August 2019 Issue: CPMA/020/2019

Member Companies CPMA in the News Commentary for the month India is looking at cutting capacity at its biggest oil refinery to Focus on SUP continued as Prime Minister clarion call on match lower fuel demand projections and contain costs which Independence Day urging citizens to eliminate the use of jumped to $60 billion due to meeting stringent environment single-use plastics (SUP) from October 2, has refocused the norms and relocation of the plant, top officials said. State- spotlight on corporate India’s preparedness in making his owned Indian Oil Corp (IOC), Corp Ltd (BPCL) vision a reality. However, in a first, the CPCB has mooted and Corp Ltd (HPCL) together with Saudi a definition for single-use plastic: “Disposable plastics used Aramco and Abu Dhabi National Oil Co (ADNOC) plan to set up a 60 million tonnes refinery-cum-petrochemical complex on for packaging only once before being disposed or recycled Maharashtra coast. and which are non-biodegradable and remain in dumpsites, landfills or littered on streets and cause serious environmental The board of Oil and Natural Gas Corporation (ONGC) has or health hazards to our flora and fauna.” In what could be a

BUZZ offered to help ONGC Petro Additions Ltd (OPAL) raise debt relief to beverage firms, only bottles of less than 200 ml will resources of `2,680 crore. be barred from use, according to the proposal. State-run Oil and Natural Gas Corporation (ONGC) Indian economy continued to face headwinds in terms of said the proposed merger of its subsidiaries, Hindustan Petroleum Corporation (HPCL), and Mangalore Refinery weak core sector output, slump in manufacturing activity and and Petrochemicals (MRPL), would happen next year. The services sector. Slowdown is being witnessed across sectors largest hydrocarbon producer in India has lined up a capital - Automobile sales in India witnessed the worst-ever fall in 21 expenditure of Rs 32,921 crore during 2019-20, compared to years. India’s core sector output remained weak in July, with Rs 29,449 crore during the previous financial year. growth slowing to 2.1% from a year earlier, as production of coal, crude oil, natural gas and refinery products declined. Indian Oil Corp plans to invest Rs 2 trillion ($27.98 billion) in Manufacturing activity in India slumped to a 15-month low five-seven years to meet energy needs of diverse user groups, in August as sales slowed, forcing factories to cut back on Chairman Sanjiv Singh told at shareholders meeting. production. India’s services sector activity softened in August The Petrochemicals Limited (HPL) will invest over Rs as job creation and output expansion moderated. The twin 78,000 crore for setting up a hydrocarbon processing complex sets of data indicated the lack of any indications of recovery, in Baleswar district. both in demand or investment, in the economy in the second The HPL, one of the largest petrochemical majors in the country quarter from the six-year low it touched in the June quarter. located at Haldia in East Medinipur district of , In the core sector, cement (7.9%) and steel (6.6%) posted good has proposed to set up a light crude oil refinery, an aromatic growth. Post the surprisingly weak GDP growth momentum in complex and an ethylene cracker complex near the proposed Q1 FY20, the moderately healthy growth of cement and steel Subarnarekha Port in Baleswar district. This would ensure output in July 2019 offers some encouragement. availability of a wide range of feedstock for development of downstream petrochemical units. On a positive note, FDI equity inflows rose 28% in the first GAIL (India) Limited’s Director (Projects) Ashutosh Karnatak quarter of 2019-20 to $16.3 billion from $12.7 billion in the has been appointed as the interim Chairman and Managing year-ago period. Director of the company. He has been serving as the Director In past two weeks, the government has announced a number (Projects) since March 2014. of measures including consolidation of public sector banks GAIL India reported a net profit of Rs. 1,501.95 crore for the April- and capital infusion in them besides a relaxation in foreign June period. That meant an increase of 4.19 per cent compared investment norms and steps to ease credit flow to reverse to the corresponding period a year ago. In a regulatory filing the slowdown. during market hours, GAIL said its revenue from operations came in at Rs. 18,481.56 crore, up 5.17 per cent compared to On RCEP front - Members of the Regional Comprehensive the year-ago period. Economic Partnership (RCEP) have asked India to decide if it wants to remain a part of the proposed trade grouping, GAIL India Ltd will invest over Rs 45,000 crore over the next five as pressure mounts to conclude the deal this year. Talks are years to expand the National Gas Grid and city gas distribution on for instantly ending tariff on 28% of traded goods, 35% network, its chairman Ashutosh Karnatak said on August 20. in phases. India is likely to give Asean the steepest cut and PETCHEM The PVC pipes maker’s consolidated net profit fell 43.8% to China the least. continued on page 2 Economy & Industry Snippets Monthly Newsletter NN Crude oil futures were higher during mid-morning trade in Asia amid bullish data on last week’s US crude inventory, while ongoing from geopolitical tensions in the Middle East also provided price support.

NN PetroChina Guangdong Petrochemical Company has selected Honeywell UOP to build the world’s largest single-train paraxylene unit at its new integrated petrochemical complex in Jieyang, Guangdong province, Honeywell said.

NN The Asian petrochemical markets this week will continue to be pressured by the US president’s announcement to impose 10% tariff on another $300 billion worth of Chinese goods, effective September 1.

