industry analysis report inorganic chemicals industry

Inorganic Chemicals Industry

INORGANIC CHEMICALS INDUSTRY PROFILE

The global inorganic chemicals industry, estimated at US$ 2.4 trillion, is one of

the fastest growing sectors of the manufacturing industry. The industry growth exceeds

that of the manufacturing sector, despite the challenges of escalating crude oil prices and

demanding international environmental protection standards which are now adopted

globally. Pharmaceuticals and petrochemicals are the two biggest segments in chemicals

that account for approximately 26 per cent and 35 per cent respectively of the

overall industry size. Europe, is the largest consumer of chemicals in the world,

accounting for approximately half the global chemical consumption, USA consumes

approximately one fifth.

The global inorganic chemicals industry is being shaped by the following trends

that are impacting business models, processes and product segments of multinational

players.

Globalization

The global manufacturing footprint of MNCs is getting transformed, as

companies seek to gain proximity to consumer markets, raw material sources,

cheaper energy sources and lower tax regime in an effort to drive down costs and

safeguard profitability.

Consolidation

Mergers and acquisitions are increasingly prevalent and companies seek

economies of scale in manufacturing, logistics and R&D and to pave entry into new

markets, expanding the global reach.

Increased environment consciousness This is a global phenomenon, that is driving the industry to innovate and

modernize. Effluent disposal issues have resulted in research into cogeneration and up

gradation of Technology, having a healthy impact on costs and profitability.

APGCMS, RAJAMPET. 1


INDIAN INORGANIC CHEMICAL INDUSTRY

A SIGNIFICANT IN INDIA’S ECONOMY INDUSTRY STRUCTURE AND SEGMENTATION

Indian chemicals industry, which includes basic chemicals & its products,

petrochemicals, fertilizers, paints, gases and pharmaceuticals, is one of the oldest

industries in the country and plays an important role in its overall economic

development. Other features that set it apart, are the requirement for large capital for

set-up, high power consumption for production and a highly diversified product

range, covering more than 70,000 commercial products. The chemical industry

forms the backbone of the industrial and agricultural development of India, by

providing building blocks for downstream industries.

The chemical industry accounts for about 17.6 per cent of the output of India’s

manufacturing sector and about 3 per cent of the GDP. The industry output is estimated

at US$ 35 billion, with a total investment of approximately US$ 60 billion.

The Indian chemical industry is the 12th largest in the world and 3rd largest in

Asia, in terms of volume. It accounts for about 13 per cent of total exports and 8 per cent

of the total imports of India. During the last 5 years, exports of chemicals have

exceeded imports thereby resulting in a positive balance of trade, as against negative

balance in the nineties. The industry contributes about 18-20 per cent of total customs

and excise duties collection in India. India’s current per capita consumption of

chemicals is just a tenth of the world’s average, indicating the tremendous scope

for industry’s growth in India. The industry size is projected to more than double, to

reach US$ 80 – 100 billion by 2010.

The industry is highly fragmented, with close to 7000 firms developing multiple

products at dispersed locations. Western India accounts for half of the total Indian

chemical industry.

APGCMS, RAJAMPET. 2


Concentration of the inorganic chemical industry

Gujarat 53%Maharashtra 9%

Uttar Pradesh 6%Tamil Nadu 6%Madhya Pradesh 5%Punjab 4%others 17%

Industry Segmentation

The chemicals industry is broadly classified into basic chemicals, specialty

chemicals and knowledge chemicals. Basic chemicals have traditionally formed the bulk

of the chemicals industry in India and still account for 57 per cent of the output. The

industry is now evolving and developing with higher investments in R&D. As a result,

knowledge chemicals and specialty chemicals have grown and today occupy nearly 43

per cent of the industry.

Inorganic chemicals are those that are not carbon based. Typically, they are of

mineral origin. The chemicals produced by this industry are intermediate products that

are used as inputs in industrial and manufacturing processes.

The inorganic chemicals industry consists of two segments–basic inorganic

chemicals and alkaline chemicals. The chemicals in each segment are:

APGCMS, RAJAMPET. 3

Composition of Indian chemical industryBasic Chemicals 57%Speciality Chemicals 26%Knowledge Chemicals 17%


Basic Inorganic Chemicals

-Aluminum Fluoride

-Calcium Carbide

-Carbon Black

-Potassium Chlorate

-Sodium Chlorate

-Titanium Dioxide

-Red Phosphorus

Alkali chemicals

-Soda Ash

-Caustic Soda

-Liquid Chlorine

MARKET SIZE

The inorganic chemicals industry had an output of approximately 5.8 million

tonnes in 2006-07. Of this, alkaline chemicals contributed 5.26 million tonnes, or

nearly 90 per cent and basic inorganic chemicals contributed 0.6 million tonnes.

Among alkaline chemicals, soda ash is the largest segment, contributing to 40 per

cent of the output caustic soda has a 36 per cent share and liquid chlorine has 24

per cent.

Carbon black is the biggest segment in basic inorganic chemicals, with a share of nearly

71 per cent of the output. Calcium carbide with 16 per cent and titanium dioxide with 10

per cent, are the other significant segments.

APGCMS, RAJAMPET. 4


DOMESTIC PROD UCTION OF INORGAN IC CHEMICALS HAS BEEN GROWING

Production of inorganic chemicals has been growing at a CAGR of 4.4 percent between

FY’2002 and FY 2007. The output has gone up from 4.7 million tones in 2001-02 to 5.9

million tones in 2006-07. Alkaline chemicals have grown at a CAGR on 3.9 percent,

from 4.34 million tones to 5.26 million tones during this period. Basic inorganic

chemicals have grown at a CAGR of 10 per cent, from 374000 tonnes to 602000 tonnes.

As a result of faster growth, the share of inorganic chemicals has gone up, from 8 percent

to 10 percent.

EXPORTS AND IMPORTS OF INORGANIC CHEMICALS

Imports of inorganic chemicals into India have gone up, from 256,000

tonnes in 2001-02 to 842,000 tonnes in 2005-06, at a CAGR 34.7 per cent. Alkaline

chemicals have grown at 36.8 per cent CAGR and basic inorganic chemicals have grown

at 25.4 per cent CAGR.

There was a sudden growth in alkali chemicals imports in 2005-06, which was

contributed by a spurt in imports of soda ash.

Exports have followed a similar trend, with a growth of 24.2 per cent

CAGR between FY’02 and FY’06. Basic inorganic chemicals have grown at 31.4 per

cent CAGR and alkaline chemicals, at 21.1 per cent CAGR, during the period.

