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1、 Datamonitor USA 245 Fifth Avenue 4th Floor New York, NY 10016 USA t: +1 212 686 7400 f: +1 212 686 2626 e: Datamonitor Europe Charles House 108-110 Finchley Road London NW3 5JJ United Kingdom t: +44 20 7675 7000 f: +44 20 7675 7500 e: Datamonitor Germany Kastor small scale entry is unlikely to b
2、e successful. Rivalry is fairly high among market players as companies are on the whole selling undifferentiated products where branding is of little significance. The threat of substitutes in this market is very weak as buyers generally need products of a particular chemical composition, unobtainab
3、le anywhere else. FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 14 5.2 Buyer Power Figure 5: Drivers of Buyer Power in the Chemicals Market in India, 2008 0 1 2 3 4 5 Buyer size Oligopsony threat Low-cost switching Undifferentiated product Tendency to switch Price
4、 sensitivity Financial muscle Backwards integration Buyer independence Product dispensability Scores: 1= weak driver.5=strong driver Source: Datamonitor D A T A M O N I T O R The products in question include base (inorganic and organic) and specialty chemicals, pharmaceutical materials, and chemical
5、s used in agriculture. Therefore buyers include manufacturers of plastic products, water utilities, consumer chemical manufacturers, and others. These all tend to be medium- to large businesses with correspondingly strong negotiating positions relative to the market players, enhancing buyer power. B
6、ase chemicals are undifferentiated commodities, specified only by chemical composition and purity; and branding is of negligible importance. This strengthens buyers, as they can obtain the same materials from several market players. On the other hand, as base and specialty chemicals include a wide v
7、ariety of substances, the number of potential buyers is quite high, especially for the large base chemical players that typically operate in several sub-markets. This diversity can weaken the power of buyers significantly. Base chemicals are generally highly significant to the business of the buyers
8、, and as a result, are often supplied through long-term contracts with periodic renewal and/or price renegotiation. Strength of buyer power WeakStrong FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 15 Another type of goods in this market are specialty chemicals whi
9、ch create the category of relatively high valued chemicals with diverse end product markets. They are usually characterized by their innovative aspects and sold for what they can do rather than for what chemicals they contain. Because of their versatility they add to buyer power as the final product
10、 can be sold much easier or can be transformed to other product. Switching costs include those incurred by waiting for the end of a contractual period while losing out during that time on a better deal offered by another player. Overall, buyer power is moderate. FIVE FORCES ANALYSIS India - Chemical
11、s Datamonitor (Published November 2009) Page 16 5.3 Supplier Power Figure 6: Drivers of Supplier Power in the Chemicals Market in India, 2008 0 1 2 3 4 5 Supplier size Oligopoly threat Switching costs Player independence Player dispensabilityNo substitute inputs Importance of quality/cost Differenti
12、ated input Forward integration Scores: 1= weak driver.5=strong driver Source: Datamonitor D A T A M O N I T O R The feedstock used in much of the chemical industry is derived from oil or natural gas; not only for organic (carbon-containing) end-products, but also for certain inorganics: ammonia, for
13、 example, is manufactured from natural gas. S upplier power is increased by the fact that the main oil and gas companies are large, and there are only a small number of them, supplying to all kinds of different buyers from large range of industries and market. Moreover, supplier power has been stren
14、gthened by the fact that major chemical manufacturers, particularly in the US and Europe, have been faced with rising raw material prices (at least until recently) and reluctant customers. As a result, these companies tend to enter into stronger partnerships with their suppliers to ensure that they
15、remain profitable. Forward integration by suppliers can be fairly common, for example, oil and gas companies are often producers of petrochemicals as well as suppliers to base chemical manufacturers. This increases supplier power relative to chemical producers that do not own their own upstream reso
16、urces. Supplier power is weakened by the fact that raw materials are not highly differentiated. Oil and gas companies are essentially offering the same raw materials. By buying raw materials in the open market, feedstock manufacturers have little control over the price, and may need hedging strategi
