India has achieved considerable progress in production of chemicals. And with slash in tariffs, Indian chemical companies with well-built systems and structured operations are likely to be benefited further.

It is not only country’s oldest industry, but the Indian Chemical Industry has been contributing to India’s growing economy in a phenomenal way. It may be hard to believe, but the industry serves the basic need of many different industry verticals like natural gas, water, oil, metals, minerals, air, oil, etc and all these verticals eventually bring into marketplace an array of products, almost 70000 products, to be precise.

Today, India has achieved considerable progress in production of basic organic and inorganic chemicals, pesticides, paints, dyestuffs and intermediates, petrochemicals, fine and specialty chemicals and toiletry product segments. And with slash in tariffs, Indian chemical companies with well-built systems and structured operations are likely to be benefited further. The companies manufacturing highly valued chemicals, and who are compliant of industrial quality standards, can make their mark not just in India but even in the overseas markets as well.

In Indian context, the rise in disposable income has led to improved chemical consumption. This has aided country’s GDP climb further, from 9% to 13%. In an attempt to make the industry more progressive and flourishing, the government of India has introduced a slew of policies and special economic zones centering on the petrochemical sector. Furthermore, several manufacturing companies are focusing on expansion plans in the coming years.

Chemicals and chemical products influence our lives in a significant way. Be it donning synthetic clothes, or consuming drugs, or when it comes to using thermoplastic furniture at homes and offices, chemicals have become a way of life in this fast-changing world. In addition, the industry plays a pivotal role in agricultural and development sectors. Some of the other sectors, like engineering, automotive, consumer durables and food processing also depend on this sector in a big way.

The industry is on a high growth trajectory. The industry, through a series of efforts is expected to achieve USD 100 billion in the upcoming years. The industry’s contribution to the Indian manufacturing sector is almost 17.6 percent. Since the ages, Indian chemicals have been traded and today imports stand at USD 7.92 billion and exports at 5.95 billion. And now with the onset of liberalization and globalization, the Industry is on a major expansion spree. The industry today is into manufacturing wide range of goods including fine and specialty chemicals, drugs and pharmaceuticals, dyes and pigments, agrochemicals and fertilizers, pesticides, plastics and petrochemicals etc.

However, Indian chemical industry is yet to makes its presence felt in a big way in the international markets.

Fast-facts on Indian chemical industry

o Highly fragmented

o Operates at the micro level.

o Increased per capita consumption level has put the industry on fast-track

o Higher cost of capital, import duties and power, making it less competitive in the international markets.

o Very little spotlight on Resource & Development

o Presence of many multinational companies

o Big players in bulk chemicals. Presence of small and big players in fine and specialty chemicals.

Major Segments

The Indian Chemical Industry has following major segments:

* Petrochemicals

* Inorganic Chemicals

* Organic Chemicals

* Fine and specialties

* Bulk Drugs

* Agrochemicals

* Paints and Dyes

Petrochemicals

Petrochemicals form the biggest category in the chemicals, and it is also one of the fastest growing sectors. The segement is into producing basic chemicals like Ethylene, Propylene, Benzene and Xylene etc, intermediates like MEG, PAN and LAB etc., synthetic fibres like Nylon, PSF and PFY etc, polymers like LDPE/HDPE, PVC, Polyester and PET etc, synthetic rubber like SBR, PBR etc. The key players include: Reliance, IPCL, NOCIL, Haldia and GAIL etc.

Inorganic Chemicals

At present it is worth US$ 2.5 Billion industry. The segment concentrates on the production of caustic, chlorine, sulphuric Acid etc. The inorganic chemicals are commonly used in detergents, glass, soap, fertiliser, alkalies etc. However, the industry is encountering stiff competition from international players, when it comes to catering to the requirements of the local markets.

Organic Chemicals

It is reportedly 1billion dollar industry and includes an array of chemicals. Most of the companies manufacturing organic chemicals can be found in western India.

