While the chemical industry has been known for its cost competitiveness and
high quality, it has been a laggard in the export market, which is dominated by
European and Chinese players.
Out of the $108 billion chemicals export market, India’s share is merely $24
billion and this is what Satish Wagh, the newly appointed chairman of Chemexcil,
wants to change. Being part of an initiative of the Ministry of Commerce and
Industry, Chemexcil is one of the largest chemical manufacturers associations in
the country.
In a chat with DNA, Wagh talks about the industry, the fading Chinese dominance,
the implications of the recent Registration, Evaluation, Authorisation and
Restriction of Chemical substances (REACH) legislation on Indian players among
other things. Excerpts:
As the chairman of Chemexcil, what is your agenda going forward?
My single-point agenda will be to promote the country’s exports. Frankly, today
the chemical industry has got a good advantage, as the United States and the
entire European Union are increasingly looking at India as a prospective country
to buy chemical products.
Earlier, China was a preferred destination owing to its huge manufacturing
capacity and aggressive promotion. But in the long run, countries are slowly
realising that Indian products have better quality.
Was the China factor the only reason for India to lag in exports or are
there some more factors too?
Another reason is constraints on capacity. While the Chinese have been the
biggest exporter from Asia, the reason behind their aggressive exports was their
huge capacity. After domestic consumption, they had to look at overseas
territories to exhaust their huge production.
Therefore, for Indian exports to rise, first our capacities too should rise.
Thankfully, now there is widespread awareness among manufacturers that if they
want to survive in the long run, exports is the only way out and for that they
have to increase their production capacity tremendously. Several companies are
doubling and tripling their capacities.
This, coupled with the high quality standards in India, will act in our favour.
Have you set any export targets?
The commerce ministry has a target to double exports from the chemical industry
in the next three years. But I am confident that with concerted efforts, we will
be able to surpass the target comfortably anddouble our exports in the next
one-year-and-a-half.
How have exports grown in the last few years?
Last year (FY2009-10), exports from the Indian chemical industry grew 5%. But
this year, since the chemicals exported from India and others to the European
Union came under a strict scrutiny due to the REACH legislation, exports may be
a little muted. But I am happy that the government, in a very short time, took
measures to meet the REACH norms and is also offering concessional rates for
pre-registration and registration for companies that come under the REACH
legislation. The first phase of this registration is over and the next phase
will begin shortly. So I am confident that in the coming years our exports will
grow faster and we will do better.
Which are the other areas where the chemical industry requires some
help?
There are several other issues such as lack of infrastructure and skilled
workforce. But now our Prime Minister and the chairman of the Planning
Commission, Montek Singh Ahluwalia, have already constituted a taskforce to look
into the cracks in the chemical industry and the issues that require urgent
attention. The task force will be submitting its report in the next three months
and I believe it will look into these important issues of infrastructure,
trained manpower etc.
Has Chemexcil made any recommendations to the government to boost
growth?
See, another problem with the chemical industry is that it is very cluttered and
unorganised. There are several small companies scattered across the country. So
what we want is that the government should come up with guidelines to set up
chemical parks in every state, where all these companies will come together
under one roof. We have already submitted our request and the proposal will be
taken up by the government in the next two months.
Our idea is to make these chemical parks as manufacturing hubs, where all
required infrastructure will be provided to large- and small-scale companies.
These chemical parks are much on the lines of PCPIRs, which the
government had proposed to set up. But PCPIRs have been a slow starter and so
far not much progress has been made. Don’t you think the chemical parks will
also go the same way?
Yes, the chemical parks will be more or less similar, but the idea behind them
is to bring together the scattered industry under one roof, where all facilities
are made available to the players.
PCPIRs (Petroleum, Chemicals and Petrochemical Investment Region) are an
initiative of the central government and we need equal support from the state
governments also to take them forward, which was lacking earlier.
For the chemical parks, we have not only submitted our proposal to the commerce
ministry, but have also garnered support from the chemical and fertiliser
ministry as well, so we there will be more focused efforts.
Source : dnaindia.com