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Summer Internship Project Report
on
EUROPEAN ACETIC ANHYDRIDE MARKETBy
Chetanya RajputA0101911181
MBA Class of 2013
Under the Supervision of
Mrs. Mamta Mohan
Assistant Professor
Department of Marketing
In Partial Fulfillment of the Requirements for the Degree ofMaster of Business Administration
at
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESHSECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA
2012
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DECLARATION
Title of Project Report:European Acetic Anhydride Market
I declare
(a) That the work presented for assessment in this Summer Internship Report
is my own, that it has not previously been presented for another assessment and that
my debts (for words, data, arguments and ideas) have been appropriately
acknowledged.
(b) That the work conforms to the guidelines for presentation and style set out
in the relevant documentation.
Date : Chetanya Rajput
A0101911181
MBA Class of 2013
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CERTIFICATE
This is to hereby certify that Chetanya Rajput student of Masters of
Business Administration at Amity Business School; Amity University Uttar Pradesh
has completed the Project Report on European Acetic Anhydride Market under
my guidance.
Mrs. Mamta Mohan
Assistant Professor
Department of Marketing
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ACKNOWLEDGEMENT
First and foremost, I would like to thank my faculty guide, Mrs. Mamta Mohan, and
my industrial guide, Mr. Abhishek Sharma (Manager - Acetyl), for allowing me to
undergo internship under their guidance and supervision. It gave me an opportunity to
participate and learn a deal about the various aspect of marketing pharmaceutical
product.
I would also like to show my sincere appreciation to Mr. Abhishek Sharma (Manager
- Acetyl), who inspired me greatly to work on this project. His willingness to motivate
me contributed tremendously to the project. I would also like to thank him for guiding
me with some examples that related to the topic of the project, for suggesting
alternative solutions & sharing their valuable experience & knowledge with me, and
also for facilitating me in gaining practical knowledge.
This project has been made possible through the direct and indirect co-operation of
various staff members of Jubilant Life Sciences Ltd. And without whose co-operation
& help the completion of this internship was not possible.
Besides, I would like to thank the authority of Jubilant Life Sciences Ltd for
providing me with a good environment and facilities to complete this project.
Finally, an honorable mention goes to my family and friends for their understandings
and supports on me in completing this project. Without helps of the particular that
mentioned above, we would face many difficulties while doing this project.
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TABLE OF CONTENTS
DECLARATION...............iiCERTIFICATE.............iiiACKNOWLEDGEMENT................iv
LIST OF TABLES...............viiLIST OF FIGURES................viiiABSTRACT.....xii
1. INTRODUCTION......................................................................................................11.1 Purpose of the Study.11.2 Significance of the Study..........11.3 Theoretical Framework.............2
1.3.1 Indian Chemical Industry Overview.................21.3.1.1 Market Segmentation......3
1.3.2 Structure of the European chemicals industry.31.3.3 Introduction to Jubilant Life Sciences Ltd.......6
1.3.3.1 Jubilant Life Sciences Ltd.......71.3.3.2 Products &Services offered...........................................8
1.3.3.3 Competitors of Jubilant Life Sciences Ltd..81.3.3.4 Jubilant Life Sciences Ltd in the EU...9
1.4 Definitions...............................................................................................101.4.1 Acetic Anhydride......10
1.4.1.1 Product Information...101.4.1.2 Main Characteristics.......111.4.1.3 Usage......11
1.4.1.4 Packaging............121.4.2 Modified Starch......12 1.4.2.1 Usage...........13
1.4.3 Mystery Shopping..13
2. REVIEW OF THE LITERATURE..........................................................................14
3. RESEARCH METHODS AND PROCEDURES....................................................213.1 Purpose of the Study.........223.2 Research Design...223.3 Research Questions......22
3.4 Participants.......243.5 Data collection technique and procedure.....243.6 Instrument Used...........243.7 Tools Used.......243.8 Pilot Study.......253.9 Limitations...25
4. DATA ANALYSIS AND FINDINGS ................................264.1 Findings .......264.2 Regional Results for End Sector Use of Acetic Anhydride.........28
4.2.1 Eastern Europe Region.....28
4.2.1.1 Observations .....29
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4.2.2 Northern Europe314.2.2.1 Observations...32
4.2.3 Southern Region....344.2.3.1 Observations...35
4.2.4 Western Europe.37
4.2.4.1 Observations...384.2.5 Europe (Continent)...40
4.2.5.1 Observations...404.3 SWOT Profile of Jubilant Life Sciences Ltd.....43
4.3.1 The SWOT Matrix.....444.4 Segment Analysis...514.5 Porters Five Forces Model....544.6 Ansoff Matrix.554.7 Product Innovation Matrix.....56
4.8 Market Impact of Top 10 Growth Trends of Acetic Anhydride564.9 PESTEL Analysis.......57
4.9.1 Political Factors.....574.9.2 Economic Factors......57
4.9.2.1 European Market for Acetic Anhydride...574.9.2.2 Effect of European Sovereign Debt Crisis574.9.2.3 Effect of Competition...58
4.9.3 Social Factors....594.9.4 Technological Factors...604.9.5 Environmental Factors..604.9.6 Legal Factors.60
4.9.6.1 Objectives of REACH...604.9.6.2 Benefits of REACH...614.9.6.3 Disadvantages of REACH.....624.9.6.4 Substance Information Exchange Forum...............624.9.6.5 Jubilant Life Sciences Ltd & REACH...62
4.10 Observations in Modified Starch....644.10.2 Major Players....644.10.3 Potential Threats from Substitutes....64
4.11 Summary of Findings.............64
5. CONCLUSIONS AND RECOMMENDATIONS......665.1 Recommendations ......66
5.2 Limitations......675.3 Implications for Practice.....675.4 Implications for Future Research....67
REFERENCES...68Web Resources.........68
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Lis t o f Table s
Table No . T i t l e Page
No .
Table 1 .1 C h e m i c a l i n d u s t r y s p e c i a l i z a t i o n o f E U
member s t a t e s (Source - CE FIC)
5
Table 1 .2 C h e m i c a l a n d c h e m i c a l s p r o d u c t s
m a n u f a c t u r i n g s e c t o r ( e x c l u d i n g
p h a rm ac eu t i c a l s ) by c o u n t r y ( 2 0 08 )
r a n k e d b y t u r n o v e r s i z e ( S o u r c e - C E F I C )
5
Table 1 .3 J u b i l a n t L i f e S c i e n c e s L t d F a c i l i t i es 7
Table 1 .4 S u b s i d i a r i e s o f J u b i l a n t L i f e S c i e n c e s L t d 8
Table 1 .5 C h a r a c t e r i s ti c s o f A c e t i c A n h y d r i d e 1 1
Table 4 .1 D a t a b a s e o f A c e t i c A n h y d r i d eM a n u f a c t u r e r s
2 6
Table 4 .2 D a t a b a s e o f A c e t i c A n h y d r i d e S u p p l i e r s 2 7
Table 4 .2
( cont inued)
D a t a b a s e o f A c e t i c A n h y d r i d e S u p p l i e r s 2 8
Table 4 .3 E u r o p e i n d u s t r y d a t a ( C o n s o l i d a t e d ) 4 3
Table 4 .4 I n t e r n a l F a c t o r E v a l u a t i o n M a t r i x -
J u b i l a n t L i f e S c i e n c e s L t d
5 0
Table 4 .5 U n - m o d i f i e d a n d m o d i f i e d s t a r c h m a r k e t
s t r u c t u r e & o p p o r t u n i t i e s
6 4
Table 4 .6 D r y s t a r c h u s a g e i n E n d s e c t o r s s e g m e n t s 6 4
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Lis t o f F igures
F igure No . F igure Name Page No .