KEY PRODUCT SEGMENTS

CAUSTIC SODA

Production of caustic soda has been increasing at a CAGR of 4.9 per cent, from

1.56 million tonnes in 2001-02 to 1.91 million tonnes in 2006-07. Imports have been

declining over the past 4 years, after a sudden increase in 2002-03. Exports have had a

fluctuating trend.

APGCMS, RAJAMPET. 5


There are about 40 manufacturers of caustic soda in India. Caustic soda, finds

use in various applications, such as, finishing operations in textiles, manufacture of

soaps and detergents, control of pH (softening) of water for various applications and

general cleansing / bleaching applications. As such, demand for caustic soda is driven by

user industries such as, FMCG, textiles, food processing, paper and pulp, etc.

SODA ASH

Soda ash production in India has been growing at 2.5 per cent CAGR

from 1.83 million tones in 2001-02 to 2.08 million tones in 2006-07. Imports have

grown at 41.3 per cent CAGR between FY’02 and FY’06, largely due to a jump of 350

per cent between 2004-05 and 2005-06. Exports have more than doubled between FY’02

and FY’06, from 87,000 tonnes to 197,000 tonnes.

Glass manufacturing is the largest application for soda ash whether it is in the

production of containers, fiberglass insulation or flat glass for the housing, commercial

building, and automotive industries. Soda ash also is used to clean the air and soften

water. Household detergents and paper products are a few other common examples of

readily

Identifiable products using soda ash.

LIQUID CHLORINE

Liquid chlorine production in India has been growing at 6.1 per cent CAGR,

from 0.9 million tonnes in 2001-02 to 1.27 million tonnes in 2006-07. Imports have been

negligible,

and exports have fluctuated widely over the past 5 years.

Liquid chlorine is used primarily for various bleaching applications, across

paper and pulp, textiles and other industries.

APGCMS, RAJAMPET. 6


CARBON BLACK

Carbon black production has grown from 248,000 tonnes in 2001-02 to 422,000

tonnes in 2006-07, a CAGR of 11.2 per cent. The sector has a capacity of 455,000

tonnes. Both imports and exports have been increasing, imports from 16,300 tonnes in

FY’02 to 55300 tonnes in FY’06, at a CAGR of 35.6 per cent and exports from 36,900

tonnes in FY’02 to 97,000 tonnes in FY’06, at 27 per cent CAGR.

The most widespread use of carbon black is as a pigment the manufacture of

automotive tyres, industrial rubber, plastics and toners for printers.

SOURCES OF INORGANIC CHEMICALS

There are many different sources of raw materials for the manufacture of

inorganic chemicals. Very few of them are found in their elemental form. Sulfur is a

notable exception. It occurs in underground deposits and can be brought to the surface by

compressed air after it is melted by superheated steam. However, increasing quantities of

sulfur are recovered from petroleum and natural gas (where they occur as impurities).

Air contains molecular nitrogen and oxygen. They may be separated by

liquefaction and fractional distillation along with inert gases, especially argon. Salt or

brine can be used as sources of chlorine and sometimes bromine, sodium hydroxide, and

sodium carbonate, whereas metals such as iron, aluminum, copper, or titanium as well as

phosphors, potassium, calcium, and fluorine are obtained from mineral ores. Saltpeter

was once an important source of nitrogen compounds, but today most ammonia and

nitrates are produced synthetically from nitrogen gas in the air.

Recovery and recycling provide increasing amounts of some metals. As

environmental concerns increase, these operations will probably become an important

source of materials used in the manufacture of certain inorganic chemicals.

APGCMS, RAJAMPET. 7


KEY USER INDUSTRIES

The inorganic chemicals industry produces intermediate products that are used as

inputs for several user industries. Hence, the demand for chemicals will depend on the

demand for the products in whose production they are used. In this context, it is

pertinent to look at some of the key user segments for inorganic chemicals and assess the

potential demand for those products. Five major segments are discussed here paints,

glass, automotive, paper and detergents/soaps.

PAINTS INDUSTRY

The Indian paint industry is divided into two segments decorative and industrial.

The market is highly fragmented, with 25 large and medium players and about 2,000

unorganized players. Asian Paints is the market leader in the industry, with a market

share of 37 per cent, followed by Kansai Nerolac and Berger Paints, both accounting for

18 per cent and 15 per cent, respectively. The paint industry has shown a compounded

annual rate of growth (CAGR) of 28 per cent over the past five years. The continued

growth in the demand from the housing sector, backed by low home finance rates,

augurs well for the decorative segment. The household construction industry is

expected to grow at 8 per cent in the next five years. Demand will be generated

through the new constructions, coming in housing and industries. The decorative

segment, spurred by these trends, is expected to grow at CAGR of 30-32 per cent

over the next couple of years.

The automobile sector, accounts for the lion’s share of industrial paints demand.

The growing demand in consumer durables is expected to improve the demand in

powder coatings. Overall, the industrial paints segment is expected to grow at 18-20 per

cent in the coming years.

GLASS INDUSTRY

The glass industry in India manufactures almost a complete range of glass items.

Glass products are manufactured both in the organized and small-scale sector and the

APGCMS, RAJAMPET. 8


major segment of tiny and small-scale sector is concentrated in Ferozabad, Uttar

Pradesh. However, the large units are spread over throughout the country.

The Indian glass industry has been growing across all segments. Sheet and Float

glass have recorded the fastest growth at nearly 67 per cent CAGR between 2001 and

2005. This growth has been driven primarily by India’s booming automotive and

construction sectors. Other glassware such as bottles and fiberglass has recorded more

modest growth rates, of about 5 to 6 per cent CAGR over the same period.

Exports of glassware from India have been growing at a rate of 17 per cent

CAGR over the period 2001-02 to 2006-07. From a level of US$ 139 million in 2001,

exports have increased to US$ 307 million by 2007.

AUTOMOTIVE INDUSTRY

The Indian automotive market has been one of the key drivers of the economy.

The domestic market has been growing at 14 per cent CAGR from FY’02 to

FY’07. All segments of the vehicles market are growing. Exports of vehicles have been

growing at over 40 per cent CAGR during the same period. Growth in vehicle sales

has been complemented by that in auto components. The components sector has

been growing at 22 per cent CAGR and components exports at 33 per cent CAGR over

FY ‘02 to FY ‘07.

Growth in the automotive industry is based on several fundamental and long

lasting changes in the Indian economy the primary drivers being:

Growth in GDP of close to 8 per cent a year, which is expected to be

stabilize.

Shift in demographics – rising income levels, emergence of young consumers

and increasing consumerism.

