Dear Member-exporters,

I have pleasure to bring to you the 5th issue of the CHEMEXCIL e-Bulletin for the month of Sept. 2016. You may be aware that CHEMEXCIL has been continuously organizing its Awareness Seminars in various centresfor the benefit of our member-exporters as also part of our drive for increasing its Membership. Accordingly, we had organized one of the Seminars on ‘Handling of Dangerous Goods (Chemicals) Transportation by Sea on 16th Sept. 2016 at Dahej in co-ordination with the Dahej Industries Association.

Further, as part of its export promotional activities, CHEMEXCIL had participated in the 9th INDIACHEM 2016 organised jointly by the Deptt. Of Chemicals &Petrochemicals,Govt. of India and the FICCI from 1st to 3rd Sept. 2016 at the Bombay Exhibition Centre, Mumbai. Along-side the said Exhibition, CHEMEXCIL had also organized free consultations by experts on two important topics, viz. ‘Foreign Trade Policy matters, Free Trade Agreements and Custom Procedures’ on 1st Sept. 2016 and on “Handling of Dangerous Goods (Chemicals) Transportaton by Sea and Road’.

Another Seminar on ‘Forex Management & Trade Finance’ was also organized by us in association with Yes Bank on 29th Sept. 2016 at Mumbai which was followed by our 53rd Annual General Meeting. Brief details of the said Seminars and the Annual General Meeting of the Council are given in this Bulletin. This Bulletin alsocovers details on Exports of top items covered by the Council to Brazil, issuance of Free Sale & Commerce Certificate by the DGFT to Merchant Exporters and other similar useful information.

I am hopeful that you would find this Bulletin informative and useful. The Secretariat looks forward to receiving your valuable feedback and suggestions.

With regards,

Dr. B.R. Gaikwad
Chairman,
CHEMEXCIL

Mr. S.G. Bharadi Executive Director Chemexcil, Dr. B.R. Gaikwad Chairman Chemexcil, Mr. S.K. Ranjan Dy. Secretary, EP (CAP), Ministry of Commerce & Industry ,Government of India, Mr. S.G. Mokashi, Additional Vice Chairman and Member Basic Inorganic and Organic Chemicals including Agrochemicals, Chemexcil

• Annual Report of the Working Committee for the year ended as on 31st March, 2016.
• The Audited Income and Expenditure Accounts for the year ended as on 31st March, 2016.
• Balance Sheet as on 31st March, 2016.
• To place on record the names of the Committee Members under Para 34.2 (b)
• To appoint and fix the remuneration of the Auditors as required under Para 34.2 (c)

• Brazil’s population of 202 million is the fifth largest in the world, representing nearly 3 percent of global consumers.
• At the same time, Brazil has the highest per capita income of any of the BRICS, with more than half of its population defined as middle-class, earning between $11,500 and $29,000 per year.
• Brazil is also traditional leader among emerging markets. A BRICS member, it is now considered by many multi-national companies as an essential market for truly global businesses.
• Brazil has a natural affinity for the United States and a high regard for our products, brands and technology. Brazil’s existing affinity for the United States has been further reinforced through the Scientific Mobility Program, a government scholarship that has already funded 32,716 students to study for one year in the United States. One of the stated aims of the program is increasing science and technology cooperation between our countries.
• The Brazilian Government is actively cultivating relationships with international and Indian businesses and prioritizing macroeconomic stability.

India's first Central Institute of Chemical Engineering and Technology to come up in Mumbai?