17、es in order to minimize the impact of price volatility. Strength of supplier power WeakStrong FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 17 For other chemicals, minerals and sea water are among the most important inputs. For example, sodium chloride can be form
18、ed by evaporating sea water or obtained from halite mines; it is then used in the production of sodium carbonate, sodium hydroxide, chlorine, etc. Sulfur, a key starting material for base chemicals such as sulfuric acid, is obtained by mining. The present economic situation has been causing many che
19、mical manufacturers to cut back production, and the consequent decreasing demand for raw materials may weaken suppliers by affecting the prices they can obtain. Overall, supplier power is assessed as moderate. FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 18 5.4 N
20、ew Entrants Figure 7: Factors Influencing the Likelihood of New Entrants in the Chemicals Market in India, 2008 0 1 2 3 4 5 Low-cost switching Undifferentiated product Scale unimportant Low fixed costs Little regulation Incumbents acquiescentDistribution accessible Suppliers accessible Little IP inv
21、olved Weak brands Market growth Scores: 1= weak driver.5=strong driver Source: Datamonitor D A T A M O N I T O R Chemicals do have some uses in their own right - for example, some base chemicals may be used as household cleaners like for example sodium hydroxide or ammonia - but more commonly they a
22、re used close to the beginning of the value chain as raw materials for the manufacture of more valuable products. As a result, they are manufactured in bulk, and scale economies are highly important if the margins available from them are to be worthwhile. Entering the market as a completely new play
23、er (rather than an existing company exporting to this market) requires large amounts of capital to set up high-volume production plants. The capital intensity, and the importance of scale economies, restricts market entry to medium-sized and large companies. In addition to this there is the uncertai
24、n global economic climate to consider. On the other hand, factors favoring market entry include the fact that chemicals are usually undifferentiated commodities in their segments: a new player can make products indistinguishable from those of the incumbents, which means that provided they are not ti
25、ed into contracts with existing suppliers buyers are as likely to opt for the newcomer. While many of the processes used to manufacture chemicals were originally developed in the early twentieth century and are in the public domain, incumbents nevertheless often own significant IP assets and non-pat
26、ented in-house expertise, which allow them to enhance their production methodology. New players may find it difficult to replicate this knowledge. Likelihood of new entrants Weak Strong FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 19 Particularly for a large-scal
27、e market entry, access to suppliers can be problematic. Because of the volume of raw materials used, it is preferable to locate near to their sources. On the other hand, the threat of new entrants is intensified by the fact that commodity chemicals are undifferentiated and branding is of negligible
28、importance. Buyers can therefore be attracted away from the incumbent fairly easily. Moreover, market growth has been fairly strong in recent years, at least prior to the global recession, which may be attractive to potential new entrants. On balance, there is a moderate likelihood of new entrants.
29、FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 20 5.5 Substitutes Figure 8: Factors Influencing the Threat of Substitutes in the Chemicals Market in India, 2008 0 1 2 3 4 5 Low-cost switching Cheap alternativeBeneficial alternative Scores: 1= weak driver.5=strong d
30、river Source: Datamonitor D A T A M O N I T O R Chemicals are fundamental to a wide variety of downstream businesses; there are no substitutes for these products, considered collectively. Furthermore, buyers generally need products of a particular chemical composition. In situations where a buyer ca
31、n choose between different but related chemicals, it is likely that the same market players manufacture them all. Overall, the threat of substitutes is weak. Threat of substitutes WeakStrong FIVE FORCES ANALYSIS India - Chemicals Datamonitor (Published November 2009) Page 21 5.6 Rivalry Figure 9: Dr
32、ivers of Degree of Rivalry in the Chemicals Market in India, 2008 0 1 2 3 4 5 Competitor size Number of players Low-cost switching Undifferentiated product Low fixed costs Easy to expandHard to exit Lack of diversity Similarity of players Storage costs Zero-sum game? Scores: 1= weak driver.5=strong
33、driver Source: Datamonitor D A T A M O N I T O R A fairly large number of medium-to-large companies, including some powerful multinationals, are active in the chemicals market. As manufacturers of chemicals offer fairly commoditized product, it is often difficult for players to offer strong incentiv
