Inorganic Chemicals

Industry Overview :

• Rs. 9,600 crore industry (US $ 2.2 billion).
• Covers a wide spectrum of products - Soda ash, Caustic soda, Sulphuric acid, Chlorine Calcium Carbonate, Hydrogen Peroxide, Potassium Chlorate, Lead Phosphorus, Titanium Dioxide, Aluminium Fluoride, Carbon Blac.
• Inorganic chemicals are used mainly in the manufacture of detergents, glass industry, soaps, fertilisers, alkalies, etc.
  "Fastest growing industry since independence. Average growth rate 9% per annum during the last decade. Industry average - 6%. Slow down in production of a few chemicals due to excess capacity build up."
  

The Indian chemical industry is the 12th largest in the world and the 3rd largest in Asia, in terms of volume. The chemical industry accounts for about 17.6 per cent of the output of India's manufacturing sector and about 3 per cent of the gross domestic product (GDP). The industry output is estimated at US$ 35 billion, with a total investment of approximately US$ 60 billion and the industry size is projected to more than double, to reach US$ 80 - 100 billion by 2010.
Indian chemicals industry, which includes basic chemicals & its products, petrochemicals, fertilisers, paints, gases and pharmaceuticals, is one of the oldest industries inthe country and plays an important role in its overall economic development. Other features that set it apart, are the requirement for large capital for set-up, high powerconsumption for production and a highly diversified product range, covering more than 70,000 commercial products. The chemical industry forms the backbone of the industrial and agricultural development of India, by providing building blocks for downstream industries.

Inorganic chemicals are those, that are not carbon based. Typically, they are of mineral origin. The chemicals produced by this industry are intermediate products, that are used asinputs in industrial and manufacturing processes.

India has a long standing, well established inorganic chemical industry that produces a range of chemicals to support the country’s thriving manufacturing sector. All the key alkaline chemicals and basic inorganic chemicals are growing in the domestic and exports markets. Imports have also gone up, to cater to growing domestic demand.

Most of the chemicals clusters in India are located in the western region and these states offer a conducive ecosystem for the industry. Progressive states, such as, Andhra Pradesh and Tamil Nadu could be other options for investors to consider.

Future outlook:

• Industry expected to grow at 6 - 7% in the next few years.
• Industry will continue to be dominated by organised sector manufacturers.
• Excess capacities in the domestic market will be offset by exports.
• Companies likely to focus on reducing costs, upgrading technology to improve profitability.
  

One can also read the report from IBEF .

Why I am interested in this industry:

When the buyers of these products are above 1 billion one can easily play the game on this industry, as the products from this industry are of daily use.