI will achieve this by
productively promoting the industry through practices
that are fair, inclusive and sustainable.”



                                                         5
 AMAI Initiatives on Safety,Health & Environment
                                                                                     AMAI


1.   AMAI SHE Committee:-

 promotes awareness on Safety, Health & Environment Climate Change, Responsible Care.
 Imparts Education to Industry, Customers and Stakeholders on SHE related regulations and
  their Compliance.
 Emphasis is on Safer Production Practices, Safe Transportation & Handling of Chlorine.

2. Represented on Global Safety Team of World Chlorine Council. Indian Industry benefits from
   sharing of Safety/Accident data worldwide for better and faster learning.

3. Target to create several Regional Chlorine Safety Network throughout the country to provide
   immediate help in case of emergency. First such Chlorine Transportation Emergency Network
   being implemented in Gujarat.

4. AMAI has undertaken extensive Education, Training and Awareness amongst all stakeholders
   through:-

 Showing DVD on „Safe handling of Chlorine‟ during production, transportation and at
  consumers‟ end, in regional languages.
 Publishing & Distributing complete Guide on “Safe Handling of Cl2”in Hindi/English.
 Preparing & circulating pamphlet on “Chlorine- An Essential Element of Life” in Hindi/English to
  make community aware of Cl2 applications & its safe handling.
 Publishing and widely distributing Pamphlet on benefits of “Chlorination of Drinking Water ”
                                                                                            6
 Global vis-a-vis Indian Alkali Industry
                                                                                        AMAI


S.NO.     DESCRIPTION               UNIT         WORLD          INDIA      INDIAN
                                                                           SHARE(%)
A.        CAUSTIC SODA                                48          1.9               4
          -INDUSTRY SIZE            $billion
          -CAPACITY                 mMTPA             80          3.2               4
          -PRODUCTION               mMTPA             65          2.3               4
B.        SODA ASH
          -INDUSTRY SIZE            $billion          34          1.9               6


          -CAPACITY                 mMTPA             55          3.1               6

          -PRODUCTION               mMTPA             50          2.1               4


 SOURCE:- CAUSTIC SODA- Harriman Chemsult & 13th Asian Chlor-Alkali Conference June,2009, China
           SODA ASH – Paper presented by TPM Consultants for Safeguard on Soda Ash & GHCL AR 7
              INDIAN ALKALI INDUSTRY
                 SIZE & TURNOVER
                                                                               AMAI


                                                     CAUSTIC SODA &
S.
               DESCRIPTION                  UNITS       RELATED           SODA ASH
N
                                                       CHEMICALS
                                             Lac
1    Installed Capacity                                    32.0              31.0
                                            MTPA
                                                            37                 6
2    Number.of Plants                       Nos.     (Spread all over    (96% capacity
                                                       the country)        in Gujarat)
3    Approx. Power Requirement               MW            1300              165
                                                           13000
                                             Rs.
4    Approx. Investment                              (includes cost of       9500
                                            Crores
                                                      captive power)

     Approx. Turnover (includes Taxes &      Rs.
5                                                          5000              3000
     duties, excludes freight)              Crores

     Approx. Revenue to Govt. thro‟
                                             Rs.
6    various taxes( includes local taxes,                  750               450
                                            Crores
     excludes levies on imports)
                                                                                      8
                                          Alkali Industry
       From Natural Minerals to Essential Basic Chemicals
                                                                                                                        AMAI



A>      CAUSTIC SODA & CHLORINE                                                               Caustic Soda lye/Flakes
                                                                       Caustic Soda
                                                                          Lye
                                                                                              Sod.Hypo/Cal.Hypo
        Salt                               Caustic
                                           Soda Plant                    Chlorine              Liquid Chlorine
     Coal/Fuel/                            (Membrane
      Oil/Gas               Power          Process)                                                  HCL
                                                                        Hydrogen
                                                                          Gas                    Compressed
                                                                                                  Hydrogen


B>      SODA ASH



                  Salt
                                                          Soda Ash
               Lime stone                                   Plant                          Soda Ash
                                                         (AKZO Dry
                                Coke                        Lime                          Light/Dense
                                                           Process)
                              Sea Water


 Converting Local Resources to value added Essential Basic chemicals.
 For Caustic soda, though all resources/Inputs available locally, yet not internationally competitive due to high power9cost,
  high taxes and duties on captive power, poor infrastructure, high transport cost in India.
                                   AMAI