Fine Specialties

The fine specialties segment is highly fragmented, with sizeable number of big players. However, all these players operate on low volume and high price margin. It is one of the fastest growing sectors with market around US$80 million p.a. And many big and small Indian companies form part of it. The major end user segments include: Textile, Leather, paper, detergent, rubber, paints, polyester, oil and gas etc.

Bulk Drugs

Bulk Drugs have a large market in India and in the outside world. Out of the 475 drugs used, 425 are locally procured. There are around 350 units in the organized sector, while there can be many more in the unorganized sector. Bulk drug production is concentrated in the areas around Bombay, Ankleshwar, Hyderabad – Madras, Chandigarh.

India has very strong base in reverse engineering, molecular chemistry and patents on processes and not just on products. Major players in India in bulk drug category include: Ranbaxy, Dr. Reddy’s, Cheminor, Shasun, Cipla, Lupin, IPCA, Sun, Aurobindo, Kopran, Cadilla, Wockhardt, etc. It is a well-acknowledged fact that most of the bulk drug companies are Indian companies while those into formulations are primarily MNCs.

Agrochemicals

India being an agricultural dominated country, it is obvious that the country is a major user of agrochemicals; nonetheless, the average Indian consumption is reportedly low i.e., 1/20th of world average. The segment has been witnessing a growth of 10% pa and has registered revenue worth US$800 million. Consumption of the crop varies depending on the crop and region. Cash crops like sugarcane, tobacco etc. consume large amount of pesticides, almost over 60%. Major agrochemicals exports include: Insecticides, Fungicides, Herbicides, Weedicides, Rodenticides, and Fumigants.

Paint and Dyes

Indian dyes are in demand world over, thanks to ban on production of dyes in developed nations due to the reservations related to pollution. Dyes are principally used in Paints, Inks, Textiles and Polymers. The total market of paint and dyes is almost US$ 1 Billion, and the growth rate is almost 12%. In addition, the marketplace is highly fragmented. There are about 25 large and medium players, which cover 50% market share, while 2000 other organized players contribute next fifty percent. Moreover, the per capita consumption is very low in India(400 gms) as opposed to the developed countries(15 kgs).

Overseas Trade

In the early 1990s, India was more into importing of chemicals; however, with the setting up of large scale petrochemical plants like Reliance, etc exports have improved. Even exports of bulk drugs, pharma, pesticides, dyes and intermediates have climbed up.

The overall performance of Indian Chemical Industry has been good in the domestic markets; however, in the international markets the industry it is yet to make its presence felt in a significant way. And factors like recession and crises in the Middle East have had a poor impact on the manufacturing and export sector of the industry.

The International Council of Chemical Associations (ICCA), an association that consists 80% of the world manufacturers of chemicals has announced its support for a new round of multilateral trade negotiations in the World Trade Organization.

ICCA’s main concerns include: removal of chemical tariffs, management of anti-dumping practices, making simpler the custom processes and full execution of TRIPs agreement. While management of anti- dumping practices would profit India, the tariff-free world would lead to stiff competition

Road ahead

Highly developed technology, in-depth research capabilities, backward and forward linkages, development of domestic capacity to decrease the dependence on imports are some of the crucial factors that need to be taken into consideration. Nowadays, safety, health and environment protection issues have become the major-talking point in almost all industries and even in the Indian chemical industry too. The Indian chemical manufacturers are addressing the issue on a war-footing.

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The chemical engineering is the profession in which one works principally in the chemical industry to convert the basic raw materials into the variety of products and deals with the design and operation of the plants and equipments to perform such operations. Chemical engineer is the one who applies the principles of this engineering in practical applications with respect to the study of design, manufacture and operation of plant. As of now you know that the there is the position of great responsibility, good salary packages are offered to these engineers. The salary for them varies depending on the type of project and the company.

Chemical Engineer Salary:

This field is creating new career opportunities and have been immense and rewarding profession in terms of career and money. There salary is highest and most decent in the engineering fraternity.

