At the recent Indian Chemical Counil (ICC) organised Chemical Industry Outlook Conference at Hotel JW Marriott in Mumbai, the cross section of various expert views, based on the presentations made was that India can be a key global player and even become a global chemical hub scaling up from India’s current $220 billion chemical industry to $1 trillion by 2040, provided Indian chemical industry addressed many of its shortcomings, embraced latest digital technologies like AI, built global scale plants, invested in result oriented R&D and prepared to face global headwinds.
The challenges on the global front are the geo-political uncertainty, supply chain disruptions, sluggish demand, over capacity particularly due to China’s capacity building over the years, high energy prices and no major R&D breakthroughs. In India too apart from facing up to global challenges, other issues are lower scale of operations, dearth of feedstocks, limitations of logistics and infrastructure and paltry R&D investments.
Engaging the Future
In his opening remarks, while welcoming the delegates, Kamal Nanavaty, Chairman of the Conference and Exhibition Expert Committee, ICC elaborated on the theme of the conference, “Engaging the future: Reinventing the Indian Chemicals sector for enhanced resilience”. Presenting the global and Indian chemical industry scenarios, he pointed to several challenges the industry is experiencing from supply chain uncertainty to slower demand and growth. He requested the CEOs of chemical companies to give the utmost priority to sustainability and to safety, with the recent spate of accidents in the industry, a matter of concern. He lauded government support to the industry, the Viksit Bharat endeavour and the Rs. 20,000 crore allotted to promote R&D in the private sector.
Dr Kartik Bharat Ram, President of ICC and Joint Managing Director of SRF Ltd, welcoming the large gathering of more than 700 delegates, in his keynote address, said, “The event has grown exponentially over the last few years, uniting visionaries, innovators, and thought leaders to shape the future of India’s chemical industry. With rising domestic consumption, shifting supply chains, and competitive costs, the sector is poised for significant growth. Government support and technological advancements further drive this momentum. Representing over 80% of the industry, ICC received the prestigious 2024 OPCW Hague Award for its commitment to chemical safety and security. Now, our focus must be on positioning India as a global powerhouse in chemicals.”
Centres of Excellence
The Chief Guest Nivedita Shukla Verma, I.A.S., Secretary, Department of Chemicals and Petrochemicals, Ministry of Chemicals and Fertilisers, Government of India, addressing the event virtually, emphasized the theme’s relevance amid the evolving geopolitical landscape and India’s vision for Viksit Bharat 2047. Highlighting the need for increased investments, R&D, and global value chain integration, she announced the approval of five new Centres of Excellence, with plans for three more. A dedicated portal now connects 1,000 industries with 50 research institutions, fostering industry-academia collaboration. She also stressed policies promoting renewable resources and cleaner technologies, balancing economic growth with environmental and human health priorities.
In his keynote address, Deepankar Aron, IRS, Joint Secretary, Chemicals, Department of Chemicals and Petrochemicals, Government of India, highlighted the impact of global geopolitical shifts and the urgent need for technological reinvention in the chemical industry. He emphasized that Viksit Bharat 2047, requires rapid economic expansion—targeting a $26 trillion economy and a per capita income exceeding $14,000. With chemical exports contributing 7% of India’s merchandise exports ($45 billion last year) and FDI inflows nearing $20 billion over two decades, the sector remains a key growth driver. He reiterated India’s commitment to INDOVATION—affordable, accessible, and sustainable innovation with Indian characteristics.
R&D Driving Sustainability
Dr. N Sreeram, Chief Technology Officer and Senior VP-R&D, Dow Chemicals, USA in his keynote address elaborated on the Dow experience of being innovative, customer centric, inclusive and sustainable. He gave many examples of reinventing products based on easily recyclable plastics. He also gave examples of special performance materials and coatings, which all conform to sustainability and find myriad applications including in infrastructure. These achievements were due to the Dow approach of accelerating innovation through high thoroughput research. Emphasising the importance of redesigning products and processes on the sustainability principles, he mentioned about the phased approach to decarbonise in Dow’s path towards Net Zero. Dow he said has a three-point methodology, i.e. footprint must be reduced, handprint for redeveloping products and blueprint to create new ways of doing.
Global Perspectives
Presenting a global perspective on the chemical industry, in the second keynote address, Chris Musso, Sr. Partner of Mckinsey and Company, USA spoke of the various forces impacting the global chemical industry. He felt that the chemical industry is now losing its market leadership compared to other industries. Musso explained that the chemical industry is buffeted by high energy prices due to the wars in Ukraine and Gaza, supply chain problems, downturn in demand while at the same time, capacities are in far excess and breakthrough innovations have stalled. Technology developments particularly AI driven are promising to create massive shifts and newer value creations. It will impact all areas of chemical and manufacturing from operations to maintenance, R&D and marketing, Musso predicted. The large sized Chinese market continues to drive the chemical industry, globally.