Overview of Indian Caustic Soda Industry




                                          10
                Overview of Indian Caustic Soda Industry
 CAUSTIC SODA – Essential Input Chemical for vital Industries
                                                                                      AMAI



                                     Others
                          Water                    Textiles
                                     10.7%
                         Treatment                 20.3%
                           1.8%
                     Inorganics
                       11.3%

                     Organics
                      10.2%                                   Pulp & Paper
                                                                 20.2%
                         Soaps &
                        Detergents
                                        Alumina
                          7.5%
                                         18.0%




• Demand of Alumina, Paper & Textiles drives Caustic Soda Industry; These three
 industries alone consume almost 60% of total demand.
• Indian Alumina Industry growing @ 10-11%, gearing up to become world leader, Textiles @
 12 % and Paper @ 4-5 %. Thus growth of Caustic Soda Industry is imperative.

                                                                                             11
                                                                             (SOURCE-INDIAN INDUSTRY)
                  Overview of Indian Caustic soda Industry
         CHLORINE-Serving wide spectrum of Industries                                               AMAI

                                    Inorganics,
                                                              Organics,
                                      10.9%
                                                               26.5%
                        Pulp & Paper,
                            9.8%
                                                                              Vinyl
                                                                          (incl.PVC),
                     CPW, 16.1%                                              18.0%


                          water                                      Others, 6.7%
                       treatment,
                          2.8%                                        Textiles, 1.1%
                              Pest/insect/wee
                                                               Dyes & Inks,
                               dicides, 6.0%
                                                  Pharma, 1.3%    0.7%



• Chlorine is an essential element of our daily life
• Major consuming sectors are Vinyls, CPW, Pulp & Paper and Chemicals; consuming over 80% of demand.
• Chlorine Use for water treatment needs to be promoted in India, to ensure clean & safe drinking water
   supply to community, as is the practice worldwide & recommended by WHO.
• In the world , PVC is the major consumer - 36%; In India, yet to grow- only 18%.
• Chlorine per capita consumption in India is only 1.8 kg against 13 kg in China and 7.8 kg in Brazil. Thus
  enormous potential; need to be explored.                                                                 12
                                                                                           (SOURCE-INDIAN INDUSTRY)
       CAUSTIC SODA PRODUCTION SITES SPREAD
               ACROSS THE COUNTRY
                                                           AMAI




                                  Zone    No. of Units   %Capacity
                                  West           16         53
WEST                 EAST         South          9          21
                                  East           8          13
                                  North          4          13



               Production Sites


                                                                  13
                Overview of Indian Caustic Soda Industry

                      GROWTH PATTERN                                                AMAI


               33

               31

               29

               27
   Lakh MTPA




               25

               23

               21

               19

               17

               15
                    2004-05      2005-06
                          (LAKH MTPA)      2006-07    2007-08   2008-09   2009-10

                                    Capacity   Production   Consumption



•Sufficient capacity of Caustic Soda (32 lakh MTPA) in country to meet
domestic demand (27 lakh MTPA).

•Decline in Production due to increasing imports.                                          14
Overview of Indian Caustic Soda Industry
                                                                                                                                     AMAI
SUDDEN SURGE IN IMPORTS OF CAUSTIC SODA LYE (MT)

               120000
                                2007-08                                         2008-09                               2009-10                 107139
               100000

                80000
 IMPORTS(MT)




                60000

                40000                                                                                                            36226
                                                                                                                    32329
                                                                               24962
                20000                                 19766
                             10716                                                          9642
                                          6050                     7538
                                                                                                        2262
                   0
                        Q1           Q2          Q3           Q4          Q1           Q2          Q3          Q4           Q1           Q2
                                             MONTHLY AVERAGE ON QUARTER BASIS
                                                                                                                                                15
                                                                                   Source:- DGSG Data from ports
                              AMAI




    Strengths & Challenges
of Indian Caustic Soda Industry




                                     16
    Strengths & Challenges of Indian Caustic Soda Industry
                                                 (contd./-)
                                                                AMAI




   A Mature and Developed Industry ; over 93% Capacity based on
    latest Energy Efficient, Environment Friendly Membrane Cell
    technology.Target-100% on Membrane Cell by the year 2012;Next
    only to Japan.
   More than adequate Capacity to meet domestic demand of both
    Caustic Soda & Chlorine.
   Caustic an Essential Chemical that must be produced locally,
      - To cater to basic Industries like Alumina, Textile, Paper
        & Detergents
      - To secure Chlorine Production which otherwise can not
        be imported but required for PVC, Pulp & Paper,
        Agrochemicals, Pesticides/Insecticides, wide variety of
        Chemicals produced by SMEs.
   Chlorine usage in India for PVC is limited by lack of
    production/availability of merchant Ethylene. Govt.‟s policy to
    encourage merchant Crackers/Petrochemical Complexes, can help   17

    boost/double Chlorine Consumption
Strengths & Challenges of Indian Caustic Soda Industry
                                                         AMAI