This field increasing its wings in various sectors and it has lots of scope in future. In good companies, the average salary of the engineer ranges anywhere from $87,000 to $1,22,345 and in some companies, it is between $63,000 to $88,000. For the research and development field it ranges from $63,000 to $98,000.

Chemical engineering is one of the evergreen branches of engineering. There are many chemical hubs opening in India and abroad adding to the growth of this industry. Many companies are hiring number of students every year in this sector. The major chemical companies in this industry are HP, IOCL, TATA Chemicals, etc.

This field is vast and there are many job options for them. They can get the job in following industries.

• Fertilizer technology

• Petroleum Refining

• Recycling metals

• Glass and plastics industry

• Paints and Dyes

• Processing of Food and Agricultural products

• Cosmetics Industry

• Prevention and control of environmental hazards

• Mineral based industry

The starting salary of the chemical engineer in the above industries may not be high, but it will gradually increase with the increasing experience.

Chemical Engineer Salary Range:

Chemical Manufacturing – $68,000 to $85,000

Engineering Consultant – $65,000 to $80,000

Oil and Gas Industry – $70,000 to $88,000

Pharmaceuticals – $70,000 to $88,000

Petroleum Refining – $76,000 to $95,000

Government/ federal Agencies – $50,000 to $100,000

The salary range of the chemical engineer depends on what type of job you are going to get, the type of company, your academic qualifications, etc. Choose the industry that you are best interested in.

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For many executives, and particularly so in the Chemical Industry, security is a necessary evil, but an unnecessary cost item on the budget, as it does not produce revenues or add to a company’s profitability. I would contend that such a belief is simply not true! Security systems and measures, applied correctly (meeting design criteria and in keeping with accepted standards and practices within the security industry) can greatly enhance the “bottom line” of any company, and even more so for a chemical company in today’s uncertain economic climate by virtue of the following:

1) Prevention of Incidents:

Obviously, a primary goal of any security department and the systems and measures adopted, is to prevent incidents, particularly those that might impact employees, company operations, infrastructure, inventories, etc. A stoppage in operations or provision of services is measurable in many different ways, and I would put forward that security measures in preventing such stoppages is a valuable addition to the “bottom line”, as is the prevention of damage to infrastructure and other situations. What would be the cost to the company if a primary manufacturing area was damaged, or a warehouse destroyed with its inventory, or there was critical damage to a series of loading docks that disrupted supplies, etc? Such events certainly give rise to thought.

It should also be remembered that while chemical facilities have always been concerned about safety and the prevention of accidents at a plant, they now have to be very concerned about deliberate acts of sabotage. Such acts may be terrorist related, or the vengeful intent of a disgruntled employee. In either case, a successful event could be financially crippling to the company.

2) Prevention of Negligent Liability:

It is unfortunate that negligence can only be measured “after the fact” in the minds of many executives, but in fact, it is an area that should be considered in anticipation of an incident that might involve alleged negligence or alleged gross negligence. In today’s America in particular, the occurrence of a security event such as an assault in the workplace, assault in the parking lot, theft of private data, etc., will almost certainly trigger a legal action of some sort. As I have commented in other articles, it is unlikely that an organization will be able to completely avoid a lawsuit as such, but it is vital that the company be able to defend itself against any alleged negligence.

Those companies and organizations that take sound and effective security measures, and utilize adequate security design criteria in developing their security measures will be in a much better position to thwart charges of negligence than those who have not pursued such measures. Punitive damages, if proven in court, could mean very significant amounts in the hundreds of thousands and possibly millions of dollars, exacted as a penalty against the company. That will certainly affect the “bottom line” even with the best insurance coverage.

3) Loss of Public Confidence

In the event of a serious incident taking place, and again, particularly so in the case of chemical and pharmaceutical companies, there is a secondary cost in addition to the legal and health consequences; that involving a loss of public confidence. Where that occurs, it is almost immediately followed by your customer’s loss of confidence. Everyone remembers the 1982 “Tylenol” situation in the U.S., or the 1984 Bhopal gas leak situation in India. Imagine the effect of an incident with similar consequences upon your company, and it was deliberate.