F igure 1 .1 S e g m e n t a t i o n o f C h e m i c a l I n d u s t r y 3
Figure 1 .2 O r g a n i z a t i o n a l s t r u c t u r e o f J u b i l a n t
B h a r t i a G r o u p
6
Figure 1 .3 C h e m i c a l S t r u c t u r e o f A c e t i c A n h y d r i d e . 1 1
Figure 1 .4 V a r i o u s p a c k a g i n g o p t i o n s . 1 2
Figure 2 .1 P o s s i b l e s c e n a r i o s 1 8
Figure 2 .2 E s t i m a t e d e f f e c t o f s c e n a r i o s - G r o w t h i n
2 0 0 2 / 2 0 1 5
1 8
Figure 2 .3 C h e m i c a l t r a d e b a l a n c e w . r . t s c e n a r i o s 1 8
Figure 2 .4 I n t e g r a t i o n o f a co mp an y s su p p l i e r s an d
c u s t o m e r s .
2 0
Figure 4 .1 .1 C h e m i c a l I n d u s t r y i n E a s t e r n E u r o p e a n
R e g i o n
2 9
Figure 4 .1 .2 W o o d I n d u s t r y i n E a s t e r n E u r o p e a n
R e g i o n
2 9
Figure 4 .1 .3 F o o d a n d F o o d P r o c e s s i n g I n d u s t r y i n
E a s t e r n E u r o p e a n R e g i o n
3 0
Figure 4 .1 .4 D y e I n d u s t r y i n E a s t e r n E u r o p e a n R e g i o n 3 0
Figure 4 .1 .5 P h a r m a c e u t i c al I n d u s t r y i n E a s t e r n
E u r o p e a n R e g i o n
3 1
Figure 4 .2 .1 C h e m i c a l I n d u s t r y i n N o r t h e r n E u r o p e a n
R e g i o n
3 2
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Figure 4 .2 .2 W o o d I n d u s t r y i n N o r t h e r n E u r o p e a n
R e g i o n
3 2
Figure 4 .2 .3 F o o d a n d F o o d P r o c e s s i n g I n d u s t r y i n
N o r t h e rn E u ro p e an R eg io n
3 3
Figure 4 .2 .4 D y e I n d u s t r y i n N o r t h e r n E u r o p e a n
R e g i o n
3 3
Figure 4 .2 .5 P h a r m a c e u t i c al I n d u s t r y i n N o r t h e r n
E u r o p e a n R e g i o n
3 4
Figure 4 .3 .1 C h e m i c a l I n d u s t r y i n S o u t h e r n E u r o p e a n
R e g i o n
3 5
Figure 4 .3 .2 W o o d I n d u s t r y i n S o u t h e r n E u r o p e a n
R e g i o n
3 5
Figure 4 .3 .3 F o o d a n d F o o d P r o c e s s i n g I n d u s t r y i n
S o u t h e r n E u r o p e a n R e g i o n
3 6
Figure 4 .3 .4 D y e I n d u s t r y i n S o u t h e r n E u r o p e a nR e g i o n
3 6
Figure 4 .3 .5 P h a r m a c e u t i c al I n d u s t r y i n S o u t h e r n
E u r o p e a n R e g i o n
3 7
Figure 4 .4 .1 C h e m i c a l I n d u s t r y i n W e s t e r n E u r o p e a n
R e g i o n
3 8
Figure 4 .4 .2 W o o d I n d u s t r y i n W e s t e r n E u r o p e a n
R e g i o n
3 8
Figure 4 .4 .3 F o o d a n d F o o d P r o c e s s i n g I n d u s t r y i n
W e s t e r n E u r o p e a n R e g i o n
3 9
Figure 4 .4 .4 D y e I n d u s t r y i n W e s t e r n E u r o p e a n
R e g i o n
3 9
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Figure 4 .4 .5 P h a r m a c e u t i c al I n d u s t r y i n W e s t e r n
E u r o p e a n R e g i o n
4 0
Figure 4 .5 .1 C h e m i c a l I n d u s t r y i n E u r o p e 4 0
Figure 4 .5 .2 W o o d I n d u s t r y i n E u r o p e 4 1
Figure 4 .5 .3 F o o d a n d F o o d P r o c e s s i n g I n d u s t r y i n
E u r o p e
4 1
Figure 4 .5 .4 D y e I n d u s t r y i n E u r o p e 4 2
Figure 4 .5 .5 P h a r m a c e u t i c al I n d u s t r y i n E u r o p e 4 2
Figure 4 .6 T he SWOT /T OWS Mat r ix 44
Figure 4 .7 A n a l y s i s o f W e b s i t e T r a f f i c i n
co mp ar i so n to co mp et i to r s web s i t e
4 6
Figure 4 .8 Go o g le Mark e t F in d er s Resu l t 4 6
Figure 4 .9 S c r e e n s h o t o f G o o g l e M a r k e t
I n t e l l i g e n c e ' s R e s u l t
4 7
Figure 4 .10 I m p a c t o f S W O T F a c t o r s 4 8
Figure 4 .11 O p p o r t u n i t y S t r a t e g y E v a l u a t i o n ( O S E )
G r i d
4 8
Figure 4 .12 T h r e a t M i t i g a t i o n S t r a t e g y / C h a l l e n g e
I m p a c t A s s e s s m e n t ( C I A ) G r i d
4 9
Figure 4 .13 P r o d u c t L i f e C y c l e A n a l y s i s 5 1
Figure 4 .14 S e g m e n t A n a l y s i s 5 2
Figure 4 .15 R e g i o n a l M a r k e t L i f e C y c l e A n a l y s i s 5 3
Figure 4 .16 Po r te r s 5 Fo rces Mo d e l Ace t i c
A n h y d r i d e m a n u f a c t u r i n g i n d u s t r i e s
5 4
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Figure 4 .17 A n s o f f M a t r i x 5 5
Figure 4 .18 P r o d u c t I n n o v a t i o n M a t r i x 5 6
Figure 4 .19 M a r k e t I m p a c t o f T o p 1 0 G r o w t h T r e n d s
o f A c e t i c A n h y d r i d e
5 6
Figure
4 .20 .1
I n t e r n a t i o n a l c o m p a r i s o n o f c h e m i c a l
p ro d u c t i on g r ow th ( So u r c e - CE FIC)
5 8
Figure
4 .20 .2
C h e m i c a l I n d u s t r y P r o f i l e - C h e m i c a l
S a l e s b y C o u n t r y ( S o u r c e - C E F I C )
5 8
Figure 4 .21 PE ST E L Ana lys i s 59
Figure 4 .22 Flow Diagram of RE ACH 63
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Chet anya Raj put
EUROPEAN ACETIC ANHYDRIDE MARKET
Abstract
This research paper studies various factors which affect European Acetic Anhydride
Market and opportunities which can be capitalized by Jubilant Life Sciences Ltd. The
European chemicals industry is one of the largest European industrial sectors and an
important source of direct and indirect employment in many regions of the European
Union (EU). With a total production value of 449 billion in 2010, the chemical
industry's contribution to the EU gross domestic product amounted to 1.1%
representing about 7% of the total for the manufacturing sector.
The outputs of the EU chemicals industry are typically classified in 3 types of
industries: basic, specialties and Consumer Chemicals. There are many factors which
affect the chemical industry across the Europe that has been studied in this report. To
analyze them in-depth, various analyses like Porters 5 Forces Model, Life Cycle
Analysis, PESTEL Analysis etc. As a value addition to the organization (Jubilant LifeSciences Ltd) which supported my research, various analyses like SWOT Analysis,
Product Innovation Matrix etc. to find opportunities for them were conducted. Their
website was also analyzed and feasibility of e-commerce was studied.
This project provides an insight into basic chemical industry which emphasizes on
Acetic Anhydride, chemicals which finds usage in varied sectors. It explores various
chemical manufacturers and distributers which are involved in producing or trading
Acetic Anhydride. It studies each and every countrys industry where Jubilant Life
Sciences Ltd can target for end usage. To achieve this objective, primary research
telephonic survey was employed along with extensive secondary research. The paper
suggests use of e-commerce after analysis of competitors website and several critical
changes required in Jubilant life sciences Ltd. website. The paper also suggests
preferential areas of Europe and segments of industries suitable for target. It also
studies market of modified starch as well in European markets based on end usage.
