Abstract
Indian Chlor-Alkali Industry ..... On a growth trajectory
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-a-vis global
market size of USD 48 billion.
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.
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 an in-depth analysis and CARE Research's view on the future of this
sector, please refer to the exhaustive Report on Indian Paper Industry by CARE
Research.
Table of Contents
1. Executive Summary
2. Outlook
- Caustic Soda Industry
- Soda Ash Industry
3. Overview of Chlor-Alkali Industry
- Global Chemical Industry
- Domestic Chemical Industry
- Chlor-Alkali Industry
- Caustic Soda
- Chlorine
- Soda Ash
- Custom Duties on Alkali Products
- Government Regulations applicable to chlor-alkali industry
4. Caustic Soda
- Overview
- Global Scenario
- Manufacturing Processes
- Demand
- End-user Industries
- Textiles
- Paper
- Alumina/ Aluminium
- Supply
- Capacity & Production
- Company-wise Capacity & Production
- Region-wise Capacity & Production
- Capacity Expansions
- Prices
- International Trade
- Cost Structure
- Power & Fuel Cost
- Coal Price Hike
- Raw Materials
- Anti-dumping measures initiated by GoI
- SWOT Analysis
5. Soda Ash
- Overview
- Global Scenario
- World Resources
- Rebound in Soda Ash industry from year 2010
- International Prices
- Domestic Soda Ash Industry
- Manufacturing Processes
- Demand
- End-user Industries
- Soap & Detergents
- Glass
- Chemicals & Silicates
- Supply
- Capacity & Production
- Company-wise Capacity & Production
- Company-wise Capacity Expansions
- International Trade
- Anti-dumping measures planned by GoI
- Prices
- Cost Structure
- Raw Materials
- Financial Analysis
- SWOT Analysis
6. Chlorine & Hydrogen
- Chlorine
- Overview
- Manufacturing Process
- Demand
- Supply
- Hydrogen
7. Company Profiles
- Caustic Soda
- Aditya Birla Chemicals (India) Ltd. (ABCIL)
- Gujarat Alkalies & Chemicals Ltd. (GACL)
- Sree Rayalaseema Alkalies & Chemicals Ltd.
- Soda Ash
- Tata Chemicals Ltd.
- Nirma Ltd.
- Gujarat Heavy Chemicals Ltd. (GHCL)
List of Figures
2. Outlook
- Caustic Soda Domestic Capacity & Production: FY06 to FY16P
- Caustic Soda Domestic Consumption: FY06 to FY16P
- Domestic Caustic Soda (Lye) Prices: FY07 to FY13P
- Soda Ash Domestic Capacity & Production: FY06 to FY16P
- Soda Ash Domestic Consumption: FY06 to FY16P
- Domestic Soda Ash Prices: FY07 to FY13P
3. Overview of Chlor-Alkali Industry
- Snapshot of Chemical Industry
- Global Chemical Market Segmentation
- Indian Chemical Industry - Development Phases
- Indian Chemical Market - 2010
- Basic Chemical - Domestic Production in FY11
- Chlor-alkali capacity break-up
- Chlor-alkali production break-up
4. Caustic Soda
- Global Region-wise capacity break-up
- Global Sector-wise Consumption share
- World Exports in FY10
- World Imports in FY10
- Mercury Cell, Diaphragm Cell, and Membrane Cell
- No. of Caustic Soda Plants in India: Membrane & Mercury Cell
- Capacity & Production: Membrane & Mercury Cell
- Caustic Soda Sector-wise Consumption: FY09-FY11
- Caustic Soda Sector-wise Consumption: FY11
- Production of Rayon Grade Pulp In India: FY01-FY11
- Domestic Paper demand outlook
- Indian per capita paper consumption
- Alumina Production: FY97-FY09
- Alumina Refinery Cost Structure
- Company-wise Aluminium Production: FY09-FY11
- Domestic Aluminium Consuming Sectors
- Company-wise share in caustic soda capacity in FY11
- Company-wise share in caustic soda production in FY11
- Capacity & Production of Major Caustic Soda Companies-FY11