Improvement in road infrastructure.

Increasing availability of vehicle financing.

Based on these drivers, the growth in automobiles is expected to continue at almost

the same pace over the coming years.

APGCMS, RAJAMPET. 9


PAPER INDUSTRY

An improvement in the standard of living of Indians, especially, in urban areas

has resulted in a gradual shift towards better quality of papers, hence increasing

the demand of high-end varieties of paper. Further, with rising exports and keeping

in view the current trend of outsourcing, foreign publishers have started

outsourcing Printing and publishing jobs to India. This will significantly Increase the

demand for different varieties of paper.

DETERGENTS/SOAPS INDUSTRY

The soaps and detergents industry include laundry soaps, Synthetic detergents,

and toilet soaps including bathing bars. The production of soap during 2005-2006 was 4,

86,533 tonnes and detergents was 9, 28,222 tonnes. The export and import of soaps

during 2005-06 was 15,344 tonnes and 35,579 tonnes. The export and import of

detergents during 2005-06 was 32,342.02 tonnes and 20,547 tonnes, respectively.

GOVERNMENT POLICIES SUPPORTING THE INDUSTRY

With the chemical industry now having reached a stage of maturity, this sector

has been to a large extent de-regulated. Licensing requirements have also been done

away with, except for hazardous chemicals and a few specified drugs.

Entrepreneurs are allowed to set up chemical industries following the Industrial

Entrepreneurs’ Memorandum (IEM) route.

Tariff levels have been reduced substantially for most chemicals

andpetrochemical products and majority of the chemical items can now be freely

imported or exported through simplified procedures.

100 per cent FDI under the automatic route is allowed for all chemical items

except hazardous chemicals, where Government/FIPB approval and license to

manufacture are required.

APGCMS, RAJAMPET. 10


Plans are underway to set up port based chemical parks in SEZs have been

planned to use the output of chemical parks.

MARKET & OPPORTUNITIES

There was a spurt in inorganic chemical exports in 2004-05, mainly due to

increase in exports of carbon black, titanium dioxide and aluminium fluoride.

The industry is reaching capacity saturation levels in some of the key segments,

which indicates that imports could increase further unless capacity is added urgently.

The capacity utilization across different segments in 2006-07 is given in the table –

Carbon black, soda ash and caustic soda are approaching full capacity utilization levels.

POTENTIAL LOCATIONS FOR INVESTMENT

Access to raw materials and power are key requirements for the chemicals sector.

Most of the key chemicals manufacturing units in India have been clustered in Western

India, in the states of Gujarat and Maharashtra. As these states, also have among the best

infrastructure facilities in India, in the states, also have among the best infrastructure

facilities in India and provide easy access to major ports, these form India and provide

easy access to major ports, these form the most attractive locations for the chemicals

industry. Andhra Pradesh is another potential location, as it has a flourishing chemicals

industry base as well.


Chemical Capacity UtilizationCarbon Black 93%Soda Ash 88%Caustic Soda 87%Liquid Chlorine 80%Aluminium Fluoride 75%Calcium Carbide 61%Titanium Dioxide 58%


GUJARAT

FACTOR CONDITIONS

Proactive policies of the government and capability driven are supporting factors for driving this industry.

The state accounts for 34.5 per cent of the total sales by industries. The state has accounted for investments worth US$ 32.57 billion in this sector, aggregating 50.3 per cent of the total investment from 1991.

The state has vast reserves of limestone, bauxite and natural gas, which has enabled the mineral-based industry to flourish.

The state boasts of abundant raw-material, good infrastructure and skilled man-power.

The states SSIs have had impressive performance.

The state has vast reserves of limestone, bauxite and natural gas, which has enabled the mineral-based industry to flourish.

The state boasts of abundant raw-material, good infrastructure and skilled man-power.

The exports of chemicals have accounted for 30 per cent of the total exports for the year 2002-03.

In the past, international firms have investment in the state in the chemicals segment.

The state offers quality manpower, good infrastructure facilities such as, power, water supply, ports and gas grid.

ANDHRA PRADESH

FACTOR CONDITIONS

The state has high literacy rates and the presence of good vocational training institutions have ensured that the state has well qualified manpower.

Proactive policies along with capabilities have made the state attractive in the chemicals and pharmaceuticals industry.



The state derives close to around 40 per cent of its revenues from the chemicals sector. This industry is growing at a healthy rate, when compared to other sectors in state.

Majority of the FDI’s in the state has been in chemicals & petrochemicals sector (as on Feb. 2004).

The state supports the chemical industry with excellent research institutes.`

The contribution of exports by drugs & pharmaceuticals, chemicals & allied products has been 17.8 per cent during the year 2002-03.

MAHARASHTRA

FACTOR CONDITIONS

Chemicals, petrochemicals, oil & gas contribution around 44 per cent of the total NVA (Net Value Added).

The state contributes 27.4 per cent of the country’s chemicals, petrochemicals and oil & gas output.

The chemical industry is expected to grow 15 per cent per annum till 2010 and thus, present ample opportunities for the state.

The state accounts for 18.2 per cent of the countries employment in the sector.

The upstream and downstream linkages for the industry are the strongest in the state.

The pharmaceuticals sector accounts for 40 per cent of country’s output.

The upstream and downstream linkages for the industry are the strongest in the state.

12 percent of the total exports have been contributed by the chemicals and petroleum crude for the 2002.



