Indian plastic market 2012.pdf

7/27/2019 Indian plastic market 2012.pdf

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DEVELOPMENT IN THE INDIAN MARKET

FOR PLASTICS

ANDREW REYNOLDS, RESEARCH DIRECTOR

AMI CONSULTING

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Contents

Introduction

The economic environment

Where the Indian continent fits in the world

Dynamics of the market

Characteristics of the Indian market

Polymer demand

Structure

Market trends Conclusions

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Introduction: about AMI

Market Analysis: in-depth multi-

client reports The Global market for BOPP film

The Global market for Stretch film

The Global market for Grass Yarns

Single client services

Feasibility studies Technical and commercial due diligence

Strategic analysis/business development

Customised market research

E-magazines

Sector oriented (e.g. Orientate BOPP)

Free-to-reader (at www.amiplastics.com): Compounding World

Injection World

Film & Sheet Extrusion

Pipe & Profile Extrusion

Conferences and Seminars

Middle East Plastic Pipes, May 15-16, 2012,Dubai

Flexible Packaging Middle East, November

13-14 2012, Dubai

The Plastics Industry Strategy Seminar,

November, Mumbai 2012

Database products Thermoplastics Compounders

Polyolefin film producers

Injection moulders

Blow moulders

Pipe producers Rotational moulders

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Raw material flow for plastics

Processor

Compounders

Injection

Molding

Blow

Molding

Film

Extrusion

Pipe &

Profile

Extrusion

Fiber

ExtrusionOther

Processors

Pigment & Additive

Producers

Merchant

masterbatch

producer

Resin

Producers

Merchant

CompoundersResin Producer

Compounders

Toll

Compounders

Chemical

synthesis

Compounding

Plastics

fabrication

Raw

materials

Formulated

Compounds

Fabricated

products

Toll

Masterbatch

producer

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The economic environment

2010 2011 2012

India 10.1% 7.8% 7.5%

Pakistan 3.8% 2.6% 3.8%

Sri Lanka 8.0% 7.0% 6.5%

Bangladesh 6.4% 6.3% 6.1%

The IMF details a strong GDP performance in the whole Indian sub-continent Prospects remain bright in the medium term

In this environment and with a population of over one billion plastics conversion hasmoved ahead strongly

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Position of the Indian continent in the

world

India5%

Rest of World95%

The world market is

214 million tonnes

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Plastics world: Per Capita vs. Population

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

0.0 200.0 400.0 600.0 800.0 1000.0 1200.0 1400.0 1600.0 1800.0 2000.0

Percapitademand

(kg)

Population (millions)

NAFTA

Europe

China

Asia

Middle East & Africa

Indian SubcontinentLatin America

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Plastics world: Per capita & growth

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

CAGR2011-20

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Per capita demand (kg)

Latin America

Indian Subcontinent

China

Middle East & Africa

Asia

Europe

NAFTA

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The World 1983 and 2011

44.8 million tonnes 213.8 million tonnes

1983 2011

Europe38%

NAFTA30%

Latin America

4%

Greater China6%

Asia

17%

Indian SubContinent

1%

Africa and theMiddle East

4%

Europe21.4%

NAFTA17.8%

Latin America4.9%

Greater China

27.9%

Asia14.7%

Indian SubContinent

4.9%

Africa and theMiddle East

8.4%

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Dynamics of the Indian Sub Continent market

The subcontinent is dominated by the Indian market which in 2011 continued to grow

but a lower rate than that seen in the last five years

Growth in India has been rapid since the economic reforms championed by Narasimha

Rao and Manmohan Singh in the 1990s

Indian development has been assisted by the growth of resin availability following the

establishment of global scale plants by Reliance Industries

Local demand has so far been primarily driven by local domestic demand rather than

any export focus

Processors increasingly looking at the global opportunity

Demand patterns are often focussed on solutions tailored to a relatively

low income groups (significant sales of single unit pouches etc..)

Significant opportunity exists to replace traditional materials

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Global polymer growth by region % p.a.

