PVC, the second largest polymer in India has touched consumption of more than 1.1 million tons for the first time in 2005-2006 (year ending on March 31, 2006). The global consumption of PVC in 2005 is expected to reach a level of 31 million tonnes. India therefore has barely a 3% share of global PVC consumption. PP, the largest polymer, is expected to reach a level of 1.3 million tons This note is specially prepared to review the heat stabilization of PVC in India.

PVC Pipes predominantly use the one pack system that has lower density than lead products. There are different types of one pack systems ranging from complete system containing lubricant to that has no lubricants. In addition, calcium carbonate is added to reduce overall cost of one pack system. The low cost system is marketed at about Rs 55/kg while the most expensive product sells at Rs.72/ kg.
It is estimated that 80% of the total pipe is converted to one pack system. At this level, the estimated consumption of one pack system was 18,500 MT in 2005. It is expected that more conversion to one pack system will take place in the next 5 years and is quite possible that by the end of this decade only one pack system will be used by pipe processors. Lead stabilizer system will lose out to one pack system. As expected the one pack system has almost 70 % share of the total stabilizer business by volume. However its low cost results into only 50% share by value. (accounting only for about Rs.110 crore out of total Rs. 220 crore).

Lead stabilizer is largely used in cable application because of its excellent electrical insulation characteristics. It will continue to be used in this application for another decade or so. As European suppliers have voluntarily decided to reduce the use of lead stabilizer by 50% only by 2010, it is therefore not expected that India will change lead from cable application at least for another ten years. Lead stabilizer alone at 3000 MT has a market share of just about 10% by volume and has similar share by value.
Mixed metal stabilizer blend based on barium, zinc and more often lead sums up to 2500 MT- accounting for just below 10% both by volume and value. They are typically used for plasticized calendered PVC products, leather cloth and footwear applications. Calcium zinc stabilizer system is possibly the smallest accounting for merely 150 MT and has the lowest share by volume (below 1%.) By value it increases to 1% because of its higher cost. It is expected that calcium zinc stabilizer will remain the smallest for the next 10 years. Organo tin stabilizer system, because of its high cost and suitability for rigid PVC products that are transparent has about 7.5% share by volume. Its high cost however, makes it the second largest system after one pack system in terms of value. It accounts by 27% by sales value.

Antimony stabilizer that was developed globally about 2-3 decades ago when lead was threatened because of environmental issues. Tin was considered to be more expensive alternate for lead stabilizer in pipe fitting. Since antimony also posed problems due to its heavy metal content most of the internationally well known stabilizers suppliers stopped the development of this product in pipe fitting. The environmental regulations are not enforced in India and are not likely to be enforced at least for another decade. The Indian heat stabilizer manufacturers have been positioning antimony stabilizer as a better product against lead. For quite some time the users did not know that they were using antimony because the suppliers refrained from an honest explanation. However, leading international heat stabilizer suppliers having plants in India (mainly Barlocher India) educated the processors. However several pipe manufacturers continue the use of antimony stabilizer despite awareness, due to lack of strict enforcement of regulations. While leading processors of fitting do not use antimony stabilizer, the other large producers continue to use them because of cost effectiveness against tin stabilizers. Antimony stabilizer has some technical deficiency in pipe fitting. First of all it reduces the Vicat softening point by 3-5 C. Interestingly more emphasis is now laid on the higher Vicat softening point particularly in export markets. Antimony stabilizer is therefore discontinued for export. It is used only for the domestic market. Second problem associated with antimony stabilizer is that it imparts whitish colour to the black pipe fittings. Higher carbon black is then required to compensate for masking and neutralizing the colour. Typically antimony stabilizer is sold in the Indian market at costs ranging from Rs 180/KG to as high as Rs. 225/KG. Higher cost version contains some amount of tin. The major supplier of such version is Patchem Ltd from UAR. Obviously higher efficiency of such a version requires dosage level to be lower. Typically the conventional antimony stabilizer is used at 2phr level while high cost version is used at about 1.75 phr level.

Tin stabilizer obviously provides the smoothest surface finish to pipe fitting. Antimony however meets about 80-90% of the surface finish derived from tin stabilizer. Some of the quality conscious processors therefore refuse to even evaluate antimony stabilizer. However the other cost conscious and many small producers merrily use antimony stabilizer. From discussions with several processors as well as suppliers of antimony stabilizer following trends emerge:
* The largest supplier of antimony stabilizer is Patchem Ltd. with annual sale of 100 MT.
* The Indian suppliers are:
    ALA Chemical - Annual sale of 25 MT
    Aryavat - Annual sale of 50 MT
    Lalitha Chem -Annual sale of 50 MT
    Sheetal - Annual sale of 50 MT
    S V Agrochem - Annual sale of 50 MT
* The total consumption of antimony stabilizer works out to be 325 MT.
* Pipe fittings consumption in India in 2005-2006 was 40 KT. At this level, the total requirement of stabilizers was 650 MT in 2005.
* Antimony therefore has 50% share of the pipe fitting sector. Lead stabilizer is used at the level of 200 MT while only 100 MT of tin stabilizer is used for used in this application. This estimate for tin could be optimistic.
* Some large processors such as Prince Plastics is doing development work to replace antimony with lead stabilizer. It is quite possible that such processors may succeed in near future. The existing lead stabilizer manufacturers are assisting Prince Plastics to convert to lead from antimony systems.
* While the suppliers of antimony stabilizer are confident of further growth of antimony stabilizer in this sector, the large quality conscious processors as well Barlocher think that antimony stabilizer will get extinct in the near future.
* It can be assumed that antimony stabilizer will continue to be used by small pipe fitting manufacturers as well as less quality oriented large processors (Kissan, Sudhakar & Supreme).
* Considering annual growth of PVC at 7% in India and higher growth rate generating from pipe and fitting (say 7-9%), the expected growth of antimony could be 7% on an optimistic assumption. However, average growth of 5 % can be assumed safely. At the average growth rate of 5% antimony demand could reach a level of about 400 MT by 2010.

Overall heat stabilizers would grow at the rate of PVC growth (about 7%). However due to higher growth of pipe, the one pack will grow at about 8-10%. Lead stabilizer will have a lower growth (at about 3-5%) because of increased conversion to one pack system in pipe sector. Mixed metal as well as calcium zinc are not expected to grow more than 3 %. Calcium zinc could find little higher growth. However its growth will depend upon its acceptance in cable sector.
Organo tin stabilizer is expected to grow below 7%. It is estimated to have a growth of about 5 %. It is because it has limited applications because of higher cost. However among all the heat stabilizer systems organo tin will have the second fastest growth after one pack system.

Exhibit 2 given below describes the demand estimates of PVC heat stabilizer in 2010 in India.