Income details

Inorganic Chemicals

Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Total Income2587.3

42763.2

33200.8

13261.3

53672.9

33687.0

5

Income from financial services 69.29 57.86 38.92 39.57 56.83 47.17

Fund based financial services income 41.99 48.07 34.16 35.77 41.79 33.18

Interest income 37.99 38.76 30.38 32.5 37.96 26.76

Dividends 2.74 7.88 3.33 2.89 3.62 6.22

Income from leasing, etc. 1.26 1.43 0.45 0.38 0.21 0.2

Fee based financial services income 0.29 0 0 0.13 0.06 0.02

Income from treasury operations 27.01 9.79 4.76 3.67 14.98 13.97

Profit on sale of investments 26.78 5 2.16 2.76 7.79 0.92

Profit on long term investment 1.88 3.05 0.54 0.02 5.09 0.19

Profit on current investment 0.15 1.17 0.03 0.03 0.03 0

Income from other treasury operations 0 0.46 1.62 0 0 0.35

Gain relating to forex transactions 0.23 4.33 0.98 0.91 7.19 12.7

Income from non-financial services 49.27 106.04 55.39 56.43 92.9 186.89

Other income 15.77 12.23 12.2 19.31 16.26 18.14

Prior period & extra-ordinary income 28.41 30.12 182.92 70.87 48.87 25.17

Prior period income 20.96 25.63 96.91 16.43 25.36 15.14

Cash prior period income 3.07 1.67 10.41 2.62 2.12 0.48

Bad debts recovered 0.12 0.06 0.16 0.11 0.06 0.03

Residual and combined cash prior period income 2.95 1.61 10.25 2.51 2.06 0.45

Non-cash prior period income 17.89 23.96 86.5 13.81 23.24 14.66

Provisions written back 16.99 23.39 85.01 10.93 22.98 14.32

Residual and combined non cash prior period income 0.9 0.57 1.49 2.88 0.26 0.34

Extra-ordinary income 7.45 4.49 86.01 54.44 23.51 10.03

Profit on sale of fixed assets 4.37 0.43 23.41 5.71 14.78 5.3

Insurance claims 0.83 0.91 3.12 9.08 1.17 1.88

Gain on change in accounting policies 0 0 0 0 0 0

No of companies 71 80 80 78 71 61



Expenses details

Inorganic Chemicals


Total expenses2547.1

72700.8

53033.2

33095.5

53595.7

63553.8

8Fund based financial services expenses 116.65 84.4 87.03 96.91 116.61 133.65Interest paid 116.64 84.4 86.78 96.75 116.26 133.2Financial charges on instruments 0 0 0 0 0 0Other fund based financial services expenses 0.01 0 0.25 0.16 0.35 0.45Fee based financial services expenses 8.13 8.79 9.96 8.35 13.79 15.24Bill discounting charges 0.28 0.18 0.23 0.29 0.45 0.8Bank charges, guarantee fees, etc. 7.85 8.61 9.73 8.06 13.34 14.44Treasury operations expenses 3.81 2.48 31 1.68 0.87 1.34Loss on sale of investments 2.5 1.28 30.16 0.1 0.55 0.66Loss on sale of long term investment 2.11 0.09 29.7 0 0 0Loss on sale of current investment 0.19 0 0 0 0 0.02Loss relating to forex transactions 1.31 1.2 0.84 1.58 0.32 0.68Compensation to employees 234.39 270.69 263 261.47 291.29 195.72Indirect taxes 295.3 302.26 344.77 349.77 393.62 398.8Rent & lease rent 9.9 8.24 8.61 6.97 8.04 8.85Repairs & maintenance 55.08 60.81 67.04 77.16 85.08 77.59Insurance premium paid 10.81 9.87 11.55 11.09 13.21 10.6Outsourced professional jobs 4.72 6.64 5.89 8.11 8.76 12.45Advertising expenses 1.34 1.37 1.56 1.29 1.28 0.5Marketing expenses 36.25 32.54 32.09 35.62 40.64 43.95Distribution expenses 58.37 75.56 71.84 69.35 80.46 87.38Directors' fees 0.12 0.22 0.26 0.29 0.4 0.61Travel expenses 11.99 12.01 12.32 13.06 14.22 14.49Communications expenses 4.91 5.17 5.12 4.5 4.53 3.96Printing & stationery expenses 2.26 2.22 2.43 2.39 2.24 1.56Royalties, technical know-how fees, etc. 0.7 0.64 0.63 0.75 0.75 0Outsourced jobs 10.97 12.31 14.02 7.88 9.84 9.88Miscellaneous expenditure 50.34 47.36 54.85 63.22 69.23 68.43Provisions & contingencies 6.36 45 66.92 6.77 8.6 2.02Provision for NPAs 0 0 0 0 0 0Provisions for dimunition in investments 1.07 0.08 59.55 0 1.59 0.22Provisions for unspecified contingencies 0.98 0 2.84 0.53 0.24 0.19Depreciation (net of transfer from reval. reserves) 101.24 106.05 112.31 113.82 131.17 136.07Amortisation 9.32 3.81 2 1.14 0.9 1.15Write-offs 8.92 5.89 6.26 3.18 9.91 4.16Less: Expenses capitalised 2.46 3.47 6.62 11.66 10.52 8.29Less: DRE & expenses charged to others 0.09 0 0.32 2.74 1.57 1.93Prior period and extra-ordinary expenses 51.06 24.98 12.63 22.56 28.3 27.06Prior period expenses 37.1 13.38 4.57 15.51 19.03 10Cash prior period expenses 2.79 5.03 3.8 9.87 10.41 9.75Prior period taxes 2.47 0.71 0.41 7.76 8.58 4.13Residual and combined cash prior period expenses 0.32 4.32 3.39 2.11 1.83 5.62Non cash prior period expenses 34.31 8.35 0.77 5.64 8.62 0.25Prior period depreciation 0 0.01 0 0.03 5.14 0Residual and combined non cash prior period expenses 34.31 8.34 0.77 5.61 3.48 0.25Extra-ordinary expenses 13.96 11.6 8.06 7.05 9.27 17.06Loss on impairment of assets 0 0 0 0 1.55 0Loss on sale of assets 2.49 11.6 2.47 2.19 4.46 11.86Tax on extra-ordinary income 0 0 0 0 0 0Loss on change in accounting policies 0 0 0 0 0 0Provision for direct tax 66.41 58.71 69.74 58.51 75.74 80.41Corporate tax 50.33 41.81 46.62 44.82 51.82 55.05Deferred tax 17.63 18.27 32.26 17.48 28.31 26.8Less: Deferred tax assets / credit 1.84 1.53 9.22 6.99 7.12 3.9



Other direct taxes 0.29 0.16 0.08 3.2 2.73 2.46Fringe benefit tax 0 0 0.04 3.17 2.7 2.43Profit /surplus after tax 49.72 48.72 170.89 167.57 110.04 121.21No of companies 71 80 80 78 71 61

