In the next weeks, plastics supplier Reliance Industries expects to bring online its most recent plant, a one-million-tonne/yr polypropylene facility, but processors interested in the new material will have to take a number: the new capacity for its Repol-brand PP already has all been claimed, according to Kamal Nanavaty, president of the supplier’s crackers, polymers and chemicals sector, who met with MPW during the Plastindia trade show earlier this month.
At Plastindia, Hall 11 – with processors’ booths only, no machinery or materials suppliers – was jammed during the entire show.
Although Reliance is active internationally, the vast majority of the new PP capacity will stay in the country. “Every major end-use market (in India) is on a growth curve,” Nanavaty said. “We saw the dip in October-November 2008, but now everybody’s plants are running flat out,” he added. Compounders, formerly not as prevalent, moved in to support India’s growing automotive market – Ford and Daimler both announced plans in the past weeks to increase capacity in the country – and have since branched out to other industries. “The growth driver here is our young population,” Nanavaty said. Every day, by Reliance’s count, about 11,000 TVs and refrigerators are bought in India; 500,000 cell phones are too, daily.
The new capacity will bring Reliance to about 2,835,000 tonnes/yr of PP capacity, enough to raise it from seventh into the top five rankings of global suppliers. By its own reckoning, it controls about 80% of its domestic market and about 3% of global demand for PP. Reliance recognizes it must stay “lean, thin and mean” as India’s growing domestic market poses a rich target for its competition. “For (plastics suppliers in the Middle East), my customers are just one week away,” noted Nanavaty. He added that India’s government plans to invest some $515 billion in the country’s infrastructure, with much of that related to the agricultural industry, including about $100 billion tagged for water and irrigation projects. Feeding a population of more than a billion clearly is no easy task, but India’s government wants to ensure its farming industry has the wherewithal to do just that.
Reliance keeps tabs on the local machine market, much as trade groups do elsewhere, and reckons sales in India since about mid-2008 have included 739 extruders, 1448 injection molding machines and about 150 blowmolding machines. According to Nanavaty, these new machines, coupled with improved management practices and growing economies of scale, have helped processors leap forward. Efficiency has improved, so that EBITDA for leading Indian plastics processors has climbed to 17%, up from about 10% just five years ago, he said. —[email protected]