January 2018 issue

Nobel Laureates By now, hugely interested Pierre professorship at the in what Marie was research- Pierre was then 34, and still living with his parents. Sorbonne in 1904 and promised ing, Pierre gave up his work on With Marie sharing space with him in his lab, the him a new lab. crystals and joined her to expe- relationship between the two of them transitioned Working with radioactive dite the new discoveries – two from intellectual affinity and mutual respect to love. substances had already begun new elements they named ‘po- This development in the lives of Marie Sklodowska taking its toll on Marie’s and lonium’ (after Marie’s native Pierre’s health. The skin on country) and ‘radium’ (derived and Pierre Curie would dramatically change their from a term Marie was to coin). personal lives and the course of science. their hands was cracked and scarred and they experienced The Curies published papers weakness in their limbs due to the radioactive emis- on the two new elements they had discovered. Marie sions corroding their bones. Today, the note books in invented the word ‘radio-active’ to describe them, and which they recorded their work are kept under lock the rest, as they say, is history. and key because of how highly radioactive they are. Nobel Prizes: Appreciation and Agony Those who need access to them have to do so at their own risk. In fact, due to ill health and their on-going Marie, with the help of Pierre, spent almost three work, the Curies could travel to Stockholm only in years, arduously processing over a ton of pitchblende June 1905, thus receiving their award two years after to isolate one decigram of radium chloride and it was announced. When Pierre delivered the ac- finally presented her doctoral thesis on ‘Research on ceptance lecture, he made it a point to distinguish Radioactive Substances’ in June 1903. Those review- between Marie’s independent research work and the ing her thesis commented that Mme. Curie’s findings work on which they had collaborated. represented the greatest scientific contribution ever made in a doctoral thesis. True to character, Marie The very next year, Pierre died tragically on being bought a black dress to wear to a small private cel- run over by a fully-laden, horse-drawn wagon, and ebration to felicitate her achievement of being the first then Marie went through another bout of depression. woman to be awarded a doctorate in France, so that Instead of a widow’s pension, in 1908, she accepted just like the navy-blue dress she had worn at her wed- the offer to teach at the Sorbonne in Pierre’s place, ding, she could wear this one too in the lab without becoming the first woman to teach there. any stains showing. In 1911, just when she was selected for a second Later that year, Marie and Pierre along with Henri Nobel Prize, this time in Chemistry for the discovery Becquerel, were awarded the Nobel Prize in Physics of radium and polonium, the French press was awash for their revolutionary work on radioactivity. But, with slanderous articles about her alleged affair with Marie almost didn’t get the honour. A few scientists one of her late husband’s most brilliant students, believed only Becquerel and Pierre could have done Paul Langevin, a married man already living apart all the hard work and had objected to Marie’s inclu- from his wife. Marie was painted as the foreign home sion. The award citation itself avoided any specific wrecker who had destroyed a French woman’s mar- mention of the Curies’ discovery of polonium and ra- riage. Pressurised by some not to go to Sweden to ac- dium as some chemists on the nominating committee cept the Nobel Prize because of the scandalous stories insisted that the Curies could deserve a Nobel Prize in the press, Marie went there all the same, deciding for Chemistry in the future once they isolated the new to stand up for the integrity of her work. “I believe elements in more substantial amounts. there is no connection between my scientific work and the facts of private life,” was her reply to one critic. The Nobel Prize brought the Curies international In her acceptance speech, she paid a tribute to Pierre, recognition and improved their life somewhat. besides also describing her independent work. However, upholding the humanitarian ideals of sci- ence, they refused to patent their discovery of radium Later life and cash in on the demand for it, making all their Marie was getting ready to set up the Radium research work publicly available. Experts who visited Institute in Paris, when World War I broke out. their ‘lab’ were stunned that Mme. Curie could have Appalled by the way military hospitals were operat- accurately determined the atomic weight of radium in ing without X-Ray equipment, sometimes chopping such dinghy conditions. In recognition of their award- off limbs that could have been saved, she set up winning work, the French government finally offered Chemical Industry Digest. Annual - January 2018 51

Nobel Laureates around 20 mobile X-ray stations for treating wounded References soldiers on the frontlines, sometimes driving one of Nobelprize.org. Nobel Media AB 2014: Marie Curie the cars and even operating the machines herself. In - Facts - https://www.nobelprize.org/nobel_prizes/ addition, she helped set up around 200 permanent chemistry/laureates/1911/marie-curie-facts.html X-ray centres during the war. Nobelprize.org. Nobel Media AB 2014: Marie and Established with help from philanthropists, the Pierre Curie and the Discovery of Polonium and Radium French government, and friends and well-wishers - https://www.nobelprize.org/nobel_prizes/themes/ from the US and other parts of the world, the Radium physics/curie/ Institute is a world centre for radium research. American Institute of Physics, Naomi Pasachoff: Marie Madame Curie died on 4 July, 1934 of a blood Curie and the Science of Radioactivity - https://history. disorder that had gone undetected for some time. aip.org/exhibits/curie/polgirl1.htm Though she and Pierre were first buried in the Curie Julie Des Jardins: Madame Curie’s passion – family plot near Paris, their remains were re-interred Smithsonian magazine, October 2011 in 1995 in the Pantheon, France’s national mausoleum Sara Rockwell: The life and legacy of Marie Curie – Yale for eminent French citizens. On that occasion, the then Journal of Biology and Medicine, 76(4-6), 2003 French President, Francois Mitterrand paid a tribute The Biography.com website: Marie Curie Biography. to Pierre and Marie and a special one to Marie saying, com - https://www.biography.com/people/marie- “As the country bows before her ashes... I form the curie-9263538 wish, in the name of France, that everywhere in the world the equality of the rights of women and men Robert Krulwich: Don’t Come to Stockholm! Madame might progress.” Curie’s Nobel Scandal - National Public Radio, 14 December, 2010 Stir Things Up With Stirrers from Cole-Parmer ® From overhead mixers to magnetic stirrers, from use in lab to process, for lower to higher viscosities, we’ve got you the best and latest! Pharmaceutical Food & Beverages Chemical/Industrial FMCG  Suitable for diversified lab and process applications, with the highest safety standards  Wide range of magnetic stirrers – digital/analog, for various quantities, with or without heating capabilities  Hot plate stirrers with single/multi-place heating plates, aluminium/ceramic tops and different stirring capacities & speeds  Broad range of overhead stirrers handling different viscosities and volume Need Demo? Contact us today!  Extremely safe, compact and affordable instruments with 022-6139-4444 | [email protected] a long life-span and easy maintenance Find more on ColeParmer.in/Stirrers 52 Chemical Industry Digest. Annual - January 2018

Union Budget Key direct tax expectations of Indian chemicals sector from Budget 2018 Aashish Kasad In the wake of the GST, it remains to be seen whether the Union Finance budget would hold the same awe and anticipation as before. Neverthless, there are still many expectations from industry. This article sums up briefly the tax proposal expectation for the chemical sectors in the author’s opinion. Aashish Kasad has over 21 years of experience, advis- ing on international tax, transfer pricing, Indian income-tax and regulatory matters. Her specialties include Chemicals, Retail and Consumer Products, Health sciences, Automotive, Building Products. Chemical Industry Digest. Annual - January 2018 53

Union Budget he Indian chemical industry which isthe 3rd- tion to set up a plant. largest producer in Asia (after China and Japan) Tand 7thlargest in the world , is one of the focus Encourage Research and Development (R&D) sectors of the ‘Make in India’ initiative as all other sec- India’s R&D expense has been increasing at the tors i.e. consumer products, construction, automobiles, rate of 17% during the FY 2011-16 as compared to US pharmaceuticals, etc are dependent on this sector. This (11%) and Europe (7%) . However, the R&D expense sector is expected to double its size at USD 300 billion as % of sales in India has been estimated to be around by 2025, clocking an annual growth rate of 8-10 per 1.3% of sales . The draft national chemical policy rec- cent . With the present governmentssocial, economic ognises that India’s R&D expense needs to reach closer and fiscal policies,this sector has witnessed a 107% in- to the global benchmark of around 4% of sales (China, crease in FDI equity inflows from the period 2012-2014 to 2014-2016. The chemical sector, post Budget 2017, welcomed the implementation of a major tax reform in India i.e. GST and they are now looking forward for this Budget which is significant, as it comes at a time when the economy is rebuilding momentum after demonetisa- tion and implementation of GST. Some of the key ex- pectations of the chemical sector are: Encourage Petroleum, Chemical and Petrochemical Investment Regions, plastic parks, EOU • PCPIRs are aimed to reap the benefits of co-siting, networking and greater effiencies through use of common infrastructure and support services. Government of India has approved 4 PCPIRs in the state of Andhra Pradesh, Gujarat, Odisha and Tamil Nadu to boost investment and industrial develop- ment in these sectors. With a view to increase in- vestments in the PCPIR and attain the proposed ob- Europe and USA are at 3-4% of sales). The current in- jective of PCPIRs,an incentive/ deduction be given come tax provisions provides for a weighted deduc- to the new units established in PCPIRs as well as tion of 1.5 times the R&D spend,upto 31 March 2020, development of PCPIRs. on specified expenditure incurred in an approved in- • Plastic parks scheme, aimed to provide the requisite house R&D facility. Given that R&D is the backbone state-of-art infrastructure and common facilities, for the chemical industry, it will be imperative if the was approved by the Government of India in 2015. period for claiming the R&D incentive is further ex- The share of India in world trade of plastics is very tended and expenditure incurred for application R&D, low. The Indian Plastics industry is large but highly REACH expenses etcare notified as permissible for fragmented with dominance of tiny, small and me- claiming the weighted deduction. dium units and thus lacks the capacity to tap this Encouraging sustainable development of chemical opportunity. With a view to increase investments in the plastic parks and attain the proposed objective sector of plastic parks an incentive/ deduction be given to In 2015, China’s Ministry of Environmental Prote- the new units established in plastic parks and for ction cracked down on factories foundto be in viola- development of plastic parks. tion of its emission standards. Several chemical plants • Presently, profit linked incentive is given to units – especially unorganisedand small units in the region set up in SEZ. Government should explore extend- – faced shutdowns, leading to uncertainty in produc- ing similar benefits to EOU as currently available to tion and adelay in exports . The growth of the Indian SEZ to enable the companies making new invest- chemical industry without adequate sustainable devel- ment with more options in terms of selecting a loca- opment would not only impact the Indian chemical in- 54 Chemical Industry Digest. Annual - January 2018

Union Budget Above all,the chemical sector would again wel- come the continuous focus of the present government on the various economic development reforms, espe- cially on improving the infrastructure of India, which would serve as a catalyst for the Indian chemical sector to gradually move on the path of becoming a world leader. dustry in the long term but also impact the larger issue of environmental concerns. Therefore, with a view to accelerate the implementation of companies initiatives Editor’s Note: Views are personal. Saral Barlota, senior tax to reduce environmental concerns, additional depre- professional, EY, contributed to the article. ciation, weighted deduction or investment allowance be given on expenditure incurred during the specified period towards sustainable development e.g. expendi- References ture incurred on energy efficient devices, efficient wa- ter effluent treatment, pollution control devices etc. 1. Achievement report – Indian Chemical industry 2. http://www.financialexpress.com/industry/indias- Reduction in corporate tax rates chemical-industry-to-hit-300-bn-by-2025-govern- ment/951589/ Given the global trend of lowering the corpo- rate tax rate and the earlier assurance given by the 3. Indian Specialty Chemicals – Growth Catalysts – JM HonorableFinance Minister, the overall expectation Financial is that the government would lower the corporate tax 4. Indian Specialty Chemicals – Growth Catalysts – JM rate given the fact that various exemptions/ deductions Financial are being phased out to enable corporates invest the 5, http://www.business-standard.com/article/markets/ disposable income to expand operations and develop indian-speciality-chemicals-firms-to-benefit-from-chi- new technologically advanced products. na-s-stricter-green-norms-116042500124_1.html Chemical Industry Digest. Annual - January 2018 55

Sourcing Companies into Agrochemicals Aimco Pesticides Ltd Mumbai 400102 Tel: 022-66464200 Backbay Reclamation, Churchgate Akhand Jyoti, 8th Rd, Santacruz (E) Email: [email protected] Mumbai 400020 Tel: 022-66364062 Mumbai 400055 Tel: 022-67604000 Web: www.excelind.co.in Email: [email protected] Email: [email protected] Web: www.nocil.com Web: www.aimcopesticides.com Gharda Chemicals Ltd 48, Hill Road, Bandra (W), Punjab Chemicals & Crop Protect- Atul Ltd Mumbai 400050 ion Ltd P O Atul, Valsad, Tel: 022-33065600 (30 lines) Oberoi Chambers II, 5th Flr, Gujarat 396020 Tel: 02632-230000 Email: [email protected] 645/646, New Link Rd, Email: [email protected] Web: www.gharda.com Andheri (W), Mumbai 400053 Web: www.atul.co.in Tel: 022-26747900 Gujarat Insecticides Ltd Email: enquiry@punjabchemicals. BASF India Ltd 805/806, GIDC Indl Est, com The Capital, ‘A’ wing, 1204-C, 12th P O Box No.90, Ankleshwar Web: www.punjabchemicals.com Floor, Plot No. C-10, ‘G’ Block, Bharuch, Gujarat 393002 Bandra-Kurla Complex, Bandra (E), Tel: 02646-222271/251472 Rallis India Ltd Mumbai - 400051 Email: [email protected] 156/157, Nariman Bhavan, 15th Flr Tel: 022-62785606 Web: www.gilgharda.com 227 Nariman Point, Mumbai 400021 Web: www.india.basf.com Tel: 022-66652860/66652700 Hindustan Insecticides Ltd Email: [email protected] Dhanuka Agritech Limited Scope Complex, Core 6, 2nd Flr, Web: www.rallis.co.in 14th Floor, Building 5A, 7, Lodhi Road, New Delhi 110003 DLF Cyber Terrace, Cyber City, Tel: 011-2436 2165/1107 Sudarshan Chemical Industries Ltd DLF Phase III, Gurgaon Email: [email protected] 162, Wellesley Rd, Sangam Bridge Haryana 122002 Tel: 0124-3838500 Web: www.hil.gov.in Pune, Maharashtra 411001 Email: [email protected] Tel: 020-26058888/26226200 Web: www.dhanuka.com Indofil Industries Ltd Email: [email protected] Kalpataru Square, 4th Flr, Web: www.sudarshan.com Dow AgroSciences India Pvt Ltd Kondivita Road, Off Andheri-Kurla 1st floor, Block B, Gate 02, Godrej Rd, Andheri (E), Mumbai 400059 Transpek Industry Ltd IT Park, Godrej Business District, Tel: 022-66637373/555 6th Flr, Marble Arch, Race Course Pirojshanagar, L.B.S Marg, Email: [email protected] Circle, Vadodara, Gujarat 390007 Vikhroli (W), Mumbai – 400079 Web: www.indofilcc.com Tel: 0265-2335444 Tel: 022 66741500 Email: [email protected] Email: [email protected] Nagarjuna Agrichem Ltd Web: www.transpek.com Web: www.dowagro.com Lakshmi Towers, Plot No.12-A, C Block, Nagarjuna Hills, United Phosphorus Ltd Excel Cropcare Ltd Panjagutta, Hyderabad, UPL House, 610 B/2, Bandra Village, 13/14 Aradhana Industrial Develop- Andhra Pradesh 500082 Off Western Express Highway, ment Corp, Near Virwani Industrial Tel: 040-33605123-27 Bandra (E), Mumbai 400051 Estate, Goregaon (E), Tel: 022-26468000 Mumbai 400063 Tel: 022-42522200 Email: [email protected] Email: [email protected] Web: www.excelcropcare.com Web: www.nagarjunaagrichem.com Web: www.uplonline.com NOCIL Limited Excel Industries Ltd Mafatlal House, H T Parekh Marg, 184-87, S V Rd, Jogeshwari (W), (Please note that only a selection of companies are listed here and this is by no means a comprehensive directory) 56 Chemical Industry Digest. Annual - January 2018

Elements Matter Elements Matter This is a new and unique feature on Elements which is now being regularly published every month. Behind every element are stories from how it was discovered, the scientists behind the element to the stories on its amazing developments and applications. This feature will bring you very interesting and not widely known nuggets behind every element. Carbon – The multi-faceted wonder element Veena Patwardhan, Special Correspondent arbon, the wondrous element with amazing hydrogen and oxygen, and you could produce myri- properties, forms the foundation for all known ads of compounds ranging from glucose to gasoline. Clife forms on earth. Carbon atoms are the ma- In fact, an entire discipline of chemistry, organic chem- jor component of many important substances and also istry, involves the study of just carbon compounds. To polymers in the body including proteins, carbohy- date, scientists have been able to identify around ten drates, fats, DNA, and RNA, and synthetic polymers million carbon-containing compounds. And they’re such as nylon, polyethylene, polystyrene etc. Even still counting! steel, the metal that hugely influences our lives is an alloy of iron and carbon. Some of the strongest materi- From soot to the stars als used today in place of metals are made of carbon fi- Known to man for millennia, from the soot formed bres. Not only are we made of carbon, this remarkable element forms the backbone of by burning candles to the stars in the sky, carbon is present all around us. the food we eat, the homes we live in, our transport systems, It got its name from the Latin word for the things we use in daily life, coal – carbo. But, in global economies, and more. addition to coal, that Also, carbon’s potential to is mostly made up of form countless different com- carbon, and the well- pounds by bonding with atoms known allotropes dia- of almost all the elements of mond and graphite, the periodic table in numerous carbon is present all ways – in linear and branched over the earth in the chains of varying complexity, form of chemical com- and rings, and also by way pounds such as CO 2 of single, double, and triple that is a component bonds – is unmatched by any of our atmosphere other element. Let it react with Prof. Willard Libby and also dissolved in Chemical Industry Digest. Annual - January 2018 57

