New Delhi: Nayara Energy, India's second-largest private oil firm, said on Friday that it will start operations of a new polypropylene plant in the first half of next year, marking its entry into the lucrative petrochemical sector. In the last financial year (April 2022 to March 2023), India's consumption of polypropylene stood at 6.4 million tonnes, of which around 1.6 million tonnes or around 25 percent was imported.
With wide applications in segments like packaging, automotive applications, consumer durables and lifestyle products, the demand for polypropylene (PP) is projected to rise.
"Nayara is well on track for its entry into the petrochemicals sector with its upcoming 4,50,000 tonnes per annum polypropylene plant expected to be commercially operational during H1 2024 - when Nayara expects the demand to accelerate and margins to kick in," the firm said. As India's GDP grows, the demand for polypropylene is expected to grow to around 7.5 million tonnes in the next two years, creating sufficient room for new and upcoming domestic capacities.
Nayara said it will be the first polypropylene (PP) producer in the country using the latest phthalate-free catalyst for the entire PP production. Phthalate-free grades will provide cleaner PP for pharma, health and hygiene applications.
"Our customers are also expected to achieve higher throughput, quality consistency and smooth processing with our PP grades produced using advanced catalyst and technology platform," it said. "We will be packaging our products in pilferage-contamination proof HDSS bags. Our customers will also have the advantage of our all-India sales distribution network and strong technical support. We believe it will be the best product in India for food applications."
Presently, refinery-based PP economics are lower due to strong fuel cracks and lower PP prices (which have fallen significantly in the last 18 months). This is the cyclical nature of the business and the long-term prospects of the industry remain bright.
Importantly, integrated refineries with Petchem portfolios are expected to achieve margin resilience through business cycles as compared to standalone refiners. "At the same time, we are actively considering increasing investment in the India growth story, especially in the petchem sector," Nayara said.
With its strategically located refinery at Vadinar in Gujarat, which is the largest petrochemical consumption region in the country, the company is positioned to make a strong entry into this high growth segment. Nayara operates a 20 million tonnes a year oil refinery at Vadinar and also has more than 6,500 petrol pumps in the country. It delivers about 8 per cent of India's refining output.
