CHEMEXCIL

Chemical Export Promotion Council Of India

GROWTH PROSPECTS OF THRUST AREAS OF INDIAN EXPORTS

Presented by

Rahul Goyal Sidharth Ahuja Mayank Gupta (Section F)

Overview of Indian Chemical Industry

The Indian Chemical Industry has been ranked 5th largest in Asia as per the Exim Bank studies. Chemical industry is one of Indias oldest industries, contributing significantly towards the industrial and economic growth of the nation. The Indian chemical industry is estimated to be worth approximately US$ 35 billion, which is about 3% of Indias total GDP. In terms of volume, it is 12th largest in the world and 3rd largest in Asia. The industry is forecasted to reach USD 200 billion mark by 2020. The industry accounts for about 10% of the output of the Indian manufacturing sector, 13% of Indias total exports, and 9% of the countrys total imports. In terms of segmentation, basic chemicals is the largest sector with total revenues estimated at US$ 43 billion. Domestic Specialty Chemical Industry is expected to grow at 15%, almost double the growth of global industry; exports to touch USD 13 billion in 2013.

Overview of Indian Chemical Industry (Cont..)

The Indian Government is rendering extensive support to give impetus to the Indian Chemical Industry and has set up the Task Force to consider suggestions for National Chemical Policy to ensure steady growth of the countrys chemical sector. Investment Regions (PCPIR) in Gujarat, Andhra Pradesh, West Bengal and Odisha to accelerate the countrys industrial growth. The Indian Government has earmarked substantial funds to achieve healthy growth of the countrys upstream and downstream sectors of the chemical industry. India is emerging as Asias refining hub and has become the net exporter of petrochemicals to countries like the Middle East, Korea, Japan and Singapore. The Indian chemical industry is matured and is in the midst of a major restructuring and consolidation phase. In a nutshell, the Indian chemical industry has a large potential to grow in domestic as well as in export markets.

Overview of Global Chemical Industry

The world chemical industry is estimated to have reached 2353 billion (US$ 3127 billion) in 2012. The Asian region is the largest contributor to the global chemical industry, accounting for nearly half the global sales ( 1147 billion) followed by Europe ( 578 billion). International trade in chemical products has witnessed a continuous rise with global exports of chemicals recording an average annual increase of 6.2% during 2006-2010 to amount to US$545 billion in 2010 as compared to US$ 451 billion in 2006. While the average annual increase in exports from Asia-Pacific region was 11.9% during the 2006-2010 period, it was as high as 21.9% each in the case of Middle East and Africa. The importance of the Economies of Brazil Russia India China & South Africa (BRICS) is growing in the chemical Industry, on a continuous basis.

CHEMEXCIL
Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion Council, popularly known as CHEMEXCIL was established in the year 1963. Its headquarters at Mumbai, with the objective of making concerted efforts to promote exports of Basic Organic and Inorganic Chemicals, Dyes, Pesticides, Soaps, Detergents, Cosmetics, Toiletries and other products like Essential Oils, Castor Oil etc. Chemexcil has 4000 members comprising of Large Scale Manufacturers, Small Scale Manufacturers & Merchant Exporters. CHEMEXCIL has four separate panels viz. Dyes & Dye Intermediates.

Basic Inorganic and Organic Chemicals including Agro Chemicals.

Cosmetics, Toiletries, Essential Oils. Castor Oil and Derivatives of Castor Oil.

Roles of Chemexcil
Assisting members to get their MDA/MAI claims refunded from Govt. of India. Issuance of Certificate of Origin.

Maintenance of Chemical Library & help overseas importers/ Exporters - sourcing their products.
Organizing Indian Pavilion in important International Chemical shows in order to create Brand India Image. Holding of Sector Specific International Conferences/ B2B Meets in India/ Abroad. Organize Reverse Buyer-Seller in India. Help exporters in their needs for technology up gradation from inception of the product till it is put in the Warehouse/ Showcase of Departmental stores under MAI. (For e.g. Export of Menthol to USA / Canada.) Interface with Govt. for policy concern/ suggestions so that export is done smoothly.

DYES & DYES INTERMEDIATES

Inorganic, Organic and Agro Chemicals

Year Inorganic Chemicals % growth from previous Year Organic Chemicals % growth from previous Year Agro Chemicals % growth from previous Year Total % growth from previous Year

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

9625 13759 15631 16388 22520 37120 36530 46790 *

4 43 14 5 37 65 -1.6 28.1 *

33928 49802 59146 59894 60240 79580 76190 98950 *

-8 47 19 1 1 32 -4.4 29.9

9377 8919 13093 20478 29230 43040 52651 52140

-37 -5 47 56 43 47 22.3 19.5

52930 72480 87870 96760 111900 159740 165300 197880 277300

-13 37 21 10 16 43 3.5 19.7 40.1

Cosmetics, Toiletries & Essential Oils

Castor Oil

Towns of Export Excellence

Major Competitors in the Global Market

China ----------- $ 975.9 billion USA ------------- $ 543.0 billion Japan ----------- $232.3 billion Germany ------ $ 207.1 billion South Korea -- $ 156.7 billion Brazil ----------- $ 116.8 billion France --------- $ 110.2 billion Taiwan --------- $ 82.3 billion Russia ---------- $ 75.7 billion Netherlands -- $ 73.0 billion
(Source www.cefig.org as of 2011)

