Chemical Industry 2022: An Year-End Overview

In 2022, the chemical and petrochemical industry in India has seen a rise in production, as per data from the Department of Chemicals and Petrochemicals. 

Chemicals Production

Overall, the production of major chemicals has increased by 5.73%  (43.51 lakh tons) up to July 2022 as compared to July 2021. However, some specific chemicals have seen a decrease in production such as pesticides & insecticides, dyes & pigments, and organic chemicals.

Petrochemicals Production

The production of major petrochemicals has decreased by 8.88% to (133.38 lakh tons) up to July 2022 as compared to July 2021. But, there are some specific petrochemicals that have seen an increase in production such as synthetic fibre, performance plastics, and other petrochemicals.

Remarkable Growth

A few significant chemicals like acetic acid, ethanol, and ethyl acetate showed upward trends. In FY 2021, the Indian acetic acid market demand stood at 1.16 million tons. This demand increased to 1.18 million tons in FY 2022, representing a growth of 1.72% from FY 21. In the Indian ethanol market, demand increased to 3520 million litres in FY 2022 from 3250 million litres in FY 2021, representing a growth of 8.25%. The ethyl acetate market has grown by 8.07% for the year 2022.

While speaking at an event organized by the Gujarat Chemical Association (GCA), a government official from the Department of Chemicals and Petrochemicals (Government of India), stated that the chemical industry is marching up at the rate of 9.3%. Keeping in mind the growth rate and the predicted demand, the growth rate will continue to rise. 

Speciality Chemicals Sector

Gujarat has over 11,000 chemical units that account for more than 50% of the major chemicals produced in India. According to market experts, the speciality chemicals sector in India is expected to grow even at a faster rate. He stated that the speciality chemicals industry is targeting a growth rate of 12.5%, which is higher than the growth rate of the chemical industry as a whole.

IIFL Wealth Hurun India Rich List 2022

As per the IIFL Wealth Hurun India Rich List 2022, the chemicals and petrochemicals industry is one of the fastest-growing industries in India. When it comes to the representation of billionaires, the chemicals & petrochemicals sector is the runner-up, just below the pharmaceutical sector.

Notable Names From Chemicals And Petrochemicals Industry

Out of 149 people who made it to the rich list, 20 people are from the chemicals and petrochemicals industry. Some of the notable entrepreneurs from major chemicals and petrochemical companies who made it to the 2022 list are:

1. 7th Rank-  Hinduja- SP Hinduja & family, with a a net worth of ₹1,65,000 crore.
2. 13th Rank- Asian Paints– Ashwin Dani & family, a net worth of ₹71,600 crore. 
3. 27th Rank- Indorama-Sri Prakash Lohia at, with a net worth of ₹48,600 crore.
4. 48th Rank- Pidilite Industries– Madhukar Parekh & family at 48th rank, with a wealth of ₹31,600 crore.
5. 65th Rank- Berger Paints- Gurbachan Singh Dhingra, with a net worth of ₹25,000 crore.

Road Ahead

The chemical industry in India experienced robust growth in 2022 and was one of the few industries that recovered well after the COVID-19 pandemic. It has the potential to keep growing in the upcoming years. Though India relies heavily on imports for its acetic acid supply from China, Malaysia, and Germany being the major sources of these imports, it is experiencing a faster growth rate in terms of ethanol and ethyl acetate demand as compared to the global growth rate. This was due to many industries shifting their focus to the “China-plus-one” strategy. 

Indian chemical companies are now investing heavily to capitalize on opportunities arising from changes in global preferences and environmental issues affecting Chinese companies that currently dominate the global chemical market.

India’s Scope of Capturing Chemical Industry

The chemical industry in China is evaluated at around $1,550 billion. Compared to India’s $150 billion industry, it is much larger. Despite this significant gap, there is hope for India’s chemical industry to grow and reach new heights by capturing a portion of the chemical trade currently dominated by China. If India can capture even 10% of the chemical trade of China, it has the potential to rapidly grow and become a $300 billion industry in a few years.