Published on May 28, 2014
Polyvinyl chloride (PVC) despite opposition from environmentalists has been performing exceptionally well. Demand for thermoplastic has been growing steadily, especially from the construction sector.
This increase in consumption has been due to the versatile mature of this material. Also, PVC is inexpensive and can be processed easily to a wide variety of forms and shapes with excellent properties like flame retardancy. Polymer is recyclable, provided the right technology is used, and compared to other thermoplastics it has the lowest carbon footprint.
PVC forms a bridge between the petrochemical and inorganic industries. The business of PVC has a number of entry points. The most cost efficient business is production of vinyl chloride monomer (VCM) from ethylene dichloride (EDC), which is produced using caustic soda or chlorine and ethylene.
However, shortage of ethylene has encouraged producers to rely on acetylene, particularly in China. In China, nearly 80 per cent of PVC is produced via the carbide process using acetylene. This method has helped China become a major player in the global vinyl industry. Despite concerns about the quality of resin produced and carbon footprint of the polymer, China's PVC output has grown by leaps and bounds.
In India, PVC is produced through diverse means. Reliance Industries Ltd., for instance, manufactures PVC through the integrated route oxychlorination route. Other producers import VCM and EDC from merchant markets, which makes them vulnerable to pressure on margins. Also, VCM and EDC volumes have gone down and there is very little investment in capacity, making it difficult for manufacturers to source these feedstocks.
The PVC market in India has witnessed 10-12 per cent growth per year over the last decade. However, in the previous year growth slumped to 2-3 per cent as a result of the economic downturn and declining construction activities.
Majority of the local demand for PVC is for manufacture of rigid pipes and fittings, with a small quantity used for window frames and profiles etc. This is not likely to change in the coming few years but certain positive signs from the profiles market signals toward greater use of the product locally. This trend can shift emphasis from pipes and fittings.
The diversification of the Indian PVC industry will impact a few related sectors. PVC cannot be processed without stabilisers and plasticisers. Lead-based stabilisers are the most used ones as they are effective and cheap. But lead affects human health. The developed nations have already replaced lead with safer alternatives like those based on calcium or tin. However, these alternative systems have only been introduced in India recently, and as the PVC industry develops further these alternatives will plat a greater role.
As far as plasticisers are concerned, dioctyl phthalate is said to have harmful effects. These are used in making toys, medical devices, but are gradually being replaced by by long chain phthalates or other chemistries including succinates, adipates, citrates etc. In India, awareness about these safer alternatives is considerably less, which will change once more sophisticated PVC uses emerge.
The increasing import volumes is a source of worry. The gap between local demand and supply is expected to cross 2-mt unless domestic capacity is increased. However, it is highly unlikely that the current players will increase capacity.
However, the situation can be changed by increasing ethylene availability and the PCPIRs can be used for such a project.
