Development of chemical industry in Maharashtra

The Indian chemical industry is well-established in Maharashtra. During FY07, the production of major chemicals in the state was 565,481 MT. In the same year, chemical production capacity of 17,928 MT was added that took and the total installed capacity increased to 1.02 MMTPA.

Under the National Industrial Classification, the chemical industry includes basic chemicals and its products –petrochemicals, fertilisers, paints, varnishes, gases, soaps, perfumes, toiletries and pharmaceuticals. For the purpose of the cluster and industry study, the chemical industry is classified into five major segments and these are as follows: alkali, inorganic chemicals, organic chemicals, pesticides, and dyes and dyestuff. Accordingly, any reference made to the Indian chemical industry hereon will include the information on these five major segments exclusively.

The Indian chemical industry is endowed with availability of low cost labour. The allied industries such as leather, plastics, food processing, rubber, textiles offer huge growth opportunities in the long term for the chemical industry. Besides, the government is also undertaking several initiatives to sustain the growth of the industry. The promotion of Special Export and Investment Zones, SEZs, cluster development and monetary incentives through fiscal and policy initiatives will foster the growth of the industry. Infrastructure sector has gained significant importance and is a priority focus of the government. Thus, the increased spending on infrastructure will help in reducing the infrastructural bottlenecks in the long run. However, issues like inadequate technologies, skilled labour, environmental norms and need to innovate remain a threat to the industry.

The players must focus on specialising in their areas of expertise in line with the global trend. Innovation is gaining importance as it enables focus on core competence and enables players to lead in specialty products. The idea is to focus on one’s core competency and select business segments where competitive advantage exists. Likewise, the industry must focus on improving its product and production processes by investing in technology development and building R&D capabilities. Such a step will enable the industry to not only build its expertise in a chosen field but also will lead to cut down in production costs. Adherence to environmental and public safety norms and promotion of safe management of substances are also pivotal areas that need focus right from the design, end use, to its final disposal (hazardous waste) of products.

Logistical bottlenecks, high raw material and fuel prices and anti-dumping activities are posing a threat to the industry in the short run. Thus technology upgradation, access to skilled manpower and funds at a reasonable cost, adequate infrastructure support and economical input costs are essential for the sustained growth and development of the Indian chemical industry. Even though ths industry is currently affected by economic recession, in the long term it will benefit immensely from the high growth foreseen in its consuming industries and the improvement in export markets.

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