Elements Matter the waters of lakes, rivers, and seas, calcium carbon- been discovered, assuming that the site’s layers were ate found in rocks of limestone, chalk, and marble, and created chronologically. hydrocarbons in the deposits of petroleum, and natu- ral gas. Libby’s carbon dating method invalidated many previously held beliefs, such as, the notion that civili- Revolutionary discoveries of the twentieth century sation originated in Europe and then spread through- out the world. The new dating of man-made artefacts In 1946, Willard Libby, a chemistry professor at found in different continents helped archaeologists the University of Chicago, put forward an innovative establish that civilisations developed independently method for dating organic materials by measuring in sites across the world. The carbon dating method their content of C-14, the radioactive isotope of carbon can be used to date materials as old as 50,000 years. discovered just a few years earlier in 1940. It was wide- For his phenomenal discovery, Libby was awarded the ly acknowledged as a ground-breaking discovery. The Chemistry Nobel Prize in 1960. celebrated British archaeologist Colin Renfrew hailed the carbon dating method as “the radiocarbon revolu- While Libby’s discovery rewrote human history tion”. Not surprising, since Libby’s discovery impact- and what we previously knew about the earth, the ed not only the realm of chemis- discovery of a new three-dimen- try, but also brought about radical sional allotrope of carbon rewrote changes in the fields of archaeol- what was taught to students about ogy, geology, and anthropology carbon. Till 1985, when the British by enabling more precise dating chemistry professor Harold Kroto, and understanding of historical and the American chemistry pro- chronologies. fessors Richard Smalley and Robert Curl discovered a previously un- When Libby began his re- known pure carbon molecule, C60, search work in 1945, it was known the world only knew of two distinct that C-14 moved freely through allotropes of carbon – diamond and the atmosphere, the different eco- graphite. In fact, at first a few sci- systems and the oceans through entists were cynical about their dis- what is known as the carbon cy- covery, carbon being a diligently re- cle. Libby discovered that plants searched and studied element since absorb a specific amount of C-14 long. They questioned how such a along with the carbon they absorb radically different carbon molecule for photosynthesis. Realising that C-14 present in the could have gone undetected till then. atmosphere would somehow get into living matter, he thought that, theoretically, if the amount of this ra- The three pioneering scientists named the new car- dioactive isotope in anything could be measured, one bon allotrope buckminsterfullerene. They had chosen could calculate that object’s age based on the half-life to name it after the American architect Buckminster of the isotope. Fuller, because it was the design of the geodesic domes he had created in the 1960s that provided the vital Using specially developed equipment, that he and clue to the structure of the highly stable and neutral his group called the ‘anti-coincidence counter’, Libby 60-atom carbon molecule they had discovered. They first tested samples of redwood and fir trees, whose age realised that the atoms of the C60 molecule could only was already known from their annual growth rings. be arranged in the form of a hollow cage. The aesthetic Next, he tested artefacts from museums including a appeal of the structure, a truncated icosahedron with piece of timber from the Egyptian pharaoh Senusret 12 pentagonal and 20 hexagonal faces, shaped like a III’s funerary boat whose age was known from the his- microscopic soccer ball, led many to dub C60 as the torical record of the pharaoh’s death. The age estimat- ‘beautiful molecule’. In 1996, Curl, Kroto, and Smalley ed by Libby through his carbon dating technique was won the Nobel Prize in Chemistry for their discovery of found to be remarkably close to the known age for all what are now known as fullerenes. In his Nobel Prize the samples he tested. Till the introduction of Libby’s speech, Harold Kroto, the son of German refugees, had innovative method of dating, archaeological artefacts, jokingly referred to how in his school in England he fossils, and organic remains were dated approximate- felt like the odd one out as his other classmates had ly, just going by the layer of the site in which they had 58 Chemical Industry Digest. Annual - January 2018

Elements Matter typical English names like economy. This could involve Higginbottom. using hydrogen (produced ef- ficiently from water using al- Measured in nanome- tres, fullerenes are nano- ternative energy resources) for materials that could be car- the reductive conversion of bon molecules in the shape carbon dioxide to methanol, of hollow spheres (bucky- a much cleaner and cheaper balls), tubes (nanotubes), fuel that could replace fossil and some other shapes as fuels. Currently, like China, the well. Buckminsterfullerene, Indian government too is push- the most common naturally Graphene, the world’s thinnest material ing for a methanol economy. occurring fullerene, can be found in minute quantities in soot. Today, fullerenes have not only opened a new branch in organic chem- References istry they also form the vital core of nanotechnology. Nobel Laureate George A. Olah: Carbon – C&EN, 8 Fullerenes are used in novel drug delivery systems that September 2003 specifically target tumour cells. Research is also being Elton Santos: New form of carbon discovered that is hard- carried out on the use of carbon nanotubes for convert- er than diamond but flexible as rubber – The Conversation, ing sea water into drinking water more efficiently than 24 June 2017 the traditional technologies. Royal Society of Chemistry: Periodic Table - Carbon - Significant developments in the twenty-first century http://www.rsc.org/periodic-table/element/6/carbon Often referred to as the ‘miracle material’, graphene, By Holli Riebeek: The Carbon Cycle – Earth Observatory, the world’s thinnest material, was isolated in 2004 by NASA, 16 June 2011 researchers Andre Geim and Prof Kostya Novoselov JRank Articles: Why Carbon is special - http://science. who won the Nobel Prize in Physics for this pioneering jrank.org/pages/1202/Carbon-Why-carbon-special.html work. Comprising a single layer of carbon atoms ar- ranged in a hexagonal mesh, graphene is several times JRank Articles: The Chemistry of Carbon - http://science. stronger than steel, more flexible than rubber, and con- jrank.org/pages/1201/Carbon-chemistry-carbon.html ducts electricity much better than copper. The hottest Simon H. Friedman: The four worlds of Carbon – Nature carbon-related research today is centred on graphene, Chemistry, 23 April 2012 though mass production of this wonder material is still Stephanie Pappas: Facts About Carbon - Livescience.com, a challenge. 29 September 2017 Graphene has immense potential for use in the Kevin Bullis: The methanol economy- MIT Technical manufacture of composite materials, photovoltaic Review, 2 March 2006 cells, and optical electronics, and as an ultrafiltration medium and substitute for silicon in electrical systems. University of Manchester: The story of graphene - http:// www.graphene.manchester.ac.uk/explore/the-story-of- One of the serious problems scientists are grappling graphene/ with in the 21st century is global warming, something Nobelprize.org. Nobel Media AB 2014: Sir Harold Kroto closely linked to the rise in atmospheric carbon. Since - Biographical – https://www.nobelprize.org/nobel_priz- the Industrial Revolution, that enormously increased es/chemistry/laureates/1996/kroto-bio.html fuel combustion, the concentration of carbon dioxide in the atmosphere has also increased significantly. At American Chemical Society National Historic Chemical the same time, fossil fuels, that are formed naturally Landmarks: Discovery of Fullerenes - http://www.acs. over a long period of hundreds of millions of years, are org/content/acs/en/education/whatischemistry/land- being rapidly depleted. marks/fullerenes.html Currently, one of the strategies suggested for re- versing the global warming process and slowing down the consumption of fossil fuels is the methanol Chemical Industry Digest. Annual - January 2018 59

Sourcing Surfactants Companies Aarti Industries Ltd Tel: 022-65134444 /27616666 Navi Mumbai-400710 Udyog Kshetra, 2nd Floor, Email: galaxy@galaxysurfactants. Mob: 08046048267 Mulund Goregaon Link Road, com Email: [email protected] Mulund (West), Mumbai-400080, Web: www.galaxysurfactants.com Tel: 22 6797 6666/ +91 22 6797 6697 Godrej Industries Ltd (Chemicals Reliance Industries Ltd Email: [email protected] Divn) Maker Chambers IV, Nariman Web: www.aartigroup.com Pirojsha Nagar, Eastern Express Point, Mumbai - 400021 Highway, Vikhroli, Tel: 022-22785000 Ashok Surfactants Pvt. Ltd. Mumbai 400079 Email: [email protected] 203, Hare Krishna Nagar, Jawahar Tel: 022-22-25188010, 25188020 Web: www.ril.com Road, Ghatkopar (E), Mumbai, Email: [email protected] Tamilnadu Petroproducts Ltd Maharashtra 400077 Web: www.godrej.com Manali Express Highway, Phone: 022 2501 2973 Henkel Adhesive Technologies Manali, Chennai, Email: [email protected] India Pvt Ltd Tamilnadu 600068 th Barkur Surfactants Pvt Ltd Kesar Solitaire, 10 Floor, 044-2594-1350/1501-10 Plot No. 5, Sector 19, Palm Beach Rd, Email: [email protected] Uniton House, East West Estate, Web: www.tnpetro.com Safed Pool, A K Road,, Andheri Sanpada, Navi Mumbai 400705 East, Mumbai, Maharashtra 400072 Tel: 022-711301112 Tel: 022 2852 9800 Web: www.loctite.in Thurs Organics Pvt. Ltd. 19, Udyog Mandir No.1, Pitamber K-Tech (india) Limited Lane, Mahim (W), Mumbai - 400016, Clariant Chemicals (India) Ltd 7-B, Bata Compound, Khopat, Reliable Tech Park, Thane-Belapur Eastern Express Highway, Thane Tel: 022 - 24466585 Road, Airoli, Navi Mumbai 400708 West, Thane, Maharashtra 400601 Web: www.thursorganics.com Tel: 022-71251000 Tel: 022 2547 6486 Unitop Chemicals Private Limited Email: [email protected] Unitop House, C-wing, East Web: www.clariant.com Nirma Ltd West Center, Safed Pool, Andheri Nirma House, Ashram Road, Dai-ichi Karkaria Ltd Ahmedabad, Gujarat 380009 Kurla Road, Safed Pool, Liberty Bldg, Sir Vithaldas Tel: 079-27546565-74 Mumbai 400072 Tel: 022 2852 9800 Thackersey Marg, Email: [email protected] Web: www.unitopchemicals.com Mumbai 400020 Web: www.nirma.co.in Tel: 022-2201-5895/7130 Viswaat Chemicals Ltd Email: [email protected] Pandian Surfactants Pvt Ltd 7, Satsang Complex, Upper Govind Web: www.dai-ichiindia.com Old no.6, New No. 15, Nagar, Malad (E), Mumbai 400097 New Avadi Road, Kilpauk, Tel: 022-30052255 Evonik India Pvt Ltd Chennai- 6000 010 Email: [email protected] Krislon House, Saki Vihar Road, Web: www.viswaatchem.com Sakinaka, Andheri East, Tel: 044 2642 6202; 98409 60831 Mumbai - 400072 Email: [email protected] VVF Ltd Tel: 022-67238800 Web: www.pandiansurfactants. Opp. Sion Fort Garden, Web: evonik.com com 109, Sion (E), Mumbai 400022 Tel: 022-240732-21/40282000 Galaxy Surfactants Ltd Prasol Chemicals Limited Email: corporatecommunications@ C-49/2, TTC Indl Area, Prasol House, Plot No. A-17/2/3, T. vvfltd.com MIDC, Pawne Village, T. C. Industrial Area Khairne, M. I. Web: www.vvfltd.com Navi Mumbai, Maharashtra 400701 D. C., Thane Belapur Road, (Please note that only a selection of companies are listed here and this is by no means a comprehensive directory) 60 Chemical Industry Digest. Annual - January 2018

OPEX Operational Excellence Emerges From Multiple Dimensions O P Goyal Abstract The chemical Industry performs within certain dimensions, some make a difference more than others. The do- main and calibre of these select dimensions contribute to Operational Excellence. It is appreciated that there are layers within and they reside hierarchically. perational excellence (OE) is driven by orga- the following seven relevant dimensions. nizational performance. Targeting the specific 1. Management Effectiveness Odomain and tasks within an organization helps 2. Competitiveness produce the most effective and responsive changes in 3. Produceability performance. Organization should collectively address all elements of organizational effectiveness. Through 4. Change Management systematic approach an organization can move on a 5. Interface Management progressive path from even statuesquo to success to 6. Technical Pursuits excellence. 7. Focus on System Wastes Operational Excellence: an Indicator of Collective One may argue that effective management alone Achievement will take care of everything else. But such a belief may not be an assurance that there is no lacuna or slip in Operational Excellence is an indicator of the com- the management endeavors and pursuits. Hence it is prehensive achievement of an organization while en- worth reviewing this as a prime dimension together suring that each factor performed to the level of excel- with other dimensions so that an assurance emerges lence as they have a multiplying effect. It is the com- for Operational Excellence. mitment of the organization where management vi- sion, mission, leadership, problem-solving effort, abil- Dimension-1: Management Effectiveness ity, coherent teamwork, strategies and critical goals re- Needless to say that effectiveness is achieved with sult in continuous improvement. It is appreciated that the initiative and support of the organization’s top most of the organizations differ in these aspects while leadership who design and manage a comprehensive working for excellent business results including prof- pragmatic management system for operations excel- itability sustainable over an extended period of time. lence. The top executives of several oil companies have Depending on type of industry, the dimensions can not minced words in stating that they are strong and differ; but broadly they are similar. Identified here are tireless advocates for operational excellence and seek commitments from each and every one to pursue the highest standards of excellence in all areas of business. O P Goyal, a Chemical Engineer with a Bachelor’s Degree from IIT-Roorkee and This obviously induces and directs highest profitabil- Master’s from University of Waterloo, Canada teaches at Institute of Chemical ity. The inner layer of management effectiveness com- Technology, Mumbai, and is a member of the “Technology prises vision, relations, communications, productivity and Energy Expert Committee” of Indian Chemical Council. and quality. See Annexure-1. The outer layer compris- He has worked with petroleum refining, petrochemicals and es motivation, development and welfare; training, cre- engineering consultancy companies for four decades in ativity and skills; and technology, safety and environ- India and South America and has written extensively for the ment. There are various strategies (See Sets A to D) that last 45 years. are conceptualized by corporate management. Chemical Industry Digest. Annual - January 2018 61

OPEX Dimension-2: Competitiveness (World Class Manufacturing) Annexure-1: Markets and business operations are becoming Inner Layer Dimensions of Management global. Four forms of companies encompassing World Effectiveness (ME) class manufacturing (WCM) and distinct strategies have emerged. ME-1A: Vision A. Traditional: largely in private sector having own 1. It is defined as the smallest integrated whole value system 2. What is envisioned is articulated both in art & text B. Multinational: with business presence in several forms countries 3. It is like horizon, keeps moving/changing; redefine C. Global: with operations viewing the world from 4. It leads to specific missions, objectives, guiding prin- different angles as one market ciples D. Transnational: Such companies combine benefits of 5. It guides to turn adversity into opportunity global scale efficiency and of local responsiveness, ME-1B: Relations e.g. companies manufacturing automobiles, home 1. Onus of building a great work place is on the man- appliances. agement team Approach of all is process and results driven, guid- 2. Ensure that the whole organization is on talking terms ed by concepts, principles, policies, strategies and team spirit created by corporate management system to suit 3. Challenge lies in handling sensitive relations suc- the purpose; that aims at highest level of profitability cessfully besides other features. It usually focuses on: 4. Abrasive behavior makes situations and work places difficult 1. Identification of opportunities 5. Fractured relations lead to frustration of all con- 2. Creation of effective organization cerned 3. Improvement/ rationalization of operations ME-1C: Communications 4. Outlining strategies 1. Effective leaders are effective communicators 5. Elimination of wastes 2. Verbal communications carry a personal touch Dimension-3: Produceability 3. Let presentations be persuasive and understandable Produceability is an activity of formidable core con- 4. Effective listening is as important as reading, writing cern. It is the ultimate and rather difficult operation- and speaking al pursuit, influenced by many elements such as con- 5. Listening is bipartite, does not encourage compul- structability, operability, maintainability, quality, reli- sive monologues ability and safety. Produceability is central to opera- ME-1D: Productivity tional excellence. When it runs into trouble, the causes 1. Can be measured in several different ways are traced to the elements of its support layer. In chem- ical industries, produceability is dependent upon the 2. Emulate those having sustained enthusiasm to per- qualitative as well as quantitative aspects of raw ma- form terials, intermediates, products, catalysts & chemicals, 3. Productivity audits provide useful inputs utilities and even materials of construction and the 4. Keep the aging plants and emerging technologies fo- needed level of professional/ domain skills of the op- cused erations personnel. Once produceability is well estab- 5. The seemingly enough is not enough lished, the production teams should be able to contin- ME-1E: Quality ually and profitably produce the needed quantity of 1. Quality of human resource is indispensable: the quality-products reflexively as desired. thoughts, the actions Construction: This phase sows the seeds 2. Quality in work processes and employee behaviour It involves an active multifunctional team in place are the key ensuring the integration of construction expertise in all 3. Focus on quality systems, quality procedures, quali- project phases (planning, designing, procurement and ty production construction itself). This is intended to derive the bene- 4. Technology employed must manifest quality out- fits on cost, schedule, quality and overall project objec- puts tives; moreover give the project the benefits of experi- 5. Do it right first time, every time ence with materials besides site issues. In other words, 62 Chemical Industry Digest. Annual - January 2018

