mr. sanjay moolji - petrochem 2017 conclave. sanjay moolji global product manager ... india, sanjay...
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Mr. Sanjay Moolji
Global Product Manager Tricon Energy Ltd.USA
Mr. Sanjay has more than 25 years of Sales and Marketingexperience in a spectrum of industries ranging fromPolymers, Industrial Chemicals, ConsumerDurables, Pharmaceuticals and Bulk Drugs.
Prior to his current assignment, he was the General Manager forExports of Reliance Industries Limited for Polymer Sector.
An Economics Graduate from the Calcutta University inIndia, Sanjay has also done Post graduation in Internationaltrade. He is widely traveled and has participated in variousinternational forums.
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Sanjay Moolji Tricon Energy Ltd.
Global Polymer Business – Trends & Market Dynamics
IOCL Conclave - 2013
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ContentsContents
World Polymer Business
Polymers – Trade balance & Global Markets
Challenges & Uncertainties
About Tricon Energy
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Global Polymer MarketGlobal Polymer Market
Polymer Market 205 MMT
• Polyethylene Market: 75.9 MMTHDPE
17%
PET
8%
PS
5%
ABS
4%
PVC
18%PC
2%
PP
26%
LDPE
9%
LLDPE
11%
• Polypropylene Market: 53.3 MMT
• PVC Market: 36.9 MMT
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PP Top 10 Producers
Source – CMAI/IHS
PE CapacityPE Capacity
NE
Asi
a
NE
Asi
a
NE
Asi
a
W E
uro
pe
W E
uro
pe
W E
uro
pe
N A
mer
ica
N A
mer
ica
N A
mer
ica
SE A
sia
SE A
sia
SE A
sia
M E
ast
M E
ast
M E
ast
S A
mer
ica
S A
mer
ica
S A
mer
ica
I Su
bco
n
I Su
bco
n
I Su
bco
n
C E
uro
pe
C E
uro
pe
C E
uro
pe
CIS
& B
S
CIS
& B
S
CIS
& B
S
Afr
ica
Afr
ica
Afr
ica
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2007 2012 2017
78 MMT 94 MMT 117 MMT
NE Asia --> 25% of global PE capacities by 2017
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PP Top 10 Producers
Source – CMAI/IHS
PP CapacityPP Capacity
NE
Asi
a
NE
Asi
a
NE
Asi
a
W E
uro
pe
W E
uro
pe
W E
uro
pe
N A
mer
ica
N A
mer
ica
N A
mer
ica
SE A
sia
SE A
sia
SE A
sia
M E
ast
M E
ast
M E
ast
S A
mer
ica
S A
mer
ica
S A
mer
ica
I Su
bco
n
I Su
bco
n
I Su
bco
n
C E
uro
pe
C E
uro
pe
C E
uro
pe
CIS
& B
S
CIS
& B
S
CIS
& B
S
Afr
ica
Afr
ica
Afr
ica
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2007 2012 2017
49 MMT 65 MMT 80 MMT
NE Asia --> 41% of global PP capacities by 2017
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PP Top 10 Producers
Source – CMAI/IHS
PVC Capacity
NE
Asi
a
NE
Asi
a
NE
Asi
a
W E
uro
pe
W E
uro
pe
W E
uro
pe
N A
mer
ica
N A
mer
ica
N A
mer
ica
SE A
sia
SE A
sia
SE A
sia
M E
ast
M E
ast
M E
ast
S A
mer
ica
S A
mer
ica
S A
mer
ica
I Su
bco
n
I Su
bco
n
I Su
bco
n
C E
uro
pe
C E
uro
pe
C E
uro
pe
CIS
& B
S
CIS
& B
S
CIS
& B
S
Afr
ica
Afr
ica
Afr
ica
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2007 2012 2017
40 MMT 54 MMT 56 MMT
NE Asia --> 54% of global PVC capacities by 2017
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2654
2453
2846
2200
2300
2400
2500
2600
2700
2800
2900
NORTH AMERICA
-1357-1793
-2701
-3000
-2000
-1000
0
SOUTH AMERICA
100
-671
-1174
-1500
-1000
-500
0
500
WEST EUROPE
-669
-1028
-1380
-1500
-1000
-500
0
CENTRAL EUROPECIS/ BALTIC
-1244-1490
-1717
-2000-1800-1600-1400-1200-1000
