A worker rides a bicycle at the Bharat Petroleum Corporation Ltd. refinery in Mumbai, India. -Reuters
India's state oil refiners - long focused on churning out transport and cooking fuels - are planning a $35 billion push into petrochemicals to meet an expected surge in demand for goods ranging from plastics to paints and adhesives. The drive comes as the government seeks to promote durable, cheaper materials in industries such as farming and food packaging, while refiners eye long-term threats to their business from renewable energy and a shift to electric vehicles.
India's per capita consumption of synthetic polymers, for instance, used to make various grades of plastics, is just 10 kg (22 lbs) a year, compared with a global average of about 32 kg. "India is one of the fastest growing economies globally, but our petrochemical use is one-fourth the world average. We import half of our petchem consumption," said S. Mitra, executive member at trade body, the Chemical and Petrochemical Manu-facturing Association.
He estimated demand would jump from 30 million tonnes to 40 million tonnes in the three years to 2019/20, growing the country's petrochemicals market to around $65-$70 billion. India's Petroleum minister Dharmendra Pradhan said in July the government wants to set up petrochemical clusters in the eastern, western and southern regions around refineries.
The government is still formulating a national policy for petrochemicals after a white paper that proposed a fund to boost investment and encouraging the use of plastics in areas like packaging and farming wasn't taken forward. However, India's big three state refiners, Indian Oil Corp (IOCL), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), already plan to spend about $35 billion to boost their petrochemicals business, according to interviews with senior company executives.
-Reuters, New Delhi
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