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CHAPTER 1: INTRODUCTION
1.1 Purpose o f t he S t udy
The main objectives and the purpose of the research paper is stated in this
chapter. The main objectives are as mentioned below:
To study the complete list of producers/manufacturers of Acetic Anhydride inEurope with their capabilities and complete profile.
To study breakup of consumption of Acetic Anhydride in term of end sectorusage with special emphasis on modified starch.
To analyze and prepare a SWOT profile of Jubilant Life Sciences Ltd. To analyse feasibility of e-commerce in chemical industry.
1 .2 S ign i f i cance o f t he S t udy
Europe as a continent comprises of 50 countries with largest economy and is
the richest region as measured by assets under management with over $32.7 trillion
compared to North America's $27.1 trillion in 2008. The chemicals industry is one of
the largest European industrial sectors and an important source of direct and indirect
employment in many regions of the European Union (EU). In 2009, the EU chemical
industry comprised some 29,000 enterprises that employed around 1.2 million
employees representing 4% of the total employment in the EU manufacturing sector.
96% of the companies in the sector are SMEs 61% with less than 9 employees and
account for 28% of sales and 35% of employment of the sector.
With a total production value of 449 billion in 2010, the chemical industry's
contribution to the EU gross domestic product amounted to 1.1% representing about
7% of the total for the manufacturing sector.
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According to CEFIC, in the 10 year period from 1999 to 2009 the chemical
industry production experienced an average growth rate of 0.4%, slightly higher than
the 0.3% average growth rate for total EU manufacturing. The outputs of the EU
chemicals industry are typically classified in 3 types of industries: basic, specialties
and Consumer Chemicals. There are many factors which affect the chemical industry
across the Europe and some of them are as follows:
Political factors Competition Legal factors Operational Factors Economic FactorsSo likewise there are many factors which affect the European chemical market.
It analyzes the effect of ongoing European Sovereign Debt crisis. This project
provides an insight into basic chemical industry which emphasizes on Acetic
Anhydride, chemicals which finds usage in varied sectors. It aims to study about
European chemical market and look for opportunities for Jubilant Life Sciences Ltd.
It explores various chemical manufacturers and distributers which are involved in
producing or trading Acetic Anhydride. It studies each and every countrys industry
where Jubilant Life Sciences Ltd can target for end usage. It studies feasibility of e-
commerce in chemical industry and website as a tool to get competitive advantage.
1.3 Theoretical Framework
1.3.1 I ndian Chemical Industry Overview
The Indian chemicals industry is twelfth largest in the world and third largest
in Asia in terms of volumes. Chemicals industry contributes nearly 3 percent of
Indias GDP (USD 42 billion of 1.25 trillion). The Indian chemicals industry has
evolved from being a basic producer of chemicals to an innovative industry. Chemical
industry is one of the fastest growing one in the India. It is highly fragmented and
dispersed multi product and multi-faceted. Chemicals are sold either directly to a
business consumer or through distribution channels. Western India accounts for
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majority of production. Indian chemical industry has grown from USD 28 billion in
FY2003 to USD 42 billion in FY2009. The CAGR for the sector was about 7.5
percent for the period FY2003-FY2008 before global recession, owing to sub-prime
crisis hit US and its aftermath on rest of the World, brought down the pace. Indian
chemical industry witnessed a modest growth of 5 percent in FY2008-09, thanks to
stimulus package announced by Government of India. If we go by IIP data for the
period Apr09-Jan10, the Indian chemical industry has bounced back strongly,
growing at about 10.4 percent during FY2009-10.
1.3.1.1 M arket Segmentation
The chemical industry primarily comprises of three segments namely basic
chemicals, specialty chemicals and knowledge chemicals. Basic chemicals with
nearly 57 percent share is the largest segment followed by specialty chemicals at 25
percent, and knowledge chemicals at 18 percent (including USD 7.5 billion
pharmaceuticals and nearly USD 1 billion agrochemicals) . This break-up has
remained nearly same for past few years.
Figure 1.1 - Segmentation of Chemical Industry
1.3.2 Structure of the European chemicals industry
The chemicals industry is one of the largest European industrial sectors and an
important source of direct and indirect employment in many regions of the European
Union (EU). In 2009, the EU chemical industry comprised some 29,000 enterprises
that employed around 1.2 million employees representing 4% of the total employmentin the EU manufacturing sector. 96% of the companies in the sector are SMEs 61%
BASIC CHEMICALS
InorganicChemicals
Petrochemicals
Fertilizers
Other IndustrialChemicals
SPECIALITYCHEMICALS
Adhesives &Sealants
Industrial Gases
Catalysts
Plastic Additives
KNOWLEGECHEMICALS
Agrochemicals
Pharmaceuticals
OtherBiochemicals
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with less than 9 employees and account for 28% of sales and 35% of employment of
the sector.
With a total production value of 449 billion in 2010, the chemical industry'scontribution to the EU gross domestic product amounted to 1.1% representing about
7% of the total for the manufacturing sector. This is a substantial reduction from the
684 billion production value in 2007, primarily a result of the financial crisis.
One of the key features of the chemicals sector is its important contribution to
all branches of the economy. Around 30% of the combined output of the chemical and
pharmaceutical industry is sold to end users while the rest is sold as intermediate
inputs. Raw materials and feedstock are transformed into tailor-made solutions for
customers in the chemicals industry but also most downstream industries in almost all
manufacturing sectors, in construction services and in general services. Thus, the EU
chemicals industry has a key position in the value chain.
The outputs of the EU chemicals industry are typically classified in five wide
ranges of products: Petrochemicals, Basic Inorganics, Polymers, Specialties and
Consumer Chemicals.
Among the EU countries, Germany is the largest chemicals producer in
Europe, followed by France, Italy and the United Kingdom.
European chemicals industry is doing better in innovation driven subsectors
than in more cost-orientated basic chemicals subsectors where investment in larger
facilities, access to cheap raw material and energy costs provide a comparative
advantage to facilities in China, Russia or the Middle East.
Acetic Anhydride is also one of the crucial chemical which is manufactured in
European chemical industries due to its application in various industries like
Chemical industries, Pharmaceuticals industries, Dye & paints industries, Automobile
industries, Food and food processing industries and Construction industries.
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Table 1.1Chemical industry specialization of EU member states (Source - CEFIC)
Table 1.2 Chemical and chemicals products manufacturing sector (excluding
pharmaceuticals) by country (2008)ranked by turnover size (Source - CEFIC)
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1.3.3 I ntroduction to Jubil ant L if e Sciences L td
Jubilant Bhartia Group, a $3Bn with 24000 employees globally, headed by Mr
Shyam S Bhartia and Mr Hari S Bhartia, embarked on a journey to create leadershipin its chosen areas of business over two decades ago. The Group has a strong presence
in Pharmaceuticals, life sciences and healthcare sector through its flagship company
Jubilant Life Sciences and has the fastest growing Dominos pizza chain in India
through Jubilant FoodWorks.
Figure 1.2Organizational structure of Jubilant Bhartia Group
JUBILANTBHARTIAGROUP
JUBILANT LIFESCIENCES LTD
(Pharmaceutical,Life Sciences and
Healthcare)
JUBILANTFOODWORKS
(Dominos andDumkin Donuts)
JUBILANTENERGY
(Oil & Gases)
JUBILANTENPRO
(Services in oilexploration and
aerospace)
JUBILANTBHARTIA
FOUNDATION(CSR Activities)
JUBILANTINDUSTRIES
(Agri Product,Polymer)
JUBILANTMOTORWORKS(Sales & Service
of Audi inChennai &Bangalore)
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1.3.3.1 Jubi lant L if e Sciences L td
Jubilant Life Sciences Ltd is an integrated pharmaceutical and life sciences
company which started in 1978 as Vam Organic Chemicals Ltd. It was also renamed
as Jubilant Organosys Ltd. In order to reflect the focus of the company as a pure
pharmaceuticals and life science player, the company changed its name from Jubilant
Organosys Ltd to Jubilant Life Sciences Ltd w.e.f October 1, 2010. Also the process
of the demerger of Agri and Performance polymers business and listing of the
demerged entity separately as Jubilant Industries Ltd was completed February 14,
2011.