-800-600-400-200
0
AFRICA
-4253
-6308-7461
-8000
-6000
-4000
-2000
0
N E ASIA
220
1060922
0
200
400
600
800
1000
1200
S E ASIA
6165
9237
11323
0
2000
4000
6000
8000
10000
12000
MIDDLE EAST
-1616-1461
-658
-2000
-1500
-1000
-500
0
INDIAN S C
PE Trade Balance 2010PE Trade Balance 2010--20162016
ME, N America, and SE Asia will continue to dominate the export markets
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PE International Markets PE International Markets -- 20122012
ME the largest exporter for PE 35 %
N America739223%
S America11323%
W. Europe26638%
C Europe & CIS
13724%
Middle East
1139035%
India2101%
NEA367711%
SEA488615%
Source: CMAI/IHS
China, 8419, 25%
W Europe, 2911,
9%
N America, 4842
, 15%S America, 2724
, 8%
Turkey, 1055, 3%
Other Asia & SEA, 5217, 16
%
Africa, 2220, 7%
C Europe & CIS, 2524, 8%
ISC, 1534, 5%
Middle East, 1401, 4%
Exporting Regions Importing Regions
Market of 32.5 MMT
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559
104
-453
-600
-400
-200
0
200
400
600
800
-214-308
-699
-800
-600
-400
-200
0
970
302
-153
-400
-200
0
200
400
600
800
1000
1200
-540-596
-450
-800
-600
-400
-200
0
NORTH AMERICA
SOUTH AMERICA
WEST EUROPE
CENTRAL EUROPECIS/ BALTIC
-508-587
-648
-800
-600
-400
-200
0
AFRICA
-1467
-1867
-769
-2000
-1500
-1000
-500
0
-349
173
689
-600
-400
-200
0
200
400
600
800
N E ASIA
S E ASIA
-182 -168
-945
-1000
-800
-600
-400
-200
0
1665
2826
3460
0
1000
2000
3000
4000
MIDDLE EAST
INDIAN S C
PP PP Trade Balance 2010Trade Balance 2010--20162016
Changing Global DynamicsSource: CMAI/IHS
2010 2012 2016
2010 2012 2016
2010 2012 2016
2010 2012 2016
2010 2012 2016
2010 2012 20162010 2012 2016
2010 2012 2016
2010 2012 2016
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PP International Markets PP International Markets -- 20122012
ME the largest exporter for PP 31 %
Americas203513%
W. Europe180012%
C Europe & CIS8756%
Africa3202%
Middle East, 5005,
31%
India8005%
NEA280018%
SEA210013%
Source: CMAI/IHS
China, 4500, 29%
W Europe, 1500,
10%
Americas, 2260, 14%
Turkey, 1480, 9%
Other Asia & SEA, 2140, 14
%
Africa, 910, 6%
C Europe & CIS, 1350, 9%
ISC, 870, 5%
Middle East, 620, 4%
Market of 15.7 MMT
Exporting Regions Importing Regions
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PVC :Trade PVC :Trade Balance Balance 20112011--20162016
USA most competitive production
China fastest growing export region; but not regular
South America
-784-930
-1,072-1,500
-1,000
-500
0
2011 2014 2016
North America2,615 2,900
3,254
0
1,000
2,000
3,000
4,000
2011 2014 2016
Europe680
400300
0
200
400
600
800
2011 2014 2016
CIS
-600-500 -420
-1,000
-500
0
2011 2014 2016
Middle East
-1,500
-1,400-1,300
-1,200
-1,100
2011 2014 2016
Africa
-588
-610
-640-650
-600
-550
2011 2014 2016
ISC
-933
-1,500
-2,100-3,000
-2,000
-1,000
0
2011 2014 2016
NE Asia
722
1,300
2,000
0
500
1,000
1,500
2,000
2,500
2011 2014 2016
SE Asia
144
150 150
140
145
150
155
2011 2014 2016
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PVC International Markets PVC International Markets -- 20122012
N. America is the largest exporter for PVC 44 %
Africa491%
C Europe & CIS4996%
Middle East1502%
N America354244%
NE Asia, 2000,
31%
S America3134%
SE Asia5216%
W Europe99512%
Source: CMAI/IHS
Africa, 561, 7% Brazil, 450, 6%
C Europe & CIS, 554, 7%
China, 1000, 12%