OPEX Sets A To D: Subject Wide Sets of Chemical Industry Strategies Set-A: Select Strategies On Location And Capacity 2. Match the process and product specification Set-A1: Location 3. Optimize plant and process run-time 1. Land: free hold, free of religious tangles, development cost 4. Implement efficient logistics 2. Proximity to labor, raw materials, water & power 5. Maximize online product tracking 3. Market dynamics: movement, shifts 6. Track truck movement on road by Global Positioning 4. Surroundings: serenity, climate, neighboring structures System (GPS) 5. Services: medical, restaurant, school/ college, entertainment Set-C2: Benchmarking 6. Roads: network/condition/traffic, width/destinations 1. Is target or reference for comparison 7. Sewage system: source and destination of public effluent 2. Helps comparison of performance with industry best prac- 8. Local labor: attitude, economic condition, skill level tices 9. Connectivity: to bus stand, railway station, airport, nearest 3. Helps comparison of performance with historical best city 4. Helps comparison of Capex and Revex plans 10. Cost of transportation: goods, machinery 5. Helps enhance operating adeptness (skill, proficiency) 11. Industrial cluster/ belt/zone, business corridor 6. Helps to ensure better quality to customers 12. Taxes: duties & taxes, tax holiday, Govt. incentives 13. Least cost center analysis: grid, rows & columns Set-C3: Just-In-Time 1. Highly applicable to engineering works Set-A2: Capacity 2. Applicable to mass manufacturing industries 1. Helps maximize market share 3. Useful for batch chemical plants 2. Is compared with demand and supply 4. Useful for blending operations 3. Evens out undulations/perturbations in demand 4. Building large unsupported capacity runs risk 5. Minimize total processing time and total storage time 5. Not building enough capacity means opportunity lost Set-C4: Risk Management 6. Options: Lead/Lag/Track capacity 1. Create a culture that minimizes risk 7. Focus is on product life cycle 2. Identify all risks related to processes, plants and properties 8. If capex of new plant is high, debot the existing ones 3. Regulatory compliance in emergency management Set-B: Select Strategies on Inestment, Technology and 4. Insurance cover for natural calamities such as floods, light- Quality ening and earthquake Set-B1: Investment 5. Insurance cover for accidents, fire and explosion 1. Provision for future growth 6. Insurance cover for loss of production 2. Long term investment in medium return companies Set-D: Select Strategies on Customer Focus, EHS Priority 3. Short term investment in high return companies and Human Resource Dimension 4. Accuracy in project cost estimates Set-D1: Customer Focus 5. High economic parameters 1. Well aware of customer needs 6. Invest only for assured markets 2. Feedback mechanism in place 7. Use only well rated feasibility studies 3. Marketing for customer satisfaction Set-B2: Technology 4. Regard customer interface 1. Sustainable and cost effective 5. Prompt post-sale service 2. Constant upgradation: safe and serviced Set-D2: EHS (Environment Health and Safety) Priority 3. Regular internal audits 1. Receives highest priority at corporate level 4. Optimum automation 2. EHS Coordinator reports organizationally to CEO 5. Maximum process integration 3. Interface involves statutory bodies 6. Maximum modular approach 4. Real time statistics is displayed at the entrance gate Set-B3: Quality 5. Continuous attention paid to issues 1. Standards and Good Practices in place 6. Periodic enviro reports prepared/ submitted on time 2. Adopting modern processes 3. Applying Poka Yoke approach Set-D3: Human Resource Dimension (HRD) 1. Find, attract, develop and retain talent 4. Buying only quality raw materials 2. Render effective human resource services 5. Selling only quality products 3. Encourage controlled outsourcing 6. Avoiding quality violations 4. Ensure continuous enhancement/update of domain skills Set-C: Select Strategies on Quick Delivery, Benchmarking, 5. Establish system for developing leadership skills Just-In-Time and Risk Management Set-C1: Quick Delivery 6. Structure and prioritize skill development 1. Satisfy customers’ specific needs Chemical Industry Digest. Annual - January 2018 63

OPEX give the project very much what it deserves—an all- rates, setting reliability targets, making a plan, organiz- round well encapsulated field-experience. The latest ing team/experts, allocating resources and controlling methods such as pre-casting of foundations, slabs and the plan to achieve targets, and preventing/ correcting sections; prefabrication of structural members; auto any non-compliance. Like any other task oriented pro- fabrication of piping spools; pre-assembly and modu- gram a reliability program encompasses: finding what larization do help improve schedules and reduce costs. equipment fails: how & why, and what repairs war- Operation: This makes excellence visible ranted; collecting design basis for the equipment/ pro- Operability is an assurance that a plant is operable cess and about the operating environment, reliability technically and otherwise. Owners/ top management limits; compiling relevant manufacturers’ and indus- do get concerned about implementing risky chang- try practices; identifying and dealing separately with es for small gains. For, they are sensitive about plant poor reliability equipment; scheduling and carrying changes, lest they might turn counter-productive; out both corrective and predictive maintenance while might even lose the originally proven capacity. Plant reviewing how well preventive maintenance is done; personnel should make sure that Plant Modification and continuing plant reliability improvement. Procedure is rigidly adhered to. Operability needs Safety: This is never an over addressed subject availability of process equipment, availability needs Some chemical plants by virtue of their existing ac- good controllability and maintainability, and control- tivities make them vulnerable to fires, explosions, and lability needs good design and flexibility and above all accidents; and the consequences could be catastroph- smart and experienced hands to operate. ic. Hence, it is of utmost importance to regularly ob- Maintenance: This is an assurance of operational serve and attend to all the safety issues related to peo- ple, plant & equipment, and property. Behind all activ- health ities – whether planning, process development, design- That plant and equipment can be retained in or re- ing, fabrication, construction, operation or maintenance turned to operation makes the fundamental definition – it is the people who perform. Routine checks/ permits of maintenance. They must reveal high operational as are necessary to ensure safety in operations, such as well as intrinsic availability; as it directly affects oper- using the permit system for cold & hot work and for ational profitability. Maintenance begins with plant/ vessel entry, using positive isolation of vessels/ equip- equipment health checks. The more reliable the sys- ment/ storage tanks etc., ensuring further that there are tem, the less maintenance usually it requires. Keep de- no situations that result in hits and slips and the vessels signs simple: easy to operate and maintain. Give im- are cleared for buttoning up only after internally hav- portance to prefab/ modular design and standardiza- ing been checked and okayed. Plant personnel should tion. Maintain proper and accessible records of inspec- work with a specific & complete check list. tion/repair jobs performed. Streamline testing, calibra- tion and troubleshooting. Maintain easy & speedy ac- Dimension-4: Change Management cess to all key resources: skilled people, spare parts, One of the difficult challenges is handling change. planning charts, procedures and tools/ equipment. It is simply difficult for the people to habitually change from the old ways and adopt the new ways. Continuous Quality: This makes operational excellence shine improvement requires change. Change requires new As businesses face increasing competition, practice knowledge. New knowledge requires learning. But, of quality gets a boost. Quality perseverance indeed most transitional parameter is “the change”. Changes starts from top management commitment and flows are led; and don’t automatically happen. While imple- down the pyramid. Entire team is made quality con- menting changes, remember if the informal groups/ scious. And, all teams should be answerable for their leaders resist the proposed change, brief them until quality performance. Be conscious of “Right first time, they are positively informed. So, they would not inad- and every time.” So the quality perseverance leaves no vertently spread adverse messages around. There are room for goof-ups. Often, efficiency and effectiveness always some influential people forming center of grav- have been interpreted as two different names for the ity of an organization. Induct them to give their sup- same thing. Indeed, efficiency is one of the factors of ef- port in the execution of change. People need to feel in- fectiveness. The other two factors are operational avail- cluded in the decision to change. Efforts to implement ability and rate of quality production. Sometimes, effi- change should be supported with deep understanding ciency alone suffices. of the change. Reliability: Endeavors add to operational reliability Dimension-5: Interface Management Managing reliability comprises: finding failure Management of Operations Interfaces means man- 64 Chemical Industry Digest. Annual - January 2018

OPEX channels Annexure-2: Addressing Subject Wide System Wastes (SW) E. Ensures reliability of interdependence/ increased SW-2A: Capital transparency 1. Excessive inventory maintained F. Identifies re-engineering and value-addition oppor- 2. Overdue receivables tunities 3. Lost receivables including items not billed Dimension-6: Technical Pursuits 4. Bad execution of capital projects Due to creativity and constantly increasing knowl- 5. Project execution/ implementation delays and over- edge and competition, new technologies emerge. runs Consequently old ones tend to become obsolete. Hence 6. Assets remaining unutilized or underutilized in order to remain relevant, productive and competi- tive, technology upgradation becomes necessary so as SW-2B: Materials to achieve lowest costs and high quality of goods and 1. Wrong materials ordered services. Technology in chemical industry historical- 2. Followed over or under specification ly has undergone continuous improvement, making 3. Purchased at too high a price it possible to design and execute even most complex 4. Consumed excessively and fully integrated production centers. Technology is 5. Material laden with defects and defectives selected in consonance with economic resources, pro- 6. Material getting spoilt in storage duction goals and growth potential and it becomes SW-2C: Time of People: one of the essential prime resources of comprehensive 1. Excess, incompetent, wrong people assigned to the transformation process. Hence it is only right to be se- job lective, while choosing the most appropriate technolo- 2. Working on wrong jobs or priorities gy from among available modern technologies. 3. Badly designed systems or work flow procedures Dimension-7: Focus on System Wastes 4. Situations causing waiting time By analyzing business systems, managers can iden- 5. Not planning and not aiming for minimizing time & tify the underlying events, parameters, problems that motion cause waste and accordingly take steps to eliminate/ 6. Not minimizing transportation and processing steps remedy them. Corporate Executives understand and SW-2D: Lost Sales, Due To: ask for continuous reduction in system wastes and work with revised/ improved targets because the effort 1. Billing incongruities, errors and/or complexity directly gets translated into profitability. Particularly 2. Shipment arriving late or reached a wrong destina- these are likely forgotten, as most people limit the tion waste definition to material & energy wastes. Typical 3. Not keeping customers informed system wastes enabling identification of improvement 4. Sales people not calling right companies/ persons areas and continuous focus are listed in Annexure-2. 5. New/modified product not appropriately advertised 6. Too slow or non-responsiveness Conclusions 1. Operational Excellence (OE) touches the ultimate of agement of common boundaries among people, sys- industrial objectives. tems, plants, responsibilities and actions. It intends ef- 2. OE attainment validates institutional vision, mis- fective communication and coordination across do- sion and values. mains, phases and activities which are interdependent. 3. The effort made to OE augments profitability and It helps solve problems that occur among individuals solves perennial problems. and groups. The benefits of effective interface manage- 4. Layers of multiple dimensions define specific ac- ment are that it: tions to achieve OE. A. Establishes a deep understanding of job/ project 5. Organizations achieving OE are happy, and em- complexity ployees are proud of this affiliation. B. Optimizes resources, designs, quality, compatibili- References ty, cost, risk and schedule This article is based on the Author’s long industrial experi- C. Improves planning and reduces waste ence and publications, and his lecture notes. D. Builds, maintains relationships and communication Chemical Industry Digest. Annual - January 2018 65

Methanol Proposed Methanol Economy Fund – Ground Realities Need To Be Considered N S Venkataraman Abstract iti Aayog is reported to be considering a pro- posal for suggesting the creation of a Methanol This article provides a brief on the methanol NEconomy Fund with corpus of `4000 to `5000 scenario in India from capacities to production, crore for developing methanol as a fuel in India. technology and feedstock issues and the op- Bureau of Indian Standards have certified methanol tions for India. The author states that access to as a fuel and the regulatory approvals for the same will low cost feedstock (natural gas) is the key to the be notified shortly. economics of methanol projects in India - which Niti Aayog proposes to prepare a road map to feedstock is in short supply in India and there- achieve its target of increasing the penetration of meth- fore heavily import dependant. A cost compari- anol as an alternative fuel to petrol and diesel, with the son is made between coal based methanol proj- target that the roadmap should be applicable from ects in China and in India. The author suggests 2018. bio-methanol based on municipal solid waste In the roadmap, Niti Aayog proposes setting up fa- as an ideal alternative for India. cilities to convert coal/stranded gas/ biomass to metha- nol. Niti Aayog wants to set up 3 to 4 methanol plants, out of which it expects at least one plant running in the next 3 years. While the plans and proposals of Niti Aayog are impressive on paper, any discerning observer who understands the ground realities would wonder as to whether the proposal of Niti Aayog to setup coal / gas / biomass based methanol projects in India can materi- N S Venkataraman is the Founder and Director, Nandini Consultancy alise in the foreseeable future. Centre, a firm of chemical engineers and project consultants, based in Chennai and Singapore. He has over 17 years of experience in pro- Has Niti Aayog carefully studied the limitations duction and project management functions in several industries such posed by the ground realities in implementing it’s as titanium dioxide, sulphuric acid, single super phosphate, monocro- plans.? tophos, butachlor, cartap hydrochloride (padan), methomyl (lannate) Indian methanol scenario etc. He has over 22 years of experience in consultancy functions relat- Access to low cost feedstock (natural gas) is the key ing to project design and installation, market to economics of methanol projects in India. research, technology studies, preparation of techno economic feasibility reports and proj- Since natural gas price in India is high compared to ect appraisal. He is also the Chief Editor of the price of natural gas available for methanol produc- Nandini Chemical Journal and Chief Executive ers abroad in countries such as Iran and Saudi Arabia, the price of imported methanol is lower than the price of Nandini Institute of Chemical Industries. of methanol produced in India. 66 Chemical Industry Digest. Annual - January 2018

Proposed Methanol Economy Fund – Ground Realities Need To Be Considered Niti Aayog is reported to be considering a proposal for suggesting the creation of a Methanol Economy Fund with corpus of Rs.4000 to Rs.5000 crore for developing methanol as a fuel in India. Bureau of Indian Standards have certified methanol as a fuel and the regulatory approvals for the same will be notified shortly. Niti Aayog proposes to prepare a road map to achieve its target of increasing the penetration of methanol as an alternative fuel to petrol and diesel, with the target that the roadmap should be applicable from 2018. In the roadmap, Niti Aayog proposes setting up facilities to convert coal/stranded gas/ biomass to methanol. Niti Aayog wants to set up 3 to 4 methanol plants, out of which it expects at least one plant running in the next 3 years. While the plans and proposals of Niti Aayog are impressive on paper, any discerning observer who understands the ground realities would wonder as to whether the proposal of Niti Aayog to setup coal / gas / biomass based methanol projects in India can materialise in the foreseeable future. Has Niti Aayog carefully studied the limitations posed by the ground realities in implementing it’s plans.? Indian methanol scenario Methanol Indian producers and installed capacity - Period : April to March Indian producers and installed capacity - Period: April to March Production Installed capacity in metric tonne in metric tonne Name of the producer Plant location Feedstock 2016 - 17 2015 - 16 2016 – 17 Assam Petrochemicals Dibrugarh , Natural 33,000 30,172 Not Ltd., Assam Gas available Deepak Fertilizers and Taloja, Natural Petrochemicals Ltd., Maharashtra Gas 100,000 Nil Nil Narmada Valley Fertiliser Bharuch, Natural 238,100 132,449 137,975 Co. Ltd., Gujarat gas Nangal, National fertilizers Ltd., Fuel oil 22,110 Nil Nil Punjab Rashtriya Chemicals and Trombay, Natural 72,600 Nil Nil Fertilisers Ltd., Maharashtra gas Gujarat State Fertilizers Gujarat Natural 173,250 Nil Nil Ltd gas Total 639,060 162,621 Access to low cost feedstock (natural gas) is the key to economics of methanol projects in India. methane (natural gas) Though capacity exists in India for methanol production, most of the methanol plants re- Though capacity exists in India for metha- Coal based methanol proj- main shut down at present, as nol production, most of the methanol plants ects in China the Indian methanol units are remain shut down at present, as the Indian About two-thirds of China’s unable to compete with the im- methanol units are unable to compete with methanol feedstock is produced ported methanol in terms of the imported methanol in terms of price. from coal and the remainder price. from coking gas (a byproduct Import of methanol has of steel production) and natu- been steadily increasing, as the ral gas. Indian production has been registering decline with In China, coal is graded into 13 grades based on ash little feasibility of domestic production of methanol in- content under GB397-65 quality standard with differ- creasing significantly in the coming years, due to lack ence of 0.5% in ash content for consecutive grades. The of global price competitiveness of Indian methanol ash content is 5.5% for grade 1 and 11.5 % for grade 13. projects that are using natural gas as feedstock. China has abundant coal resources and for more Alternate feedstock for methanol production than a decade, China has increased its capacity to man- Methanol is produced from synthesis gas (syngas),– ufacture methanol using coal as feedstock. a mixture of carbon mon- oxide and hydrogen. Comparative landed price of natural gas in India with price in USA, Iran and Saudi Arabia - Period – 2017 Syngas is produced by in USD / MMBTU either: (i) Gasification of carbon- India USA *Iran Saudi Arabia rich matters (like coal, Price of 8.5 4.2 ~ 1.0 ~1.25 biomass, wood, indus- natural gas (delivered price of imported LNG) (industrial (price to (price to (considering 2.5 % import duty and trial waste, petcoke) USD 1.7 per MMBTU for re-gasifica- price) industries) industries) (ii) Steam reforming of tion and delivery) Chemical Industry Digest. Annual - January 2018 67