In yet another keynote address, Marco Mensink, Director General, European Chemical Industry Council – CEFIC, Belgium spoke of the great unpredictability that has suddenly set in due to trade wars and illogical geopolitics which makes any kind of scientific extrapolation based on statistics difficult. Navigating and finding the way forward has become all too challenging, Mensink said. The transition taking place globally are fast paced. He said in Europe there are fears over the Ukraine war, the political uncertainties global overcapacities and that the European chemical industry may lose its pole position. In the wake of global developments, he said that the EU is realising the need for strategic independence and self-reliance in the wake of trade terrorists arising in the world. The earlier globalisation is stalling and shifting to regionalism. Mensink informed that India accounted for 2.6 % of global chemical sales in 2023 and therefore there was tremendous opportunity for India to increase exports to the EU as demand for chemicals in the long run will only grow substantially. In this respect he pushed for increasing India-EU trade association. Countries and companies, should look towards win-win for both sides.
He lauded the Chinese example where the Chinese chemical industry is present in all value chains and in every aspect from IP to production. He informed that the capex in China continues to be enormous.
Investment Potential in Andhra Pradesh
The CEO of Andhra Pradesh (AP) Economic Development Board Saikant Varma pushed the case for AP as the number one investment destination due to the ease of doing business. He spoke of the various industry corridors in AP and those coming up. He informed that there is tremendous potential for petrochemical as well as pharma and lifesciences industries and the downstream chemical industry to put up projects in AP. In Mulapeta a petrochemical hub is being planned and a pharma cluster close to Vizag, apart from a green hydrogen hub, he disclosed. There are IT enabled data centres for chemical industry. AP is also likely to get a natural gas pipeline, he added. He exhorted the captains of the chemical industry to seriously consider AP for their projects.
Supply Chain Issues
In a subsequent presentation, Jayant Dhobley, Business Head and CEO, Global Chemicals of Aditya Birla Group spoke on Portfolio Management in chemical industry, particularly building a diversified portfolio based on the strengths of each company.
Suyog Kotecha, CEO and Executive Director of Aarti Industries, speaking on securing supply chains elaborated on the challenges Indian chemical industry is facing in supply chains from global headwinds to insufficient logistics and infrastructure. Other challenges include in procurement due to lower labour productivity, over dependence on imported feedstocks, lack of sufficient integration to value chains and competing in a situation of global surplus. We don’t have end to end integrated value chains in India and this is a drawback. Material flow in supply chain need to be mapped, he suggested. The changing regulatory landscape is another factor that one has to come to grips with.
He lamented the inadequate investment in R&D which only can lead to solutions for using biofeedstocks in large measures and also converting CO2 to chemicals. He argued for a collaborative R&D diverse model focussing on some of the new age requirements. He also exhorted the industry to leverage AI to optimise costs, to drive commercial excellence, enhance labour productivity and drive supply chain efficiency.
A whitepaper by McKinsey & Company was released at the conference titled, ‘Building Resilience for Global Leadership: The Path Forward for India’s Chemicals Industry’. Presenting the findings from the whitepaper, Senor Partner of McKinsey, Avinash Goyal exhorted the industry to reverse the underperformance of the Indian chemical industry for elevating India’s position in the global industry. He said that India needs to create a strong international presence in the world for which India has good opportunities in building world scale plants in chemicals like for citric acid, TiO2, polyether, polyols, EVA, MDI etc. We need both scale and value chain integration as well as hitech R&D. Goyal stated that the fastest way to be global is through mergers and acqusitions for which there are good opportunities today. The shift towards sustainability, circularity, biobased products are all also opening up many opportunity areas. Timely project execution and completion is important as many projects in India suffer from time overruns. Indian companies should leapfrog from traditional ways of doing to functioning excellence, he emphasised.
Importance of Digital Technologies
Umesh Sathe, CEO, Process Automation, Siemens Ltd speaking on the Role of Digitalisation and AI said that latest digital technologies can take manufacturing and business to unprecedented heights.
At the outset he stated that it is very important to use technology in a purposeful and consolidated manner. Latest digital technologies and process automation can maximise thoroughput in the existing production set up itself. He said that most plants operate at less than their design capacity. Across the production process there are great opportunities to vastly increase manufacturing efficiency from procurement to maintenance to R&D. All costs can be improved and better price realisations are possible, Sathe stated. AI, digital or process twins, asset twins allow high simulation of processes, process interchangeability and flexible production. In batch processes particularly, he said that the asset utilisation is rather poor which can easily be optimised and enhanced. Cybersecurity is also not given due importance by industry and this could result in serious problems, he warned.
Earlier in the day Ramya Bharat Ram, VP, ICC and Managing Director and CEO, Thirumalai Chemicals in her vote of thanks, summing up drew attention to the fragility of supply chain and how the Indian chemical industry can use innovation to transform all areas of manufacturing. Working on these lines, she said, India can become a global hub for chemical manufacturing.
There were many other expert presentations and panel discussions during the course of the two day event from captains of industry.
Adjacent to the conference there was a mini exhibition where many companies and organisations displayed their expertise and services.