The Company through its presence in India, USA, Canada, Europe and China
constantly serves its customers in over 60 countries across the globe. It has Indias
largest Custom Research & Manufacturing Services (CRAMS), overall 6thglobally. It
is leading in Drug Discovery & Development Solution as well. It is among top 10 in
Acetic Anhydride and 1st in 10 API, Pyridines and its derivatives. It has seven
vertically integrated manufacturing facilities in India and three abroad as enlisted in
Table 1.3
Table 1.3Jubilant Life Sciences Ltd Facilities
S No Location
1 Maryland, USA
2 Spokane USA
3 Kirkland, Canada.
4 Samlaya (Gujarat)
5 Ambarnath (Mumbai)
6 Udaipur (Rajasthan)
7 Nanjangud (Karnataka)
8 Roorkee (Uttarakhand)
9 Gajroula (Uttar Pradesh)
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Nira and Gajroula are strategically located near sugar belt of Maharashtra and
Uttar Pradesh respectively as Jubilant Life Sciences Ltd uses Molasses (by product of
Sugar Mill) for Acetyl Production.
Jubilant Life Sciences Ltd has eight subsidiaries as depicted in Table 1.4
four national and four international, most of them have been strategically acquired.
Table 1.4- Subsidiaries of Jubilant Life Sciences Ltd
Subsidiaries of Jubilant Life Sciences Ltd.
National Subsidiaries International Subsidiaries
Jubilant Biosys Jubilant Cadista, USA
Jubilant Chemsys Jubilant HollisterStier Laboratories, USA
Jubilant Clinsys Jubilant DraxImage, Canada
Jubilant Kalpataru Hospital Jubilant Pharmaceuticals NV, Belgium
1.3.3.2 Products & Services offered L if e Science Products
L ife Science I ngredients - It includes Active PharmaceuticalIngredients (APIs), Advance Intermediates, Fine Chemicals, Nutrition
Ingredients, Acetyls and Crop science chemicals.
Generics It includes Solid dosage forms, radiopharmaceuticals andallergenic extracts.
L ife Science Services CMO of sterile & non sterile products Drug Discovery & Development Services Healthcare
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1.3.3.3 Competitor s of Jubi lant L if e Sciences L td
Jubilant Life Sciences Ltd has competition from diverse field due to its diverse
portfolio. Thus the main competitors of Jubilant Life Sciences Ltd are:
1. Ranbaxy2. Cipla3. Lupin4. Glaxo Smithkline5. Aurbindo6. Sun Pharma7. Wockhardt8. Divis Laboratories (in CRAMS sector)
In Acetic Anhydride segment, the main competitors are
1. Celanese AG2. Eastman Chemical Company3. Alfa Aesar4. BUFA Chemikalien GmbH & Co. KG5. Merck KGaA6. Lonza7. BP
1.3.3.4 Jubi lant L if e Sciences L td in the EU
Europe is the largest market for Jubilant Life Sciences Ltd outside of India
contributing 33.3 per cent to its international sales in the FY 2005-06.The Company isexporting its range of advance intermediates and fine chemicals, APIs, acetyls and
select performance polymers to Europe for more than a decade. Jubilant Organosys
forayed into European market in FY 2005 with the acquisition of two pharmaceutical
companies in Belgium. They acquired Pharmaceutical Services Inc. (PSI) NV, which
offers regulatory affairs services to generic pharmaceutical companies, and PSI
Supply NV, which deals in the development and supply of generic dosage forms to
European markets. With these acquisitions, they aim to make stronghold on
formulation. In 2011, Fitch Ratings affirmed Jubilant Life Sciences Limited's (JLL)
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National Long-Term rating at 'Fitch A+ (ind)' which means that the outlook is Stable.
The main reason was its strong domestic market position in custom research and
manufacturing services (CRAMS) and its geographically diversified revenue streams
(international sales: 69% of FY11 revenue). Its products use molasses and alcohol as
raw materials, as against petroleum products, which insulate it to some extent from
high crude oil prices.
1.4 Definitions
1.4.1 Acetic Anhydride
Acetic anhydride was first synthesized in 1852 by French chemist Charles
Frdric Gerhardt (1816-1856). It is chemically represented as C4H6O3 and commonly
known as Ac2O.
1.4.1.1 Product Information
Acetic Anhydride is produced by carbonylation of methyl acetate or by
dehydration of acetic acid at 800EC. It is highly inflammable, very reactive withstrong and pungent odor. In its liquid or vapor state, acetic anhydride can irritate body
tissues, possibly leading to the death of such tissue.
I UPAC name: Acetic Anhydride. Systematic Name-Ethonoic Anhydride
Other names: Ethanoyl ethanoate, Acetic acid anhydride, Acetyl acetate, Acetyl
oxide, Acetic oxide.
Name of Acetic Anhydride in other European languages
De : Eissigsureanhydrid
Espaniol : Anhidrido acetico
French : Anhydride acetique
Italian: Anidride acetica
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Custom codes for Acetic Anhydride
HS6: 291524
CN8: 291524 00
1.4.1.2 M ain Characteri stics
Table 1.5Characteristics of Acetic Anhydride
Appearance Clear liquid
Density 1.082g/cm3 (liquid)
Boiling Point 139 C
Melting Point -73 C
Figure 1.3Chemical Structure of Acetic Anhydride.
1.4.1.3 Usage
1.
It is used as reagent in organic synthesis conversion of cellulose to celluloseacetate, which is component of photographic film. It is also used in the
production of cigarette filters and textile fibers. Vinegar is precursor unit in
this process.
2. It is used in making Aspirin.3. It used in making Paracetemol (1 tonne of acetic anhydride makes 2.7 million
paracetamol tablets).
4. It is used in making wood preservatives.5. Processing of dyes and perfumes.
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6. It is used in making modified starch.7. It can convert morphine into heroin which is illegal.
1.4.1.4 Packaging
There are many options for company following flexible packaging concept as
shown in Figure 1.4, however Jubilant Life Sciences Ltd uses standard size
Figure 1.4Various packaging options.
1.4.2 Modif ied Starch
Modified starch is prepared by physically, enzymatically, or chemically
treating and modifying native starch (carbohydrate consisting of a large number of
glucose units joined by glycosidic bonds) found in potato, rice, wheat, corn(maize)
and cassava thereby changing the properties of the starch. It also called starch
derivatives. Jubilant Life Sciences Ltd manufactures modified starch by treating with
Acetic Anhydride, which is called Starch Acetate Esterified with Acetic Anhydride. It
is prepared by treating starch with acetic acid anhydride to form white or nearly white
powder, granules, or flakes It is modified to function properly under conditions
frequently encountered during processing or storage, such as high heat, high shear,
low pH, freeze/thaw and cooling.
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This area is recently becoming active with margin improvement enhancing the
profitability in view of multitude of applications and functions in many food and non-
food segments. Recent growth of global developing economies and the demands of
processed, convenience foods of populations with rising income and the two income
families. This has created very attractive opportunities for starch and carbohydrate
ingredient that are essential as bulking agents and functional nutritional demands of
food and industrial segments.
1.4.2.1 Usage
1. It is degraded with amylase enzyme to make a sweetener.2. It is added to frozen products to prevent them from dripping when
defrosted.
3. It is used to thicken instant desserts.4. It is used as stabilizing agent in food and food processing industries. It
finds its application in used in frozen foods, ice-cream (plus soy ice-
cream), frozen cakes, dry mixes (cupcakes, muffins, cakes, and self-
saucing puddings), flavoured toppings and sauces, mayonnaises, snacks
and muesli bars, tunas, and gravies.
1.4.3 Mystery Shopping
It is type of primary data collection used in marketing research to get the
information anonymously where a researcher pose as a shopper or employs people to
shop and give details on their experience of purchasing, customer service etc. It can
be used to monitor the quality of customer service. Reporting is done based on their
experiences in a detailed and objective way.
