The three main players in the Poly Vinyl Chloride (PVC) market are Reliance Industries (RIL) Indian Petrochemicals Corporation (IPCL) and Finolex Industries Ltd. (FIL). These three players control 78% of the industry's capacity. Finolex has sizeable capacity, however, it is used captively for its integrated pipe manufacturing. India controls 2.8% of the global capacity.
The PVC market, which grew at a compounded rate (CAGR) of 13.7% from FY95 to FY99, slumped in FY00. The market reported a negative growth of 9.4% during this period. The slump in demand was primarily due to the rise in prices, which led to a substitution effect. However, by the beginning of 4QFY00 prices had started to decline, which resuscitated demand.
The first six months of the current fiscal has seen PVC prices once again bounce back. During this period, PVC prices have risen by 7.7%. This time around, however, the demand was not affected by the price rise due to polymer prices increasing across the board on the back of the crude price surge.
Production during the first five months of the current fiscal is up 15.4% YoY and demand for FY01 is expected to rise by 14% to 766,000 MT from 672,000 MT. By FY04, the demand for PVC is anticipated to touch 1MMT, registering a growth of 12.5% CAGR. This leaves a gap of 200,000 MT between the future demand and current capacity.
The share of polymers and polymer intermediates in the revenue mix of RIL, IPCL and FIL is 36%, 73% and (an estimated) 70% respectively.
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