1 | August 2019 PETCHEM BUZZ

Government Communications Trade Statistics- Key Products and Interactions 2018-19 2019-20 (Apr-Jul) Average monthly Imports Sr. 2019-20 CPMA submitted detailed justification Product Category Product Imports Exports Imports Exports 2018-19 % No. (Apr-Jul) to keep Key Petrochemical Products (KT) (KT) (KT) (KT) (KT) Change under exclusive list of RCEP (KT) 1 Polymer PVC 2047 20 734 7 171 183 7.6% Further submissions made as to how Benzene and Toluene to be treated 2 Polymer LLDPE+HDPE 1179 966 379 315 98 95 -3.5% under RCEP 3 Polymer PP 855 718 345 156 71 86 20.9% First Meeting of Chemicals & 4 Polymer PET 335 1082 165 336 28 41 48.1% Petrochemicals Advisory Forum took place during the month 5 Polymer LDPE 341 164 140 45 28 35 23.0% where CPMA mainly focused on 6 Polymer ABS 119 0.4 36 0.1 10 9 -9.1% the following: 7 Polymer PS 54 63 22 18 4 6 24.2% NN Urgently address Tariff issues 8 Polymer SAN 9.2 0.4 3.3 0.3 0.8 1 8.1% NN Taskforce to address the need for India to produce chemical products 9 Polymer EPS 1.2 3.1 0.6 0.9 0.1 0 34.7% which India is not producing w.r.t to 10 Elastomers PBR 105 13 36 6 9 9 3.0% Fuel demand disruption because of 11 Elastomers SBR 126 29 32 11 11 8 -23.7% Electric Vehicles NN Bring back the Income tax rebate for 12 Elastomers Butyl Rubber 70 0 21 0 6 5 -12.0% R&D (being reduced to 100%) 13 Intermed Fibre PTA 570 162 370 17 47 93 94.9%

NN RCEP is a real threat and need to 14 Intermed Fibre MEG 635 293 313 82 53 78 47.9% address it immediately and safeguard 15 Intermed Polymer SM 818 7 288 2 68 72 5.8% the domestic industry and upcoming investments in the Country 16 Intermed Polymer EDC 582 19 232 20 48 58 19.8%

CPMA made a case for submissions 17 Intermed Polymer VCM 458 0 152 0 38 38 -0.3% on Key Pet-Chem Product stating arguments for increase in Import Duty Source: DGFT and arguments against reduction in duty under RCEP. Key Economic Indicators Raised the issues on logistics constraints UoM Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 being faced by the members at Haldia Forex Reserves US $ Bn 407.0 418.5 419.9 427.7 429.6 429.1 dock in a meeting at DCPC. Exchange rates 1 US$ 69.7 69.4 69.8 68.9 68.8 71.7 MOS ( C& F ) chaired the meeting with particular focus on RCEP where CPMA 1 Euro 78.7 78.0 78.1 78.4 76.6 78.8 highlighted issues being faced by the 100 Jap Yen 62.7 62.2 63.4 63.9 63.4 67.5 industry and cautious approach needed before finalization of RCEP. 1 Pound Sterling 91.8 90.4 89.9 87.6 84.1 87.3 %age over Prev Members attended the meeting IIP 0.4% 3.4% 4.6% 2.0% N.A. N.A. month end convened by Secy DCPC on perspective plan for Petrochemical industry. Dubai Crude Oil US$/Barrel 66.9 70.9 69.0 61.8 63.3 59.1 Attended the meeting at Ministry of Naphtha C&F SEA US$/MT 540 569 544 465 500 455 Jal Shakti on action plan needed to C2 C&F SEA UD$/MT 984 918 888 716 721 820 implement the Campaign on plastic clean up, the call given by Hon’ble PM C3 C&F SEA US$/MT 828 816 801 814 854 856 beginning 11th Sep 2019. Source: MosPI, Platts. May IIP revised to 4.6% from 3.8%

CPMA: Member Companies... continued from page 1 Rs 73.17 crore on 14% rise in net sales Upcoming to Rs 943.81 crore in Q1 June 2019 over Q1 June 2018.Shares of Finolex [email protected] Industries fell 1.43% to Rs 525.85. The 53rd Annual Meeting result was announced on Saturday, 10 Events August 2019. 6-9 October 2019 | BERLIN

CPMA Members

Apcotex Industries Limited l BPCL l Chemplast Cuddalore Vinyls Ltd. l DCM Shriram Ltd. l DCW Ltd. l Engineers India Ltd. l Finolex Industries Ltd. l GAIL (India) Ltd. l Gujarat State Fertilizers & Chemicals Ltd. l Haldia Petrochemicals Ltd. l Hindustan Petroleum Corporation Ltd. l HPCL – Mittal Energy Ltd. l Ltd. l Indian Synthetic Rubber Private Limited l INEOS Styrolution India Ltd. l LG Polymers (India) Pvt. Ltd. l MCPI Pvt. Ltd. l Mangalore Refinery and Petrochemicals Ltd. l ONGC Mangalore Petrochemicals Ltd. l ONGC Petro Additions Ltd. l Ltd. l Supreme Petrochem Ltd. l Tamilnadu Petroproducts Ltd.

Associate Members: Braskem SA l HPL Additives Ltd. l ICIS l Indorama Industries Ltd. l Jindal Poly Films Ltd. l SABIC India Pvt Ltd.

CHEMICALS AND PETROCHEMICALS MANUFACTURERS ASSOCIATION 708, 7th floor, Kailash Building, 26 Kasturba Gandhi Marg, New Delhi – 110 001. l Telephone: 011-43612198 l Email: [email protected] Forprivate circulation.

2 | August 2019