SWOT ANALYSIS
Strengths
Diversified manufacturing base Vibrant downstream industries in different segments Competitive core industries Capability to produce world-class end product Large domestic market Major raw material component sources within the country Good R&D base and quality human resources

Weaknesses
Cost of Power Cost of Finance Infrastructure Scale of Production Cost Disadvantages Multiple taxes Extra transportation cost for raw material & finished goods Low investments in R&D and technology

Opportunities
Market in developed country is opening up Success in Dyestuff has boosted other sectors Being close to Middle east India has close vicinity to petrochemicals Large no of product going off patent Competencies to utilize renewable resources Climatic conditions in India Competency to emerge as a global player in area of specialty chemicals

Threats
Reduction in import tariffs Chinas lower chemical cost

Threat of extinction, if competency is not acquired Bilateral / multilateral trade agreement

Foreign Trade Policy Provisions

CHAPTER- 1 B
SPECIAL FOCUS INITIATIVES Technological Upgradation

(a) EPCG Scheme at zero duty has been introduced for certain engineering products, electronic products, basic chemicals and pharmaceuticals, apparel and textiles, plastics, handicrafts, chemicals and allied products and leather and leather products.

CHAPTER 3 PROMOTIONAL MEASURES PROMOTIONAL MEASURES IN DEPARTMENT OF COMMERCE Market Development Assistance (MDA) DOC provides for reimbursement of charges/expenses for fulfilling statutory requirements in the buyer country, including registration charges for product registration for pharmaceuticals, bio-technology and agro-chemicals products on recommendation of EPCs. Financial assistance is also provided for contesting litigation(s) in the foreign country concerning restrictions/anti-dumping duties etc. on particular product(s) of Indian origin, as provided under the Market Access Initiative (MAI) Scheme of DOC. REWARD / INCENTIVE SCHEMES IN DGFT Status Holders Incentive Scrip The Status Holders of the following Sectors shall be eligible for this Status Holders Incentive Scrip: 1. Basic Chemicals (excluding Pharma Products). CHAPTER-5 EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME Zero duty EPCG Scheme [5.1] Zero duty EPCG scheme allows import of capital goods for pre-production, production and post-production (including CKD/SKD thereof as well as computer software systems) at zero Customs duty, subject to an export obligation equivalent to 6 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from Authorization issue-date. The scheme will be available for exporters of engineering & electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products and leather & leather products; subject to exclusions as provided in HBPv1. Export of dual-use items and technologies under Indias Foreign Trade Policy is regulated. Export of dual-use items and technologies is either prohibited or is permitted under a license. In Foreign Trade Policy, dual-use items have been given the nomenclature of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET). Export Policy relating to SCOMET items is given in Appendix 3 of Schedule 2 of ITC (HS) Classification and Paragraph 2.49 of Hand Book of Procedures Vol.-I, 2009-14. Appendix 3 of Schedule 2 of ITC (HS) Classification contains a list of all dual-use items and technologies export of which is regulated.
Category 1 Toxic Chemicals and other chemicals

Chapter 3
SOME EVENTS UNDER MDA

4th Indexpo Muscat , Oman - 20-22 September, 2011 10th Reverse Buyer Seller Meet, Gandhinagar, Gujarat 13-15 October, 2011 Chemexpo - Thai 2011, Thailand - 5-7 January, 2012 Indian Chemical Exhibition, Mauritius - 23-24 February, 2012 BSM- Kenya & Tanzania - 27 & 29 February, 2012 BSM Australia - 15-16 March, 2012

EVENTS UNDER MAI

Chapter 3

11th China Interdye 2011, China - 26-28 April, 2011 Chemspec USA 2011, Philadelphia, USA - 3-5 May 2011 Chemspec Europe 2011, Switzerland - 15-16 June, 11 FCI Trade 2011, Argentina - 17th Aug, 2011 11th RBSM (OTAI), Mumbai 11-13 Dec, 2011 13th CAC China 2012, China. 6-8 March, 2012
Few Other Events by Chemexcil

Indian Chemical Exhibition 13th 14th November, 2012 IFEAT 4th 8th November, 2012 Kichem 2012 31st October 3rd November, 2012 Turchem Inerdye Exhibition 11th-14th October, 2012 India Pavilion Turchem 2012 11th-14th October, 2012 India Chem 2012 4th-6th October, 2012

Quality Standards
ISO has developed over 19 000 International Standards and all are included in the ISO Standards catalogue. The Standards used by CHEMEXCIL are:-

Major Challenges Faced by the Exporter

Indian chemical industry holds a recognized position in the global map; however, there are few factors, which hinders the growth of the industry. These include:
SSI reservation / Fragmented nature of industry The Indian chemical industry is having a fragmented structure with more number of units in small-scale sectors spread in various parts of the country.