Methanol Indian import of methanol tion) Period Import In the coming years, in view of the implementation (April to March) in metric tonne of stringent environmental regulation in China, the in- 2013-2014 1,310,438 vestment cost in setting up and operating coal based 2014-2015 1,639,629 methanol projects is likely to considerably increase. 2015-2016 1,711,878 In view of the above, methanol producers in China 2016-2017 1,637,457 producing methanol based on coal are likely to face pressure in the next few years. Several methanol producers in China use coal with Indian coal based methanol project beset with ash content of less than 15%. However, Yima JV plant in China claims that it uncertainties has set up facility for production of methanol using Niti Aayog has mooted proposal in favour of ex- sub bituminous coal with ash content of around 38% ploring coal based methanol projects, considering the based on the technology provided by Synthesis Energy fact that India is a large coal producing country and Systems Ltd. with claim that coal based methanol projects would decline the import dependence on methanol / natural Challenges facing coal to methanol producers in China gas. Beyond 2017, it is expected that new capacity addi- The following factors clearly indicate that the Indian tions for coal based methanol projects in China will ta- coal based methanol project is a calculated risk and the per down due to an increasing degree of restrictions risk is not worth pursuing due to many uncertainties. placed on new coal based methanol capacity additions in China, due to environmental issues. Cost of Indian coal based methanol vis-à-vis gas based methanol Concerned about the ecological issues due to coal in Iran and Saudi Arabia gasification, China’s energy regulator has released Obviously, in case of setting up coal based metha- new draft guidelines in July 2015 for projects that con- nol projects in India, it is necessary that the price of the produced coal based methanol should be competitive vert coal to oil or gas, aiming to commit the sector to the strictest possible environmental standards. Coal to with the price of imported gas based methanol from gas projects would have to Production of syngas from alternate feedstocks use no more than 2.3 met- Production of syngas from alternate feedstock ric tonne of coal for every Air Separation Unit 1,000 cubic meter of gas produced. Chinese coal based Oxygen Nitrogen methanol producers have to cope with their com- paratively high produc- Coal tion costs to endure price competition from import- ed methanol based on nat- Biomass Raw syngas Purified syngas ural gas, due to fall in glob- al natural gas price. H 2, COCO 2, Hydrogen China’s price of coal, vis-vis sale Gasifier H 2O, H 2S Acid gas Carbon monoxide Acid gas CH 4, removal removal price of methanol Petroleum (Gasification) m Price of coal: RMB 100 coke to 300 per metric tonne m Corresponding price of methanol: RMB 1300 to Municipal 1900 per metric tonne solid waste Carbon Hydrogen Derivative products (incl tax and deprecia- Steam dioxide sulphide Coal based methanol projects in China 68 Chemical Industry Digest. Annual - January 2018 About twothirds of China’s methanol feedstock is produced from coal and the remainder from coking gas (a byproduct of steel production) and natural gas. In China, coal is graded into 13 grades based on ash content under GB397-65 quality standard with difference of 0.5% in ash content for consecutive grades. The ash content is 5.5% for grade 1 and 11.5 % for grade 13. China has abundant coal resources and for more than a decade, China has increased its capacity to manufacture methanol using coal as feedstock. Several methanol producers in China use coal with ash content of less than 15 %. However, Yima JV plant in China claims that it has set up facility for production of methanol using sub bituminous coal with ash content of around 38% based on the technology provided by Synthesis Energy Systems Ltd.

Chemical Industry Digest. Annual - January 2018 69

Methanol countries such as Iran and Saudi Arabia. including environmental concerns. The cost of production of high ash coal based meth- The challenge here is to produce syngas with the anol in India will not be globally competitive with the desired composition and characteristics in a cost effec- price of natural gas based methanol abroad. tive manner, using coal with high ash content without causing serious ecological issues. Likely cost of production of methanol from coal in India The issue would be that the output / yield of syn- m Methanol capacity: 600,000 metric tonne per annum gas would come down. Higher the ash content, lower m Project cost: `5,000 crore would be the output of syngas. In the conversion of coal to methanol, more in the m Ex factory cost of methanol from coal: `28,845 per case of high ash coal, considerable amount of acidic metric tonne gases and cinders are emitted. Therefore, in the case CIF price of imported methanol in India of using coal with high ash content, high investments m CIF price: `16,000 to `18,000 per metric tonne have to be made in setting up treatment facilities to en- sure that the plant operations would meet the stipulat- Sale price of natural gas based methanol from Iran ed ecological regulations in the country. m FOB price of methanol (in USD per metric tonne): 260 There are environmental issues in starting coal based methanol projects in India, which would go Sale price of natural gas based methanol from Saudi against the targets submitted by India to COP21 (Paris Arabia Climate Conference) on green house gas emissions. m FOB price of methanol (in USD per metric tonne): Technology issues yet to be overcome 249 When gasification of coal is done at high tempera- In other words, in all probability, India would ture of over 1100 deg. C with high ash content, the high continue to remain net importer of natural gas based ash content would result in heat losses and consequent methanol from abroad, where the more expensive coal reduction in thermal efficiency. based methanol producer in India would not be chang- It is claimed that technology is available globally to ing the ground situation in any manner whatsoever use high ash coal for gasification such as ECUST tech- with India’s import dependence for methanol continu- nology developed by East China University of Science ing and increasing. and Technology, U-Gas technology developed by High ash content in Indian coal Synthesis Energy Systems, USA and HTW technology The ash content in Indian coal deposits vary con- developed by Uhde. siderably, with ash content in some locations exceed- However, these technologies are yet to be demon- ing 35%. strated using Indian coal with high ash content. Beneficiation of coal by washeries can reduce the The technology and engineering issues with regard high ash content in the coal to about 20% but this in- to coal based methanol project in India using high ash volve investment as well as processing cost. Indian coal are yet to be fully understood, which is a There is an option to blend the high ash Indian coal precondition to arrive at acceptable technology and with imported lower ash coal or pet coke for use as engineering parameters, that are required for setting feedstock for the production of methanol. However, up coal based methanol projects of commercial size in this would increase the cost of the blended coal used India. as feedstock for production of methanol. The obvious and fair question is, why not look for It is also claimed that a coal based methanol plant in better options which are available and feasible for China has been set up using sub bituminous coal with methanol production in India than coal based metha- around 38% ash as feedstock. Usage of such feedstock nol projects. would add to increase in processing costs and reduce Methanol project proposal based on stranded gas the yield considerably. Niti Aayog proposal to set up methanol project Environmental concerns based on stranded gas lacks clarity, as several natural The high ash content present in India’s indigenous- gas based methanol projects in India already remain ly available coal poses a challenge for the coal gasifica- closed, as they are unable to compete with the import- tion project from the point of view of several aspects ed gas based methanol in terms of price. 70 Chemical Industry Digest. Annual - January 2018

Methanol Methanol project proposal 1.5 times higher than the cost of based on bio mass Bio methanol is eco-friendly product consid- natural gas based methanol. Proposal of Niti Aayog for ering the fact that it is produced from renew- Sum up of factors in favour of bio biomass based methanol proj- able feedstocks unlike conventional methanol methanol project in India from munici- ects also lacks clarity,with re- that is produced from natural gas, coal or fuel pal solid waste. gard to the availability of bio- oil. Commercially proven technology param- * Eco friendly process without mass in specific location for eters are now available abroad for produc- having adverse environmental large size methanol projects, tion of bio methanol from feedstocks such as impact apart from several logistic is- municipal solid waste, which are available in * Reduction in greenhouse gas sues with regard to biomass abundance in India and requiring no import of emissions unlike in the case of feedstock for the project. feedstock. coal based methanol Bio methanol from municipal * Availability of commercially proven technology abroad for solid waste – An ideal alter- the production of bio methanol from renewable nate project scheme for India feedstock Bio methanol is similar to conventional methanol in * Indian bio methanol projects would help in achiev- all respects and can replace conventional methanol in ing the target for reduction in green house gas emis- all applications. sions committed by Government of India to COP21 Bio methanol is eco-friendly product considering The use of municipal solid waste as feedstock in the the fact that it is produced from renewable feedstocks production of bio methanol would go a long way in unlike conventional methanol that is produced from meeting the objectives of Clean India Programme of natural gas, coal or fuel oil. Government of India (Swachh Bharat). Commercially proven technology parameters are now available abroad for production of bio methanol Strategy for bio methanol projects from feedstocks such as municipal solid waste, which Set up several bio methanol projects of capacity are available in abundance in India and requiring no 50,000 metric tonne per annum each in different parts import of feedstock. of the country (Enerkem is operating a plant of capaci- ty of ~30,000 metric tonne per annum in Canada using Bio methanol from municipal solid waste – Project set up by municipal solid waste). Enerkem Considering the fact that India is likely to import In June 2014, Enerkem officially inaugurated its first around 2 million metric tonne of methanol by 2020 and full scale municipal waste to biofuels and chemicals fa- the municipal waste is available in abundance, there is cility in Edmonton, Alberta, Canada. scope for setting up around 40 bio methanol plants in Project : Alberta Biofuels LP all in different parts of India before 2020. Location : Edmonton, Alberta, Canada Such plants can be set up in different regions to uti- Status : Began production of bio methanol in 2015 lize the locally available municipal solid waste. Ethanol module currently being added; Need to incentivize bio methanol projects ethanol production start planned for 2017 Obviously, bio methanol projects have to be sup- Feedstock : Postsorted municipal solid waste (after ported by the Government of India by introducing recycling and composting) around special measures to subsidize the production cost of 100,000 metric tonne per annum bio methanol to the extent needed. Products : Methanol, ethanol Such demand for subsidy support should not be Capacity : 38 million litre per annum viewed as a negative strategy, since the subsidy sup- port can be justified from the point of view of avoid- Economics of bio methanol production ance of import of feedstock for methanol production Bio methanol production cost depends consider- and utilisation of municipal solid waste profitably, ably on feedstock price, plant set up and local condi- which now poses disposal problem and adverse eco- tions. logical issues. The production cost of bio methanol is likely to be Chemical Industry Digest. Annual - January 2018 71

Hydrocarbons Indian Hydrocarbons Scenario Oil & Gas and Refinery Companies Need to be Future Ready Chemical Industry Digest Research Group The oil & gas and refinery sectors are very crucial to India’s energy security and petrochemicals manufacture. Due to lagging oil & gas production in the country, India’s dependency on imports have gone up. We need novel solutions to address this. Technological developments on the anvil could be a boon to India. Over-capacity in refineries is helping export of petroleum products. While integration downstream into petrochemicals has started happening, we continue to be deficit in many petrochemicals. Introduction chemicals. ndia’s quest for energy security will be met when Therefore, the future of oil seems bleak though oil IIndia harnesses all possible sources of energy. As industry may never die completely. As the need for oil India’s growth accelerates, the energy requirements reduces, significantly more of it would get diverted for are going to soar. India needs stable supplies of energy; other uses mainly for petrochemicals which will make quality power, uninterrupted power without fluctua- for cheaper feedstocks for the chemical industry. This tions and all at a cost that is internationally competitive. may lead to overproduction of petrochemicals with To achieve this, India’s overwhelming dependence consequences that may be difficult to assess now. on imported oil and gas and fossil fuels as a whole has Oil losing is pre-eminence will lead to geo-political to be significantly brought down. Our domestic oil and strategic shifts with the Middle East losing its impor- gas exploration and production has to increase with tance to the powers that be. shift to cleaner fuels like natural gas, increase use of re- OPEC losing importance newables like solar and wind energy and bio-based fu- els. In the short term we have to depend on coal, abun- However, in the near term, the global reliance on dantly available, for producing power. However, we oil and gas will continue. Prices may even firm up as have to use cleaner coal technologies, underground it is happening now. After the price of oil crashed to a coal gasification and IGCC (Integrated gasification near US $40 a barrel about 5 years back due to the US combined cycle) technologies with carbon storage and shale effect, lower global economic growth and inven- utilisation. tory buildup, for the first time, since then, in the last few months, oil prices have started surging up, threat- Technological Changes ening to touch US$70 a barrel. This is reported to be The good news is that a radical transformation is in due to production cuts among OPEC states, Russia the offing by the impending advent of electric trans- and few other oil producers becoming effective, the portation powered by the rapidly advancing battery tensions between Iran and Saudi Arabia and the US, technologies. About 70% of global oil production goes the slight recovery in the western economies, falling into transportation fuels. A Stanford university study oil inventories and even climatic factors like the snow says that we are nearing the end of fossil fuel run ve- storms sweeping the northern hemisphere, mainly in hicles, most likely by 2030. This is expected to create the west. However, experts put this as a temporary huge changes in the automotive industries and as well spike and prices could soon come down and stabilize as in petrochemicals manufacture. One welcome result around US$50 a barrel unless there are drastic politi- would be the significant reduction in air pollution due cal uncertainties, wars etc. Besides according to the in- to the shift to electric transportation. China and Europe ternational energy agencies global oil demand growth have already announced they will phase out petrol fu- will be flat. In 2017 the demand growth was 1.5 million el vehicles and shift to all electric transportation. India barrels per day (mbpd) and in 2018 its expected to be has similar plans to follow suit. only 1.54 mbpd. In any unprecedented situation that There are other synergistic developments too. Solar oil prices flare up, the US shale rigs could get back into energy is fast achieving cost parity with hydrocarbon action and provide a balancing and moderating effect. based grid electricity. Renewables based technologies Overall, the importance of OPEC has been coming based on crop/plant wastes, municipal wastes will not down and their ability to dictate prices as before has only generate power but produce a wide variety of zeroed down considerably. Therefore, irrational prac- 72 Chemical Industry Digest. Annual - January 2018