The Market Research Society (MRS) defines mystery shopping as:
The use of individuals trained to experience and measure any customer service
process, by acting as potential customers and in some way reporting back on their
experiences in a detailed and objective way.
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CHAPTER 2REVIEW OF THE LITERATURE
Deloitte (2012) highlighted the robustness of the chemical industry in the
Netherlands. This research reportfocuses on one of the strongest chemical clusters in
the world, the interconnected Antwerp-Rotterdam-Rhine-Ruhr Area (ARRRA) which
responsible for a huge array of products that supply the competitive European
manufacturing industry for both domestic and export markets. It produces 2% of
global chemical manufacturer. It focused on the current position of the industry,
global market trends, future scenarios, and the industrys response. The paper
recommended clear regulatory framework along with flexibility to use a wide range of
feedstock. It suggested integration of large and small plants, suppliers, pipelines toinnovate which will be the key to dominate.
The main factor that came out here is significance of Netherlands Chemical
Industry.
Centre for Strategy & Evaluation Services (2012) explored various
benefits, disadvantages, overall market acceptance, impact of REACH through a
white paper titled Interim Evaluation: Functioning of the European chemicalmarket
after the introduction of REACH.
It suggested various recommendations for successful implementation. It
enlisted various costs that firm has to incur to comply with REACH which follows as
1. Human resources dedicated to the various REACH-related activities (concernsall firms);
2. Costs of pre-registration and registration of chemical substances (concerningprimarily manufacturers and importers of chemicals);
3. Information exchange activities along the supply chain (applies to all firms inthe supply chain);
REACH will not hamper chemical industries if implemented in a right way as
it will protect environment, encourage sustainable growth, innovation and regulate
competition.
The main factor that came out here is impact of REACH on European Chemical
Industry.
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CEFIC (2011) enlisted various fact and figures related European Chemical
Market through its report titled The European chemical industry in a worldwide
perspective.The European Chemical Industry Council statistical report has various
tables, figures and stats that have been used in this report. CEFIC is Conseil Europen
des Fdrations de l'Industrie Chimique commonly known as European Chemical
Industry Council. Based in Brussels, it represents European chemical industry and is a
committed partner to EU policymakers, facilitating dialogue with industry and sharing
our broad-based expertise. Cefic interacts daily on behalf of its members with
international and EU institutions, non-governmental organizations, the international
media and other stakeholders.
The three distinct groups of members - corporate members, national federation
members and business members form one of the most active networks of the business
community, complemented by partnerships with industry associations representing
various sectors in the value chain.
The main factor that came out here is various facts and figures about European
Chemical Industry, which is used in this study.
Patil (2010), suggested various opportunities for manufacturers of modified
starch (made from acetic anhydride) through a white paper titled Global Modified
Starch Products & Carbohydrates Functional Foods Derivatives & Markets A
Strategic Review
The paper provided an estimation of global production of Modified Starch
grow to almost 72 million tons from 68 million tons.
Current modified Agriculture production economics of China, rest of Asia,
India and South America is improving at a rapid pace and starch from corn and tubers
will compete with the US processors. China will be a formidable competitor to US
and Europe. Demand for starch by food and non-food industries in Asia is likely to
grow by 4 - 6 percent per year in low and middle income countries in this region.
Over time, demand for starch by non-food industries will tend to grow faster than
demand for starch by food industries. Value added modified starch derivatives
remains very attractive area due to high margins and numerous food and industrial
applications. Corn with amylase and other enzymes in the grain that can be activated
to improve processing economics of the way we process carbohydrates or to createnew carbohydrates with novel properties are moving forward. Modified starches are
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utilized in hundreds or even thousands of food, industrial, biofuels, bioplastic
applications. Unmodified starches have limited usage due to its inherent weakness of
hydration, swelling and structural organization. To enhance viscosity, texture,
stability among many desired functional properties desired for many foods and
industrial applications, starch and their derivatives are modified by chemical, physical
and biotechnology means. Starch industry has posted a good comeback after recession
in 2009.
This report provided current situation, products, markets and future of
modified starches for foods and industrial sectors. It also provided our insights and
strategic manufacturing and market positioning perspectives for the manufacturers of
these products and potential future developments.
The main factor that came out here is various facts, figures and future of
Modified Starch.
KPMG International (2009) examined the challenges faced by European
chemical market with special emphasizes on its decline due to competition from Asia-
pacific and recommendations to salvage industry through a white paper titled The
Future of the European Chemical Industry.
Chemical industries employ over 1.2 million people and contributed in 2007 to
a European Union (EU) trade surplus in chemicals of EUR35.4 billion. It presents
various facts and Figures of how industry declined and lost to competitors in Asia
Pacific. It analyzes various reasons for its downfall. Observing the current trend, it
also predicts major chemical manufacturers globally, with only one European
chemical manufacturer (BASF) in list of 10 companies (Reliance, India is expected as
3rd
largest manufacturer), whereas as per sales value in 2008, 5/10 manufacturers areEuropean. It provides various solutions like
1. Maintain technological superiority by closing down units which are notadvanced in comparison to their counterpart in Asia Pacific, reserve
intellectual property rights (IPR), increase R&D and embrace sustainable
development.
2. Strengthen customer relationships
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3. In order to survive competition, companies can develop joint venturerelationships with Middle East companies to gain cheap feedstock and with
China to develop local presence.
4. Evolve from commodities to specialty chemicals.The main factor that came out here is threat to European chemical industry and
how to tackle them.
Heinzelbecker (2005) emphasized on the effect of regulatory policy on
chemical through a white paper titled Futuring in the European Chemical Industry.
It focused on strength of the CEFIC concept is that it clearly addresses the challenges
the chemical industry is facing, including the increasing regulatory burden. It even
quantified the consequences if not enough is done by the authorities and the industry
itself. While in the UK concerted action between government and industry is
noticeable, in order to defend and improve the competitiveness of the chemical
industry, this has still to be achieved at the European level. It appreciated the
establishment of a Chemical Advisory Networking Group for Europe as right step this
direction, with the UK concept as the benchmark. It visualizes four scenarios with two
dimensions i.e. the market situation and activities from politics and industry.
1. Sunny:A revitalized EU chemical industry with increased innovation andcustomer orientation.
2. Cloudy: A focused EU chemical industry with strengths in high-end productsand sustainability.
3. Rain: EU chemical industry without confidence in the attractiveness of theEuropean market.
4. Storm:A shrinking EU chemical industry not able to beat imports.
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Figure 2.1 - Possible scenarios
Figure 2.2Estimated effect of scenarios- Growth in 2002/2015
If industry and politics do not act proactively, the chemical trade position will turn
negative.
Figure 2.3Chemical trade balance w.r.t scenarios
The main factor that came out here is how political system can boost European
Chemical Industry and was used in PESTEL Analysis.
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Agarwal (2001) explored the potential of e-commerce in chemical industry
through a white paper titled E-commerce: New opportunities for the chemical
industry
It enlisted two-pronged strategy adopted by the majority of chemical
companies when they made their debut in the new economy by putting a page on the
Internet to establish a Web presence. These companies soon realized the potential
beyond a brochureware site and shifted their focus rapidly to e-commerce. The
strategy were
1. Chemical companies have started their own initiatives, mainly in the B2Barea; by using extranet- and Internet-based electronic data interchange (EDI)
systems for their larger customers and suppliers. The major advantages are
automated order processing and billing and better customer service. A few
companies have also built enterprise resources planning (ERP) connections
between themselves and their biggest customers and suppliers.
2. They joined a third-party online marketplace like chemnet, worldofchemicalsto gain access to the new markets emerging in chemical sector. A third-party
marketplace offers dynamic pricing, access to more suppliers and customers,
and the ability to dispose of excess inventory and exchange information. Now,
electronic exchanges are shifting their focus to address the supply chain
inefficiencies among the business partners.
