Polyurethane scenario in India-2005

Polyurethane, commonly known as PU, is possibly the fastest growing polymer after LLDPE (commodity) and container grade PET. In fact, about 10 million tons of PU was consumed globally in 2005 – marginally lower compared to PET container grade. PU belongs to thermoplastic group and is the largest thermoset material and is also available as a thermoplastic known as TPU (Thermoplastic polyurethane). Consumption of TPU is significantly small out of the total PU consumption (not more than a few percent). Globally PU is expected to grow at almost double the GDP growth (5-6%). Asia, as expected is growing much higher compared to the developed economies of North America , Europe and Japan . Regional distribution indicates Europe to be the largest followed by North America and Asia including Japan. Europe has almost 30% share while Asia is slowly gaining ground and has reached a level of about 27% in 2005.

Polyurethane is manufactured from two monomer : isocyanate and polyol.
TDI is the oldest isocyanate and is the larger isocyanates used so far. Usage of MDI is smaller, but has a faster growth rate in the past few years. MDI is expected to grow faster for another decade, if not for longer period. The consumption of isocyanate and polyol depends upon the finished product.
Typically, flexible PU products use maximum of 15% of isocyanate while the rigid products use about of 30%. TDI has almost 45% share and MDI has 25% share. The remaining 15% belongs to special isocyanates that are used for special PU used in adhesive and coating. PU products besides isocyanate and polyol use 10% catalyst, surfactant, blowing agent, pigment/colourant and filler.
Among the isocyanates, MDI is expected to grow at about 8% while TDI is likely to grow at 3-4%. Typically MDI is used in rigid application while TDI is used in flexible products. MDI is also increasingly snatching TDI share even from flexible product range. In fact it is believed that the growth of MDI is increased by 1 % while substituting TDI as raw material.

India has shown a very healthy growth of about 14 % over the last 15 years. From a level of 17 KT in 1990, the consumption has reached a level of 120 KT in 2005. Exhibit 1 also describes the application of PU in India in 2005. Flexible products have a significantly larger share while rigid PU is only less than 5 KT out of which 1.5 KT is TPU.

Exhibit 1
Polyurethane demand estimates in India
Application	2005		2010		AAGR
	(KT)	(%)	(KT)	(%)	(%)
Flexible slabstock	50	42	95	44	13.7
Moulded flexible products	26	22	45	21	11.6
Shoe soles	11	9	20	9	12.7
Case	7	6	12	6	11.4
Rigid	24	20	40	19	10.8
TPU (Thermoplastic Polyurethane elastomer)	2	2	3	1	8.4
Total	120	100	215	100	12.4

Historical growth of PU consumption as illustrated in exhibit 2 from 1990 to 2005 shows almost uniform growth over this period.

Exhibit 2
Historical consumption of Polyurethane in India
Year	Consumption (KT)	AAGR (%)
1990	17	Nil
1995	30	12.0
1998	55	15.8
2003	105	15.0
2005	120	13.9
2010	215	13.5
*AAGR for each of the years mentioned above is calculated from 1990

Higher growth is seen from 1995 to 1998 compared to earlier phase from 1990 until 1995. It is almost similar between 1995 and 2005. In fact it is expected to grow slightly faster in the next 5 years. The main reasons for higher growth are:

Indian PU market is concentrated in flexible products. Exhibit 3 summarizes the end-use application and clearly shows a preference for flexible products.

Pioneered by U–foam, India began production of PU flexible slab stock in 1960. However it is no longer a major force to reckon in this sector. There are two other larger processors in flexible products of foam. They are:
• Sheela foam, Ghaziabad UP
• Tirupati foam, Ahmedabad, Gujarat

All major refrigerator producers in India also manufacture PU insulation slab stock.
Footwear producers such as Action and Liberty footwear are the major producers of PU shoe sole.
Flex group and Paper converter are the major players in PU adhesive and sealant

For quite sometime, India did not have manufacturing facilities for PU rfeedstock- TDI, MDI or polyols. Expanded Incorporation at Mumbai and Manali Petrochemical Ltd at Manali Chenai manufacture Polyols in India. Narmada Chematur with 18 KT capacity of TDI has partially fiiled the void. However, MDI is still not manufactured in India and is required to be imported. The dependence on import of several small sized processors affect cost effective imports of MDI. It could be one of the reasons for somewhat slower growth of MDI at least until the end of 2000. In 2000, imports were liberalized and the import tariff was reduced to a significant extent..

Indian PU market is expected to grow at about 12-13% if not at about 15% in the coming 5 years. The demand in 2010 is expected to reach a level of 215 KT from 120 KT in 2005 and thus is expected to grow at an average growth of 12.5% This estimate could be conservative. It is possible that 13.5 % growth could be seen and the demand could reach a level of 225 KT instead of 215 KT.

Indian Polyurethane Association chaired by Mr. Sarangapani of U foam and the doyen of Indian PU industry is the chairman. He is operating from his Hyderabad office. Mr. Ramamurthy is the secretary and is located at Chenai. Indian Polyurethane Association brings out quarterly magazine regularly. It also promotes the newer developments of PU applications. Recently it conducted a conference and exhibition at Delhi in October 2005.

(Source: Global PU demand – by Nick Weber, VP, Huntsman, Europe – Paper presented at PUTECH 2005 at Delhi, IAL consultants, Chemical Weekly, Indian Polyurethane Association. Special inputs from Mr. Ramamurthy, Secretary of Indian Polyurethane Association)