West Bengal Industrial Development Corporation

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PETROCHEMICALS AND DOWNSTREAM INDUSTRIES

Profile & Performance

The state of West Bengal accounts for almost 4% of India’s production of petroleum products and 13% of India’s polymer production. The production has almost doubled in the last decade. Crude throughput at Haldia refinery increased to 5,502 million tones and its capacity utilization increased to 91.7% during 2005-06.

The total number of HPL downstream industries set up during the period from January 1998 to December 2005 stands at 773 out of which 705 are in West Bengal.

Of the 705 units set up in the state 674 are small scale units, 94 are medium scale units and 5 are large scale units.

The growth of the Petrochemical sector has been very impressive both in terms of units set up and investment volume. The main reason for the recent growth of this industry is due to upstream and downstream industry linkages by the oil refining and petrochemical units set up in the state. The industry is due to receive a further fillip with the announcement of US$ 1 billion gas pipeline project to bring natural gas in the state.

Of the 705 units set up in the state 674 are small scale units, 94 are medium scale units and 5 are large scale units.

The growth of the Petrochemical sector has been very impressive both in terms of units set up and investment volume. The main reason for the recent growth of this industry is due to upstream and downstream industry linkages by the oil refining and petrochemical units set up in the state. The industry is due to receive a further fillip with the announcement of US$ 1 billion gas pipeline project to bring natural gas in the state.

Some of the light bearers in this sector are:

	Haldia Petrochemicals Ltd. is India’s second largest integrated petrochemical complex. Currently producing 1.5 million tones of polymers and chemicals, the company was set up with an initial investment of US$ 1.2 billion and has grown significantly to its present turnover of US$ 1.4 billion.
	Mitsubshi Chemicals and Corporation, Japan’s largest chemical firm and one of the world’s top 10 chemical companies has invested in Purified Terepthalic Acid (PTA) plant at Haldia at an estimated cost of US$ 355 million. Its capacity is 4,25,000 tones per annum. The company is going through an expansion costing US$ 370 million which will increase capacity by 800,000 tonnes of PTA per annum.
	South Asian Petrochem Ltd. (SAPL) is a subsidiary of Kolkata’s Dhunseri Group. It has set up a 140000 TPA of Polyethylene Terephthalate (PET) resin plant with an investment of over US$ 100 million at Haldia.

Policies & Plans

Petroleum industries are gradually gaining importance in the state with a number of petroleum & downstream industries coming up in the state. Realising the potential of this sector, West Bengal Government has undertaken a number of policy measures for the sector.

The major thrust areas of the policy are :

	Encourage public sector companies & nationalized banks to enter the capital market to raise resources & offer new investment avenues.
	Invite & encourage private sector investment in these industries in order to accelerate growth.
	Set up Petroleum, Chemical & Petroleum Investment Regions (PCPIR) in the state to promote investment on a global scale.
	Foreign Technology investments will be invited in the petrochemical industries.
	Encourage Foreign Equity participation in the petrochemical industries.

The State Government will allow the foreign companies to set up 100% owned companies in the plastic processing.

Potential

Why West Bengal?

	Excellent port facilities with comprehensive cargo handling facilities including liquid cargo.
	Availability of skilled human resources.
	Easy availability of industrial water.
	Excellent track record of Haldia Petrochemicals ad other downstream industries.
	Availability of land, particularly at Haldia.
	Good forward and backward linkages.
	A wide market for polyester products.

Products & Services (Illustrative List)

	Purified Terephthalic Acid
	Flexible packaging laminates
	Poly venyl chloride resins
	Calendered PVC Sheets / Films
	Rigid sheets used as blister packs
	LPG storage terminal and LPG bottling plant
	Benzene, Toluene, Poroxelene, Orthoxylen
	Naphtha
	Polystyrene
	Rubber
	Styrene
	Plastic products
	Condensates