It will be beneficial for suppliers as they can procure non production items like
office and MRO (maintenance, repair, and operations) supplies because current
ordering processes are cumbersome, and maverick buying is common. Intranet sites
can be deployed list items, along with company-negotiated discounts, or use thevendors extranet sites customized for the purchasing companies employees. An
employee needing to order a product can go to the company intranet, order the
product, enter the department number (or any other form of identification), and
receive the product.
It will be beneficial for all types of customers. Depending on the sizes of their
suppliers and customers, their technological maturities, and the industry environment,
chemical companies can use extranets, EDI, the Web, e-marketplaces, or a
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combination of them to transact business. It is a cost-effective and fast way to share
information and data. EDI helps in automating and creating electronic documents that
are sent over a private network platform.
Many industrial gas companies use telemetry systems to monitor the liquid
level of tanks at their customers sites. This information can be displayed in real time
on the extranet site along with the usage pattern and a reminder to schedule the next
delivery if the level goes below a predetermined limit. The biggest advantage of an
extranet site is the single-point contact for all of a customers needs, which helps in
forming an alliance between the customer and the company. MyAccount@Dow, an
extranet site for Dow Chemicals customers, provides registered customers withsecure online access to transactions such as account information, order status, repeat
orders, and payment history, resulting in a one-to-one collaboration.
Figure 2.4Integration of a companys suppliers and customers.
The main factor that came out here is application of e-Commerce in Chemical
industry.
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CHAPTER 3:RESEARCH METHODS AND PROCEDURES
As a part of studying Acetic Anhydride market in Europe, it was crucial to
study about Europe which will further help in mystery shopping by increasing
knowledge. The data collected was recorded in several excel sheets developed using
various sources.
1. European Country and Currency - It emphasize on Eurozone and thosewhich have sought bail-out due to ongoing sovereign debt crisis. It helped in
determining market conditions.
2. European I ndustry (End Sector Usage of Acetic Anhydri de) It studiescomplete Europe industries where Acetic Anhydride finds its applicationnamely
i. Chemical industriesii. Wood and Wood Product industries
iii. Food and Food processing industriesiv. Dye industriesv. Pharmaceutical industries
It also mentions famous companies and industries.
3. Europe I ndustry - Region Wise It breaks up above excel file data intoregional divisionNorthern, Eastern, Southern and Western Europe to focusmarket research.
4. Europe Industri es and DemographicsIt studies Europe regionally with alltarget industries along with demographics and good to know information.
5. Database of Acetic Anhydride Manufactur ers and Suppl iersIt enlist AceticAnhydride Manufacturers and Suppliers. It was found with help of searchengine, various website and reference in research papers.
3.1 Purpose of the Study
1) To prepare the complete list of producers/manufacturers of Acetic Anhydridein Europe with their capabilities and complete profile and observe perceptional
manufacturing capacity of respondents.
2) To study breakup of consumption of Acetic Anhydride in term of end sectorusage with special emphasis on modified starch.
3) To analyze and prepare SWOT profile of Jubilant Life Sciences Ltd.4) To study feasibility of e-commerce as a potential opportunity in chemical
industry.
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3.2 Research Design
The project uses descriptive research. An intensive secondary research is
conducted to gain insights in the chemical market. This helps in understanding the
various factors in European market of Acetic Anhydride.
3 .3 Research Ques t ions
A) E-Mail Request to Experts
Dear Team
I, Chetanya Rajput, intern from Amity Business School, under the guidance of Mr
Abhishek Sharma is conducting a market research on "Starch Acetate", a kind of
modified starch from view of consumption of Acetic Anhydride
To give you an idea of information, I am looking at
1) Production quantities of starch acetate and consumption of Acetic Anhydride for
the same.
2) Potential of Acetic Anhydride in this application for future.
3) Historic growth in consumption of Acetic Anhydride for starch acetate.
4) Major manufacturer of starch acetate and major suppliers of Acetic Anhydride to
them.
Please provide me helpful information.
Thank you
Regards
Chetanya Rajput
Intern
Amity Business School
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B) Telephonic Script (As given by Jubilant Life Sciences Ltd)
Goodmorning (Depends), is this __Company Name_____?
I am calling from Dubai, I would like to speak to someone from production or exportdepartment.
Hello, I am Hasan Khan. I am a Supplier of chemicals in Dubai. I would like to
procure Acetic Anhydride from your company.
I am would like to know following details
I F MANUFACTURERS
What types of Acetic Anhydride do you provide?
In what time, I will get my order?
We will assume the price, as per Tecnon OrbiChem or do you charge different than
that?
What amount of Acetic Anhydride is available for merchant selling?
I F DI STRIBUTOR OR SUPPL IER
What types of Acetic Anhydride do you provide?
From where do you procure Acetic Anhydride that you supply?
In what time, I will get my order?
We will assume the price, as per Tecnon OrbiChemor do you charge different than
that?
Please email the details at [email protected]
Back-Up Data
I am calling from Saral chem
Mobile No.9582534899
E-mail Id - [email protected]
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3.4 Participants
1) Manufacturers of Acetic Anhydride in Europe and foreign players.
2) Experts interviews.
3.5 Data collection technique and procedure
A.Primary Datai. Collecting information on manufacturing capacity, delivery time and
price of Acetic Anhydride as mystery shopper on telephone.
ii.
Discussion with the experts of chemical market.B.Secondary dataAlready existing data is called secondary data. I collected them by following method:
i. Internetii. Published Reports
iii. Search Engineiv. Official websites of manufacturers and suppliers.
3.6 Instruments Used
Following research instruments were deployed to conduct research
1. Tele-calling Script.2. E-mail request to experts.
3.7 Tools Used
Following softwares has been used duringcollecting, analysis and compiling of data.
1. SPSS2. Microsoft Excel3. Skype4. Google Market Finder5.
Google Market Intelligence
6. Compete comparative Web Traffic Analyzer
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3.8 Pilot Study
The pilot study was done in first call made to Celanase which cross questioned
a lot and as a result, back-up data was created and study was done to know marketprices and chemical trade.
3.9 Limitations
1. Inaccessibility to all published report due to high cost.2. Inaccessibility to Tecnon Orbichem price list due to high cost.3. Some respondents werent opening up.4. Mostly respondents do not reply to e-mails or contact us option in their
website.
