The chemical industry in India has achieved spectacular ascendancy. Its products are not only used in the local market, but are also exported to many countries. You can think of these as high-tech versions of several traditional things.
We want to take a quick peek today at three sewing circles – special catalysts, pharma intermediates and agrochemicals in our latest blog.
Read More: Setting Up a Hydrogenation Catalyst Manufacturing Unit
What’s Happening in the Market?
The earth needs more and more of these special chemicals. India is already exporting much of its output, but we could do so much more.
Today we buy many of these exotic chemicals from other countries, and sell some. This provides two giant opportunities for new businessmen:
Make them here in India: Rather than importing them, we can make these chemicals ourself. This is called import substitution.
Sell them to the world: India produces these chemicals more cheaply and has the skilled labor to make them, so it brings us both lower prices at home and higher export figures abroad.
Here’s a simple breakdown of these chemicals:
Read More: Empowering India’s Growth Through Pharmaceutical Intermediates & API Production
Why It’s a Good Time to Start New Chemical Industry Businesses
There are a few things going on now that make this the best time to start a business in these spaces.
Global Supply Problems: When medicine companies outside of India have problems, they turn to trusted suppliers like India for ingredients.
Need for Improved Technology: Industries require new catalysts to clean up and improve dirty processes.
Demand for More Food: As the world’s population increases, we need more food. What that means is they need more agrochemicals to protect their crops.
Moving Away From China: Lots of countries are interested in buying from somewhere other than China, and India is an excellent alternative.
Government Support: Indian government is supporting startups through schemes such as the Production Linked Incentive (PLI), to promote manufacturing in India.
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How Big Is the Opportunity?
The figures are extremely promising. India’s chemical exports are likely to grow at 12-15% per annum according to Chemical Weekly magazine.
This is a major export opportunity. The world market for catalysts comes to more than $20 billion annually.
The Intermediates: This is a market that will grow 8-10% each year where all over the world people need more medicaments to take to cure themselves.
Agrochemicals: India already has a $5bn market, increasing at 7-8 % each year. Latin America, Africa and to some extent Southeast Asia all offer significant export opportunities for Indian entrepreneurs.
Read More: Setting Up a Hydrogenation Catalyst Manufacturing Unit
How Are These Chemicals Made?
These chemicals can be particularly tricky to manufacture.
Specialty Catalysts: This means very, very complicated chemical reactions with special metals (like platinum or nickel). To make catalysts that work perfectly, you need to very carefully control conditions.
Pharma Intermediates: This is the equivalent of trying to cook a really complicated recipe with 30 steps. You’ve got to blend and refine and crystallize chemicals. Following very specific quality rules called Good Manufacturing Practices (GMP) are critical.
Agrochemicals: The main active ingredient is first made. Then it gets mixed into a form farmers can use, as a powder or liquid. You’re subject to strict safety and environmental regulations.
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What Are The Challenges And How Can You Overcome This?
While not easy to start a business in these sectors, at least one can prepare for the obstacles.
Challenges which can be seen at the forefront are high research costs, unreasonable environmental regulations, competition from large global companies; Moreover raw material prices sometimes go up and down erratically.
Three things can help you reduce the risk of a catastrophe:
- Focus on Quality: Go in for good research, and make sure your products are real quality.
- Take Government Help: Look for government schemes which can help you with money and support.
- Spread the Risks: Make a few different products to spread your risk and ensure that if one fails there are still others which might succeed.
Control Your Supply Chain: Try to get control over your raw materials.
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Conclusion
India looks all set to be a world chemical leader. Specialty catalysts, pharma intermediates and agrochemicals are among the best areas for new entrepreneurs to invest.
There is nothing you cannot achieve if you get the right support and plan out your smarts to scale — because when India grows, there is no limit on what you can build!
Profitable Startups: Frequently Asked Questions (FAQ)
What do they mean by specialty chemicals?
They are best described as high performance ingredients. Often only minute amounts are used, yet they can have a major impact on the final product: making plastics stronger than ever before; or improving the effect of a medicine.
Which of these three is easiest for an average person to get into?
Agrochemicals are perhaps a bit easier, for India already has its own domestic market and an operating assurance system. Still, in any case they’re each somewhat technically advanced.
Do I have to possess special scientific knowledge to launch a company like this?
You don’t have to be a scientist but you will need a good technical team. As an entrepreneur your job is to run the business but you need experts in chemistry and engineering.
How can I compete with the huge international enterprises that flood into our market?
You can compete by focusing on one sort of niche product, providing the highest level of quality, or offering the lowest price. Many international companies will investigate smaller, more dependable partners in India.
How could I get help when starting a business?
For help you can go to Niir Project Consultancy Services (NPCS).
