“Product Innovation, Cost management and Skilled workforce are need of the hour for Indian chemical industry”
At the first International Conference on Chemical Industry (ICCI – 2014) at Gandhinagar, the industry, academia and the policy makers unanimously agreed on the need of bringing product innovation, cost management and making available skilled workforce to make the local industry globally competitive.
Jointly organized by the Department of Chemical Engineering, Pandit Deendayal Petroleum University (PDPU), Gandhinagar, in association with the Gujarat Chemical Association (GCA) the two day ICCI – 2014 conference witnessed a rousing start on August here.
Representatives from Central and State governments along with captains of chemical and petrochemical industry showcased the future prospects for the industry, while touching upon the key challenges that has been pushing the industry down.
The Chief Guest of the event, Mr Indrajit Pal, Secretary, Chemicals and Petrochemicals, Government of India stressed upon the need of making chemical industry more environmentally responsible, “In his speech from the Red Fort on the Independence Day our Prime Minister had called for manufacturing with zero defect and zero effect. The industry should work in this direction.”
Addressing a gathering of industrialists, academicians, researchers and students, Mr Pal mentioned that chemical sector assumes great importance in the Indian economy, as it not only produces about over 70,000 commercial products of different types, the sector contributes about 2.11 per cent to the country’s GDP (as on 2012 – 13).
Primary output is valued at about USD 144 billion or INR 7.83 lakh crore for 2012 – 13.
The event was attended by about 1000 delegates and was organized as a Pre Vibrant Summit in association with the Industrial Extension Bureau (iNDEXTb) of the State Government. ICCI 2014 also teamed up with various international organizations such as the University of Houston, Vibrant Holland, the Australian Trade Commission, the Canadian Embassy and the Embassy of Poland.
Such is the promising future for the chemicals and petrochemicals industry in India that government officials believe that India’s chemical industry, which is third largest in Asia and sixth largest globally, will witness rapid growth with new policy initiatives joined with technology support and entrepreneurship to rank among top 5 in the world in next five years.
India’s chemical story is only a half truth without mentioning Gujarat. First among the verticals and the biggest ones in scale and size are found on the soil of Gujarat. The first public sector crude oil refinery was set up near Vadodara by Indian Oil Corporation (IOCL), also two of the biggest private sector oil refineries of Essar Oil and Reliance are stationed near Jamnagar. Also, Gujarat has one of the country’s four Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) at Dahej, first dedicated chemical port is also stationed at Dahej.
As per the official figures, Gujarat contributes nearly 40 per cent to India’s chemical production. Close to 50 per cent of India’s crude oil refining capacity is based in Gujarat. Having the longest coastline in the country, easy access to overseas trade and imported raw material has helped chemical industry to proliferate in the state.
Terming the conference as ‘Sangam’ (confluence) of three verticals industry, academia and government, Gujarat government’s Additional Chief Secretary – Department of Energy and Petrochemicals, Mr D J Pandian, IAS, shared the state’s vision about growth of chemical industry in the state. Mr Pandian stressed on giving encouragement to entrepreneurs to be responsible towards environment conservation.
He stated that while small and medium enterprises form a large section of stakeholders of state’s chemicals and petrochemical industry, there was a need to encourage them to be responsible towards environment, “We have to see how to engage them for environment cleanup activity. They may not have resources, in that case use of common effluent treatment facilities has to be encouraged”, stated Mr Pandian.
Sponsored by state government’s iNDEXTb, Reliance Industries Ltd, Naroda Enviro Project Ltd, Green Enviro, Gujarat Narmada Valley Fertilizer and Chemicals Ltd, United Phosphorous Ltd, Gujarat Alkalies & Chemicals Ltd, the event was divided into seven sessions spread across two days.
The first day was attended by leaders and experts of chemical and petrochemicals industry including Mr Zarir N Langrana, COO, Tata Chemicals; Mr K Govindarajan, CEO, Projects, Essar Oil along with Mr Rajesh Shrivastava, cEO, Jubilant Life Sciences among the others.