Hydrocarbons tices like charging an Asian premi- Table-1: Crude Oil and Natural Gas Production um i.e. about US$1 to US$1.5 per bar- Year Crude Oil % Growth in Natural Gas % Growth in rel more for Asian customers, despite Production Crude Oil Production Natural Gas geographical proximity to the Middle (MMT) Production (BCM) Production East and Asia being the largest con- 2010-11 37.684 11.85 52.219 9.94 sumer, should be discouraged. Today OPEC needs its customers more than 2011-12 38.090 1.08 47.559 -8.92 the other way round. 2012-13 37.862 -0.60 40.679 -14.47 Oil & Gas Scenario 2013-14 37.788 -0.19 35.407 -12.96 As the short term which is the pres- 2014-15 37.461 -0.87 33.657 -4.94 ent is what matters more, India has to 2015-16 36.942 -1.39 32.249 -4.18 see how it can strengthen its oil and 2016-17 (P) 36.009 -2.53 31.897 -1.09 gas exploration and production efforts P: Provisional (Ministry of Petroleum & Natural Gas) so as to produce more of oil and gas. enue share licensing policy includes a unified license The governments fiat to the industry is to increase do- for all hydrocarbons, oil, gas, coal-bed methane et al. mestic production and reduce imports by 2022 and at Operators can well carve out their own blocks under the same time secure overseas supply through diver- open acreage, licensing policy. Bidding interest has sifying purchases and buying oil assets overseas. Our public sector major - ONGC has not had much success consequently increased. in striking oil after Bombay High in the sixties and the While India’s prognosticated hydrocarbon reserves mid sized Neelam field in the 1980s. are estimated at 28 billion tonnes of oil, the recoverable India’s oil consumption grew 8.3% year on year to reserves are put at a more reasonable 2.2 billion tonnes 245.36 million tonnes in 2016-17, thus making India the or 50 times current domestic output, which is barely a third largest oil consuming nation in the world. Figures fifth of annual demand. for crude oil and natural gas production are given in Other initiatives the government has taken include Table 1. Natural gas production was also down as can promoting a National Gas Grid, use of CNG/LNG in be seen in the table. transportation. Natural gas (including LNG) consumption stood With the government promoting use of gas, the at 50.78 BCM during 2016-17. India imports 80% of its consumption of gas is expected to go up phenomenal- crude oil consumed and about 45% of India’s gas con- ly in the country and with dwindling domestic gas pro- sumed. In our overall energy mix gas consumed is on- duction, our imports of natural gas (LNG) is also ex- ly 6 to 7%, much lower than the global average of 24% pected to go up phenomenally high. India would also and the government wants India’s energy mix to shift need more than 4 LNG terminals India has as of now towards gas – a far cleaner fuel. India has been diver- – which together has a combined capacity of 27 mtpa. sifying its suppliers for oil imports to reduce depen- Dahej is the biggest LNG terminal with a capacity of 15 dence on OPEC oil. The share of OPEC in India’s crude mtpa which is expected to go up to 47.5 mtpa by 2022. oil imports fell to 82.4% in 2016-2017 from 87.9% in the The country has about 16,000 km of gas pipelines and previous years as India has Table 2: Refinery Capacity & Refinery Crude Throughput (in terms of Crude Oil Processed) started buying from the US, Canada and Russia. Year Refinery % Growth Crude % Growth Refinery in Refining Throughput in Crude Capacity Capacity @ India’s new exploration (MMTPA) Capacity (MMT) Throughput Utilization (%) policies now offer market de- 2010-11 183.386 4.22 196.989 5.59 107.42 termined prices. The new Hydrocarbon Exploration 2011-12 187.386 2.18 204.121 3.62 108.93 and Licensing Policy (HELP), 2012-13 213.066 13.70 219.212 7.39 102.88 Discovered Small Field Policy 2013-14 215.066 0.94 222.497 1.50 103.46 allow for marketing and pric- 2014-15 215.066 0.00 223.242 0.33 103.80 ing freedom for new gas pro- 2015-16 215.066 0.00 232.865 4.31 108.28 duction, and extension of pro- 2016-17 (P) 230.066 6.97 245.362 5.37 106.65 duction sharing contracts for small and medium size 2017-18 (P) 233.966 1.70 - - - fields etc. The liberalised rev- P: Provisional @: As on 1st April of Initial year. (Ministry of Petroleum & Natural Gas) Chemical Industry Digest. Annual - January 2018 73

Hydrocarbons the target is to take it to 30,000 km in the next four years. Corporation (ONGC) buying off the government share The government has also plans to build a natu- of 51% in HPCL giving ONGC management control of ral gas trading and pricing hub with the objective to the combined entity. However, the exact contours of become Asia’s trading hub that could compete with this merger are still evolving and it is expected that the Singapore, Shanghai or Tokyo. HPCL brand name and functioning autonomy may be Refinery Scenario kept. As ONGC also has refinery and petrochemicals, integration of all refineries and petrochemical activity The situation on the Indian refinery sector has been under the HPCL brand may be considered. different with India becoming a net exporter of petro- ONGC owned (alongwith GAIL and Gujarat State leum products. India is the second largest refiner in Petrochem Corporation) ONGC Petro-additions Ltd Asia after China and is emerging as a refinery hub with (OPaL) at Dahej SEZ is the first Petroleum, Chemicals refining capacity exceeding demand. The country’s re- and Petrochemicals Investment Region (PCPIR) that finery capacity has increased from 215.066 MMTPA has finally taken off. The government is reportedly tak- to 233.966 MMTPA at present (as on 01.04.2017) due ing a relook at the PCPIR policy analysing why other to addition of 2.9 MMTPA and 1 MMTPA capacity in PCPIR projects are not taking off so as to remove the BPCL-Kochi and HPCL-Mumbai refiners respectively. glitches or obstacles. Figures for refinery capacity and production are Another major development was the Russian com- given in Table 2. pany Rosneft, the world’s largest publicly traded oil Expansions, Greenfield projects & other developments company alongwith two other investors buying off Hindustan Petroleum Corporation Ltd (HPCL) is 98% stake of Essar Oil’s 20 mtpa refinery at Vadinar in expected to boost the capacity of its Mumbai refinery Gujarat, associated port and future retail network for to 190,000 bpd (from 130,000 bpd) by July 2019 and the $13 billion. This opens up the market for increasing im- Vizag refinery from 166,000 bpd to 300,000 bpd by July port of Russian crude into the country. 2020. Indian Oil Corporation Ltd (IOC) owns and oper- A major announcement made by the government is ates 11 refineries of the country’s 23 refineries and has the plan to put up a huge mega refinery of 60 MMtpa the largest share of all refiners at 30% (80.7 MMTPA) of capacity in the west coast of India in Maharashtra at an total refining capacity. estimated cost of US$40b. This would be a joint venture IOC’s ongoing brownfield expansions are expected of IOC, Bharat Petroleum Corporation Ltd (BPCL) and to take its refining capacity to 100 mmtpa by 2021-2022 HP. A foreign partner may also be roped in. The project for which IOC will be spending about `1.8 trillion. is to be implemented in 2 phases with a 40 mtpa crude Indian Oil is expanding its Barauni and Gujarat refin- processing capacity, an aromatic complex, naphtha eries and new large sized single crude unit is being in- cracker and a polymer complex in the first phase. This corporated in place of several existing small units for will be equal to the combined capacity of the two refin- increasing operational efficiency. Post 1999, IOC has eries of Reliance Industries Ltd at Jamnagar in Gujarat, expanded into petrochemicals and natural gas. From which have capacities of 33 mtpa and 27 mtpa each. 2009 IOC has expanded into upstream oil exploration Consolidation plans taking place in the Indian pub- and production. lic sector refineries took off with Oil & Natural Gas There are reports that Reliance Industries Ltd, the country’s biggest refiner with 60 Table 3: Production and Consumption of Petroleum Products mmtpa capacity may also consid- Year Production of % Growth in Consumption of % Growth in er expanding its capacity to 100 Petro-Products Production of Petro-Products Consumption of million tonnes a year by 2030 at (MMT) Petro-Products (MMT) Petro-Products an estimated cost of US$10 bil- 2010-11 194.821 5.53 141.040 2.35 lion. The Reliance refinery is one 2011-12 203.202 4.30 148.132 5.03 of the most complex with sophis- 2012-13 217.736 7.15 157.057 6.02 ticated technology which allows 2013-14 220.756 1.39 158.407 0.86 it to process low grade cheaper 2014-15 221.136 0.17 165.520 4.49 crude oil while producing high value refined products, which 2015-16 231.923 4.88 184.674 11.57 helps RIL report much higher re- 2016-17 (P) 243.551 5.01 193.745 4.91 fining margins. P: Provisional (Ministry of Petroleum & Natural Gas) BPCL’s Kochi Refinery has ex- 74 Chemical Industry Digest. Annual - January 2018

Science Pages Science Pages Hydrocarbons Samay, the only Indian candidate selected for panded its refinery at Ambalamugal in Kochi from 7.5 the programme, chose to work on life sciences, the mtpa to 13.5 mtpa. BPCL plans to expand its Mumbai topic of ‘’Autophagy’’, which also happens to be the & Bina refineries also to 15 mmtpa each. It also plans 2016 Nobel Prize-winning work. Fighting cancer, to expand capacity of its Numaligarh refinery from 3 Alzheimer’s or Parkinson’s needn’t necessarily require mt to 9 mtpa. aggressive medical treatment. Autophagy, the science Work on HPCL’s 9 mtpa Rajasthan Refinery behind fasting and a self-cleaning mechanism, may and petrochemical complex at Barmer in Rajasthan is ex- not only help in staying healthy but also in curing pected to start soon. This will mainly use the crude such neurological or biological diseases. from the Barmer oil fields of Vedanta which was ear- In his video, Samay explained this biological lier Cairn Energy. HPCL is also expanding its refinery process through a combination of humorous ani- capacity in Vizag in AP to 15 mtpa from 8.3 mtpa. Its mated stories and informative scientific explanations. Mumbai refinery is also being expanded from its pres- “Damaged organelles and cells can be decayed to ent 7.5 mmtpa to 9.5 mmtpa. create energy which can help fight diseases,” he said. The Breakthrough Challenge looks for four main areas Refinery Trends that the videos should cover: engagement, creativity, India is the fastest growing consumer of petroleum illumination and difficulty. products; it is the third largest after the US & China. good news is that Indian public sector refiner- The Samay said, “A few of my relatives have been suf- fering from neurological diseases, so I began research- ies have realized the importance of integrating down- ing on solutions to these problems. I was intrigued by stream and upstream and the newer refineries (at the topic and the capability of a simple fast to cure life- Panipat, Paradip etc) set up and planned to be set are altering diseases. I just want to spread my thoughts. If all with petrochemicals manufacturing. Though many I win this challenge, I will be able to create something of the Indian public sector refineries are of vintage, se- extraordinary for the world. Getting this far is really rious efforts have been made and are being made to cool. But I do hope I win”. modernize the old ones to the extent possible. Samay will reach the finals based on the number of Three major refinery trends are: ‘likes’, ‘shares’, ‘positive reactions’. The videos of all 1. The production of higher quality, lower sulphur 30 semi finalists have been published on Facebook for transportation fuels the public to vote. The final announcement of winners India too some of the public sector oil companies are 2. An increase in the integration of refinery and petro- also foraying into alternate sources like biofuels and will be made in Los Angeles on December 2. chemical operations renewables. Oil companies need to redefine their busi- 3. Investments to increase energy efficiency and crude ness as energy companies encampassing all sources of oil processing facility energy. Scientists transform heat into motion in nanoscale devices A clear emerging trend in addition to integration is Feedstocks for Chemical Industry for refineries to be flexibly configured to process a va- Most of the basic petrochemicals production re- team of scientists at University of Glasgow, UK cept of a gear known as a ratchet, and turning mag- riety of crudes including the cheaper dirty crudes or volves around enthylene capacity based on ethane A have found a new way to transform ambient heat netic energy into the directed rotation of the magneti- heavy crudes unlike our earlier ones which could on- crackers, globally as well as in India. While globally into motion in nanoscale devices – a discovery that zation. ly process the sweeter crudes. They should also be able there is an excess of ethylene capacity, in India it is def- could open up new possibilities for data storage, sen- The thermal ratchet was realized in a material to flexi manufacture and give changing product mix icit. Propylene, the other major output of steam crack- sors, nanomotors and oth- known as “artificial spin as per the changing requirements of the market both ing is finding greater uses and continues to be in short er applications. ice” made of an assem- based on market demand as well as on which products supply. To mitigate the growing propylene supply gap For the study pub- bly of tiny nanomagnets of attract a higher premium in the market place. All these many industries are investing in on purpose propylene Permalloy, a nickel–iron al- lished in the journal lead to higher and higher complexities in the manufac- production technologies such as propane dehydroge- loy. The individual nano- Nature Materials, an in- turing plant and also with pressure to produce cleaner nation (PDH) and processes based on coal and meth- ternational team of re- magnets are just 470 nano- and cleaner fuels – which is an important pre-requisite anol. metres long and 170 nano- searchers described how for success in exports. Crude sourcing strategies have The oil & gas and refinery sectors continue to be meters wide, with only a they created a magnetic became important for low priced heavy crudes as well mother industries for the entire petrochemicals & system capable of extract- single magnetic domain. as to what extent one should go for long term purchase downstream sectors due to the range of starting ma- After magnetizing their ing thermal energy on the contracts or spot purchases in the international market. terials (feedstock & platform chemicals) they provide. sample, the researchers ob- nanoscale, using the con- To stay competitive, refiners must find ways to in- Therefore, it is quite welcome that Indian refiners are crease operational efficiencies, maximize productivity all now getting into manufacture of petrochemicals. 41 Chemical Industry Digest. November 2017 and produce refined products at lower costs. All plans of new refineries and a few expansions in- Global oil majors are also into renewables and in clude integrating with petrochemicals manufacture. Chemical Industry Digest. Annual - January 2018 75



Hydrocarbons stream building blocks and the downstream specialty chemicals. The dearth of such platform chemicals or intermedi- ates is a great disadvan- tage to the growth of the Indian chemical indus- try. The potential to en- hance the manufacturing of ethylene and propyl- ene should be explored so that it can be used for manufacturing interme- diates like MEG, EDC, vinyl chloride and acry- lonitrile which are being imported in large quan- tities. Based on the ex- perience of Reliance Industries, refineries could explore other cost competitive feedstocks like petcoke gasification which can be sourced captively from the refin- ery to generate syngas. Reliance recently com- missioned a major proj- ect based on petcoke gasification. Likewise hydrocracker residues can serve as an excel- lent feedstock for crack- ing with yields similar (Ministry of Petroleum & Natural Gas) to naphtha cracking pro- ducing more of propyl- However, at the moment our imports of many petro- ene, butadiene etc. chemicals are on the rise which include styrene, phe- The high price of natural gas in India compared to nol, acetic acid, polycarbonate, PVC, polyethylene, methanol and so on. One of the major reasons cited for international price is another inhibiting factor for pro- paucity of capacities for many chemicals in India is the ducing in India. The Indian Chemical Industry has dearth of feedstocks. However, we have surplus naph- great potential and despite its relatively small size it is rd tha of over 7 MMPTA, which is chemical rich, a large the 3 largest in Asia after China & Japan, contributing to 2.5% of India’s GDP. portion of which is exported instead of being converted into much needed chemical intermediates needed for With adequate feedstock availability, expeditions downstream chemicals manufacturing in the country. setting up of PCPIR and facilitating policies, Indian According to a Tata Strategic Management Group re- Chemical Industry can really surge forward. port value chain integration and strategic linkages are the key to the overall attractiveness and economies of the chemical industry. Petrochemical intermediates are a major segment to ensure connectivity between up- Chemical Industry Digest. Annual - January 2018 77

Sourcing Professional & Technical Bodies All India Council for Technical Email: [email protected] Institution of Engineers (India) Education Web: wwwdghindia.gov.in 8, Gokhale Road, Nelson Mandela Marg Kolkata, W.Bengal 700020 Vasant Kunj, New Delhi-110070 Indian Institute of Chemical Engi- Tel: 033-22238335 Phone: 011-26131576-78,80 neers Email: [email protected] Web: www.aicte-india.org Dr H L Roy Building, Web: www.ieindia.org Jadavpur University Campus Association of Carbohydrate 188 Raja Subodh Chandra Mullick Institution of Mechanical Engineers Chemists & Technologists, India Road, Kolkata 700032 W. Bengal. Hasmukh Bhavan, Behind CIDCO 5, Panditwari, Phase- II, Dehradun, Tel.: 033-2414 6670, 2412 9314 Office, Kharghar, Navi Mumbai, Uttaranchal 248006 Email: [email protected] 410210 Tel: (022) 2774 3559 Tel: 0135-2773736, 989713113 Web: www.iiche.org.in Email: [email protected] Email: [email protected] Web: www.accti.in Indian Institute of Materials National Corrosion Council of Management Studies India Bureau of Energy Efficiency Plot Nos. 102 & 104, Sector - 15, C/o Central Electrochemical (Ministry of Power, Govt of India) Institutional Area, CBD Belapur, Research Institute, Karaikudi, 4th floor, Sewa Bhawan Navi Mumbai, Maharashtra 400614 Pasumpon, Tamilnadu 630006 R K Puram, New Delhi 110066 Tel: 022- 27571022 Tel: 04565-241388 Tel: 011-2617 8352 Email: [email protected] Email: [email protected] Email: [email protected] Web: www.iimm.org Web: www.nccikkdi.com Web: www.bee-india.gov.in Indian Institution of Plant National Productivity Council Chromatographic Society of India Engineers Utpadakta Bhavan, 5-6 Institutional C-1203, Synchronicity, IIPE Hse, J P Tower, 7/2, Road, Lodhi Road, New Delhi Nungam-bakkam High Road, Nahar Amrit Shakti Road, Nungambakkam, 110003 Tel: 011-24690331,24615002 Chandivali, Chennai, Tamilnadu 600034 Email: [email protected] Andheri (E), Mumbai 400072 Tel: 044-28215108 Phone: 9820093260 National Safety Council Email: [email protected] Indian Society of Cosmetic Plot No.98, Sector 15, CBD Belapur Web: www.chromsocindia.org Chemists Navi Mumbai, Maharashtra 400614 302, Srikant Chamber, Next to Tel: 022-27579924 Consultancy Development Centre RK Studio, Sion-Trombay Road, Email: [email protected] Core 4B, India Habitat Centre Chembur, Mumbai 400071 Web: www.nsc.org.in 2nd floor, Lodhi Road, New Delhi Phone: 9869007291 110003 Tel: 011-24602601 Email: [email protected] Society of Energy Engineers & Email: [email protected] Web: www.isccindia.com Managers Web: www.cdc.org.in SEEM Bhavan, Kannammoola, Institute of Pesticide Formulation Trivandrum, Kerala 695001 Directorate General of Hydrocar- Technology Tel: 0471-3242323 bons HSIDC, Sector 20, Udyog Vihar, Email: [email protected] OIDB Bhavan, Tower-A, Opp. Ambience Mall, Web: www.in.f84.mail.yahoo.com Plot No.2, Sector 73, Noida, Gurgaon, Haryana 122016 Uttar Pradesh 201301 Tel: 0124-2348487 Tel: 0120-2472000 Email: [email protected] Web: www.ipft.gov.in (Please note that only a selection of organisations are listed here and this is by no means a comprehensive directory) 78 Chemical Industry Digest. Annual - January 2018