 Industry rendered uncompetitive recently due to sudden
    surge in imports and Interim Safeguard duty, imposed by
    Government from 04.12.09 to 03.03.10 (for 3 months) not
    being extended; affecting Industry badly.
   To secure uninterrupted power & become competitive,
    most plants (80%) made heavy investment to install Captive
    Power.
   Effort to become competitive & heavy investment in Captive
    Power Capacity rendered futile due to high taxation
    (electricity duty & cess) on Captive Power, as high as 40
    paisa per KWH.
   Grid Power in India is one of the highest, ranging from Rs
    3.85 to Rs 6.0 as compared to power cost in Middle East Rs
    0.8,US-Rs.2.25,Europe-Rs. 1.98.
   Need by Centre Government to have a Policy Guideline on
    level of cess & electricity on Captive Power generation &
    also VAT for such Duties and Taxes.
                                                                18
                                  AMAI




Overview of Indian Soda Ash Industry




                                         19
               Overview of Indian Soda Ash Industry

SODA ASH- Essential Input for Several Basic Industries
                                                                                                       AMAI


                                Silicates (Indl. Glue
                               for Rubber/ Leather)
                                       14.8%

            Glass (Constrn.&
              Automobile)
                 25.4%                                                         Others (Bulk Chem.,
                                                                               Pict. Tubes, Textile,
                                                                                Paper, Al., Metal,
                                                                                Bulk Drugs, etc.)
                                                                                      20.6%




                                                                     Sod.Bicarb. (Food
                                                                          Grade)
                                                         Soaps &           5.6%
                                                        Detergents
                                                          33.6%


• Outlook for Soda Ash Industry remains strong, with End User industries continuing to grow
  (Glass 10-12%, Detergents @ 5%, Picture tubes @10%,bulbs & tubes@7%); These four sectors
  consuming almost 74% of demand.
• Demand for flat glass is increasing @ CAGR 10%, due to increasing usage of glass in
   construction and Automobile segment, mirroring the global trend post economic slow down.
                                                                                                              20
                                                                                              (SOURCE-INDIAN INDUSTRY)
                      Soda Ash Production Sites
                                                                                   AMAI




                     PAKISTAN



                                       INDIA
                                                                   BANGLA
        Tata Chemicals Ltd.      DCW Ltd.                           DESH
     Saurashtra Chemicals Ltd.
                                  Nirma Ltd.
            GHCL Ltd.




                                               Tuticorin Alkali & Chemicals Ltd.


Over 96% located in the state of Gujarat close to Salt & Limestone
resources with several having captive Salt Works & Limestone mining.
                                                                   21
                             Overview of Indian Soda Ash Industry

                                  GROWTH PATTERN                                                      AMAI


                        33

                        31

                        29

                        27
            LAKH MTPA




                        25

                        23

                        21

                        19

                        17

                        15
                             2004-05   2005-06        2006-07      2007-08        2008-09   2009-10

                                           Capacity        Production        Consumption




Soda Ash capacity (31 lakh MTPA) sufficient to meet domestic demand (25 lakh MTPA).

Decline in Production due to increasing Imports.
                                                                                                             22
Overview of Indian Soda Ash Industry
                                                                                        AMAI



  Sudden Surge of Soda Ash Imports in India from China
                              (Quarter Basis)


          110000
 (MT)




           90000


           70000


           50000


           30000


           10000
                   2005-06   2006-07   2007-08    Apr-      Oct-     Jan-     Apr-
                                                 Sept,08   Dec,08   mar,09   Jun,09

                                                   China

• Imports from China during the period Jan-May,09 vs Jan-May,08 (YOY) increased from just      23
13,000 MT to 1,81,000 MT (18% share of Indian market).
Overview of Indian Soda Ash Industry
                                                                            AMAI



  Exports during last five years
                 300000
                 280000
                 260000
  EXPORTS (MT)




                 240000
                 220000
                 200000
                 180000
                 160000
                 140000
                 120000
                 100000
                          2005-06   2006-07   2007-08   2008-09   2009-10
                                                                                   24
                          AMAI




   Strengths & Challenges
of Indian Soda Ash Industry



                                 25
    Strengths & Challenges of Indian Soda Ash Industry
                                             (contd./-)
                                                  AMAI




 Indian Soda ash Industry includes World Leaders like
  Tata Chemicals:- World‟s 2nd largest producer with
  55 lakh MTPA Capacity spread across India, USA,
  Kenya & U.K.