India's first Central Institute of Chemical Engineering and Technology is being planned to be set up in the country's commercial capital here, Chemicals and Fertilizer Minister Ananth Kumar said on Thursday. Mumbai: India's first Central Institute of Chemical Engineering and Technology is being planned to be set up in the country's commercial capital here, Chemicals and Fertilizer Minister Ananth Kumar said on Thursday. "The government is planning to set up Central Institutes of Chemical Engineering and Technology at different locations where the chemical industry has significant presence. The first such institute will come up in Mumbai," Ananth Kumar said at the inauguration of the three-day India Chem 2016 expo here being organised by his ministry jointly with industry chamber FICCI. Noting that the Indian chemical industry, which employs nearly 2 million people, requires 8.5 lakh skilled technicians, the minister said that current infrastructure to impart skill training is inadequate. "The Indian chemical industry is expected to grow at 9 per cent per annum to become a $226 billion sector driven by growth in end-use industries and government initiatives," he said. "India's long coastline, large refining capacity and a satisfactory R&D capacity are the strengths for the growth of the chemical industry, but ease of doing business needs to improve further," he said. Ananth Kumar also said imports from China and Southeast Asia continue to dominate, as raw material cost and availability pose challenges for domestic businesses. Iran is the partner country at this ninth edition of what is billed as India's largest chemicals and petrochemicals event. A host of other countries such as China, Japan, Turkey, Singapore, Vietnam, Britain, South Korea, Belgium and Taiwan are participating in India Chem 2016. Gujarat, Odisha and Andhra Pradesh are taking part as partner states in the event, which is "expected to attract big ticket investments from foreign shores to boost India's chemical industry", the government said. Iran's participation here assumes significance following the signing earlier this year between India, Iran and Afghanistan of the Chabahar trilateral transit and trade corridor deal that will ensure easy movement of goods between the three countries, bypassing Pakistan. (Ref. http://zeenews.india.com/news/mumbai/indias-first-central-institute-of-chemical-engineering-and-technology-to-come-up-in-mumbai_1924875.html dated 01.09.2016)

BACK

BACK

• Fungal dye decolourization:
  • Recently, dye decolourization using biological procedures has become more popular to counter the environmental threats of dyes released by textile industries. Fungal dye decolourization uses fungi to decolorize dye wastewater. It is fast becoming a promising alternative to usual wastewater treatment processes, as the procedure is inexpensive and can be used for a wide range of dyes.
• Reactive dyes are renowned for light and pale shades. However, several environmental problems, including higher alkalinity, colored effluence, and larger volumes of electrolytes, are associated with reactive dyeing. To solve these problems, industries took many efforts, including:
  • Modifying the dye to increase fixation by enhancing the reactivity.
  • Modifying the dye to increase the substantives, so that electrolyte requirement was reduced.
  • Modifying the cellulose substrate- cationisation of cellulosic materials.
Costs

The total world-wide production of cotton is estimated to be 21 x 106 TPA. (Metric tons per annum). The amount of reactive dye used for cotton coloration is estimated to be 120,000 TPA, of which about two thirds is dyed by exhaust technology.

The reactive dye business, owing to its maturity, is very competitive and price sensitive. As older dye technologies have moved out of patent, these have been taken up by manufacturers in a developing world, driving down manpower costs and total production costs. Therefore, a large proportion of cotton processing has shifted to relatively cheaper and less environmentally conscious economies. Further cost reduction and increasing awareness of environmental benefits has led to proposed modifications in the rinsing process, after dyeing. Approximately, half of the energy and water consumption is attributed to the rinsing process after dyeing. Thus, there is much scope for cost reduction in rinsing operations.

Future Aspects

The growth of dye sector in the future will depend on the performance of end-user industries (paints, textiles, printing inks, paper, plastics and foodstuffs). Changing customer preferences, boom and expanding infrastructure in certain parts of the world create a new market opportunity for the dye industry, which is likely to witness innovations in dying technologies, advances in technical expertise and R&D achievements. The high use of cotton, polyester and banned vat and AZO dyes in some countries have paved the way for reactive and disperse dyes. These two dyes are expected to lead the dyes & dye intermediates market in the future.

To learn more about the industry, request a sample today.

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1. Basic chemicals (includes organic chemicals and inorganic chemicals)
   
   Basic organic chemicals: Those majorly produced in India include Methanol, Aniline, andderivatives of Methanol like Formaldehyde, Acetic acid, and phenol and have varied applications at industrial level. These mainstream chemicals nearly account for two-third of the Indian chemical industry; the remaining includes various other chemicals like Chloro methane and Ethyl acetate.
   
   Basic inorganic chemicals: Some of the basic inorganic chemicals are Caustic Soda, Chlorine, andSoda ash belonging to the Chlor-alkali industry; these have application in several industries like aluminum, soap, detergent, tire, rubber, pharmaceutical, etc. Organic and inorganic chemicals are expected to grow at 9% and 6-7%, respectively, in the near future, mainly driven by the end-user segments.