Assets

Inorganic Chemicals




Gross fixed assets2472.3

92732.8

32914.7

23112.9

23404.2

63424.6

4

Land & building 372.27 406.81 429.03 441.52 472.88 469.66

Plant & machinery1811.0

5 1940.12045.5

82092.9

92384.2

52465.4

8

Transport & comm. equipment/infrastructure 41.86 47.27 56.36 55.42 64.55 55.53

Furniture,amenities & other fixed assets 61.21 67.05 78.07 89.23 91.44 90.11

Capital work-in-progress 153.46 227.44 249.81 379.48 343.06 295.68

Intangible assets 22.72 26.13 30.6 29.35 29.66 30.31

Net pre-operative expenses pending allocation 9.61 17.82 19.51 20.03 26.87 26.22

Net lease reserve adjustment 0 -9.94 0 0 0 0

Less: Cumulative depreciation1038.1

91153.6

81203.6

41207.1

61295.1

81214.2

1

Less: Arrears of depreciation 3.34 4.09 4.71 5.13 0 0

Net fixed assets1430.8

61565.1

21706.3

71900.6

32109.0

82210.4

3

Investments 185.84 154.11 239.55 189.38 207.64 209.58

Equity shares 129.91 127.37 138.36 99.07 131.53 133.96

Preference shares 10 13.75 123.47 120.16 120.16 120.58

Mutual funds 17.09 12.65 16.1 5.82 7.36 12.97

Debt instruments 18.08 1.57 2.77 2.97 4.4 1.54

Approved securites (slr/statutory req.) 0 0 0 0 0 0

Assisted companies 0 0 0 0 0 0

Others 13.62 1.2 19 21.5 5.92 1.93

Less: Provision for dimunition in value of investments 2.86 2.43 60.15 60.14 61.73 61.4

Group companies 130.8 118.17 236.24 190.44 218.29 218.28

Non-group companies 44.27 37.12 44.35 35.9 44.12 50.44

Market value of quoted investments 48.11 34.48 69.79 75.24 70.29 77.14

Deferred tax assets 59.62 62.98 44.97 37.18 28.59 24.66

Current assets1497.7

11660.4

71688.4

61659.3

41875.1

91494.7

7

Cash & bank balance 332.61 435.89 403.43 378.26 457.79 166.03

Inventories 401.56 409.55 462.07 470.99 555.47 500.04

Receivables 572.29 588.8 571.01 643.76 692.11 761.71

Expenses paid in advance 191.25 226.23 251.95 166.33 169.82 66.99

Loans & advances 0 0 0 0 0 0

Deferred revenue expenditure 16.68 11.15 10.83 9.35 11.64 6.17

Total assets3281.8

83647.2

13806.3

23925.5

54419.4

44066.9

9

No of companies 71 80 80 78 71 61

Liabilities

Inorganic Chemicals




Net Worth1373.7

41407.0

11581.5

11670.2

11877.3

7 1543.6Authorised capital 637.65 656.65 665.5 683.15 666.15 619.3Issued equity capital 412.66 420.66 429.21 370.76 396.21 365.23Paid up equity capital (net of forfeited capital) 401.3 412.86 418.93 355.49 391.16 361.89Forfeited equity capital 1.69 1.69 1.69 1.65 1.65 1.65Paid up preference capital (net of forfeited capital) 103.52 63.52 109.82 135.54 232.25 277.13Capital contibution, suspense and application money 3.63 65.29 28.41 42.85 19 19.75

Reserves & surplus 863.6 863.651022.6

61134.6

81233.3

1 883.18

Free Reserves 935.62 987.281052.1

31107.6

51210.6

3 884.25Security premium reserves (Net of deductions) 218.7 188.4 199.56 185.45 212.07 235.17Other free reserves 716.92 798.88 852.57 922.2 998.56 649.08Specific reserves 181.37 190.68 199.47 164.85 176.31 175.95Revaluation reserves 45.4 39.64 61.42 52.02 47.85 42.63Less Accumulated losses 298.79 353.95 290.36 189.84 201.48 219.65Deposits 0 0 0 0 0 0

Total borrowings 894.541051.4

41108.9

41198.3

81392.9

41399.0

8Bank borrowings 352.01 556.98 672.46 837.93 930.69 987.11Short term bank borrowings 246.27 258.1 286.98 315.45 383.35 434.38Long term bank borrowings 105.74 298.88 385.48 522.48 547.34 552.73Financial institutional borrowings 181.78 164.68 105.36 63.78 88.94 73.16Central & state govt. (usually sales tax deferrals) 3.23 3.13 3.13 3.13 3.13 3.1Debentures / bonds 45.42 43.53 31.23 7.01 7.29 11.58Convertible 0 0 3.37 3.37 1.68 0Non-convertible 45.42 43.53 27.86 3.59 5.56 11.23Fixed deposits 63.57 47.47 49.85 50.44 46.5 51.37Foreign borrowings 6.36 3.43 22.99 15.46 162.37 142.72Of which : euro convertible bonds 0 0 0 0 92.38 79.94Borrowings from corporate bodies 101.27 86.52 71.2 112.33 68.1 50.38Group / associate cos. 19.73 22.09 21.86 29.07 24.82 11.22Borrowings from promoters / directors 23.14 23.6 22.07 17.21 12.27 22.2Commercial paper 5 5 0 0 0 0Hire purchase borrowings 2.88 3.95 4.33 4.28 4.79 2.78Deferred credit 52.14 55.81 58 41.58 34.25 31.68Other borrowings 57.74 57.34 68.32 45.23 34.61 23

Secured borrowings 616.56 780.61 827.13 937.92 10461070.1

3Unsecured borrowings 277.98 270.83 281.81 260.46 346.94 328.95Current portion of long term debt 47.42 41.44 41.28 48.79 102.19 89.54

Current liabilities & provisions 843.581006.4

9 936.41 878.08 956.95 915.76Sundry creditors 374.86 394.79 443.44 450.33 464.41 602.35Acceptances 6.11 13.33 18.81 18.74 38.57 39.06Deposits & advances from customers and employees 27.86 27.78 32.63 46.01 54.87 51.59Interest accrued 108.59 104.4 44.94 16.32 15.07 13.11Share application money 0.24 0.02 0.02 0.02 0.02 0.02Other current liabilities 114.01 148 117.74 133.72 129.06 58.09Provisions 211.91 318.17 278.83 212.94 254.95 151.54Deferred tax liability 170.02 182.27 179.46 178.88 192.18 208.55

Total liabilities3281.8

83647.2

13806.3

23925.5

54419.4

44066.9

9

Net Worth (net of reval & DRE)1311.6

61356.2

21509.2

61608.8

41817.8

8 1494.8

Contingent liabilities 360.99 632.55 850.521405.0

51229.3

4 450.94No of companies 71 80 80 78 71 61



Profits

Inorganic Chemicals


PBT 116.13 107.43 240.63 226.08 185.78 201.62

Provision for direct tax 66.41 58.71 69.74 58.51 75.74 80.41

Corporate tax 50.33 41.81 46.62 44.82 51.82 55.05

Deferred tax 17.63 18.27 32.26 17.48 28.31 26.8

Less: Deferred tax assets / credit 1.84 1.53 9.22 6.99 7.12 3.9

Other direct taxes 0.29 0.16 0.08 3.2 2.73 2.46

Fringe benefits tax 0 0 0.04 3.17 2.7 2.43

PAT 49.72 48.72 170.89 167.57 110.04 121.21

PAT (as reported by the co.) 49.59 52.81 171.4 170.8 111.4 121.43Prior period and extra-ordinary income 28.41 30.12 182.92 70.87 48.87 25.17Prior period and extra-ordinary expenses 51.06 24.98 12.63 22.56 28.3 27.06Net prior period and extra-ordinary items 22.65 -5.14 -170.29 -48.31 -20.57 1.89

