The Government has unveiled a new National Policy on Petrochemicals that envisages an investment of around Rs 36,000 crore in the petrochemical sector during the next five years.

This investment is expected to increase the ethylene capacity from the current level of 2.7 million tonnes to 6.9 million tonnes.

"The Petrochemical Policy aims to increase investments in the sector, both upstream and downstream, and capture a slice of resurgent Asian demand in polymers."

"It also aims at downstream processing through additions in capacity and production by ensuring availability of raw materials at internationally competitive prices," the Minister for Steel, Chemicals and Fertilisers, Ram Vilas Paswan, said after releasing the policy recently.

The policy also aims to increase the domestic demand and consumption of plastics and synthetic fibres and to increase the use of petrochemicals in thrust areas.

According to estimates, the existing per capita domestic polymer consumption of 4.7 kg is likely to be enhanced to 12 kg compared to the existing world average per capital consumption of 25 kg.

"The policy will also help increase competitiveness, polymer absorption capacity and value addition in the domestic downstream plastic processing industry through modernisation, research and development measures," Paswan said.

The Government also expects the policy to remove structural constraints and achieve environmentally sustainable growth in the sector through innovative methods of plastic waste management, recycling and development of bio-degradable plastics.

Currently, the upstream petrochemical manufacturers have commissioned globally competitive plants with imported high tech technology.

On the other hand, the downstream plastic processing industry in the country is highly fragmented and consists of tiny, small and medium units.

According to estimates, there are at present about 26,000 registered plastic processing units in the small-scale sector.

The Minister also said that in order to address the issue of quality infrastructure the Department of Chemicals and Petrochemicals is proposing the petroleum, chemical and petrochemical regions (PCPIRs).

"Apart from the PCPIRs, the Department will also set up facilitation mechanism in consultations with the Ministries concerned to look after the infrastructure related problems. We will also set up dedicated plastic parks to promote cluster approach in the area of development of plastic applications and plastic recycling," Paswan added.

He added that the Ministry is closely monitoring the implementation of the Assam Gas Cracker project that is being implemented in Lapetkata, Assam, with an investment of Rs 5,460 crore. Once completed, the plant will have an ethylene capacity of 2.2 lakh tonnes per annum.

Mr. Divya Aggarwal

Money Management Consultants Ltd

Senior Copy Editor, Money Management Consultants Ltd
New Delhi, India

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