22 Sep 2023
IOCL has approved a 4000 crore project of PVC production in Gujarat
Indian Oil Corporation Limited has accepted a more than 4000 crore investment proposal in Gujarat for a PVC (polyvinyl chloride) production facility.
The Corporation board reportedly approved the investment request recently to help India reduce its dependency on imports of resin, which is highly demanded in sectors including infrastructure, pipe production, telephones, and automobiles.
According to a company source, this agreement is part of a strategy to focus on the downstream petrochemical and polymer business in order to capitalize on the supply gap amid strong rise in demand. This is huge news for people who are connected with PVC industry as well as PVC Manufacturers in India.
PVC Resin Manufacturing Start in India
Polyvinyl Chloride (PVC) production in India began 60 years ago, with the establishment of the country's first PVC facility in Mumbai in 1951. Calico operated a facility with a capacity of 6000 MTA.
India is the leading importer of PVC Resins, with more than 2 million tonnes imported, followed by the United States and China, and import dependence is predicted to grow as demand is expected to reach 7 million tonnes by 2030.
Indian Oil Corporation Limited (IOCL) is a major public sector company owned by the Government of India's Ministry of Petroleum and Natural Gas. Its headquarters are in New Delhi. It is a government-owned enterprise whose operations are supervised by the Ministry of Petroleum and Natural Gas.
Indian Oil's business activities span the whole hydrocarbon value chain, including refining, pipeline transportation, petroleum product marketing, crude oil, natural gas, and petrochemical exploration and production. Indian Oil has expanded towards renewable energy and globalised its downstream activities.
It has subsidiaries in Sri Lanka (Lanka IOC), Mauritius (IndianOil (Mauritius) Ltd), and the Middle East (IndianOil (Mauritius) Ltd) (IOC Middle East FZE).
About PVC Raw Material
The PVC plant in Gujarat will bring a lot to the table for the Indian plastic industry. India also exports the PVC material, however, it is low if compared to other countries like Taiwan, South Korea, and Japan, the export is way too low. This PVC plant will change the whole picture of manufacturing, import and export of Polyvinyl Chloride.
Here’s how PVC will be Manufactured in India
PVC's primary basic components are derived from salt and oil. When salt water is electrolyzed, chlorine is produced, which is coupled with ethylene (obtained from oil) to generate vinyl chloride monomer (VCM). VCM molecules are polymerized to generate PVC resin, which is then mixed with appropriate additives to create a bespoke PVC compound.
The PVC manufacturing process consists of five steps:
- Obtaining salt and hydrocarbon resources
- These materials are used to produce ethylene and chlorine.
- The reaction between chlorine and ethylene to produce vinyl chloride monomer (VCM)
- VCM polymerization to produce Polyvinyl Chloride (PVC)
- PVC polymer is blended with other elements to create various formulations with a wide range of physical qualities.
What PVC products will be manufactured?
The India PVC Pipe market was valued at $3,159 million in 2016, and is predicted to reach $6,224 million by 2023, rising at a CAGR of 10.2% from 2017 to 2023, according to Regional Opportunity Analysis and Industry Forecast, 2015-2023.
The increase in PVC pipe penetration across various applications such as irrigation, water supply, sewer & drain, plumbing, oil & gas, HVAC, and others is one of the primary driving factors in the India PVC Pipes market. The polyvinyl chloride (PVC) pipe business in India has reached maturity.
This PVC plant in Gujarat would benefit the Indian industry in a positive ways. The best part is that this plant might also manufacture PVC Sheets, PVC Panel, and so much more. Although, the capacity of this PVC Plant in India is not yet confirmed, but according to the resources, the import will be almost half of what it is today.
What more will this project bring to the market?
Due to increase in manufacturing of PVC Material, products, and more, the compounded annual growth rate of PVC is 6%. The petrochemical market in India is worth approximately $ 190 billion, however per capita consumption is substantially lower than in wealthy economies. This distinction creates numerous potential for greater demand and investment.
"The petrochemical sector supports the Prime Minister's 'Make in India' and 'Make for the World' initiatives," said Petroleum Minister Hardeep Singh Puri at a petrochemical conference in Delhi. The increasing demand for petrochemical goods from a growing population and a fast growing economy is one of the most important reasons driving the rise of the petrochemical sector. India will account for 10% of the incremental growth in global petrochemical demand. He stated that the government has implemented many policies, including 100% foreign direct investment, to encourage the sector and ease of doing business.
This strategy will not only benefit the PVC Manufacturers in Gujarat but the benefits and industry will be impacted across India. Let us wait for more information by the Government and IOCL.