PBPDTA net of P&E 255.7 257.15 251.57 299.5 305.88 342.75

PBPT net of P&E 145.14 147.29 137.26 184.54 173.81 205.53

PBT net of P&E 138.78 102.29 70.34 177.77 165.21 203.51

PAT net of P&E 72.37 43.58 0.6 119.26 89.47 123.1

Distribution of profits

PBPDTA 0.01 0.01 0.01 0.01 0.01 0.01

Provision 0.00027290.0017156

60.0015863

10.0001946

50.0002634

4 5.93E-05

Depreciation & Amortisation0.0047440

50.0041884

90.0027096

70.0033052

50.0040456

4 0.0040257

Tax 0.00284960.0022383

60.0016531

60.0016822

40.0023201

10.0023590

3

PAT0.0021334

50.0018574

90.0040508

70.0048178

60.0033708

10.0035560

1

Non--provisions for 25.69 35.16 11.38 16.95 20.41 19.49

Diminution in investment 0 0 0 0 0 0

Sundry debtors 3.09 0.47 0.57 0.16 1.08 0.83

Loans and advances including npas 21.76 24.23 0.19 0.18 0.1 0Loans and advances to group companies 0 0 0 0 0 0

Interest expenses 0.56 2.49 2.47 16.43 18.45 18.06

Power expenses 0 0 0 0 0 0

Gratuity 0 7.97 7.97 0 0.6 0.6

Others 0.28 0 0.18 0.18 0.18 0

No of companies 71 80 80 78 71 61



Investments

Inorganic Chemicals

Rs. Crore (Non-Annualised)Mar-

03Mar-

04Mar-

05Mar-

06Mar-

07Mar-

08

Investments 185.84 154.11 239.55 189.38 207.64 209.58

In equity shares 129.91 127.37 138.36 99.07 131.53 133.96

Group companies 113.3 99.92 111.7 70.72 98.57 98.14

Other than group companies 16.61 27.45 26.66 28.35 32.96 35.82

In preference shares 10 13.75 123.47 120.16 120.16 120.58

Group companies 10 13.75 123.47 119.72 119.72 120.14

Other than group companies 0 0 0 0.44 0.44 0.44

In debt instruments 18.08 1.57 2.77 2.97 4.4 1.54

Other than governement debentures/bonds 18.07 1.52 2.66 1.29 3.36 1.21

Group companies 7.5 0 0.32 0 0 0


In bonds/debentures of government/local bodies 0.01 0.05 0.11 1.68 1.04 0.33

In mutual funds 17.09 12.65 16.1 5.82 7.36 12.97

Group companies 0 4.5 0.75 0 0 0


In others 13.62 1.2 19 21.5 5.92 1.93

Less: Provision for dimunition in value of investments 2.86 2.43 60.15 60.14 61.73 61.4

Non-provisioning of dimunition in investments 0 0 0 0 0 0

Book value of quoted investments 40.19 30.74 43.22 34.01 39.53 39.26

Market value of quoted investments 48.11 34.48 69.79 75.24 70.29 77.14

Marketable securities 54.44 37.04 52.62 36.99 44.3 47.24

Investment lodged as security 0.66 0.58 20.83 20.29 21.1 20.47

No of companies 71 80 80 78 71 61



TOOLS OF ANALYSIS

Correlation

Coefficient of correlation is independent of change of scale and origin of the

variable X and Y. By change of origin we mean subtracting some constant from every

given value of x and y by change of scale. We can divide or multiply every value of x and

y by some constant.

_ _ ∑(X-X) (Y-Y)

r = ------------------------- _ _

√∑(X-X) 2 √∑(Y-Y) 2

Trend Analysis:

The method of least squares may be used either to fit a straight line trend

is represented by the equation

Yc = a+bx

In order to determine the values of the constants a and b the following to

normal equations are to be solved.

ΣY = Na+bΣX

ΣXY = aΣX+bΣX²



COST STRUCTURE

Table no: 1S. No

Particulars2003 2004 2005 2006 2007 2008

1 Sales 2473.87 2663.02 2966.77 3131.60 3550.97 3596.57

2 Raw Material & spares

924.76 1028.08 1294.97 1357.97 1621.49 1676.26

3 Power ,Fuel &water charges

378.80 341.23 378.59 430.17 468.96 364.19

4 Employee compensation

234.39 270.69 263 261.47 291.29 195.72

5 Interest paid 116.64 84.4 86.78 96.75 116.26 133.2

6 Depreciation 101.24 106.05 112.31 113.82 131.17 136.07

7 Value added(1)-(2)-(3)

1170.31 1293.71 1293.21 1343.46 1460.52 1556.12

8 Fixed charges(4)+(5)+(6)

452.27 461.14 462.09 472.04 538.72 464.99

9 Fixed charges / Value added(8/7)

0.386 0.356 0.357 0.351 0.368 0.298

INTERPRETATION

From the above table it is observed that the cost structure of the inorganic industry

is fluctuating because of the fluctuations occurred in fixed charges and value added.



RAW MATERIAL PRODUCTIVITY

The relationship between input & output is called productivity. Net sales Raw material productivity = ---------------------------------- Raw materials expenses Table no: 2

YEAR NET SALES(rs in crs)

RAW MATERIAL

PRODUCTIVITY RATIO

2003 2473.87 784.49 3.1532004 2663.02 925.92 2.8262005 2966.77 1144.85 2.5912006 3131.6 1207.88 2.5922007 3550.97 1456.40 2.4382008 3596.57 1553.962 2.314

Graph No: 2.1

2003 2004 2005 2006 2007 20080

0.51

1.52

2.53

3.53.153 2.871 2.591 2.592 2.3142.438

Raw material productivity

YEARS

RA

TIO

INTERPRETATION

From the above table it is clear that the raw material productivity of the inorganic

industry has been continuously decreasing. It is high in the year 2003 because of

purchasing of raw material and sales are very high. In the year 2008 raw material

productivity is very low.