34、es for their customers not to switch to rival companies. The business is characterized by high fixed costs. Furthermore, the need to invest heavily in plant when entering the market translates into high exit costs. These factors all boost rivalry. Rivalry is eased during periods of rapid market expa
35、nsion, but intensified when - as during the global recession - revenue growth slows or actually goes into decline. Rivalry remains strong when all of the factors are considered. Degree of rivalry WeakStrong LEADING COMPANIES India - Chemicals Datamonitor (Published November 2009) Page 22 CHAPTER 6 L
36、EADING COMPANIES 6.1 Reliance Industries Limited Table 4: Key Facts: Reliance Industries Limited Address: Maker Chambers IV, Nariman Point, Mumbai 400 021, Maharashtra, IND Telephone: 91 22 2278 5000 Fax: 91 22 2204 2268 Website: Financial Year-End: March Ticker: 500325 Stock Exchange: Bombay Sourc
37、e: Company Website D A T A M O N I T O R Reliance Industries (RIL) is a private sector company in India. The company operates in more than 100 countries around the world. It has production facilities at three major locations in India and four in Europe. The company operates through three major busin
38、ess segments: refining, petrochemicals, and oil and gas. RIL operates the third largest refinery in the world at Jamnagar, Gujarat. The refinery has a capacity of 33 million tons per year (0.66 million barrels per day of crude throughput). IN FY2008, the refinery processed 31.8 million tonnes of cru
39、de and had a high utilization rate of 96.4%. The segment produces liquefied petroleum gas (LPG), propylene, naphtha, reformate, gasoline, TAME (tertiary amyl methyl ether), jet/aviation turbine fuel/superior kerosene oil, high speed diesel, sulphur, and petroleum coke. RIL has production capacities
40、of (in millions of barrels per annum): LPG up to 2.3, propylene up to 0.7, naphtha up to 4, reformate up to 2.7, gasoline up to 4, TAME up to 0. 25, jet, aviation turbine fuel, and superior kerosene oil up to 3.6, high speed diesel up to 11, sulphur up to 0.5, and petroleum coke up to 2.5. In FY2008
41、, RIL produced 33,139 kilotonnes (KT) of petroleum products comprising 28,522 KT of gases and distillates and 4,617 KT of fuel oils and solids. RIL markets its petroleum products through 1,432 retail outlets in India. The company exported 22.1 million tonnes of refined products in FY2008. Asia accou
42、nted for 55% of overall petroleum products exports, Europe accounted for 20%, and Africa 18%. LEADING COMPANIES India - Chemicals Datamonitor (Published November 2009) Page 23 The petrochemicals segment encompasses the production and marketing operations of petrochemical products namely, high and lo
43、w density polyethylene, polypropylene, polyvinyl chloride, polyester yarn, polyester fibres, purified terephthalic acid, paraxylene, ethylene glycol, olefins, aromatics, linear alkyl benzene, and polyethylene terephthalate. The petrochemicals segment manufactures polymers, polyester, polyester inter
44、mediates, and other petrochemicals. The polymer business has cracker facility at Hazira, as well as its refinery at Jamnagar. The company operates plants for polyolefins and PVC (polyvinyl chloride) with licensors like Novacor, Geon, and Union Carbide. The products manufactured include polypropylene
45、 (PP), high density polyethylene (HDPE), and liner low density polyethylene (LLDPE), polyvinyl chloride (PVC), and poly-olefin (HDPE and PP) pipes. The products are sold under various brand names including, Repol (polypropylene), Relene (high density polyethylene), Reon (polyvinyl chloride), and Rel
46、pipe (HDPE and PP). In FY2008, the business produced 1,712 KT of PP, 1,083 KT of PE, and 579 KT of PVC. RIL is the largest producer of polyester fiber and yarn in the world. The company has a manufacturing capacity of 2,000 KT per annum with a production plant at Naroda. The company has a portfolio
47、of about 120 global patents in the polyester domain. It has a manufacturing capacity of about 2.5 million tonnes. The products manufactured include staple fiber, filament yarn, texturized yarn, twisted and dyed yarn, stretch yarns, cotton look, cotluk feel yarns, can dyed, dope dyed, low pill, hollo
48、w fibers, secondary reinforcement products, quality certified sleep products, and polyethylene terephthalate (PET). The products are offered under the brand names Recron (texturized yarn, twisted yarn, staple fiber, and filament yarn), Recron Stretch, Recron Cotluk, Recron Dyefast, Recron Superblack
49、, Recron Superdye, Recron Fibrefill, Recron 3S, Recron Certified, and Relpet. In FY2008, the business produced 840 kilotons of PFY, 765 kilotons of PSF, and 305 kilotons of PET. The polyester intermediates manufactures paraxylene (PX) and purified terephthalic acid (PTA) and mono ethylene glycol (MEG). In FY2008, the business produced 1,878 kilotons of PX, 2,035 kilotons of PTA, and 801 kilotons of MEG. The company is also Indias largest manufacturer of linear alkyl benz