Indian Oil Corp (IOC) Ltd expects to double its revenue from its petrochemicals business to Rs 6,000 crore in the current fiscal and then push it up to Rs 15,000 crore next year, as the company has identified this value- added segment "as a prime driver of future growth".
IOC chairman B. M. Bansal said that while petrochemicals account for two to three per cent of the company's total turnover at present, the share is expected to go up to six per cent next year.
Bansal explained that with more natural gas being produced in India, naphtha was becoming surplus and the only other option would be to export it at a low price. Also, this would involve huge transport costs.
Hence, it was a better decision to convert this naphtha into highvalue petrochemical products, such as polyester used in textiles, polymers (plastics) for producing aircraft interiors, furniture and suitcases and linear alkyl benzene used to make detergents, he added.
Launching IOC's petrochemical brand 'Propel' on Wednesday, Bansal said that with the world- class naphtha cracker complex going on stream at Panipat this year, the turnover from petrochemicals during this fiscal would be twice that of the Rs 3,000 crore figure for 2009- 10.
Bansal said the Panipat naphtha cracker complex, set up at an investment of Rs 14,400 crore, has four major downstream units and has the largest operating cracker capacity in India today. The naphtha feed for the unit is being sourced internally from IOC's Koyali, Mathura and Panipat refineries.
Bansal admitted that Reliance Industries Ltd (RIL) is the dominant player in the petrochemicals business with an 80 per cent share of the market. IOC currently has a five per cent share and is the second largest company in this business.
Bansal added that with the domestic petrochemicals industry growing at 13-15 per cent per annum in the last two decades and considering the large potential for the future, IOC has set up a dedicated " petrochemicals group" for marketing these products.
The firm has also laid out a web- based marketing strategy.
"A dedicated technical team, backed by a product application development centre at Panipat, will also guide customers in the use of Propel grades and try out new product lines," Bansal added.
IOC's polymer warehouse at Panipat is the biggest in Asia with 15 online bagging and palletising machines - each can pack 1,200 bags per hour.
IOC is setting up another petrochemicals complex at the grassroots refinery that it is building at Paradip on the Orissa coast. The 15- million tonnes per annum refinery will be commissioned by 2011- 12.
In addition, IOC is also setting up a styrene butadiene rubber unit in Panipat, which is the first of its kind in the country.
Courtesy: Mail Today