2. Specialty chemicals: Thespecialty chemicals segment is one of the fastest growing segments,growing at the rate of ~15% per annum, worth US $23 Billion in 2015, and expected to reach US $90 Billion by 2020. These are also known as performance chemicals, derived from basic chemicals with flexibility to perform particular function and play important roles in the development of new products, identifying customers’ needs, and delivering solutions. In simple words, it is acknowledged by ‘what they do’. The key specialty segments in India are Polymer additives, Paints and Coating, Construction Chemicals, Surfactants, Flavor, Water treatment, Agrochemicals, Pharmaceuticals, Biotechnology, etc. Despite witnessing the highest growth rate, per capita consumption of specialty chemicals is the lowest in India when compared to other emerging markets. The following exhibit gives an overview of the specialty chemicals market in India
   
   Exhibit 2: Overview of Specialty Chemicals Market in India
   
   
   
   Growth in the Indian specialty chemicals segment is largely driven by the robust domestic demand from the key industries like Pharmaceuticals, Agrochemicals, and Constructive Chemicals. Secondly, need for customized application development in Paints and Coatings, Dyes etc. and industries like
   
   textiles calling for products with higher quality and better performance products like wrinkle free, reflective glass etc.
   
   Exhibit 3: Lifecycle of Specialty Chemicals
   
   
   
   Exhibit 4: Comparison of Key Specialty Chemical Segments in India
   
   

   Segment	Value (INR Crore)	Key Sub-segments driving growth	Penetration of Specialty Products*	CAGR to 2020
   Paints and Coatings	35,500	Protective Coatings, especially wood coatings and automotive coating (metal/plastic)	Medium	15-18%
   Dyes & Pigments (Colourants)	28,100	High Performance Pigments (automotive), Textile Pigments,	Medium	12-14%
   Agrochemicals	28,900	Biocides, Insecticide	Low	9-10%
   Adhesives	13,600	Polyurethane adhesives, Hot Melts,	High	14-16%
   Home Care Surfactants	11,500	Laundry Care, Dishwashing	Very High	22-25%
   Construction Chemicals	4,500	Tile Adhesive, Waterproofing	Low	15-18%
   Water Treatment	5,000	Industrial Water Treatment	Medium	6-8%
   Polymer Additives	2,750	Plasticizers, Heat Stabilizers	Medium	8-10%
   Personal Care Chemicals	4,000	Bath & Shower, Hair Care	Low	10-12%
   Flavours& Fragrances	3,800	Natural Variants,	Low	10-12%
   Industrial & Institutional Cleaners	1,300	Disinfectants, Surfactants	Medium	16-18%
   Rubber Chemicals	1,500	Tyres	High	12-14%
   Other	33,500	N/A
   Total	174,000		Medium	14-18%

   
   
   



3. Petrochemicals: Petrochemicals are also included in the Indian chemicals industry.Petrochemicals, also known as petroleum distillates, are chemical products derived from petroleum. The common source for its production is hydrocarbons derived from coal or natural gas, or some other fossil fuels, or some renewable sources such as sugarcane or corn. Other unconventional feedstocks used are shale gas, coke, pet coke, etc.

1. Development in Nano / Biotech: New evolving applications in the end-user segment, which are highlyresult-oriented in areas like electronics, foods, chemicals, textiles, etc.


2. Sustainability and Green Chemistry: There’s a growing preferences for chemicals and products thatare environment-friendly, thus emphasizing on sustainable development. The goal for most companies is to move closer and closer to zero effluent plants and reduce environmental foot-print of the industry as a whole.



3. Increasing Expenditure on R&D: A huge amount of investment is essential in the technical aspect ofmolecule. In 2014-2015, investments from the top 25 pharmaceutical companies like Lupin, Cipla, Dr. Reddy’s, Biocon, Aurobindo, etc. has increased to 28.8% from 20.6% in the previous year. The key focus area for Indian chemical companies include new molecule development / innovations in agrochemicals with low dosage, high potency, bio pesticides, and other varied allied products.

1. Lack of infrastructure and power shortage: Lack of a strong multi-modal infrastructure, given theconnectivity issues at ports, railways, and roads, obstructs the manufacturer’s bandwidth in procuring raw materials with global peers, which in turn negatively impacts the production of chemicals. Logistics and connectivity hindrances from the supplier to the manufacturers are a major cost component, especially in the bulk chemicals space. For e.g., Soda ash manufacturers are located in Gujarat and ~40% of the end-user industries like glass, detergents, etc. are based in the South. As a result, a lot of South-based customers tend to look at imports as a potential substitute. Another issue is the power supply to manufacturing location. Continuous supply of power is another requisite for efficient production. Although many big companies have started investing in captive power plants, it is typically not cost-effective and increases the cost of production significantly. Small and medium-sized companies are severely affected by uninterrupted power supply issues, often resulting in lowered capacity utilization among these industry participants.