 High Price of basic feed stock The fluctuations in oil prices therefore affect the growth projections of the firms. Low R&D Levels R&D intensity is assuming greater significance for many of the manufacturing segments. Environmental Regulations Safety, health and environment protection issues are becoming important concerns for the Indian chemical industry.

Relevant News Articles

Chemexcil seeks opportunities in South Africa
Press Trust of India / Johannesburg July 27, 2012, 16:05

"South Africa is a highly quality-conscious market, so I think the key issue is not the size of the Indian company, but the kind of quality that you can consistently adhere to. There is considerable opportunity for entry for small and medium sized entrepreneurs," Gupta told a delegation from the Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council (Chemexcil) here yesterday. As many as 68 Indian exporters and manufacturers from Chemexcil are participating in a two-day buyer-seller meet to boost business in South Africa.

Source: http://www.business-standard.com/generalnews/news/chemexcil-seeksopportunities-in-south-africa/37347/

Relevant News Articles

India, Nigeria trade crosses $17 billion in FY12
PTI Aug 1, 2012, 08.10PM IS The bilateral trade between India and Nigeria has risen by over 36 per cent to USD 17.3 billion in the fiscal ended March, 2012. The trade between the two nations stood at USD 12.7 billion in 2010-11. Exports rose to USD 2.7 billion in FY2011-12 from USD 2 billion in the previous fiscal, while imports stood at USD 14.6 billion as against USD 10.7 billion in 2010-11, Indian High Commissioner to Nigeria, Mahesh Sachdev, said quoting official data. He was speaking at the opening ceremony of the first Indian-Nigerian Chemical Products Buyer-Seller Meet in Lagos yesterday. Nigeria constitutes nearly a quarter of India's trade with the African continent, making it the largest trading partner in the region, he said.
Source: http://articles.economictimes.indiatimes.com/2012-08- 01/news/32981286_1_nigeriapetroleum-industry-bill-mahesh-sachdev

Relevant News Articles

Biesterfeld works with Indias Chemexcil on Reach Legislation
23 June 2009 15:02 [Source: ICIS news] HELSINKI (ICIS news)--German distributor Biesterfeld is cooperating with Chemexcil, an Indian government organisation, on Europes Reach legislation, the company said Tuesday. Speaking on the sidelines of the FECC Congress in Helsinki, Finland, Biesterfeld CEO Birger Kuck said that subsidiary Biesterfeld ChemLogs would help small and medium-sized enterprises (SMEs) in India by providing training and consultancy work, as well as preregistering and registering products. The alliance would reduce considerably the expenses involved, Kuck said. The deal with Chemexcil, which followed a visit by a German delegation to the country in November last year, would mainly focus on dyes, as India is a major exporter of dyestuffs to Europe. Speciality chemicals and some basic chemicals would also be included. Source: http://www.icis.com/Articles/2009/06/23/9226990/biesterfeld-works-withindias-chemexcil-on-reach-legislation.html

References
ANNUAL REPORT 49TH WEB CHEMEXCIL (2011-2012) [http://chemexcil.gov.in/Download.aspx] Statistics CHEMEXILS EXPORT [http://chemexcil.gov.in/Chemexcil%20Exports.aspx] Statistics - TOP COUNTRIES OF EXPORTS OF CHEMEXCILS ITEMS [http://chemexcil.gov.in/TopCountries.aspx] Statistics TOP 15 COUNTRIES OF EXPORTS OF DYES & DYE INTERMEDIATES FROM INDIA DURING 2009-10 WITH COMPARATIVE FIGURES FOR PREVIOUS YEARS [http://chemexcil.gov.in/Top%20Item%20Export.aspx]

ISO Standards - Chemical Technology [http://www.iso.org/iso/home/store/catalogue_ics/catalogue_ics_browse.htm?ICS1=71]

ISO Standards - Paint and Color Industries [http://www.iso.org/iso/home/store/catalogue_ics/catalogue_ics_browse.htm?ICS1=87] Provisions in Foreign Trade Policies [http://www.commerce.nic.in]

News Article Chemexcil seeks opportunities in South Africa [http://www.business-standard.com/generalnews/news/chemexcil-seeks-opportunities-in-south-africa/37347]

News Article - India, Nigeria trade crosses $17 billion in FY12 [http://articles.economictimes.indiatimes.com/2012-08-01/news/32981286_1_nigeria-petroleum-industry-bill-mahesh-sachdev] News Article Chemexcil seeks opportunities in South Africa [http://www.icis.com/Articles/2009/06/23/9226990/biesterfeld-works-with-indias-chemexcil-on-reach-legislation.html]