India, 1000, 12%
ISC, 160, 2%
Middle East, 597, 7%
N America, 850,
11%
NE Asia, 112, 1%
Russia, 550, 7%
S America, 659,
8%
SE Asia, 356, 5%
Turkey, 821, 10%
W Europe, 399, 5
%
Exporting Regions Importing Regions
Market of 7.7 MMT
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Trade Flow Trade Flow –– PastPast
Western World Feeding the Global Markets… N. America
W. Europe
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Trade Flow Trade Flow –– CurrentCurrent
N. America
W. Europe
Middle EastMiddle East the supplier to the world…Polyolefins
North America the ME of PVCKorea
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Logistics & Supply Logistics & Supply ChainChain
Polymer
Manufacturer
Demand
Transportation
Purc
hase
Purch
ase
Sch
edulin
g
Polymer
Processor
30 – 90 days
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Polymer Markets: EvolutionPolymer Markets: Evolution
Production has shifted from High consumption Areas to Low Cost Feedstock Areas
Consumption Growth has shifted from Developed Areas to Low Labor Cost Areas
Trade flow patterns have changed
Size of Plants have changed to Mega projects huge production volumes
Logistics & supply chain have become more complex
A New World Order……….
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Global Economic EnvironmentGlobal Economic Environment
Recession in developed economies collateral damage across globe
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Managing Payment Managing Payment RisksRisks
Can your business afford the loss if it is not paid?
Will extending credit and the possibility of waiting several months for payment still make the sale profitable?
Can the sale be made only by extending credit? - How long have the buyers been operating, and what is their credit history?
Are there reasonable alternatives for collecting if the buyer does not pay?
If shipment is made but not accepted, can alternative buyers be found?
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Movement of documents, Movement of documents, goods & goods & paymentspayments
Issuing / Opening BankAdvising /
Confirming Bank
Applicati
on
Beneficiary
Seller
ExporterContract
Goods
Letter of Credit (Sight/Time)
Documents
Applicant / BuyerImporter
Many risks to be contained
• Bankruptcy or insolvency by the buyer
• Protracted default
• Problems with payment arrangements
• Problems with the merchandise
• Contract disputes
• Additional costs for financing, insurance, and shipping
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CACM
FTAA
PR China
Canada
USA
Mexico
Chile
UruguayParaguay
BrazilArgentina
Mercosur
Bolivia
Colombia
Venezuela
Peru
Ecuador
Costa
Rica
Nicaragua
El Salvador
HondurasGuatemala
Trinidad & Tobago
Antigua & Barbuda
Barbados
Belize
DominicaGrenada
GuyanaJamaica
Suriname
St. Lucia
St. Vincent & Grenadines
St. Kitts & Nevis
CARICOM
Panama
Dominican
Republic
AndeanCommunity
Bahamas
Haiti
Brunei
Cambodia
Indonesia
Laos
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
Japan
New Zealand
Australia
ASEAN
South Korea
Hong Kong
Taiwan
Russia
Papua New Guinea
APECIntra-LAC
in forceIntra-Asia-
Pacific in forceIntra-LAC
Under NegotiationTrans-Pacific
Under NegotiationNegotiations under
strong consideration
APEC
Trade Agreements …..a barrierTrade Agreements …..a barrier
Where Does the world Sell……?