Fertilizers Will Indian Fertilizer Industry see changes soon? Piyush Nimgaonkar Abstract The Indian government is proactively incentivising the incumbents to increase production of urea and reduce import dependence,which is expected to provide fillip to the overall Fertilizer sector. Further, the government is also pushing these players to adhere to increased efficiency norms and implement the Direct Benefit Transfer (DBT) Scheme. CARE Ratings believes that these policy initiatives will go a long way in bringing much needed investments into the sector, while reducing the subsidy bill for the government and make the sector sustainable in the longer term. However, CARE Ratings believes that key risks for the sector are 1) higher capital expenditure requirements that may increase leverage for these companies and 2) agro-climatic changes may reduce the rev- enues for these companies. Background Government of India (GoI) policy initiatives to make he recent reforms in the fertilizer sector, includ- India self-sufficient in urea going forward ing neem-coating to prevent diversion of urea Urea is an inexpensive form of nitrogenous fertil- Tto industrial uses, and gas-pooling to induce izer used in agriculture. It is synthetically produced efficiency in production, are steps in the right direc- in enormous quantities. Urea is the only “Controlled tion. Fertilizer accounts for large fiscal subsidies (about Fertilizer” which means the GoI controls the retail `70,000 crore or 0.5 percent of GDP), the second- price of the product (MRP is set at `5,360 per tonne) highest after food. As per Economic Survey 2016-17, and manufacturers are compensated through subsi- only `17,500 crores or 35% of total fertilizer subsidy dies, which is the difference between normative cost reaches small farmers. The urea sector is highly regu- of manufacturing fertilizer and Farm Gate Price (FGP). lated which creates a black market that burdens small Subsidy figure varies in line with feedstock and fu- farmers disproportionately. Further, it incentivizes el prices in order to ensure, in principle, a normative production inefficiency and leads to its over-use, while fixed return (post tax RoE of 12% p.a.) – except in case depleting the soil quality and damaging human health. of debottlenecked capacities, which get subsidy based Hence, Government of India (GoI) is addressing these on uniform fixed contribution subject to a cap of inter- problems through incentivizing domestic production national parity price levels. and implementing efficiency related reforms. The key impediment for growth in capacity/pro- duction of urea in the domestic market was availability of its key feedstock i.e. natural gas. Natural gas is the preferred feedstock as it intrinsically is hydrogen rich and contributes more hydrogen per unit as compared Piyush Nimgaonkar is Senior Manager with Care Ratings Ltd , Mumbai to other feedstocks like nephaline or coal. Chemical Industry Digest. Annual - January 2018 79

Fertilizers Gas-Pooling for the Fertilizer (Urea) Sector (July 2015) GoI is planning to revive five closed fertilizer plants As per the policy, GoI implemented pooling of with total investments of ~`50,000 crore. These plants Domestic Gas with Re-Gasified LNG which is import- would add total of 65 lakh metric tonnes (LMT) of urea ed. This has led to the supply of natural gas at uniform every year, which would tide over urea imports by delivered price to all gas grid connected Urea manu- 2020. facturing plants. The cost of gas, which is the most im- In addition to these five urea plants, GoI has also ap- portant component for production of urea (50-60% of proved to establish a new brown field ammonia – urea the production cost), varies from plant to plant owing complex in the existing premises of the Brahmaputra to differential rates at which imported LNG is contract- Valley Fertilizer Corporation Limited (BVFCL). The ca- ed as well as cost of transportation. This move would pacity of this plant will be 8.646 lakh MTPA. Setting up enable the government to save about `1,550 crores in of new urea plants at these locations will help in bridg- subsidy and help urea manufacturing plants focus on ing the gap between demand and production of fertil- their core business operations. izers in the country. This being done by setting up new New Urea Policy 2015: ammonia-urea plants with a capacity of 12.7 LMTPA. Under the New Urea Policy 2015 (NUP 2015), the Further, under the provision of New Investment production beyond the RAC (Reassessed Capacity; Policy (NIP), Matix Fertilizers & Chemicals Limited which is the best monthly average production capac- (Matix) has set up a Coal Bed Methane (CBM) based ity of a unit) is eligible for 100% of the variable cost Greenfield ammonia - urea complex at Panagarh, West (primarily energy cost) plus the minimum additional Bengal with installed capacity of 13 LMTPA. The com- fixed cost for each unit. This is subject to a cap of the pany has already achieved commercial production as International Price Parity (IPP) plus incidental charges on October 01, 2017. on urea imports. The reimbursement under new poli- Chambal Fertilizers & Chemicals Limited (CFCL) cy is higher from the pricing as per the earlier policy of has proposed to set up a brownfield project with ca- 85% of IPP. As a result of this policy change there has pacity of 13.4 LMT at Gadepan, Rajasthan, which is been stark increase in domestic production coupled likely to start commercial production in January 2019. with decline in imports of urea. Indigenous urea has constituted ~60% of the over- Direct Benefit Transfer (DBT) Scheme is expected to benefit the Fertilizer Industry all fertilizer production, while the share of urea im- The introduction of DBT in the Fertilizer Industry is ports vis-a-vis total fertilizer imports has been declin- expected to be a boon to the fertilizer sector. Under the ing. Urea comprised ~50% of the total fertilizer imports DBT scheme the subsidy will be released to the fertiliz- in FY13 which has declined to 34% in FY17. er companies instead of the beneficiaries, avoiding de- Import dependence (imports as a proportion of pro- lays in receipt of subsidy benefits to producers aiding duction plus imports) came down from 26.3% to 18.5% their operational efficiencies. When DBT was first in- in FY17 while share of domestic production increased troduced in the fertilizer industry, the subsidy was giv- from 73.7% to 81.5% during this period, indicating that India is moving towards self- sufficiency of urea produc- tion. India plans to eliminate imports by 2022. Presently India mainly imports Urea from China, Oman and Iran. The government is reviv- ing five closed fertilizer plants to reduce imports of fertilizers In order to enhance the domestic urea production and reduce urea imports, 80 Chemical Industry Digest. Annual - January 2018

Fertilizers Company name Location Capacity Commercial Operation (Lakh MT) Date Fertilizer Corporation of India Talcher 12.7 December 2020 Fertilizer Corporation of India Ramagundam 12.7 November 2018 Fertilizer Corporation of India Gorakhpur 12.7 August 2020 Fertilizer Corporation of India Sindri 12.7 September 2020 Hindustan Fertilizer Corporation Ltd Barauni 12.7 October 2020 en on the dispatch of the materials from their respec- vised energy norms under the New Urea Policy (NUP tive factories. After a few revisions, on the disburse- 2015), which saved ~`800 crore of total fertilizer subsi- ment of the fertilizers, the subsidy was getting paid at dy for 25 gas based urea plants. As per the norms is- a railhead point or any approved godown of a district. sued by the Fertilizer Ministry, all the gas-based urea Now under the proposed new system, payment of manufacturing plants are divided into three groups subsidy is to be based on weekly settlement of claims and a specific energy norm is fixed for each plant. from actual sales data captured on Point of Sale (POS) Natural gas constitutes ~65-70% of the cost of produc- machines after the sale is made by the retailers to the tion of urea and cost of gas used is reimbursed by the beneficiaries on submission of claims generated in the government in the form of subsidy. web-based online Integrated Fertilizer Monitoring Thus, most of the older plants have to incur signifi- System (iFMS) by fertilizer companies. The DBT cant capital expenditure in the next 2-3 years for adher- scheme should help curb the issues relating to diver- ing to the pre-set norms. The planned capital expendi- sion and smuggling of urea. ture, if debt funded, may reduce operating margins for The POS machines will capture details of the farm- these companies. er such as Aadhar number, details of the retailer, the Exposure to highly regulated industry and agro-climatic risks product purchased, the farm land in which the com- may result in reduced profitability modity is used, health of the soil, land ownership de- Though, the Fertilizer Industry is strategic for the tails if available and the opening and closing stock of Indian government, it is a highly controlled industry. every retailer. This will help to bring soil health in fo- The allocated subsidy budget stood at `70,000 crore for cus and curb any pilferages and leakages in the subsi- FY17, which was grossly inadequate with back-log of dy reimbursement process as every sale made will be unpaid subsidy of `35,000 crore for FY16. As a result, recorded in the POS machine which in turn will make the allocated subsidy budget of FY17 for urea and P&K sure the manufacturer will receive the subsidy in a day fertilizers was exhausted in early H2FY17. However, or two and it will ensure the fertilizer is received by the since the subsidy requirement in FY18 was lower and farmer himself. Timely outgo of the subsidy will en- GoI kept the budgeted subsidy at same levels, the un- sure the interest coverage of the fertilizer companies to paid back-log for subsidy to be paid of `32,000 crore reduce considerably which will further revive the prof- was cleared in Q1FY18. its of these companies. This scheme is also expected to help in reducing the working capital requirements for As a result, the working capital requirement for fer- the fertilizer companies. tilizer companies has reduced leading to better prof- itability. However, the profitability of the fertilizer However, fertilizer companies require high capex to comply with companies with high exposure to Urea manufactur- tightening efficiency norms ing have operating profitability depending upon time- In August 2015, the Indian government issued re- ly subsidy support from GoI. Further, in case of P&K fertilizers, the subsidy remains capped and increase in gas prices may affect the profitability of the company. Group of fertilizer Energy efficiency norm Further, agro-climatic risks may also reduce the reve- plant (Gcal/MT) nues and delay the receipt of subsidies for the fertiliz- Group-I 5.5 er companies. Group-II 6.2 Group-III 6.5 Chemical Industry Digest. Annual - January 2018 81

Specialty Chemicals The Challenges in the Specialty Chemicals Industry Dr N C Datta Specialty chemicals - which definition has also been evolving and which has differ- ent nomenclatures too like performance chemicals, fine chemicals etc - have very good growth prospects in India. While the industry has been growing double digit, we are far behind many countries. The author underlines the constraints and challenges facing the industry, which if addressed, can lead to astronomical growth of the Dr N C Datta, (physical chemist, Ph.D.Chemistry (1972) from IIT, Kharagpur) is presently Consultant with Modicon Pvt Ltd, industry as India has all the required ingre- Navi Mumbai. He is in the field of industrial catalysis since dients to achieve this. 1972. He has worked in the Catalyst Division of Projects & Development India Ltd, Sindri; Warwick Manufacturing Group, University of Warwick, Coventry, UK, and in the erstwhile CATAD Division of Indian Petrochemicals Corporation Ltd (IPCL), Navi Mumbai. Besides catalysis, Dr Datta’s other research interests are in quantum chemistry. He has several research papers, in- cluding a couple of papers in quantum chemistry, a book and a patent on water gas shift catalyst manufacture to his credit. 82 Chemical Industry Digest. Annual - January 2018

Specialty Chemicals “A fable for Tomorrow - some effects. For example, catalysts accelerate reaction here was once a town…where all life seemed rates or produce a particular molecule in selectively to live in harmony with its surroundings. The higher yield, or an active pharmaceutical ingredient Ttown lay in the midst of a checkerboard of pros- (API) that kills a certain bacteria or binds to a specific perous farms, with fields of grains and hillsides of or- site in the cell or the triclosan molecules in a shampoo chards where, in spring, white clouds of bloom drifted kill the fungi on the scalp, or the stilbene molecules in above the green fields. …… Then a strange blight crept optical brighteners brighten the fabrics, when exposed over the area and everything began to change. Some to light, or the ethyl hexyl triazone molecules in a sun- evil spirit had settled on the community; mysterious screen lotion protect the skin from UV rays. All these are performance chemicals. A major difference of spe- maladies swept the flocks of chickens; the cattle and sheep sickened and died. Everywhere was a shadow cialty chemicals from bulk chemicals is the fact that as of death….There was a strange stillness. The birds, for these are performance oriented, their production, ca- example, where have they gone?......On the farms the pacity planning and expansions are to a large extent hens brooded, but no chicks hatched…….The road- consumer-driven. sides once so attractive, were now lined with browned Regarding the fine chemicals, Wikipedia defines and withered vegetation as though swept by fire…….. it as ”complex, single, pure chemical substances, pro- No witchcraft, no enemy action had silenced the re- duced in limited quantities in multi-purpose plants birth of new life in this stricken world. The people had by multi-step batch chemical or biotechnological pro- done it themselves.” cesses.” But this characterisation is true for specialty chemicals, too. Therefore, in the final analysis, hardly Rachel Carson, “Silent Spring” (1962, P.21) there is any difference between fine chemicals and The chemical industry is an important sector in specialty chemicals, and either of the two may be ad- manufacturing, and its contribution to GNP of any dressed by the other. Most of the products in this vast country is well established. It touches almost every as- specialty chemicals or fine chemical industry are high pect of our life – food, cloth, shelter, health, education, value organic molecules (Wikipedia specifies the price transport, and even spiritual uplift. as more than USD 10 per kg or so), which are produced The chemical industry is broadly divided into four by batch processing in relatively low volumes through categories based on the production level and value well-documented procedures, mostly by a series of addition: basic chemicals, commodity chemicals, fine steps, under stringent quality control. chemicals and specialty chemicals. The basic chemi- Thus, because of multiple steps, the overall yield cals and commodity chemicals are produced in large is often quite low. For example, in a six-step process, volumes, are of relatively low values and used as raw even if each step gives uniformly 90% yield, the overall materials to make other chemicals and/or in large yield is just (0.9) = 53 %. Therefore, the wastes are very 6 quantities for mass consumptions. Common inorganic high, approximately of the order of 5 kg to more than acids, alkalis, salts, etc., basic organic chemicals such 100 kg per kg of the final product. This requires exten- as methane, ethane, butadiene, aromatics, etc., and in- sive separation, purification and recovery processes, dustrial polymeric materials such as plastics, rubber, whereas in case of basic and commodity chemicals the fibres, etc. are examples of basic as well as commod- waste is sometimes even less than 0.1 kg per kg of the ity chemicals. Sometimes these are also called as bulk finished product. Moreover, most of these processes chemicals because of their large volumes. These mate- use various solvents, which are in general harmful to rials are generally produced by continuous processes in large production plants, employing more front-to- Most of the products in this vast specialty chemi- back integrated process technologies with tighter con- cals or fine chemicals industry are high value organic trol over heat and mass balances, and over generation molecules, which are produced by batch processing in of pollutants and industrial wastes. relatively low volumes through well-documented pro- Wikipedia defines specialty chemicals as “particu- cedures, mostly by a series of steps, under stringent lar chemical products which provide a wide variety quality control. Thus, because of multiple steps, the of effects or performance which many other industry overall yield is often quite low. Therefore, the wastes sectors rely on.” Thus, the specialty chemicals are also are very high. This requires extensive separation, puri- known as performance chemicals or effect chemicals, fication and recovery processes. as these materials perform some functions or produce Chemical Industry Digest. Annual - January 2018 83