2. Lack of infrastructure and power shortage: Lack of a strong multi-modal infrastructure, given theconnectivity issues at ports, railways, and roads, obstructs the manufacturer’s bandwidth in procuring raw materials with global peers, which in turn negatively impacts the production of chemicals. Logistics and connectivity hindrances from the supplier to the manufacturers are a major cost component, especially in the bulk chemicals space. For e.g., Soda ash manufacturers are located in Gujarat and ~40% of the end-user industries like glass, detergents, etc. are based in the South. As a result, a lot of South-based customers tend to look at imports as a potential substitute. Another issue is the power supply to manufacturing location. Continuous supply of power is another requisite for efficient production. Although many big companies have started investing in captive power plants, it is typically not cost-effective and increases the cost of production significantly. Small and medium-sized companies are severely affected by uninterrupted power supply issues, often resulting in lowered capacity utilization among these industry participants.
   
   
3. Feedstock availability: Feedstocks are the basic building blocks for all chemical products andsustained availability of feedstock at competitive cost is a key concern for companies in the chemical industry; for e.g., crude oil, natural gas. These feedstocks are generally available in India at higher prices compared to costs in China, the Middle East, and Southeast Asian countries like Thailand.



4. Regulatory challenges: The US and the EU together account for about 25% of the global chemicalindustry and India exports specialty chemicals to these developed regions. It, thus, becomes necessary to meet the target countries’ regulations, like REACH (Registration, Evaluation, and Authorization of Chemicals) in the EU. REACH regulations lead to additional time, effort, and money for Indian companies to register chemicals and to do business with the EU, thus increasing the price of exports from India to the EU. On similar lines, the US also imposes norms as per Toxic Substances Control Act (TSCA) that requires testing of chemicals coming into the US. Feedstocks are the basic building blocks for all chemical products andsustained availability of feedstock at competitive cost is a key concern for companies in the chemical industry; for e.g., crude oil, natural gas. These feedstocks are generally available in India at higher prices compared to costs in China, the Middle East, and Southeast Asian countries like Thailand.

Chairman's Desk

Chemexcil Activities

A Brief report of Dye+Chem Bangladesh 2016 exhibition

Chemexcil’s participation in 9th India Chem 2016 dated 1st -3rd September-2016 at Mumbai

Seminar on "Handling of Dangerous Goods (Chemicals) Transportation by Sea and Road” on 16th Sept 2016 at Fortune Park, Dahej

CHEMEXCIL 2ND MEETING OF THE COMMITTEE OF ADMINISTRATION

Seminar on "Forex Management & Trade Finance" on 29th September 2016 at The Banquet Hall 4, Garware Club House, Wankhede Stadium, Mumbai

CHEMEXCIL’S 53RD ANNUAL GENERAL MEETING DATED 29TH SEPTEMBER-2016 AT THE BANQUET HALL 4, GARWARE CLUB HOUSE, WANKHEDE STADIUM, MUMBAI

EXPORT STRATEGY BRAZIL

Chemexcil top items of exports to Brazil GroupwiseCountrywise Exports for the year 2013-2014 , 2014-2015 & 2015-2016

News & Articles

India's first Central Institute of Chemical Engineering and Technology to come up in Mumbai?

Indian chemical industry is expected to grow at 9% p.a. to become a US$226bn sector: Ananth Kumar

India-Chile PTA to be signed soon; exports set to double

DGFT asks exporters’ incorrectly availing simultaneous benefit of 0% EPCG & SHIS to surrender benefits

Government to incentivisefertiliser retail outlets to check leakages

DYES & DYE INTERMEDIATES: DYING TO COLOUR THINGS DIFFERENTLY

The Indian Chemical Industry, at a Glance

Exim Updates

Amendment in Import Policy of Urea under ITC (HS) code 3102 10 00 of chapter 31 of ITC(HS), 2012-Schedule-1(Import Policy)

Issuance of Free Sale & Commerce Certificate by DGFT RA's to Merchant Exporters

Incremental Export Incentivisation Scheme (IEIS)

(MEIS)—Additions/Amendments in Table 2 of Appendix 3B