What is Merger in the Chemical Industry ?
A merger is an official agreement between two more existing companies to emerge as a new face to expand the reach and momentum in the market. The consolidating of various units in a particular industry usually happens to throw a challenge to the other competitors in the market, says business Astrologer and Astro strategist Hirav Shah
On the other hand, the key source for the modern world’s economy, the Chemical industry, is the place where various industrial chemicals are produced.
For instance, Raw materials like oil, natural gas, water, air, minerals and various metals are converted into approximately a wide range of commercial products in the Chemical industry.
As various professional divisions such as chemists, lab technicians and chemical engineers work round the clock to produce a product, famous business Astrologer Hirav Shah comes up with a merger deal between various units in the chemical industry.
Picture of the chemical industry in India
The chemical industry in India is extremely diversified and covers more than 80,000 commercial products such as fertilisers, polymers, petrochemicals, agrochemicals, specialty products.
Indian colourants industry has emerged as a key player with a global market share of approximately 15%. Coming to dyestuffs and dye intermediates, Indian’s contribution is close to 16% of the world’s mass chemical production.
In the scale sector, India’s proximity to the Middle East, the world’s source of petrochemicals is seeing significant growth. Different kinds of chemical products produced in India have good demand in the world market, says Hirav Shah.
Scope for the chemical market in India
In 2020, exports of organic and inorganic chemicals increased by 2% and reached close to 1,810 million dollars. In the petrochemicals sector, imports of petroleum and crude products registered decreased by 39%.
The 2019 statistics says that the Indian chemical industry stood at 178 billion dollars and is projected to reach 304 billion dollars target by 2025 with a growth in CACR of approximately 9.3%.
On the other side of the coin, the demand for chemicals is going to expand by 9% per annum by the targeted year. Despite Covid lockdown effect, the production of key chemicals was 8,36,435 MT and petrochemicals was 17,26,502 MT, says official data released by the industry experts.
Out of total chemicals and petrochemicals market in India, the specialty chemicals constitute a share of 22% and the demand for these chemicals is expected to rise at 12% CAGR by 2022. Adding to it, the demand for petrochemicals is going to see a growth of 7.5% CAGR with a demand for polymers increasing by 8%.
The agrochemicals market is expected to witness 8% CAGR by 2022 and see revenue of approximately 4.7 billion dollars by 2025.
Major developments in the chemical industry
In 2020, Hindustan Insecticides Limited ( HCL) signed a MOC with the department of Chemicals & PetroChemicals to achieve a revenue target of approximately 60 million dollars.
In the same month, Pidilite Industries bagged Huntsman Group’s Indian Subsidiary for ₹2,100 crores to strengthen adhesives and sealants portfolio.
Grasim Industries signed a definitive agreement with Lubrizol Advanced Materials to manufacture and supply chlorinated polyvinyl chloride and started up a plant in Gujarat.
Days ahead for Chemical industry in our country
Despite pandemic circumstances, the Indian chemical industry has witnessed numerous opportunities in 2020.
Considering the continuous failure in maintaining the Air-pollution measures in our neighbourhood country China will also create opportunities in specific segments in our country.
How about a merger deal between various units in the industry?
To witness the structural change in the domestic chemical industry, merger deals between various manufacturing industries in the filed will definitely gain unimaginable results.
Instead of reducing the production by going ahead with ego clashes, focusing on various revenue complexes will turn as a win-win situation between the investors in the industry.
After witnessing the wide range of opportunities in the chemical industry, it is a clever move to go ahead with merger agreements between various units and sub-sectors in this strong and evergreen income-generating field. But before planning merger deals, approaching an Astrologer, who has a good idea about the chemical industry is a smart idea as the information helps to gain knowledge on various products and manufacturing sectors in the vast industry, concludes Hirav Shah