The cost of good security needs to be looked at in comparison to such consequences, though not necessarily on the scale of the two events referred to above.

4) Staff Morale:

There is a multitude of sources that detail the effects of low staff morale affecting productivity caused by everything from the Monday morning “blues” to personal concerns in their life, to corporate concerns which include fears for personal safety when at work, and fears of damage or theft of property while working. Good security will generally give an employee a feeling of being in a safe environment which is normally found to be a morale booster. Where a person is concerned that they may be accosted or assaulted at any moment, or harassed in a myriad of different ways, the productivity for that person is not going to be high.

One example that I have utilized many times in CCTV camera surveillance systems, particularly where there are exterior cameras covering the facility parking lots is to provide additional video monitors (an inexpensive addition) in areas such as the cafeteria, meeting rooms, supervisor offices where employees can see that their vehicles are being monitored. The increase in morale, and by definition, productivity is considerable.

It also provides “free” security manpower to a degree, as those same employees watching their vehicles, as an example, are also almost certainly going to report suspicious activity.

5) Company Perception:

Good security at a facility is often a deterrent to theft and pilferage where otherwise, individuals or groups might easily be tempted to engage in such criminal acts. I have previously made mention of the 10/80/10 rule in security where 10% of the population are considered to be totally honest all of the time. 10% of the population are considered to be totally dishonest all of the time, and the remaining 80% are prone to dishonesty if there is opportunity. Sound security measures are not only a deterrent to possible criminal acts from the outside, but are also a valuable deterrent to what is considered “insider” crime, and may range from petty theft to fatal assault.

Unfortunately, the pilferage factor takes on an entirely new meaning at chemical facilities where there is real concern about “Theft/Diversion” of certain types of chemicals, that when mixed with other materials, provides a very effective Improvised Explosive Device (IED). Terrorists and Extremists will be prepared to pay well for small amounts of such chemicals.

6) Sales Advantage:

It does sound a little incredulous at first to suggest that good security is somehow able to assist and actually increase sales, but it is a perfectly valid point. From experience, and particularly in industries such as the chemical industry, where companies are supplying raw materials, or sub-compounds, etc., to their customers, continuity of supply can often be as important as price and other factors, and in several situations, being able to rely upon a vendor for continuous deliveries at all times, particularly in a crisis, is paramount.

Indicating to a customer that you have carried-out a qualified Security Vulnerability Assessment (SVA), devised appropriate security design criteria, and implemented sound security measures will greatly aid in the customer’s perception of your company, and its ability to provide product or services without interruption. In addition to establishing long-term customer relationships, such perception will often lead to increased sales as well as referrals from that customer to other potential customers. As such, there is certainly an addition to the “bottom line” that is both valid and significant.

7) Security Legislation

In 2006, the U.S. released its initial version of new security legislation entitled ” Chemical Facility Anti-Terrorism (CFATS) Standards”, (ANPR) – 6CFR Part 27 with the Final Regulations (Final “Chemicals of Interest” – COI List approved in 2008.

The regulations are substantially different to prior regulations on security, such as the 2003-2004 Public Health Security and Bioterrorism Preparedness and Response Act (BPRA), and involve not only the completion of a Security Vulnerability Assessment of a facility, but where applicable, the submission of a Site Security Plan (SSP) followed by a timetable of implementation.

At last count, the Department of Homeland Security (DHS) had trained some 250 inspectors to monitor and enforce the security regulations. Failure to meet the regulations in a timely manner can result in severe fines (up to $25,000.00 per day of violation), and in certain circumstances, the DHS have the power to shut-down a facility altogether.

As can be seen, the cost of not having adequate security may well outweigh whatever budget costs apply to actual security measures and systems at a facility.

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