- Major Companies Caustic Soda Production: FY09-FY11
- Regional Capacity Distribution FY11
- Regional Production Distribution FY09-11
- Region-wise Capacity Changes FY11-FY13P
- Company-wise Capacity Expansion: FY11
- Company-wise Capacity: FY11-FY13P
- International Lye Prices 2010-11
- Domestic Prices -FY11
- Domestic ECU Realizations: FY08-FY12E
- Domestic Prices-FY12 (upto Oct'11)
- Imports & Exports: FY07-FY11
- Company-wise domestic exports in 2010-11
- Cost Structure of Caustic Soda Units
- PBIDT and PAT margins: FY03-FY11
- Captive Power Capacity: FY11
- Average Power Cost: FY01-FY10
- WPI Index of domestic coal vs. imported coal prices: CY05-CY11
- Comparative Power Cost
- State-wise Domestic Salt Production: FY07-FY11
- Domestic Salt Demand: FY07-FY11
- WPI of Salt in India: FY05-FY11
- Number of salt works in India
5. Soda Ash
- Global Soda Ash Production CY10
- Global Natural Soda Ash Production
- Global Soda Ash Capacity CY10
- Global Soda Ash Consumption CY10
- Global Soda Ash Exports CY10: Region-wise break-up
- Global Soda Ash Production CY10: Region-wise break-up
- Natural Soda Ash Manufacturing
- Synthetic Soda Ash Manufacturing - Solvay Process
- Sector-wise Consumption in FY11
- Production of Soaps & Detergents: FY01-FY11E
- Production of glass/glassware in India: FY01-FY11E
- Domestic Capacity & Production: FY07-FY11
- Company-wise Capacity, Production in FY11
- Company-wise share in capacity FY11
- Company-wise share in production FY11
- Company-wise Production: from FY09-FY11
- Expected Capacity changes - FY11 to FY13P
- Imports & Exports FY07-FY11
- Company-wise break-up of exports in FY11
- International Soda Ash Prices in FY11
- Domestic Prices FY11
- Domestic Realizations 2008-2012P
- Cost structure of soda ash manufacturers in India
- Hard coke production in India: FY95-FY11E
- Coke Wholesale Price Index: CY05-CY10
- Import of Coke, Coal & Briquettes: FY00-FY11E
- Limestone Industrial Consumption
- Limestone Production: FY95-FY11E
- Limestone Price Index: CY05-CY10
6. Chlorine & Hydrogen
- Global Chlorine sector wise Consumption-CY10
- Domestic Chlorine Consumption in FY11
- Domestic Sector-wise Chlorine Consumption: FY07-FY11
- Domestic WPI of Liquid Chlorine: CY94-CY10E
List of Tables
3. Overview of Chlor-Alkali Industry
- Industrial Applications of Caustic Soda
- Industrial Applications of Chlorine
- Industrial Applications of Soda Ash
- Customs Duties on Chlor-Alkali products
- Government Regulations applicable to chlor-alkali industry
- BIS Standards for Chlor-Alkali Industry
4. Caustic Soda
- Basic Properties of Caustic Soda
- Features of Caustic Soda Manufacturing Processes
- Caustic Soda: Demand & Supply
- Production of Man-made Fibres in India: FY08-FY11E
- Domestic Paper & Paper Board Scenario: FY06-FY11E
- Domestic Aluminium Scenario: FY06-FY11E
- Caustic Soda - Domestic Capacity, Production & Utilization FY06-FY11
- Company-wise caustic soda Exports 2010-11
- Key Financial Ratios of Caustic Soda producers: FY07-FY11
- Coal price Hike
- Total Salt Production and Consumption: FY07-FY11
- Average Salt Price
5. Soda Ash
- Basic Properties of Soda Ash
- Evolution of Indian Soda Ash Industry
- Manufacturing Processes - Advantages & Disadvantages
- Soda Ash Demand-Supply: FY07-FY11
- Glass Consumption - Industry-wise
- Coke Import Demand
- Key Financial Ratios of Soda Ash Producers: FY07 - FY11
6. Chlorine & Hydrogen
- Properties of Chlorine
- Domestic Chlorine Production: FY09-FY11
- Liquid Chlorine - Domestic Capacity & Production
- Utilization of Hydrogen - FY07 to FY11