7.9%

10.2%

4.5%

7.8%

5.3%

2.7%

2.9%

GCC

Indian Sub Continent

Asia

Greater China

Latin America

NAFTA

Europe

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

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Evolution of the Indian industry

The polymer industry in the Indian sub continent has always been highlyentrepreneurial and expansive

Early development was based on:

Thermoset producers making the move into thermoplastic material

Textile groups investing in polymeric alternatives

Traders and small merchants diversifying into new business (often encouraged by

government focus on small industry and the need for changing share ownership) Evolution of conglomerates active in a number of processes

Recent years have seen the development of more stock market quoted companies,expanding more rapidly via the availability of wider capital sources

Fibers

BOPP Wire and Cable

PET film

Processing remains fragmented with over 30,000 operating companies

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Polymer demand in the Indian

continent 2011

India89%

Pakistan9%

Sri Lanka1%

Bangladesh1% Other Indian Sub.

Contineint0%

Demand is 10.4

million tonnes

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Per Capita vs. Population

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

-200.0 0.0 200.0 400.0 600.0 800.0 1000.0 1200.0 1400.0 1600.0

Percapitademand

(kg)

Population (millions)

Germany

Sri Lanka

Other India

Bangladesh

India

Pakistan

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Per Capita & growth

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The plastics industry Indian Sub

Continent

Highly fragmented industry in all the countries Entrepreneurial flair

Poor logistics

Bureaucracy at state and national government level

Many companies but limited resources

Most companies privately owned

Companies run from the top down with a thin management structure

Industry structure

Most markets remain national

High level of trade barriers between nations (but levels are declining)

Increasingly aware of global developments

Specialisation increasing in all sectors

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End use applications for polymers

Flexible PackagingIndustrial

8%

Flexible PackagingConsumer

23%

Rigid PackagingIndustrial

6%

Rigid PackagingConsumer

18%

Building24%

Agriculture1%

Automotive

2%

Electrical Appliances2%

Medical0%

Housewares2%

Toys1%

Sport and Leisure

0%Furniture

2% Others11%

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Distribution of polymer processors

Injection Moulding66%

Blow Moulding7%

RotationalMoulding

1%

Polyolefin Film13%

Pipe Extrusion6%

ProfileExtrusion

1%

Cable Producers0%

Sheet Extruders1%

Thermoplastic

Compounders3%

Other Processors2%

Over 30,000 processors

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Distribution of plastics processing in

India

West43%

North

28%

East8%

South21%

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Structure of the Indian plastics industry

Quoted Companies

(17% of demand)

Limited Companies

(24% of demand)

Family

owned/small

(59% of

demand)

Ca.

50

Ca. 700

Ca. 30,0000

Sli

de

Quoted Companies

(17% of demand)

Limited Companies

(24% of demand)

Familyowned/small

(59% of demand)


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Concluding remarks

The Indian sub continent is a dynamic and fast growing market driven by:

Entrepreneurial culture

Availability of investment capital

Young population (under 30s are around one third of the population)

Awareness of the global opportunity

Opportunity is driven by: Over a billion people with a high degree of education and increasing disposable income

Car production increasing from 2.5 million units to 15 million units

Infrastructure improvements (building)

Improving food production

Investment is a two way street Indian companies going global (e.g. Flex Industries, Motherson Summi, Jain Irrigation,

Essel Propack)

International companies locating in India (e.g. Ampacet, Alcan, A. Schulman)

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Thank you

Andrew Reynolds, Research Director

AMI Consulting

Applied Market Information Ltd.

45-47 Stokes Croft

Bristol, BS1 3QP, UK

Tel: +44 (0)117 9249442

Fax: +44 (0)117 9892128

Email: [email protected]

Applied Market Information LLC

1210 Broadcasting Road, Suite 103

Wyomissing, PA 19610, USA

Tel: +1 (610) 478 0800

Fax: +1 (610) 478 0900

Email: [email protected]

Documents

Indian plastic market 2012.pdf