Nafta
Source: WTO
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Pricing…..a game of witsPricing…..a game of wits
Market has fewer buyers & sellers.
Transactions are more “Transparent”
Better “margin retention” capability long term
Hundreds of seller, thousands of transactions.
Salesman need to “ask the right questions” – but
they still may not get the right answers.
Prices are not always transparent.
Polymer margins can go negative in a soft market.
Polymer market is a challenging environment!!Source: CMAI
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Petrochemical Industry DynamicsPetrochemical Industry Dynamics
Crude Price and operating rates fundamental for Price
Price
Demand
Supply New InvestmentsTurnaroundsDisruptions
World EconomyGeopolitical SituationDemand SupplyWeatherFuture markets
US DemandChina DemandGDP
Elasticity
Crude
OperatingRate
Sentiments
Source: RIL APLA 2006
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Possible Global Economic Melt down– Europe’s financial struggle continues
– Debt levels appear structurally high
– Unemployment remains elevated
– Inflation is rising
– Banking and restrictive credit
Uncertainty leading to moderate growth– Stagnant growth in developed nations as
government focus on reducing debt and deficit
– Developing nations facing challenges as government tightens monetary and fiscal policy to curb inflation
– Demand destruction for finish goods
Challenges : GlobalChallenges : Global
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Producer DesiresProducer Desires
Logistics & Supply
Chain
•• LogisticsLogistics• Complex Logistics & Operations Solutions• Just in time deliveries
•• Volume PlacementVolume Placement• Need committed partners for consistent off-
takes / lifting's• Production planning and optimization.
•• Customer Service & Market Customer Service & Market informationinformation• Eyes & ears in the market for real-time
information• Global presence – different
geographies, languages, and culture
•• ValueValue• Get Best Value for the product• Diversified Product Marketing
•• Risk MitigationRisk Mitigation• Managing Financial Risks :
Credit/Currency/Banks• Mitigating Political Risks• Handling Logistics & supply chain risks
Customer Service
Best Value
Risk Mitigation
Volume Placement
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Customer Demands Customer Demands
VolumesPayment
Logistics
Pricing
•• PricingPricing• Competitive market pricing in line with
volumes and local markets
•• Customer ServiceCustomer Service• Real-time information – Order
placement and tracking• Redress technical issues
•• VolumesVolumes• Consistent volume avails • Consistent quality• Supply options – competitive prices
from other sources
•• PaymentPayment• Payment options to work within the
financial constraints• Flexibility in terms
•• LogisticsLogistics• Reliability• Timely shipments & Deliveries• Innovative logistics solutions
Customer Service
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HistoryHistoryFounded in 1996
Global Physical Trader in Bulk Chemicals and Plastics. – Focus on marketing and distribution of chemicals and plastics
World Leaders in Caustic Soda, Styrene, Xylenes & Pygas trade
Headquarters in Houston, Texas in USA
Global presence with footsteps in every markets.
High reputation for:– Customer service– Creativity– Reliability and Integrity– Quality of staff– Financial strength– Ability to make rapid decisions
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Organization Organization -- Global coverageGlobal coverage
Footprints in all major consumption regions…
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Value addition…….Value addition…….
+ +MarketingOperations &
Logistics
Financing &
Banking
Customer service, Operations
& Logistics…
…is the heart of the value chain
CUSTOMER
Operations & Finance
…to customer
Adding a world of value
Technical
Services
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Plastics 2012Plastics 2012
“We have build global relationships with more than“We have build global relationships with more than
600 customers and 50 producers 600 customers and 50 producers
based on trust, transparency and performance.”based on trust, transparency and performance.”
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“ It is not the strongest of the species that survive, nor the
most intelligent that survives. It is the one most adaptable
to change….”
Charles Darwin
Concluding Remarks……..Concluding Remarks……..