MUMBAI: India has today emerged as a major producer of quality dyes and pigments; Mrs Satwant Reddy, Secretary, Government of India (Department of Chemicals & Petrochemicals, Ministry of Chemicals & Fertilizers) said at the Inaugural Session of 2nd International Convention on Colorants in Mumbai on February 7.
International Conference on Colourants was jointly organized by Dyestuffs Manufacturers Association of India and Institute Chemical Technology, Mumbai.
She said that Conference on Colourant Industry is an ideal platform for corporates to discuss and deliberate on the current trends of colourants in the international arena and issues affecting the growth of Indian Dyestuffs Industry.
According to Mrs Reddy, since independence, the dyestuff industry has grown manifold from an Industry of importers, distributors to being a manufacturer and an important Foreign Exchange earner.
The current export of dyes and pigments is of the order of Rs. 3500 crores. Dyestuff Manufacturers Association of India (DMAI) has fixed ambitious targets for export of Dyestuffs of Rs. 12000 crores by the end of this decade.
Export growth of this magnitude can be achieved only through close coordination between the Goverment, industry, financial and technical institutes so that a conducive atmosphere providing a level playing field is created.
The industry needs to monitor its growth in exports regularly and take immediate corrective action along the route to achieve the targets; she said.
The Industry can avail of the export incentives such as Duty Drawback, Advance licences scheme, DEPB and DFRC etc. which encourage exports.
The major markets for Indian Dyestuffs are the E.U., U.S., Indonesia, Hong Kong, South Korea and Egypt. The U.S. takes almost 20% of India’s exports. China gives more competition to our industry with lower prices but Indian products have an edge because of consistent quality and conforming to international standards.
This sector is highly fragmented with about 900 units in the small scale sector and only 50 in the organized sector. Some of the Small Scale units have been closed down as they did not meet the prescribed Pollution Control Standards; she said.
The developed world understandably is not interested in further growth of the Dyestuff industries in their countries and prefer to source their requirements from countries like India, China, Taiwan, Korea and Indonesia etc.
As such there is tremendous potential for growth in the Dyestuff sectors to meet the global demand. But this cannot be at the cost of an environmental impact. The industry has to ensure that units meet the environment and pollution control standards scrupulously. Installed capacity of Dyestuff units is considerably under utilized; she said.
The main reasons are absence of world class plant capacities, use of obsolete equipments and technology, insufficient R&D efforts, lack of market support by way of consortium and absence of diversification and long term product planning.
In the liberalized era, industry is free to import proven technologies and modern equipments. 100% FDI is allowed under the automatic route. Many of the multinational companies are undertaking mergers, acquisition and restructuring.
Indian companies can also consider the route of restructuring and consolidation to make their plant capacities more viable. The Global scene has witnessed large scale mergers and acquisition and joint venture in the past. Indian dyestuffs units need to adopt the path of mergers and acquisition, to achieve the world class capacities of the plants;she said.
Coming to the global dye industry, the world market of dyes, pigment and intermediates is estimated to be around US$ 23 billion, with the dyes and pigment market of 1.3 million tones valued at US$ 16 billion and the dyes intermediates market at US$ 7 billion.
Germany, U.S., Japan, Switzerland and the U.K. account for two-thirds of the world production of dyestuff. Today, the share of the developed countries in the world production of dyes has come down from 65% to 50% and is likely to go down further as countries like China, India, South Korea and Taiwan emerge as large producers.
The major international players include Dystar, BASF, Ciba Specialties and Clariant. Dystar, the joint venture between Hoechst AG & Bayer AG is the largest producer of dyestuffs with 15% market share in the world market. This is followed by BASF, which has market share of 12%. China too has installed high capacity plants for certain dyestuffs which can cater to the world requirements.
However in terms of market share European countries have remained the largest producers because they have concentrated on specialty products.
Today, the global market scenario is characterized by over-capacity which is a challenge for this sector. Chinese Disperse Dyes capacity is 100% more than world’s total annual requirement and in India, we have 30% more capacity than what we can sell.
This overcapacity has resulted in falling prices. In the recent past, new technologies have been developed in the manufacturing process of dyes and dye intermediates to reduce the cost of production. Industry now carries out catalytic reduction in place of use of iron and hydrochloric acid. This process avoids the generation of iron sludge. The direct use of sulphur trioxide for sulphonation is being preferred as it has a more cleaner and environment friendly technology.
The process of filtration has undergone a major change with use of membrane filtration process. The spray drying process of dyes is being preferred instead of conventional tray dryer method. Newer products like high performance fluorescent pigments have been developed which have wide applications in various sectors; she said.
This industry needs to concentrate its efforts to develop new processes, products and applications to cater to the requirement of the ever changing demand of the users.
This industry needs to develop the technology that minimizes the use of solvents, recycle of the unreacted material, minimizes formation of by-products so as to achieve zero effluent levels.
The innovations in the colorant industry will not only drive consideration for technological trends, but also its market and application; she said.
Dyestuffs Industry should meet the prescribed pollution standards. This industry should endeavour to meet the obligations stipulated under Charter for Corporate Responsible Environmental Protection (CREP) formulated by MOEF in consultation with the industry; she said.
This international convention is going to discuss green and eco-friendly colourants. Moving on to the use of natural colours, use of Natural Colours shall be a step in the direction of a green environment. In the beginning it may not be possible to replace the voluminous use of synthetic dyes in textile etc. with natural dyes; she said.
Coming to the R&D scenario, the present R&D spending by the Dyestuff industry is abysmally low upto 2% of your total sales as against 5% spending in other developed countries.
This needs substantial improvement. Strengthening R&D efforts in this area will help you to innovate newer molecules of dyes, improve yields and develop technological innovations, thereby, earning an edge over competitors in this price sensitive market; she said.
Strengthening your R&D activities, will help you to gain a position in the world market. EU has proposed a new legislation called REACH under which exporters of chemicals to EU will require to register their products with complete safety data. This legislation is expected to be passed by EU Parliament in March 2007. This will no doubt put extra financial burden on our exports to EU; she said.
The chemical industry is advised to gear up to face the challenges posed by REACH. There is need to set up world class GLP labs conforming to OECD principles to generate safety data of different Industrial Chemicals.
India is also signatory to Chemical Weapons Convention (CWC). Indian Dyestuffs Industry is a significant producer of schedule 2 & 3 and Discrete Organic Chemicals including PSF chemicals. India also export substantial quantities of these items; she said. Declaration and verification regime are the important aspects for the implementation of the convention; she said.
Department of Chemicals & Petrochemicals, Ministry of Chemicals & Fertilizers has been organizing awareness programmes on CWC in different cities of the country.
She hopes that the members take benefit of these awareness workshops. The CWC Act had come into force and she advises the members to comply with the provision of the act to avoid stringent penal action.
Recently, India has become party to SAICM. There are 272 activities identified for which actions has to be taken to ensure proper management of chemicals by 2020.
Though this convention is voluntary, as a responsible nation India should endeavour to meet our obligations under this convention in a phased manner to ensure safe handling and consumption of chemicals; she said.
She wished all success to this international convention. The deliberation and suggestions of the event will attract the best attention of the government.