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"Radical Changes in Technologies and R&D will Excel the Indian Chemical Industry"
OPaL is one of those petrochemical companies that have always focused on implementing innovative and effective technologies in their operations. In an exclusive conversation with CEW, Dr PSV Rao, CEO, OPaL talks about company’s strategies and future plans.

OPaL is setting up a grass root Mega Petrochemical project in the PCPIR/ SEZ zone at Port City of Dahej, Gujarat, India. The complex will have a 1.1 million tonnes Dual Feed cracker with an investment of USD 4.5 billion and is spread out in area of 507 hectares. It will mainly produce HDPE (Swing and Dedicated lines), LLDPE, PP, Benzene, Butadiene, Pygas and CBFS. OPaL is endeavoring to use the world-class new technologies from M/s Linde AG, Germany for dual feed cracker unit. Downstream units technology licensing are from M/s Ineos Technologies, UK and M/s Mitsui Company Ltd, Japan.

Currently OPaLĘs project is going on full swing, where more than 54 per cent of the construction activities are already completed. We expect the production by beginning of 2014.

Major players like IOCL, HMEL, GAIL, and Reliance have increased their capacities in the past few years. How do you plan to consolidate your position as a strong player in the Indian market?
OPaL is poised to become a key player in the growth of the petrochemicals industry and will synergize with the strengths of its promoters. OPaL with 1.1MMT of HDPE/LLDPE will have the largest capacity compared to any other co producers in the country. More over OPaL has the combine advantages of adequate indigenous feedstock supplies, talented manpower, ready market and above all, a better and brighter domestic market.

With the PE/PP markets being short in India in foreseeable future there is adequate space for all the existing projects in the markets more with the current growth rates in fact country needs more and more plants like OPaL.

Further- in lieu of the demand and capacity increase in the in Asia Pacific region and demand decline in the western countries, what strategies is the organisation adopting to position itself in the highly volatile market?
At the outset let me make it clear the capacity increase and not demand increase, is coming mainly from Middle East Asia. In spite of flow of this MEA material all across the globe, there are certain markets which will be continue to be in deficit & hence will import material from other regions also including India.

OPaL will be reaching to such markets through international offtakers/traders.

OPaL is to focus on the grades, which are being regularly imported and will position as import replacement. Also OPaL to concentrate on specialty grades to gain faster penetration in the domestic and export market.

How do you see the demand supply situation for the manufactured products and which are the major markets you intend to tap?
Polymers are used extensively and have replaced traditional materials like Metal, Wood, Paper, and Glass in day-to-day live style. Economy of any region and per capita income & spending power directly impact the polymer consumption. As you are aware that global per capita consumption of polymer is 26 Kg per person per year. However, India is lagging much behind in terms of per capita having just 5 kg per person per year. Recently, the forecasted growth of petrochemical product consumption in agriculture sector in India is 15 per cent annually and packaging sector is 12 per cent annually. Even though the demand in western countries is declining, the demand is increasing in India at the annual rate of 12.5 per cent. Growing Indian economy will push the Polymer consumption in near future and will be the major market to tap.

In times of high energy & price volatility, how do you plan to be cost competitive? And how do you plan to address & respond to the need of the market faster and in time?
The cost competitiveness was thought of at the very beginning of the OPaL project. There are three critical factors contributing to the cost for any petrochemical complex:
1) Feedstock
2) Power
3) Cost of transportation and Manpower

Presently petrochemical complex margins for the product are driven by the costing of the feedstock. Major consuming markets like Northeast Asia, Southeast Asian market uses the conventional method; high cost feedstock i.e. Naphtha. Whereas OPaL is having Dual Feed cracker; and higher C2-C3-C4 will give more benefits to the project. Also, OPaL is installing a CPP to cater to its power requirement of 179 MW. OPaL is planning to keep very lean structure in terms of manpower as the latest technology OPaL is coming up with, helping us to do so and OPaLĘs strategic location in SEZ, which is tax-exempted area. Also, the advantage is that the plant is connected to all the four modes of transportation giving easy access for shipment of commodities etc.

Government is giving special impetus to the petrochemical industry in India according to Draft National Manufacturing Plan made by Planning Commission for 12th five-year plan. May we have your comment on the same?
Enhancing global competitiveness of Indian petrochemical manufacturing through appropriate policy support, focus on developing new technologies and better R&D facilities are much required to face the global competition. Also public awareness on recycling and recycling industry is to be focused upon.

What was the outcome of the lenderĘs meet organised in May this year? How much investments have already been made into the project and what kind of investments is the company lining up for the future?
To attract more investments for successful and timely completion of OPaL project, a LendersĘ Meet comprises of the representatives from 32 recognised and scheduled banks of India were organised at Bharuch. All the bankers showed great deal of keenness in the OPaLĘs commencement of business, showed appreciation and assured that they will put their best efforts to get the approvals from their respective boards to be associated with OPaL. As per our company policy further details cannot be disclosed.

Tell us about future projects & plans of OPaL?
We want to be a world-class petrochemical company, with dominant Indian presence and a preferred choice of customers in terms of quality and value. In future, OPaL plans to open its office outside India to itĘs have global presence. OPaL also plans to attract domestic producers for possible investment in Dahej SEZ for developing downstream products using OPaLĘs finished goods.