5. Communication barrier.6. Limited time and resources.
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CHAPTER 4: DATA ANALYSIS AND FINDINGS
4.1 Findings
The result of first objective as mystery shopper to find out manufacturingcapacity based on perception (based on calling them and exploring their website) andactual data (based on web resources and findings) is as follows
Table 4.1Database of Acetic Anhydride ManufacturersS No. Name of Organization Type Manufacturing
Capacity (Year of
data)
Manufacturing
Capacity(Perception)
Net Sales
1 Celanese AG Public 535 Kt/a (2002) Bulk, Big $6762Mn (45.57%contributed byAcetyl )
2 Eastman Chemical Co Public 1,631 million pounds(2012)
Big $7.2 billion (2011)
3 Alfa Aesar Public Big 2.3 Bn Pound
4 Panreac Private Average Data not available
5 Merck KGaA Public N/A 2,393 million(2011)
6 BUFA ChemikalienGmbH & Co. KG
Private Average Data not available
7 Kraeber & Co Private Small Data not available
8 Lonza Public Big 2.692 billion
9 BP Public 157 KT/a (Total -18536 KT/a) (2011)
Not key focus $375,517 million(2011)
10 Apollo Scientific Private Small 23434704*
11 Euram Chemicals Ltd Private N/A 815594*
12 Vicker Laborateries Ltd Private Small 4223419*
13 Finetech Industry Limited Private Small Data not available
14 TCI Europe N.V Private Big Data not available
15 Jubilant Life Sciences Ltd Public Big Rs 22008.96 Mn(Mar 2011)
16 NIPPON GOHSEIEurope GmbH
Public Big 17.9 billionyen(Capital)
17 Saudi International
Petrochemical Company(Sipchem)
Public 50,000t/y (50% to
VAM Plant and restfor Merchant Selling)
Average SR 705,897,758
(Net Profit 2011)
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Table 4.2Database of Acetic Anhydride Suppliers
S No. Name of Organization Location (HQ) Type Net Sales
1 Avonchem Ltd United Kingdom Private 1994921*
2 Romil United Kingdom Private 2432118*
3 Indace Ltd United Kingdom Private 8156854*
4 Natchemco (UK) Ltd United Kingdom Private 30m(Turnover)
5 Jonathan Phillips (UK) Ltd United Kingdom Private 10301129*
6 Cornelius Group Plc United Kingdom Private 42005498*
7 Brown & Forth Ltd United Kingdom Private 1814098*
8 Bowden Chemicals Ltd United Kingdom Private 342825*
9 Pearl Chemicals United Kingdom Private 1293680*
10 Camlab United Kingdom Private 9197401*
11 Heritage Chemicals Ltd United Kingdom Private Data not available
12 Long-Range Europe Limited United Kingdom Private 1617100*
13 Banner Chemicals Group United Kingdom Private 1213894*
14 P&R Labpak Limited United Kingdom Private 4765594*
15 Clariant International Ltd Switzerland Public 7.4 billion in 2011
16 Toscochimica S.p.A. Italy Private Data not available
17 Chimitex SpA Italy Private 88,500,000USD.(1=1,30USD)
18 Albachem Italy Private Data not available
19 Elettrochimica Valle Staffora S.p.a Italy Private N/A
20 ARNSPERGER Germany Private 315 million euros
21 D H Scientific Germany Private Data not available
22 R2 ChemTec Denmark Private Data not available
23 Cymit Quimica Spain Private Data not available
24 NEW CHEMICAL, SL Spain Private Data not available
25 QUIMIPUR, SL Spain Private Data not available
http://www.worldofchemicals.com/sup/chimitex-spa/6750.htmlhttp://www.worldofchemicals.com/sup/albachem/7717.htmlhttp://www.worldofchemicals.com/sup/albachem/7717.htmlhttp://www.chemnet.com/ChinaSuppliers/27867/acetyl-oxide--857712.htmlhttp://www.worldofchemicals.com/sup/r2-chemtec/12946.htmlhttp://www.worldofchemicals.com/sup/r2-chemtec/12946.htmlhttp://www.chemnet.com/ChinaSuppliers/27867/acetyl-oxide--857712.htmlhttp://www.worldofchemicals.com/sup/albachem/7717.htmlhttp://www.worldofchemicals.com/sup/chimitex-spa/6750.html -
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Table 4.2 (continued)Database of Acetic Anhydride Suppliers
26 Target Quimica SL Spain Private Data not available
27 PPH "STANDARD" Sp. z o. o Poland Private 350 million USD
28 A-Cell Acetyl Cellulosics Ab Sweden Private Data not available
29 P&S Chemical The Netherlands Private Data not available
30 Epenhuysen Chemicals The Netherlands Private Data not available
31 Molar Chemicals KFT Hungary Private Data not available
32 CHEMAT Odczynniki iWyposaenia Laboratoryjne
Poland Private Data not available
33 Expert Trade Romania Private Data not available
34 Nordic Invest Romania Private Data not available
35 Prodasynth France Private Data not available36 Kimeks Turkey Private Data not available
37 Brenntag NV Belgium Public USD 12.1 billion
38 Fiers SA Belgium Private Data not available
39 The Nichem Group Northern Ireland Private Data not available
* - The data entry with this symbol is taken from Manta.com, represents Annual Revenue
(USD $) and their employee strength is also taken from same website
4.2 Regional Results for End Sector Use of Acetic Anhydride
4.2.1 Eastern Europe Region
Eastern Europe comprises of 12 countries namely
1) Armenia2) Azerbaijan3) Belarus4) Bulgaria5) Czech Republic6) Hungary7) Moldova8) Poland9) Romania10)Russia11)Slovakia12)Ukraine
Poland has two acetic anhydride suppliers and two famous food processingcompanies like PPZ "TrzemeszNo", Nowamyl S.A. Russia is also an important
country which has good presence of chemical industries.
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4.2.1.1 Observations
1) Out of 12 countries, only 1 i.e. Moldova doesnt have Chemical industry. Ithas the maximum number of this industry as compared to other regions.
Figure 4.1.1ChemicalIndustry in Eastern European Region
2) Out of 12 countries, only 2 have Wood industry i.e. Bulgaria and Russia.
Figure 4.1.2Wood Industry in Eastern European Region
16.7% (2)
91.7% (11)8.3% (1)
83.3% (10)
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3) Out of 12 Countries, only 1 doesnt have Food and Food processing industriesi.e. Czech Republic
Figure 4.1.3Food and Food Processing Industry in Eastern European Region
4) Out of 12 countries, only 2 have Dye industry i.e. Czech Republic and Poland
Figure 4.1.4Dye Industry in Eastern European Region
16.7% (2)
91.7% (11)
8.3% (1)
83.3% (10)
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5) In whole Eastern Europe, no country has Pharmaceutical Industry.
Figure 4.1.5Pharmaceutical Industry in Eastern European Region
4.2.2 Northern Eur ope
Northern Europe comprises of 12 countries namely
1) Denmark2) Estonia3) Faroe Islands (Denmark)4) Finland5) Greenland (Denmark)6) Iceland7) Ireland8) Latvia9) Lithuania10)Norway11)Sweden12)United Kingdom
This region is significant and crucial as it home to various important
companies where Acetic Anhydride can finds its end-usage. The most crucial country
is United Kingdom which is home to key manufacturers of Acetic Anhydride like BP,
Apollo Scientific, Euram Chemicals Ltd, Vicker Laborateries Ltd, Finetech Industry
Limited and Manufacturing plants of Eastman Chemical Company, Alfa Aesar.
Norway is home to Yara Chemicals, which ranks 18 thbiggest chemical firm in world.
100% (12)
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4.2.2.1 Observations
1) Out of 12 countries, only 5 have chemical industry.
Figure 4.2.1Chemical Industry in Northern European Region
2) Wood industry is present in 5 countries. It has the maximum number of thisindustry as compared to other regions. Ireland is home to BSW Timber
Figure 4.2.2Wood Industry in Northern European Region
41.7% (5)58.3% (7)
41.7% (5) 58.3% (7)
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3) The food and food processing industry is present in 8 countries. UnitedKingdom is Headquarter for Tate and Lyle, Kraft Foods (Cadbury), Unilever.
Figure 4.2.3Food and Food Processing Industry in Northern European Region
4) Dye industry is present in only 2 countries i.e. Lithuania and United Kingdom.
Figure 4.2.4Dye Industry in Northern European Region
16.7% (2)
66.7% (8)
33.3% (4)
83.3% (10)
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5) Pharmaceutical industry is present in only 3 countries.
Figure 4.2.5Pharmaceutical Industry in Northern European Region
4.2.3 Southern Region
Southern region has highest number of countries i.e. 17 which are as follows
1) Albania2) Andorra3) Bosnia and Herzegovina4) Croatia5) Cyprus6) Greece7) Italy8) Macedonia9) Malta10)Montenegro11)Portugal12)San Marino13)Serbia14)Slovenia15)Spain16)Turkey17)Vatican City
The economic condition of southern region isnt in good health as 3 majoreconomies have Greece, Portugal and Spain has sought bail-out and worst affected bysovereign debt crisis. Economic Health of Cyprus, Italy isntalso robust.
25% (3)
75% (9)
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4.2.3.1 Observations
1) Out of 17 countries, 10 have chemical industries. From point of view of AceticAnhydride, Spain and Italy are important.
Figure 4.3.1Chemical Industry in Southern European Region
2) Wood industry is present only in 6 countries.
Figure 4.3.2Wood Industry in Southern European Region
35.29% (6)
58.82% (10)
41.18% (7)
64.71% (11)
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3) Food and food processing industry is present in 13 countries. It has themaximum number of this industry as compared to other regions.