 Industry has more than adequate Capacity to meet
  entire domestic demand & has been consistently
  exporting.

 Outlook for Industry remains strong with End User
  industries continuing to grow (Glass 10-12%,
  Detergents @ 5%, Picture tubes @10%,bulbs &
  tubes@7%); These four sectors consuming almost 26
  74% of demand.
Strengths & Challenges of Indian Soda Ash Industry
                                                AMAI




 Recently, Industry badly hit by sudden surge in
  imports at dumping prices from China, EU,
  Turkey, Pakistan etc. Govt. support through
  safeguard/ADD imposition urgently needed.

 Long term assurance for coal & 98% Chemical
  grade limestone essential. Hence, Govt.
  support/policy of allocation of coal blocks & long
  term lease for limestone essential.



                                                       27
                                   AMAI




BRIEF INTRODUCTION ABOUT THE AWARD &
          SELECTION CRITERIA




                                          28
                 AMAI AWARDS
                                                           AMAI


 AMAI has instituted following Awards from the year 2009


Sir Shriram Award for Best Managed Plant in Chlor-Alkali Industry

Darbari Seth Award for Best Managed Plant in Soda Ash Industry



  These are being presented Ist Time for the year 2009




                                                                  29
         Life & Achievements of Sir Shriram
                                                                                                       AMAI

    The AMAI Award for Best Managed Plant in Chlor-Alkali Industry is named after Sir
    Shriram, who was pioneer to promote Chlor-Alkali Industry in India.
    Lala Shriram was an eminent and public-spirited philanthropist, an outstanding industrialist and one of the
     trend-setting visionary leaders of the Indian business community. He possessed the rare business perceptions
     and uncommon entrepreneurial acumen for setting up industries.
    Born into a family of modest means, Lala Shriram, in the 79 years of his life, built an industrial empire
     manufacturing a vast variety of goods like - textiles, sugar, alcohol, including chlor-alkali chemicals,
     vanaspati, pottery, fans, sewing machines, electric motors and capacitors, becoming one of India’s Largest
     Business Houses- The DCM Group.
    He was one of the first & pioneer to start Caustic Soda Production in India over 60 years ago at DCM
     Chemical Works, Delhi.
     At a time when the country faced problems of multiple dimensions, the biggest challenge before the first PM
     Pt. J. L. Nehru was to lay foundation of industrially self-reliant India. Lala Shriram left no stone unturned in
     realizing the dreams of independent India by setting up new lines of industrial units with the highest standards
     of quality Lala Shriram was among the earliest industrialists who could foresee the usefulness of organized
     approach by the country's business community. Lala Shriram took lead and brought the entrepreneurs of that
     period together by forming institutions like CII, FICCI and PHDCCI, which today play a key role in the
     growth of Modern India.
    In seeking growth for his enterprises, Lala Shriram scrupulously pursued a policy which had its foundation
     based on intellectual integrity, devotion to duty, and a liberal humanism directed towards the common will of
     all sections of Indian society.Even British Raj recognized his contributions towards the development of
     society and hence conferred him with a knighthood.
    AMAI is proud to name Award for Best Managed Plant in Chlor-Alkali Industry as ‘Sir Shriram Award’.
                                                                                                    30
Life & Achievements of Shri Darbari Shah Seth
                                                                                                   AMAI

The AMAI Award for Best Managed Plant in Soda Ash Industry has been named after
Darbari Seth,who had contributed immensely for development of Indian Soda Ash Industry


   Darbari Shah Seth name is synonymous with Indian Soda Ash Industry. He was associated with Soda Ash
    Industry for 50 years having started his career with Tata Chemicals in 1946.