A major attraction of Day 1 of the event, CEO Roundtable, which was moderated Mr Sunil Parekh, industry expert and founding curator – World Economic Forum, witnessed deliberations by industry captains on the prevailing issues of the industry.
Stakeholders of the industry presented their views on issues, challenge and future growth opportunity for the sector. While one of the largest soda ash players, Tata Chemicals Ltd’s Mr Langrana expressed confidence on future prospects for India’s chemical industry.
“Knowing the demand and having customer knowledge, innovation in products, process and business models and clean businesses are the key factors. At the intersection of these three areas the growth will happen”, said Mr Langrana.
While overall industry is facing severe manpower shortage, Mr Langrana highlighted creation of skilled workforce to meet the future demand of the industry. “There is a shortage of workforce in the entire value chain of chemicals industry”, he said.
Echoing the sentiment, Mr Parekh noted that the issue of industry facing manpower shortage has been resonating throughout industries, hence it needed national agenda to meet the skilled workforce requirement.
On the environment concerns putting across Gujarat case, Mr Sailesh Patwari, Chairman, Naroda Enviro Project Ltd, Ahmedabad maintained that industry and government have jointly made efforts to meet environment norms, Gujarat Pollution Control Board (GPCB) is not acting as a police but it is playing a role of a doctor for the industry and help them meet pollution norms”, said Mr Patwari.
It was also felt that the government should allow the units increase their production or change the product if the threshold limit for pollution is maintained. Speaking for the Small and Medium Enterprises (SMEs) in the state, Mr Mahesh Desai of Gujarat Dyestuff Manufacturer’s Association (GDMA) maintained that government’s approach in dealing with industry has to change to evoke their confidence on the enforcement agencies. “Government should stop treating industries as criminals. They should respect the industrialists, who also contribute in nation building. The government should take industry as their partners.”
Macro factors affecting the industries were discussed by Mr Govindaranjan K, who explained in detail how customs duty on natural gas is spiraling up the costs for the industry. Also, it was highlighted to moderate the land acquisition laws so as to facilitate industries expand operations or set up new projects especially refineries. “The industry should be given basic social and industrial infrastructure to make investments”, said Mr Govindarajan.
He also stressed on the need to bring self regulation, which will add to ease of doing business for entrepreneurs.
In order to make the local industries globally competitive, cost management was felt to be the important area to be looked at. According to Mr Rajesh Shrivastava, CEO, Jubilant Life Sciences Ltd, costs can be reduced with forward or backward integration. Also, skilled workforce and innovation in products would give companies advantage over global peers.
“Speciality chemcials industry is based on innovations. In a developing country like India, industry may not share much from their profit towards innovation. In this situation a government support is required”, Mr Srivastava said.
Mr Shrivastava also highlighted the issue of availability of feedstock for the processing units. This, according to him, continues to be a major challenge for the chemicals industry. However, with setting up of PCPIRs, this issue may get resolved up to some extent.
While India’s chemical industry is faced with several challenges on costs, raw material availability, skilled workforce and lack of global competitiveness, there is still a hope among people at large and the investors in particular.
Speaking on these lines, Mr Sunil Parekh maintained that the recently concluded election results were the fallout of hopes that the people have put in the new government. “There is optimism in the people. The mood is upbeat in government and the people. If the industry doesn’t violate human resource and environment norms and progresses, this is a step in the right direction”, said Mr. Parekh.
Interestingly, the event witnessed detailed interactive sessions on industry – specific subjects including specialty and fine chemicals, sustainable use of fossil fuels besides having a separate session for research and innovation on Chemical Technologies.
The Day 2 had a special session dedicated to prevailing human resource practices in the industry and issues faced on HR front under the HR roundtable. Leading corporate from chemicals and petrochemicals sector would participate for the same.
Also, the Indian Council of Cultural Relations had organized a cultural programme for the event participants at the end of the Day.