Specialty Chemicals environment, and very harsh and toxic reagents such terested reader may easily access these reports through as phosgene (COCl ), thionyl chloride (SOCl ), strong Google. 2 2 mineral acids, hydrogen fluoride, carbon monoxide, Needless to say, the detailed contents of these re- etc. To summarise, the entire specialty chemical indus- ports vary from one another. But all these reports are try is characterised by the following eight characteris- unanimous in assessing the very positive performance tics – (1) low volume, (2) high value, (3) batch process- of this sector in the last several years and its bright ing, (4) multiple steps, (5) use of hazardous reagents, prospects in future. According to these sources, the (6) severe purification problems and high cost, (7) large specialty chemicals market, including pharma, have volume of wastes, and (8) high degree of pollution. grown continuously in the last several years with a With the above definitions of specialty chemicals or compounded annual growth rate (CAGR) of about 12- fine chemicals in mind, the various sub-sectors within 15 %, while the global growth rate has been just about this sector may be as follows: (1) pharmaceuticals (2) 5 % during the same period. Fig. 1 and Fig.2 show, for agro-chemicals or crop protection chemicals – insec- example, the growth of two major specialty chemicals ticides, pesticides, fungicides, herbicides, weedicides, - agrochemicals and dyes & intermediates, respective- etc. (3) flavours & fragrances, (4) dyes & pigments, (5) ly, from 2009-10 to 2016-17. (Source: GOI data www. surfactants, (6) polymer additives, (7) personal care chemicals.nic.in/document-report/reports). products – ingredients of shampoo, facial creams, A detailed analysis by McKinsey of 15 specialty bleaching agents, toothpastes, sunscreen lotions, etc., chemical sectors and an evaluation of their future po- (8) construction chemicals such as paints, water proof- tential suggested that the Indian Specialty Chemicals ing chemicals, adhesives, sealants, etc. (9) water treat- Industry could grow 4-fold or 5-fold by 2020 to be- ment chemicals such as coagulants, flocculants, bacte- come a market of USD 80-100 bn per year (see Table 1). ricidal agents, etc., (10) textile chemicals such as optical (Source: Google Winning in India: The specialty chemicals brighteners, yarn curing agents, coating agents, etc. opportunity - McKinsey). (12) institutional and industrial cleaning agents, (13) paper chemicals, (14) print- ing Inks, (15) rubber chemicals, (16) ho- mogeneous and heterogeneous catalysts. There is a trend to treat the pharmaceu- tical industry, because of its vast nature and far-reaching impacts, as a complete- ly separate industry, but strictly speak- ing, after consideration of all its charac- teristics, it should be considered as part of the fine chemicals or specialty chemi- cals industry only. Many excellent reports are available Fig.1 Production, import & export of agrochemicals from 2009-10 to on the internet on the status of specialty 2016-17 chemical and pharmaceutical industries in India. These reports are from reputed Organisations like McKinsey, Avendus Capital, JM Financials, Indian Brand Equity Foundation (IBEF), etc. Although the general objective of all these reports is to consider the past performance and future projections of this industry from financial angles, there is exhaustive in- formation on the types of molecules be- ing produced by specific industrial units, their market reach, profitability, and the technical challenges faced vis-à-vis the Fig.2. Production, import and export of dyes & intermediates from 2009-10 comparative scenarios in China. An in- to 2016-17 84 Chemical Industry Digest. Annual - January 2018

Specialty Chemicals Table 1 Google Indian Specialty Chemicals Growth Catalysts – Category Value JM Financials). (USD bn) Apart from the numbers, which have to improve astronomically, the challenges faced by the Indian spe- 2010 2020 cialty chemicals industry are on multiple fronts. Paints & pigments 3.1 12.5-16.5 One is the misalignment of the product chain and Dyes & pigments 3.5 10.0-14.5 capacity with market demand (vide McKinsey Report Agrochemicals 3.4 11.0-14.5 supra). For example, there is substantial demand of surfactants based on ethoxylates, which are to be made Specialty polymers 2.0 8.0-9.2 from ethylene oxide, but most of our ethylene oxide Polymer additives 0.8 2.3-3.2 capacity is meant for MEG (monethylene glycol). The same is the case for other building blocks, such as oxo- Construction chemicals 0.5 2.0-3.0 alcohols, vinyl acetate monomer, phenol, propylene Home care surfactants 1.0 2.1-2.8 oxide, H-acid (a dye intermediate - 8-amino-1-naph- thol-3,6-disulphonic acid), etc. All have capacity limi- Textile chemicals 0.7 2.1-2.5 tations in comparison with their market demand. Flavours & Fragrances 0.4 1.1-1.5 The case of acrylic acid is a good representative of Water chemicals 0.5 1.5-2.0 the entire situation. There is a huge demand of acrylic acid (presently to the tune of 200,000 MT per annum Cosmetic chemicals 0.4 1.3-1.8 or more), as it has numerous critical applications. It is Paper chemicals 0.4 1.2-1.8 used to make super-adsorbent polymers (a very com- mon item of daily use in the form of diapers for babies Printing inks 0.4 1.3-1.6 as well as for the oldaged), detergent builders, floccu- Institutional & Industrial 0.2 0.8-1.2 lants (polyacrylates) for water treatment, paints, ad- Cleaners hesives, textile fibres, plastic sheets, inks, engineered plastics, lubricating oil additives, etc. (as acrylates by Rubber chemicals 0.2 0.5-0.7 reaction of glacial acrylic acid with various alcohols – Others 5.0 20.0-30.0 for example, the reaction of 2-ethylhexyl alcohol with TOTAL 22.5 80-100 glacial acrylic acid produces engineered plastics). But as acrylic acid is made from propylene by oxidation, It must be mentioned that in spite of this rosy pic- and as the propylene capacity is totally tied up with ture, at present we are nowhere near China, or not polypropylene production, there is no acrylic acid ca- even among the top in the world. We are just the 6th pacity in the country, and the entire requirement is to largest chemical producer in the world far behind be met by imports. China and other countries, as shown in Fig.3 (Source: In 2007, an MOU was signed between Essar Oil Ltd and Arkema of France to make an acrylic acid Fig 3. Present Value of Chemical Industry in plant in a refinery-cum-petrochemical complex USD Billion at Khambhalia in Gujarat. It took more than 8 years to August, 2015 to have the EIA done and accord environmental clearance to this propos- al. In the meantime, a document on “Vibrant Gujarat” dated January 2017 mentioned a proj- ect for establishing an acrylic acid plant in the PCPIR region of Gujarat. Since the domestic sup- ply of propylene was uncertain and costlier, it suggested importing propylene from even USA, Europe or China! (Source:http://vibrantgujarat.com/writeread- India South Japan Germany USA China data/images/pdf/project-profiles/Manufacturin Korea g-of-Acrylic-acid.pdf) Chemical Industry Digest. Annual - January 2018 85



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Specialty Chemicals The challenges faced by the Indian specialty tor could only be imagined. The above report further chemicals industry are on multiple fronts. One is the states in its Executive Summary: “Out of 20 only 7 large scale industries have installed MEE followed spray misalignment of the product chain and capacity with dryer for treatment of high COD wastes & RO rejects. market demand. For example, there is substantial Whereas small and medium scale bulk drug indus- demand of surfactants based on ethoxylates, which tries did not have the facilities like MEE for treatment are to be made from ethylene oxide, but most of our of high COD & TDS effluents. Only 0 industries have 2 ethylene oxide capacity is used for MEG (monethyl- waste incineration facilities within their premises for ene glycol). disposal of hazardous waste. The remaining industries are disposing the hazardous waste through Treatment Storage & Disposal Facility (TSDF). There are a number of other serious structural ir- ritants, too, such as: (1) fragmented and proprietary All the large scale industries are having solvent re- nature of holdings in most of the SME sector discour- covery plants whereas small scale industries are not aging M & A and infusion of advanced technology, (2) much aware about solvent recovery and spent solvent regular power outage at many places directly affect- is being discharged along with low COD wastewater ing the output and commitment to customer, (3) in- and reaching to ETPs for conventional treatment. ordinate delay in getting various statutory clearances It is revealed from the performance study report affecting not only the marketability of the product in that major pharmaceutical industries are complying today’s highly volatile world scenario, but also the most of the statutory conditions whereas serious ef- project finance. forts are required in small scale industries for compli- But the most important challenge before the Indian ance up to the satisfaction w.r.t. effluent treatment, specialty chemicals industry is its dire need of tech- hazardous waste disposal and solvent recovery.” nology advancement so that its processes become Major reasons for the spectacular growth of the eco-friendly to the global standard, and also, its pollu- specialty chemical industry in the last few years – first, tion control systems are upgraded to the global stan- in China, and later in India, are the more and more dard. Needless to say, the condition of effluent treat- stringent environmental regulations coming to force ment systems is pathetic in most cases. In 2013-14 the in the advanced countries, and the availability of rela- Central Pollution Control Board visited 15 large high-profile pharmaceutical indus- tries in Madhya Pradesh and Rajasthan to see the conditions and performance of their ETPs. All these units had state-of- the-art ETPs with various treatment op- tions. Still it was found that in some cases, the discharge water quality violated the norms grossly. According to this Report, “The range of inlet COD was 3782 mg/l to 114307mg/l and BOD was found to be 964 mg/l to 35100mg/l. The range of COD and BOD in treated effluent was 43 mg/l to 5327 mg/l and 11mg/l to 1205 mg/l re- spectively against the prescribed limits for BOD-30 mg/l and COD- 250 mg/l.” (Source: “Performance Evaluation of ETPs and Hazardous Waste Management in Pharmaceutical Industries” by Central Pollution Control Board, uploaded on 31/01/2014 URL: http://cpcb.nic.in/report. php) . If this was the condition of the large industrial units having adequate resourc- es, the conditions of the units in SME sec- 88 Chemical Industry Digest. Annual - January 2018

Specialty Chemicals tively cheap labour here, coupled with the availability of a vast pool of skilled and technically competent manpower. Thus, a major part of the production has gradually been shifted to India and China, and their products are be- ing exported to Europe, Japan, North America and other advanced countries. Consequently, many major global play- ers like BASF, Bayer, DuPont, Syngenta, Huntsman, Monsanto, Dow, etc. have either shifted their operations to India, or strengthened their operations here. But the situation is to change soon. There are three eminent problems that the indigenous kg of waste or pollutant would require energy for its industry would face in near future. treatment and safe disposal, and every extra man-hour for an extra process step would require additional re- One, the change in the attitude of the local popula- source ultimately in terms of energy. tion: As in the West, the local population now do not want any polluting industry in the This seemingly impossible task will have to be neighbourhood. In a democratic achieved by using new generation set up like ours, where the popular But the most important challenge be- of catalysts and advanced process- mandate is the ultimate word, the fore the Indian specialty chemicals in- es of hazardous waste treatment. environmental laws would certain- dustry is its dire need of technology ad- There is no better means to make ly be more and more stringent as in vancement so that its processes become the chemistry green than the use the advanced countries, and the in- eco-friendly to the global standard, and of novel catalysts. There is no bet- dustry will have to fall in line. also, its pollution control systems are up- ter means to clean up the organic graded to the global standard. wastes than novel electrochemical Two, the European Union’s methods. Already there are a large REACH protocol (REACH = number of examples, where new Registration, Evaluation, Authorisation and Restriction catalysts have improved the green metrics of processes of Chemicals), which came into force on 1st June, 2007. considerably (see, for example, “Catalysis for Fine and Significant impact of REACH will be felt with the im- Specialty Chemicals” by S. S. Joshi, et al. in “Industrial plementation of Phase 3, which is scheduled to come Catalytic Processes in Fine and Specialty Chemicals”, in force by 1st June, 2018. This would affect India’s ex- Eds. Sunil S; Joshi & Vivek Ranade, Elsevier, 2016) ports to Europe, as it would regulate any chemical sup- One celebrated example of the synthesis of Ibuprofen, ply to European Union at quantities of 1 MT or more. which is illustrated below, would prove the point. Similar protocols / regulations would gradually come Scheme 1 is the Boots 6-step route (1967) (US Patent in force in other countries. No. 3,385,886). Its atom economy is 40.04%. Three, The Paris Climate Accord, wherein all na- Scheme 2 shows the improved 3-step process (pat- tions, including India, have pledged to bring down ented in 1991, US Patent No. 4,981,995) using a new gen- and restrict the global average temperature rise to eration palladium catalyst, bis-(triphenylphosphine) within 2 C by the end of the century in comparison dichloropalladium(II), for direct insertion of CO into o with the global average temperature of pre-industrial – OH to make - COOH. The atom economy for this revolution, that is, the 17th century level. It is almost process is 77.4%. an impossible uphill task, considering the huge rise in population over the centuries, extensive deforestation It is expected that besides catalysts, novel new and urbanisation all over the world, and all pervad- generation electrochemical methods of hazardous or- ing use of energy in every walk of life. It will require ganic waste treatment would help in truly realising the a drastic change in the mode of energy generation and dream of ‘Make in India’ in the case of specialty chemi- its usage in every walk of life, including the methods cals industry. of industrial production. The highly polluting indus- tries will have to take corrective measures, as every Chemical Industry Digest. Annual - January 2018 89

Pigments Pigment Industry: Hype or Hope An overview of Pigments industry Sambit Roy ack in the Stone Age, colours were made by grind- Without pigments and dyes, the world would not ing coloured clumps of earth or charcoal into a have been as colourful as it is today. Bpowder and then mixing them with animal fat. Over the course of history, many other substances were This article reviews the overall pigments industry discovered that could be used to impart colours. There globally and in India. It also provides a glimpse was such a wide variety of these substances that a brisk into the emerging areas of high performance and trade in colorants was established. special effect pigments. Some of the challenges From the earthen colours used to highly complex and opportunities are also mentioned. chemical structures the journey had been challenging and also exciting. The pigments and dyes industry have become integral part of life by its usage in various ap- plication like consumer products, paints, printing, cloth- ing, plastics etc. Wherever you see colours pigments and dyes are used. Then the question comes, are pigments and dyes only colour providing substances? Answer can be yes and no. Pigments and dyes provide colour but also play a vital role in other properties like UV resis- tance, being eco-friendly and a safe product for human beings. The global pigments market is estimated to be $31.98 billion industry by 2023, from $ 22.86 billion in 2014 i.e. expanding at CAGR of 3.8%. Rise in population Sambit Roy is the Head BU Pigments – India Region, Clariant. coupled with increase in per capita income has boosted Sambit is a Chemical Engineer from REC – Jaipur and has rich the consumption for many end sectors where pigments experience of over 21 years in the field of Colorant Applications, and dyes are used. In the next few years, the per capita Business Development and Sales & Marketing. He is cred- consumption of paints and coatings is expected to rise ited with two patents on ‘Encapsulation of Pigments’. He has significantly in developed and developing economies. successfully completed various international assignments for Projecting it to be the fastest growing segment of the pig- Clariant’s Global Key Accounts. ments market during the forecast period. Moreover, rise in global plastics production is estimated to spur de- 90 Chemical Industry Digest. Annual - January 2018

Pigments mand for pigments in the next cou- tomers are looking for high quality ple of years. Growing automotive Indian manufacturers are expand- consistency. With this, Indian pig- industry and rising construction ing capacities, given their low cost ments industry sales is likely grow activities in Asian countries such as advantage, with increasing focus at a CAGR of 12-13% over medium China, India, Singapore, Thailand on high performance pigments term. and Malaysia have fueled demand (HPP) and more specialized pig- for pigments in the paints and coat- ments. High performance pigments High Performance Pigments (HPP) ings industry. China is projected to (HPP) and special effect pigments. Worldwide high performance be the major consumerof pigments pigments consumption is expected by 2023, followed by India. Middle East, Africa and to grow by 4 percent in both volume and value over the Latin America are anticipated to be potential markets next five years, although rising oil and raw materials for pigments in the coming years. prices, coupled with the current economic condition Pigments business in India are significant challenges for the high-performance pigments market. Nevertheless, in the long-term de- In India, the top mega trends that are witnessed are mand for HPPs will continue to grow, especially in – urbanisation, reduction of waste and using innovative some important markets such as the coating and plas- technology, who are supporting the upward growth of tics segments and end-user markets, non-impact print- the pigments and dye industry. Indian pigments sales ing (NIP) and electronics. Much of this growth is bol- has grown at a CAGR of 13-14% over the past 5 years stered by the increase in demand for cleaner, brighter and is currently estimated at USD 0.87 bn,mainly driv- colours with high resistance properties. However, with en by growth in domestic consumption of coatings, stiff competition in the market, and entrance of new printing, consumer goods and masterbatches as well players, pricing remains under pressure, allowing for as the exports. It is considered that India will be the the use of HPPs in new applications. In the future, fa- second – largest market in terms of demand for organic vourable regulations will further open a window of pigments. In India, it is the organics, which are growing opportunities and have a positive impact on the HPP the fastest and, traditionally, India has dominated in the business development. With Asia being the largest green and blue colour space. India is clearly the domi- regional market, emerging economies too will play a nant player in the organic green pigments and has cap- pivotal role in the growth story of high performance tured a considerable market share in the blue pigments. pigments (HPP). Rise in disposable income and education, increas- Special Effect pigments ing urbanization, development of the rural market and launches of many innovative productsis expected Special effect pigments are used in a broad range of to support the growth of the industry. The main end application for decorative and functional purposes in users of pigments in India are printing inks, plas- systems like paints, plastics, printing inks and cosmet- tics, rubber, paints and coatings. Among inorganic ics. With their distinctive application of optical impres- pigments,consumption of carbon black was estimated sions such as eye-catching effects, angle-dependent in- at 790,000 tonnes and titanium dioxide consumption terference colours, pearl lustre, or multiple reflection, stood at approximately 2,50,000 MT per year in 2014- they are indispensable in many application systems. 15. Indian manufacturers are expanding capacities, Effect pigments show several advantages in decorative given their low cost advantage, with increasing focus and functional applications in comparison to extended on high performance pigments films, e.g., the broad variety of (HPP) and more specialized Special effect pigments are used in a broad achievable optical effects, the pigments. High performance range of application for decorative and ease of incorporation in all rel- pigments (HPP) and special ef- functional purposes in systems like paints, evant application systems, the fect pigments, such as metallic plastics, printing inks and cosmetics. With possibilities to blend pigments and pearlescent, are used as au- their distinctive application of optical im- with other colourants, and the tomotive coatings and are cur- pressions such as eye-catching effects, impression of “vivid” colour rently a nascent market in India. angle-dependent interference colours, pearl effects. Special effect pigments Manufacturers are focusing on lustre, or multiple reflection, they are indis- consist either of substrate-free reducing the wastage by achiev- pensable in many application systems. pigments or of layered struc- ing zero defect for that end cus- tures. Chemical Industry Digest. Annual - January 2018 91