   Was born in North West Frontier Province in undivided India on 1st January, 1920. Had his initial
    education in Lahore and came to Mithapur on scholarship. Company sent him on a study trip to USA for
    the masters degree in Chemical Engineering from the University of Cincinnati. On his return lead a team of
    young engineers to completely redesign the plant to increase the Soda Ash production capacity from 80 to
    400 TPD. Continued to lead the company to greater heights and was appointed Managing Director in 1970.
    He retired from Tata Chemicals in 1996 as its Chairman

   Was a great visionary. Contributed immensely for developing Tata group of Industries and was driving
    force behind success of Tata Chemicals & other group companies. Mithapur, Munnar, Babrala -- all stand
    monuments to the genius of Mr. Darbari Seth.

   Conceptualized and established the well-known Tata Energy Research Institute and was Chairman of TERI
    Governing Council till his death. TERI described him as a man with a ''limitless vision''.

   Won many laurels from the corporate bodies which included the Award of Eminent Chemical Engineer
    Indian Institute of Chemical Engineers and Hall of Fame Award by the Chemtech Foundation.

   AMAI is proud to name Award for Best Managed Plant in Soda Ash Industry as “Darbari Seth Award”
                                                                                                31
Panel of Judges for Selection of the
          Award Winners                                                    AMAI

1.   Prof. (Dr.) G.D. Yadav,
       Professor (Dr.) G. D. Yadav is the Director (equivalent to Vice Chancellor) and
         R.T. Mody Professor of Chemical Technology of Institute of Chemical
         Technology (deemed University), Mumbai.Have published 230 papers and
         guided 56 research scholars for PHD.Member on various governing bodies of
         chemical instituitions and well known Authority in chemical technology .
2.   Prof. (Dr.) V.V. Mahajani (nominated by Prof. G.D. Yadav)
       ICT –DAE Prof. of Chemical Technology, Mumbai University, Institute of
         Chemical Technology.published 77 papers in national and international
         journals and co-authored 2 books on chemical engineering.
3.   Mr. P.N. Devarajan
      •  Started his career with Chemplast (Metturdam) & worked with DSCL, was
         Chairman, Chemfab Alkalies-Ist Membrane Cell Chlor Alkali Plant in India.
      •  Independent Consultant, Eminent Chemical Engineer with vast experience in
         Chlor-Alkali & other Chemical Sectors. Chemical engineer with BSc Tech.
         (Madras Univ.) and M. Tech. (IIT Kharagpur). Wide experience of Technology
         Transfer and General Mgt. for 50 yrs. In organic chemicals, Pharma,
         intermediates, heavy chem.,oil refinery, polymers and downstream
         intermediates. Was CMD of HOCL, indian Drugs and Pharma, Group
         President RIL, Group President Essar Oil, Director Dr. Reddy’s Lab,
         Chairman Research Council-NEERI, Director Central Board RBI, etc.,
                                                                                  32
4.   Mr. B.S.Gilra, President AMAI, (Chaired the Award Committee)
                 3E Criteria for Evaluation                            AMAI


       Economy – Manufacturing Process, Technology            Point Rating
         Adoption, Capacity Utilization, Energy Efficiency,
         Sourcing of Raw Materials, Product Utilization,
         Innovation, Sustainable Development etc.
                                                                 40%
       Ecology – Water Conservation, Emission reduction,
         Waste water recycling, Waste Utilization,
         Renewable Source of Power (Wind Power & Solar
         Power), Rainwater Harvesting, Tree Plantation,
         Green Belt Development, House Keeping, Labour
                                                                 30%
         productivity etc.

       Equity – Employees welfare, Employees Training &
         Development Safety & Health, Plant Accidents,
         Accidents during Transportation, Corporate Social
         Responsibilities, Community Development,
         Communication with Local People regarding Safety
         Aspects of the Hazardous Chemicals, Emergency           30%
         Preparedness etc
Evaluation done through details in application, detailed presentation to panel
                                                                            33

of judges, followed by plant visit of shortlisted companies.
         Point Rating & Selection
                                                        AMAI




M/s DCW, Sahupuram was the highest scorer for Sir Shriram
Award-2009 for Best Managed Plant in Chlor-Alkali Industry and
has emerged as the winner for the award. Panel recommended to
present the Sir Shriram Award-2009 for Best Managed Plant in
Chlor-Alkali Industry to M/s DCW Ltd., Sahupuram, Tamilnadu



M/s GHCL Ltd., Gujarat is the highest scorer for Darbari Seth
Award – 2009 for Best Managed Plant in Soda Ash Industry.
Panel recommended to present the Darbari Seth Award – 2009
for Best Managed Plant in Soda Ash Industry to M/s GHCL Ltd.,
Sutrapada, Gujarat.
                                                               34
            AMAI




Thank You




                   35

				
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