OPERATING PERFORMANCE

Operating performance shows the relationship between profit before interest and tax and net assets. EBIT Operating performance = ----------------- Net Assets Table no: 3

YEAR EBIT NET ASSETS OPERATING PERFORMANCE

2003 232.13 3281.88 0.0702004 191.83 3647.21 0.0522005 327.66 3806.32 0.0862006 322.99 3925.55 0.0822007 302.99 4419.44 0.0682008 335.27 4066.69 0.082

Graph No: 3.1

2003 2004 2005 2006 2007 20080

0.02

0.04

0.06

0.08

0.1

0.07

0.052

0.086 0.0820.068

0.082

Operating performance

YEARS

RA

TIO

INTERPRETATION

From the above table it is clear that the operating performance of the inorganic

chemicals industry has been fluctuating. It is high in the year 2005 because of the EBIT is

increased and net assets decreased. In the year 2006 it is very low due to increase of the

EBIT



FINANCIAL PERFORMANCE

Financial performance shows the relationship between profit after tax and net

worth.

PAT Financial performance= -------------- Net worth

Table no:4YEAR PAT NET WORTH FINANCIAL

PERFORMANCE

2003 49.72 1373.74 0.0362004 48.72 1407.01 0.0342005 170.89 1581.51 0.1082006 167.57 1670.21 0.1002007 110.04 1877.37 0.0582008 121.21 1543.60 0.078

Graph No: 4.1

2003 2004 2005 2006 2007 20080

0.02

0.04

0.06

0.08

0.1

0.12

0.036 0.034

0.1080.1

0.058

0.078

Financial performance

YEARS

RA

TIO

INTERPRETATION

From the above table it is clear that the financial performance of the inorganic

chemicals industry has been fluctuating. It is high in the year 2005 because the PAT &

net worth are increased when compared with other years .In the year 2004 it is low.

NET PERFORMANCE



Net performance shows the relationship between Net profit to Total assets Net profit Operating performance = ----------------- Total Assets Table no: 5

YEAR NET PROFIT TOTAL ASSETS

NET PERFORMANCE

2003 49.72 3281.88 0.0152004 48.72 3647.21 0.0132005 170.89 3806.32 0.0442006 167.57 3925.55 0.0422007 110.04 4419.44 0.0242008 121.21 4066.99 0.029

Graph No: 5.1

2003 2004 2005 2006 2007 20080

0.01

0.02

0.03

0.04

0.05

0.015 0.013

0.044 0.042

0.0240.029

Operating performance

YEARS

RA

TIO

INTERPRETATION

From the above table it is clear that the net performance of the inorganic

chemicals industry has been fluctuating. It is high in the year 2005 because of the net

profit is increased and total assets decreased. In the year 2004 it is very low.

Growth trend in total income



Growth trend in income represents how much percentage of income is either

increased or decreased at current year for growth trend in income we are using growth

trend formula as

Pn = Po (1+r)n

Here Pn = Current year Po =base year r = growth rateTable no: 6

year Total income Trend in(percentages)

2003 2587.34 ------2004 2763.23 0.068

2005 3200.81 0.158

2006 3261.35 0.018

2007 3672.93 0.126

2008 3687.05 0.003

Graph No: 6.1

2003 2004 2005 2006 2007 20080

0.020.040.060.08

0.10.120.140.160.18

0

0.068

0.158

0.018

0.126

0.003

Growth trend in total income

YEARS

Interpretation From the above table it is observed that the growth trend of the inorganic chemicals

industry is fluctuating. In the year 2005 it is high because of total income increased. in

the 2008 it is low.

TREND IN SALES:



The method of least squires may be used either to fit a straight line trend

Is represented by the equation

Yc = a+bx

In order to determine the values of the Constance a & by the following to normal

equations are to be solved

∑Y= Na+b∑X ∑XY= a∑X +b∑X2

Table no: 7YEARS SALES

2003 2473.87

2004 2663.02

2005 2966.77

2006 3131.6

2007 3550.97

2008 3596.57

Estimated sales for 2009 3908

Estimated sales for 2010 4149.2

Estimated sales for 2011 4390.4

Graph No: 7.1

Interpretation

The estimated sales for 2009 is 3908The estimated sales for 2010 is 4149.2The estimated sales for 2011 is 4390.4TREND IN INCOME:

The method of least squires may be used either to fit a straight line trend

APGCMS, RAJAMPET.

360038004000420044004600

1 2 3

sales

sales

28


Is represented by the equation

Yc = a+bx

In order to determine the values of the Constance a & by the following to normal

equations are to be solved

∑Y= Na+b∑X ∑XY= a∑X +b∑X2

Table no: 8

YEARS INCOME

2003 2587.34

2004 2763.23

2005 3200.81

2006 3261.35

2007 3672.93

2008 3687.05

Estimated income for 2009 4024.29



Graph No: 8.1

INTERPRETATION:

The estimated income for 2008 is 812.77.The estimated income for 2009 is 812.83.The estimated income for 2010 is 851.13.CORRELATION BETWEEN TOTAL INCOME vs. TOTAL EXPENSES

APGCMS, RAJAMPET.

3600

3800

4000

4200

4400

4600

1 2 3

Income

Income

29


Table no: 9 (Rs. In Crores)

YEAR TOTAL INCOME TOTAL EXPENSES

2003 2587.34 2547.17

2004 2763.23 2700.85

2005 3200.81 3033.23

2006 3261.35 3095.55

2007 3672.93 3595.76

2008 3687.05 3553.88

Correlation between total income and total expenses is = 0.993

INTERPRETATION:

The Coefficient of correlation between total income and total expenses is

showing positive sign for the investors. The 100 % change in total income will lead to

99.30% change in total expenses.

CORRELATION BETWEEN TOTAL EXPENSES vs. PROFIT



Table no:10 (Rs. In Crores)

YEAR TOTAL EXPENSES PROFIT

2003 2547.17 49.72

2004 2700.85 48.72

2005 3033.23 170.89

2006 3095.55 167.57

2007 3595.76 110.04

2008 3553.88 121.21

Correlation between total expenses and profit is = 0.562

INTERPRETATION:

The Coefficient of correlation between total expenses and profit is

showing positive sign for the investors. The 100 % change in total expenses will lead to

56.20% change in profit.

