By Sharad Matade:
The Indian rubber chemical industry is poised for expansion owing to the surging growth in tyres and non-tyre rubber goods sectors, says Mahavir Vaid, Chairman, Rubber and Chemical Merchants Association (RCMA). “Based on the way the Indian tyre and non-tyre rubber goods making companies are ramping up their production capacities in the country, the rubber chemical industry will have a bright future,” he tells Rubber Asia. However, the growing demand-supply gap is a serious concern which needs to be addressed, he adds.
According to a report prepared by TechSci Research, the Indian rubber processing chemicals market stood at $ 288 million in 2017 and is projected to grow at a CAGR of 7.5% to reach $ 443 million by 2023, predominantly on the back of growing tyre manufacturing base in the country. Strong growth in the country’s industrial and automotive sectors, declining raw material prices, favorable Government initiatives to support rubber production and growing investments in production facilities of rubber processing chemicals are among the key factors expected to aid the rubber processing chemicals market in India during the forecast period, says the report.
Around 80% of rubber chemical supply is consumed by the tyre industry in India and the rest by rubber goods makers. However, out of the total ingredients needed for making a tyre, chemicals contribute hardly 1 to 2%.
The major rubber chemicals producers in India include NOCIL Limited, Lanxess India Private Limited, PMC Rubber Chemicals India Private Limited, Pukhraj Additives LLP, Yasho Industries Pvt. Ltd, Swarup Chemicals Pvt. Ltd, Finornic Chemicals (India) Pvt. Ltd, Associated Rubber Chemicals (Kochi) Pvt. Ltd, Acmechem Limited and Ceyenar Chemicals Pvt. Ltd.
However, the supply lags behind demand. “Demand is picking up and local rubber chemical companies are not able to keep pace with demand. So, there is a huge demand-supply gap in the industry,” says Vaid.
Import of rubber chemicals
On the import side also, the Government has imposed anti-dumping duty on rubber chemicals, mainly from China. There are different slabs for different rubber chemicals imported from China. “So viability of importing rubber chemicals from China is very less,” RCMA Chairman says.
However, tyre companies are importing rubber chemicals through advance license. “The companies, particularly tyre companies which are doing export business, manage to import rubber chemicals under advance license,” he says.
There is not much difference between the prices of imported rubber chemicals and locally produced ones. “I understand that even the Chinese rubber chemicals are a bit more expensive than the locally produced ones,” Vaid says.
Most domestic rubber chemical companies are not producing full range of grades. Some of them import their supplies and do repackaging. Apart from tyres and non-tyre rubber goods, efforts are on to explore the chances of using rubber chemicals in agriculture and medical sectors, having different specifications.
Despite growing demand for rubber chemicals, there are not many major producers in India as it entails massive investment and technical expertise to set up a manufacturing unit. “The number of players are less because, to have a manufacturing
plant, huge capital investment is needed. Coupled with this, technical know-how should be available. Basic raw material is hard to develop. Consequently, the rubber chemical companies import basic raw materials and develop different grades here,” says Vaid.
The rubber chemical companies also have to comply with stringent regulations regarding environmental pollution and quality. “As tyre companies are making high-quality products and developing and upgrading technology to the international standards, they are becoming stringent on the quality of rubber chemicals. To some extent, rubber chemicals contribute to pollution at the production site; but due to growing regulations, rubber chemical companies are taking pollution control measures at their plants. They also comply with REACH, RoHS, PAH and other international standards,” RCMA Chairman adds.