Pigments There has been comprehensive advancement in re- Mixed Metal Oxide (MMO) also known as Complex cent years especially for the substrate-based types, e.g., Inorganic Colour Pigments (CICP), e.g. Bismuth multilayers on mica or pigments based on alumina, sil- Vanadate (PY184), PY53. These complex inorganic pig- ica and glass flakes. Pigments with structured surfaces ments offer superior light fastness as well as chemical like the diffractive types belong also to the actual de- and weather resistance, along with excellent gloss re- velopments. In the future, we expect ongoing advance- tention, heat stability in full shade and all reductions. ments and innovations in the effect pigments market. A As per latest market projections there is a substantial course of new development is that the effect pigments increase in consumption of these pigments as an alter- are offered not only as free-flowing powders, but also nate to lead and cadmium based pigments. in the form of preparations (granulates, chips, pastes, A few entry barriers for the pigments business are colour concentrates). These preparations contain the largely organized industry, dominated by players who pigment in high concentration. In addition to the pig- have presence in the industry for several decades. ment, the preparations consist of binder components Rigorous and time consuming procedure of obtain- or binder mixtures based on solvent or waterborne ing approvals from MNCs for exports. Players have systems. The advantages of such pigment–binder com- long-term and sticky relationship with their end con- binations have for example better pigment dispens- sumers. Players need to have presence of plants and ability, non-dusting introduction of the pigment in the depots close to clients in order to maintain inventory, application system, optimized wetting behaviour, or hence any new player would need to develop distribu- improved colour effects in the final products. tion network to be competitive in this market. Manufacturing Challenges and opportunities in India is expected to be the second-largest market inorganic and organic pigments in terms of demand for organic pigments. Organic involves some degree of cus- tomization. Achieving attri- India is expected to be the pigments have a superior environmental profile in butes such as shade, strength second-largest market in terms comparison to inorganic pigments (lead chrome etc. requires experience and of demand for organic pig- and cadmium based pigments) and provides capability to provide custom- ments. Organic pigments have a wider range of bright colours that are used in ized solutions. Moreover, the a superior environmental pro- coatings, plastics, printing inks and special ap- manufacturer needs to pro- file in comparison to inorganic plications. vide technical services as well. pigments (lead chrome and cad- Editor’s Note: Clariant is one of mium based pigments) and provides a wider range of the world’s leading specialty chemical companies and their bright colours that are used in coatings, plastics, print- Business Unit Pigments forms part of business area plastics ing inks and special applications. Organic pigments are & coatings. Clariant’s Business Unit Pigments is a leading now experiencing an encouraging growth, resulting global provider of organic pigments, pigment preparations from a trend toward adopting more premium, high and dyes used in coatings, printing, plastics, consumer prod- performance pigments and the continual displacement ucts and other special applications. Their portfolio includes of heavy metal-based inorganic pigments such as lead high-performance pigments and dyes to meet the demands chromate & cadmium. for automotive, industrial and architectural coatings, for the The latest data on global market trends including plastics industry, for special applications as well as colorants the Indian market on pigment consumption shows in- used in traditional printing, and inkjet and laser printers. organic pigments is the slowest growing segment since Recently, Clariant in India doubled the capacity of pig- last five years. This is primarily due to the continued ment preparations at their production facility in Roha, phasing-out of toxic heavy metal type inorganic pig- South-east of Mumbai. Clariant in India had also acquired ments coupled with the growing popularity of vivid Lanxess’ pigments preparations portfolio in Nagda. colours with special effects. Most of the paint and plas- tic manufactures have replaced lead chrome and cad- Clariant also announced its specialized range of innova- mium pigments with most opaque organic pigments tive and eco-friendly pigments and pigment preparations of- in combination with nontoxic inorganic pigments, fering low VOC (LVOC) attributes, Infrared (IR)-reflective without affecting their market. properties and super-transparent colourant solutions to ca- ter to the unmet needs of regional customers across several However, favourable opportunities exist for cer- market segments of the paints & coatings industry. tain types of non-toxic inorganic pigments, such as 92 Chemical Industry Digest. Annual - January 2018

Chemical Industry Digest. Annual - January 2018 93

Healthcare Industry Digital technologies in healthcare and pharmaceuticals industry: Emerging perspectives MedTech Asia Research Group, Mumbai Abstract The advent hitech computing, digital technologies, internet and advances in IT has spawned new developments and technologies like Internet of Things (IoT), cloud computing, artificial intelli- gence, robotics, machine learning and now the emerging transactional platform of blockchain. All these cumulatively as well as individually will revolutionise the functioning of virtually every industry and even impact our every day living and lives. One sector which will see massive beneficial disruptive impact by the application of these tech- nologies will be the healthcare and pharma sector. This article gives a comprehensive overview of these technologies, its enabling impact and appli- cations and how it will be transforming the health sector with many examples. MedTech Asia Research Group, Mumbai is part of MPower Communications which also publishes MedTech Asia, a front line print and digital publication for medical technologies, diagnostics and devices and healthcare sector stakeholders. Its research group studies and analyses the status, the trends and growth of the healthcare, lifesciences and pharma sectors, in the context of various market forces, new technologies, new products, emerging challenges etc, both globally and in India. MedTech Asia is also associated with Blockdale Media LLP which brings out Chemical Industry Digest and The Indian Practitioner. 94 Chemical Industry Digest. Annual - January 2018

Healthcare Industry ith increasing convergence of biology, chem- promise to usher in novel and sustainable products istry and maths, new generation physical and solutions in healthcare and wellness industries. Wand digital technologies are increasingly be- Next-generation robotics: The use of robotics in ing designed and deployed in healthcare and pharma- manufacturing has shifted beyond just automotives ceuticals industry. to pharmaceuticals and life sciences with advances in Internet of Things (IOTs), cloud computing, artifi- robotics technology leading to viable human-machine cial intelligence, robotics, machine learning, etc., have collaborations; sensors, biological structures, patient immense potential in the healthcare and pharmaceuti- handling, surgical operations. cals industry. Precision medicine, m-Health solutions, 3D printing, artificial intelligence, nanotechnology are Additive manufacturing: Unlike substractive man- some of the digital innovations shaping the business ufacturing (which is based on converting a larger ma- models. M-Health tools and wearable devices connect- terials to smaller sized products of desired shape) ad- ing human activities on real time basis with comput- ditive manufacturing is based on starting with smaller ing systems and cloud platforms are already common separate materials and then turn it to a 3 D shape using place today. digital platforms. 3D Printing has made a major foray- The emergence of digital technologies is shaping in pharmaceutical amanufacturing field with the pos- sibility synthesizing thousands of different molecules. the present business models in diverse ways. The pe- Bio printing for generation of skin and bone, as well as riod 2018-2023 will be a very crucial one for global heart and vascular tissue are poised for use in person- healthcare and pharmaceuticals manufacturing sector alised medicine. Latest reports point to new products as it shifts towards digital platforms(which need so- based on 4D printing having phisticated equipment, com- high potential in diagnostic plex data and software exper- devices. tise backed by high-end tech- The period 2018-2023 will be a very crucial nology systems). one for global healthcare and pharmaceuti- Emergent artificial in- The present focus of phar- cals manufacturing sector as it shifts towards telligence (AI): AI has ad- vanced significantly in ma- maceuticals manufacturing digital platforms(which need sophisticated ny segments of pharmaceuti- is being driven by the way equipment, complex data and software exper- cal manufacturing; precision IoT technologies and devic- tise backed by high-end technology systems). surgeries; improved diagnos- es are leveraged in manufac- tics and new therapy options turing plants. IoT holds im- in oncology. mense promise to rationalise and optimise manufacturing systems, enhance quality, Distributed manufacturing: Among the range of reduce waste through wide spread use of data analyt- new manufacturing models distributed manufactur- ics and other digital technologies. ing is poised to revolutionise pharmaceuticals manu- Healthcare industry is poised to witness a host of facturing. It is expected to lead to sustainable manufac- new generation traditional and digital technologies in turing and supply chains using digital platforms while the next decade. The burst of data and new comput- leading to efficient resource management. It will be a ing capabilities complemented by advances in automa- disruptive practice and have major socio economic im- tion-robotics, artificial intelligence, additive technolo- plications. gy, and human-machine interaction are now poised to Digital genome technologies: These technologies usher in a new era of manufacturing spurred by dig- are expected to usher in major changes in the way fu- ital technology platforms. Cloud computing–based ture healthcare deliveries will take place. Recent ad- tools allow suppliers to collaborate faster and more ef- vances have made it possible to have a good under- ficiently. standing of the risk of many genetic diseases. In the coming years major investments will be I. Enabling technologies and tools made in digitally assisted machines, tools, and parts According to the World Economic Forum’s Meta- to enable real time performance indicators and analyt- Council on Emerging Technologies new technologies ics. Real-Time Data Analysis tools are leading to new are expected to transform manufacturing models in knowledge mobility inmanufacturing sites to access the healthcare and pharmaceuticals industry . These analytics and data to keep track of production, spot (1) Chemical Industry Digest. Annual - January 2018 95

Registered with Registrar of Newspaper, New Delhi under R.N. No. 47002/1988. Total Pages: 84 Postal Reg. No. MCN/31/2017-19. Publishing date: 26 of each month. Posting date: 26/27 of each month. th th 96 Chemical Industry Digest. Annual - January 2018 31 Chemical Industry Digest. November 2017 Chemical Industry Digest. June 2017 58 92 Chemical Industry Digest. August 2017

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Healthcare Industry quality issues, and minimize delays and downtime. watch that acts as a personal emergency response sys- New digitally enabled technologies will change busi- tem and relays medical and GPS data to a remote serv- ness functions across many healthcare and pharma- er has been launched. The Indian government is try- ceuticals companies. ing to set up a National Optical Fibre Network to con- nect 2,50,000 gram panchayats in the country to the II. Digital shifts in Indian healthcare industry Internet, which aids the expansion of e-health . (4) Digital technology adoption is already gaining prominence in India’s healthcare industry, with efforts III. Manufacturing and supply chain complexities: from both the public and private sectors. New start- need for digital technologies ups have come up with mobile apps, telemedicine, etc. Pharmaceutical companies have extremely com- With an estimated market size of USD 100 billion plex supply chains, including suppliers of raw materi- in 2015, healthcare industry is one of the fastest grow- als, (CMOs), third-party logistics providers, wholesal- ing industries. India currently has the second largest ers, and distributors to hospitals, pharmacies, dispens- CAGR in healthcare (11%) and is expected to expand ing doctors, and patients. at a CAGR of 18.3% during 2012–20 to reach USD 280 For companies operating globally, supply chain billion . management, regulatory compliance, and life-cycle (2) There has been a shift in the industry when it comes management are increasingly becoming more com- to delivery systems. It is now patient focused. Patients plex. The number of supply chain partners is higher today are more conscious, tech-savvy and more will- than ever before. Increasingly competitive price (and ing to embrace emerging technology and demand val- therefore cost) pressures require more efficient opera- ue added services. A new tions and supply chain man- trend “flipped care’—has agement. Companies operate now emerged, where the fo- Pharma plants typically experience high levels with cumbersome, inefficient cus has shifted from the pro- of downtime. Through digitization and analyt- networks that struggle to re- vider to the patient . Yet an- spond to dynamic shifts in (3) other trend is delivery beyond ics, this downtime can be reduced by 30 to 40 supply and demand. hospitals to home and remote percent, significantly improving overall equip- More complex product locations. The focus is on the ment effectiveness (OEE). portfolios and an increase in modalities of installing digital personalized medicine call technologies for remote pa- for greater customer and sup- tient monitoring, such as tele- ply chain segmentation. This is compounded by the monitoring, IoT, connected devices and wearables. risk of counterfeit drugs needing tracking along the According to a PwC analysis m-Health is proba- value chain. Cloud-based networks make it much eas- bly one of the largest sectors within digital healthcare ier to link all players through a single integrated net- in India, with an estimated market size of `2,083 crore work, even those with different IT architectures or ERP in 2015—which is set to rise to `5,184 crore by 2020. systems, thus making networks more scalable. These products help increase access to healthcare in re- Digitization has high potential to significantly trans- mote populations by providing point of-care diagnos- form manufacturing and supply chain operations, fun- tics, teleconsultation and e-prescription capabilities. A damentally improving processes and boosting produc- new application is a wireless health monitor that mea- tivity in the pharmaceutical manufacturing. In this re- sures blood pressure,oxygen saturation, pulse, body- gard some of the important developments are: temperature, blood sugar, blood cholesterol and total haemoglobin count with a mobile application on your a. Machine-to-machine communication and ma- smartphone chine-learning algorithms These allow for seamless processes, predictive The report points to use of telemedicine technolo- maintenance, and automatic corrective actions. gy for remote diagnosis, monitoring and education. India’s telemedicine market valued at USD 100 million b. Real-time visibility and faster decision making in 2011 is expected to grow by over four times by the Sensors throughout the supply chain can transmit end of 2016. It also points to Indian healthcare wear- information on an ongoing basis, providing real- ables market around at around `30 crore. A wrist- time insights across the value chain and enabling sales and operations leaders to make dynamic deci- 98 Chemical Industry Digest. Annual - January 2018

Healthcare Industry sions in response to changing conditions. This will houstonmethodist.org) has developed an AI model allow significantly shorter lead times that can predict breast cancer risk, allowing doctors to closely monitor those at future risk. The program in- c. Improved operational processes and maintenance Pharma plants typically experience high levels of terprets mammograms and translates patient data in- downtime. Through digitization and analytics, this to diagnostic information 30 times faster than a doctor, downtime can be reduced by 30 to 40 percent, sig- and with 99% accuracy. nificantly improving overall equipment effective- Although AI is in its infancy, the fusion of maths, ness (OEE). Innovative software solutions and ana- technology, biology and healthcare is becoming more lytics can integrate data. and more talked about in the industry and progress in being made in developing systems with real-world d. Manufacturing efficiencies and productivity gains value. m In pharmaceutical manufacturing, digital plat- forms increase efficiencies in areas such as filling, The reality of drug development is that it is labor loading, replenishing, and troubleshooting. intensive for clinical teams. Having the best technolog- ical tools mitigates labor and frees up teams to focus m While 3D printing can make decentralized pro- on strategizing and planning for the next innovative duction cost-efficient even at low volumes ad- therapy. Artificial intelligence is going to be the mech- vanced robotics and augmented reality will pro- anism that will help guide the needed principles on vide a step change in human–machine interaction R&D efficiency and drug development. and automation. Machine learning (ML) IV. Research and technol- McKinsey estimates that (5) ogy trends in artificial The reality of drug development is that it is big data and machine learn- intelligence and machine labor intensive for clinical teams. Having ing in pharma and medicine could generate a value of up learning the best technological tools mitigates labor to $100b annually. Rising ap- Artificial Intelligence (AI) and frees up teams to focus on strategizing plications of ML in pharma and planning for the next innovative therapy. AI has immense potential Artificial intelligence is going to be the mecha- sector offer high potential for for time and cost reduction nism that will help guide the needed principles future data, analysis, and in- novation synergise. Some of for the pharmaceutical indus- on R&D efficiency and drug development. try to analyse vast amounts the leading research trends of compounds that could be at industry and institutional the perfect solution to combat levels are discussed below. specific diseases. a. Disease Identification/Diagnosis A Boston based pharma start up, BERG (www.ber- Disease identification and diagnosis of ailments is at ghealth.com) uses a data driven approach to drug dis- the forefront of ML research in medicine. According covery based on an integration of maths meets biology. to a 2015 report issued by Pharmaceutical Research Their software uses AI to process large amounts of bi- and Manufacturers of America, more than 800 med- ological data to enable efficient drug development for icines and vaccines to treat cancer were in trial cancer. It is using AI to research and develop diagnos- IBM Watson Health (www.ibm.com/watson/ tics and therapeutic treatments in multiple areas, in- health) announced IBM Watson Genomics, a part- cluding oncology. Current research projects underway nership initiative with Quest Diagnostics, which include dosage trials for intravenous tumor treatment aims to make strides in precision medicine by in- and detection and management of prostate cancer. tegrating cognitive computing and genomic tumor Insilico Medicine (www.insilico.com), a bioinfor- sequencing. matics firm has designed its AI system to predict the Google’s DeepMind Health (www.deepmind. therapeutic use of new drugs before they even enter com) announced multiple UK-based partnerships, the testing process. The AI processes huge amounts of including with Moorfields Eye Hospital in London, data from experiments on human cells using known in which they’re developing technology to address drugs. macular degeneration in aging eyes is a focal area. Houston Methodist Research Institute (www. Chemical Industry Digest. Annual - January 2018 99