CORRELATION BETWEEN TOTAL INCOME vs. TOTAL ASSETS

Table no: 11 (Rs. In Crores)



YEAR TOTAL INCOME TOTAL ASSETS

2003 2587.34 1430.86

2004 2763.23 1565.12

2005 3200.81 1703.37

2006 3261.35 1900.63

2007 3672.93 2109.08

2008 3687.05 2210.43

Correlation between total income and total assets is = 0.977

INTERPRETATION:

The Coefficient of correlation between total income and total assets is

showing positive sign for the investors. The 100 % change in total income will lead to

97.70% change in total assets.

SWOT ANALYSIS OF INORGANIC CHEMICAL INDUSTRY

STRENGTHS



A diversified manufacturing base having a capacity to produce quality

chemicals from World class plants.

Vibrant downstream industries in different segments.

Competitive Core Industries essential for the development of chemical

industries.

Capability to produce World class end products.

Strong presence in the export market in sub segments such as Dyes, Pharma

and agrochemicals.

Large domestic market.

Major raw material component sources within the country

Good R&D base and quality human resources.

WEAKNESS

Cost of powerVery high cost of power, unreliability of supply and frequent interruption.

Transmission and distribution losses are very high.

Cost of financeInorganic chemical industry is highly capital intensive, cost of finance in

India is very high; interest rates are 14% -15% p. a. as compared to 2% to 6%

prevailing in developed countries.

InfrastructureIndia ranked 55th in infrastructure development in the global

competitiveness report 1999. Infrastructure facilities are not of world class.

Transport and communications are complex resulting in delays and slow

movement of goods. In-adequate port facilities result in high demurrage costs.

For example turn around time for Vessels is an average of eight days in India

as against one or two days in Singapore.

Labour LawsLabour & Industrial relation laws at present do not allow flexibility in

deployment of labour. This discourages modernization and investment in



technological changes and eventually leads to industrial sickness thus

adversely affecting workers as well.

OPPORTUNITIES

A decade of economic reforms has tested the resilience of the Indian Chemical

Industry. Individual enterprises have realised their weaknesses and are gearing

up to face the new challenges. Success stories in dyes and Agrochemicals have

boosted the confidence to take on global competition squarely.

On WTO front, India should seek greater market access. The markets in the

developed countries are opening up and India can take advantage of this. The

signing of the IPR protocol gives an opportunity to create Intellectual capital

by investment in as well as R&D collaboration with national laboratories. A

large number of products are going off Patent. India can pursue the possibility

of producing these on a more economic scale as compared to other countries.

In certain categories of chemicals, we do have advantage for exports (Dyes,

Pharma, and Agrochemicals). By creating strategic alliances with countries like

Russia and CIS countries. With the know how available in the country, there is

a tremendous potential to grow and increase exports in dyestuff and

Agrochemical market.

India has the capacity for major value addition being close to middle East. This

is a cheap and abundant source for Petrochemicals feedstock.

Availability in abundance of raw materials for Titanium Dioxide (TiO2) and

Agro based products like castor oil offer an opportunity to generate significant

value addition. This however would require substituting their exports in raw

form by manufacturing higher value derivatives.

THREATS



If the major end product industries are attracted away from India to other

countries it would cause a shift in the consumption pattern for the manufacturers

of the inorganic building blocks. It has to be recognized that demand for the end

product drives the demand for intermediates and also the bulk chemicals. For

example if world scale capacity for Polyurethane and MDI comes up in our

neighboring countries, it will have an adverse impact on the demand growth for

Aniline in India.

Most of the manufacturers in the unorganised sector need to be better informed

about the pollution control measures that could put a halt to their production

activity at any time.

China, a major competitive threat, is investing heavily in infrastructure (they are

adopting the cost-effective German model). It would not only overtake India in

current export territories but could also invade Indian market with cheaper

imports.

Stiff competition from China, Korea and Taiwan.

Decline in realisation due to over capacity of the unorganised sector, intense

unfair local competition and adverse demand-supply scenario. Manufacturers

have been forced to reduce prices in a bid to sustain volume sale and therefore

the realisation levels are estimated to have declined by 50% from 1994-95 levels.

Recession in end use industries e.g. The Textile industry (which is the major

market for dyestuff industry) is facing a big crisis which has affected the dyestuff

industry.

Movement of key raw material prices for the production of alcohol in India is

influenced by political considerations rather than economic principles.

Large capacity for Organo Phosphorous compound is being set up in China; with

economies of scale pushing domestic prices downwards.

Weak registration laws for new products will adversely affect both Indian

producers and MNC producers in India due to imports of these products from

China as an alternate

OBSERVATIONS



The cost structure of the inorganic industry is fluctuating because of the

fluctuations occurred in fixed charges and value added.

The raw material productivity of the inorganic industry has been continuously

decreasing. It is high in the year 2003 because of purchasing of raw material and

sales are very high. In the year 2008 raw material productivity is very low.

The operating performance of the inorganic chemicals industry has been

fluctuating. It is high in the year 2003 because of the EBIT is increased and net

assets decreased. In the year 2006 it is very low.

The financial performance of the inorganic chemicals industry has been

fluctuating. It is high in the year 2005 because the PAT & net worth are increased

when compared with other years .In the year 2004 it is low

The net performance of the inorganic chemicals industry has been fluctuating. It is

high in the year 2005 because of the net profit is increased and total assets

decreased. In the year 2004 it is very low

The growth trend of the inorganic chemicals industry is fluctuating. In the year

2005 it is high because of total income increased, in the 2008 it is low.

The Trend analysis table estimated sales values rapidly increased.

Trend analysis table estimated income values rapidly increased

The Coefficient of correlation between total income and total expenses is showing

positive sign for the investors. The 100 % change in total income will lead to

99.30% change in total expenses.

The Coefficient of correlation between total expenses and profit is showing

positive sign for the investors. The 100 % change in total expenses will lead to

56.20% change in profit.

The Coefficient of correlation between total income and total assets is showing

positive sign for the investors. The 100 % change in total income will lead to

97.70% change

CONCLUSION



By the studying all relevant ratios such as operating Performance, Net

Performance, financial Performance Raw material productivity of the INORGONIC

CHEMICALS INDUSTRY we can conclude that the fluctuating in the EBIT and

gradually increased Net worth not Increased more than operating profit. The profit after

tax is also fluctuating expects 2005&2006 because the total Net worth in this years low

increased than remaining years. The Raw material productivity is gradually decreased

because Net sales not increased more than Raw material expenses. When we observe the

other development indicators such as growth performance of the industry it is also

showing the positive growth rate. The trend analysis of the industry which is more

important for the analysis process is also supporting this fact. By the overall observation

we can say that the Inorganic chemicals industry has the more opportunities to grow and

earn more profits when compare with other Industries.


industry analysis report inorganic chemicals industry

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