The Indian chemical industry has various segments, which for years have contributed to the overall development and growth of the industry. Alcohol based chemical industry holds an important position in the Indian chemical industry and has made significant contributions to the boost the Indian economy. Alcohol is an extremely important feedstock for the production of basic chemicals. Alcohol is used for diluting, blending and other industrial purposes. Alcohol is also used for blending with petrol.
The two countries leading ethanol production on a global scale are United States and Brazil, followed by EU, China and India.
The alcohol based chemical industry in India currently stands at $1.1 billion. The industry provides livelihood to about 7,500 people and envisages an employment increase of 5 per cent. Some of the important alcohol based chemicals produced in India are acetic acid, ethylene glycol, glyoxal, ethylene oxide derivatives, acetaldehyde etc. The end user industries of these chemicals include dyestuffs, personal care products, pharmaceuticals, agrochemicals, pigments, flavours and fragrances etc.
India has 20 major manufacturing units and about 340 distilleries. However, the capacity utilization is low as a result of lack of access to sufficient quantities of molasses. Also, production of alcohol has been declining despite a steady increase in demand. Thus the industry has to depend on imports to meet the rising demand for alcohol.
The alcohol based chemical industry aspires to grow at the rate of 7-8 per cent to reach $1.7 billion by the end of the XIIth Five Year Plan period. However, considering the current condition of the industry this growth target can be achieved only with the support and encouragement of the Indian government.
The industry has proved its heightened environmental awareness by manufacturing chemicals using renewable feedstock. Its contribution to green chemistry has given the industry a competitive edge. The green chemicals that the industry produces has helped limit GHG emissions. Also, carbon footprint of alcohol based chemicals is lower compared to fossil fuel based chemicals. The industry has also made significant contributions to the foreign exchange reserves of the country.
However, the industry is not without weaknesses and has several obstacles to overcome. Volatile prices of molasses and alcohol have adversely affected fluctuation in prices of feedstock. Limited availability of industrial alcohol and increasing demand for alcohol for blending with petrol has made industry heavily dependent on imports.
The high export/import tax, transport fee, purchase tax, vend fee, de-naturalization fee etc have made it very difficult for the industry to thrive. The innumerable state taxes affect the competitiveness of the industry.
Only government support and encouragement can help the industry scale new heights and explore better growth opportunities. The government should find a solution to the problem of inadequate supply of molasses. The central government should regulate the movement of molasses and ethyl alcohol as this move would prevent difference in taxation applied by different countries.
In order to make the industry more competitive, the Indian government should prioritize supplying ethanol as feedstock for green chemicals. This step would increase employment, save precious foreign exchange, generate more capital investment opportunities and enable improved utilization of existing capacity.
In order to make the industry more competitive, the Indian government should prioritize supplying ethanol as feedstock for green chemicals. This step would increase employment, save precious foreign exchange, generate more capital investment opportunities and enable improved utilization of existing capacity.
Follows us:
good read...
ReplyDeletevery insightful!!
ReplyDeletenice!!!
ReplyDelete