Figure 4.3.3Food and Food Processing Industry in Southern European Region
4) Dye industry is present only in 1 country i.e. Italy
Figure 4.3.4Dye Industry in Southern European Region
5.88% (1)
76.47% (13)
23.53% (4)
94.12% (16)
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5) Pharmaceutical industry is present only in 5 countries.
Figure 4.3.5Pharmaceutical Industry in Southern European Region
4.2.4 Western Eu rope
Western Europe comprises of 9 countries yet it is known as the powerfulregion. The countries which fall under Western Europe are as follows
1) Austria2) Belgium3) France4) Germany5) Liechtenstein6) Luxembourg7) Monaco8) Switzerland9) The NetherlandsThe economic health of Western Europe is robust due to presence of countries
like Germany, The Netherlands and Switzerland. It is seen as powerful sector as itknown for automobile industries, pharmaceuticals companies etc. Automobileindustries also plays small role on Acetic anhydride demands as it is used asemulsifying agent in producing paints used over cars. The Netherlands, Germany andBelgium are famous for Antwerp-Rotterdam-Rhine-Ruhr Area (ARRRA) Belt, whereseveral chemical industries are present. Switzerland is home to Novartis and Nestle.
29.41% (5)
70.59% (12)
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4.2.4.1 Observations
1) Chemical industry is present in 7 countries. It is an important region for AceticAnhydride as it is home Clariant, Kraeber, BUFA, BASF, Saudi International
Petrochemical Company (Sipchem), TCI Europe N.V, Lonza, Merck.
Figure 4.4.1Chemical Industry in Western European Region
2) Out of 9 countries, Wood industry is present in only 1 country i.e. Austria.
Figure 4.4.2Wood Industry in Western European Region
11.1% (1)
77.8% (7)22.2% (2)
88.9% (8)
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3) Food and Food Processing Industry is present in 8 countries.
Figure 4.4.3Food and Food Processing Industry in Western European Region
4) Dye industry is present in 5 countries. It has the maximum number of thisindustry as compared to other regions.
Figure 4.5.4Dye Industry in Western European Region
55.6% (5)
88.9% (8)
11.1% (1)
44.4% (4)
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5) Pharmaceutical Industry is present in 4 countries. It has the maximum numberof this industry as compared to other regions and is very important as it ishome to Novartis, HoffmannLa, Roche, Merck, Solvay Pharmaceuticals,Sanofi AG.
Figure 4.4.5Pharmaceutical Industry in Western European Region
4.2.5 Europe (Continent)
4.2.5.1 Observations
1) The Chemical industry is present in 30 countries which means around 60% ofEurope has chemical industry.
Figure 4.5.1Chemical Industry in Europe
66% (33)
44.4% (4)55.6% (5)
34% (17)
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4) Dye industry is present in 10 countries (20%)
Figure 4.5.4Dye Industry in Europe
5) Pharmaceutical industry present in 12 countries (24%)
Figure 4.5.5Pharmaceutical Industry in Europe
76%(38)
20% (10)
80%(40)
24% (12)
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Table 4.3- Europe industry data (Consolidated)
Industry
Region
(No. of
Countries)
Chemical
Present
Percentage
(No. of
Countries)
Wood
Present
Percentage
(No. of
Countries)
Food
Present
Percentage
(No. of
Countries)
Dye
Present
Percentage
(No. of
Countries)
Pharmaceutical
Present
Percentage (No. of
Countries)
North (12) 41.7% (5) 41.7% (5) 66.7% (8) 16.7% (2) 25% (3)
East (12) 91.7% (11) 16.7% (2) 91.7% (11) 16.7% (2) 0% (0)
West (9) 77.8% (7) 11.1% (1) 88.9% (8) 55.6% (5) 44.4% (4)
South (17) 58.82% (10) 35.29% (6) 76.47% (13) 5.88%(1) 29.41% (5)
Total (50) 66% (33) 28% (14) 80% (40) 20% (10) 24% (12)
4.3 SWOT Profile of Jubilant Life Sciences Ltd
The SWOT analysis is a holistic concept to analyse a topic regarding itsstrengths, weaknesses, opportunities and threats. Strengths and weaknesses are
understood as so called internal, supporting or hindering factor, which can be directlyinfluenced by the company itself. This report further analyses SWOT profile, AnsoffMatrix, Opportunity Strategy Evaluation grid, Threat Mitigation Strategy, productinnovation Matrix and Trends Impact.
Strengths
1. Industry leading positioni. 9th largest producer of Acetic Anhydride and 4thin merchant sales
ii. Global leader of Pyridrines and Derivatives2. Extensive Range of Solutions and product line.3. Strong customer relations4. Vast presence across the value chain5. Good corporate Image & established brand name
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6. Supportive operational factorsi. Strong & wide network of manpower across India
ii. Insulation from high crude prices as it uses molasses and alcohol.iii. Possessing advanced technology & design abilityiv. Low R&D and manufacturing cost.
Weaknesses
1. Inaccessibility to cheap feedstock as compared to counterparts from China andMiddle East.
2. Website doesnt support e-commerce and not at par with competitors website. 3. Unfavourable Forex movements which leads to loss in exports.
Opportunities
1. New Business contracts and collaborations2. Due to high cost of feedstock in Europe, Manufacturing is expensive for
European counterparts.3. Outsourcing opportunity for CRO division.4. Flexible packaging for targeting laboratory usage.
Threats
1. Environmental activism.2. European economic and legal scenario3. Competitive landscape not favourable.
4.3.1 The SWOT M atrix
A firm should not necessarily pursue the more lucrative opportunities. Rather,it may have a better chance at developing a competitive advantage by identifying a fit
between the firm's strengths and upcoming opportunities.To develop strategies that take into account the SWOT profile, a matrix of thesefactors can be constructed. The SWOT matrix (also known as a TOWS Matrix) isshown below:
Strengths Weaknesses
Opportunity S-O strategies W-O strategies
Threats S-T strategies W-T strategies
Figure 4.6 - The SWOT/TOWS Matrix
1) Strengths opportuni ties (SO) strategies
In this portion of matrix, company pursue opportunities that are a good fit to the
company's strengths.
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1. Increase domestic and international market share aggressively2. Take up outsourcing projects from developed country where generics are
pushed3. Target end users with small requirements which also doesnt comes under
REACH.4. Invest in brand recognition campaign.
2) Weakness Thr eats (WT) strategies
In this column, establish a defensive plan to prevent the firm's weaknesses frommaking it highly susceptible to external threats.
1. Focus on domestic markets or non-European markets2. Joint venture with manufacturers in Middle East and China.
3) Strengths Threats (ST) strategies
In this column of matrix, a firm identify ways that the firm can use its strengths toreduce its vulnerability to external threats.
1. Brand building exercises on sustainable development and environmentalconcern
2. Gear up for competition from China and Middle East.3. Maintain strong customer relationships4. Increase number of suppliers.5. Diversify to dominate6. Maintain technological and knowledge superiority.
4) Weakness opportun ities (WO) strategies
In this column, firm overcome weaknesses to pursue opportunities1. Invest in manufacturing plant in China or Middle East.2. Hedge Forex risk.3. Add provision for e-commerce in website. Using Google Market finder and
Google Market Intelligence, huge potential for online advertisements and e-commerce as well was found. Surprisingly, web search results for Acetic
Anhydride are reported in India, which show huge potential to capitalizedomestic chemical market with e-commerce. Moreover, websites traffic isvery low as compared to competitors website as shown in Figure 4.7. Theresult are as follows
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Figure 4.7 - Analysis of Website Traffic in comparison to competitorswebsite
Figure 4.8Google Market Finders Result
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Figure 4.9 - Screenshot of Google Market Intelligences Result
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Figure 4.10Impact of SWOT Factors
Figure 4.11 - Opportunity Strategy Evaluation (OSE) Grid
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Figure 4.12 - Threat Mitigation Strategy/ Challenge Impact Assessment (CIA) Grid
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Table 4.4- Internal Factor Evaluation Matrix - Jubilant Life Sciences Ltd
Key Internal Factors Weight Rating Weighted.Score
Strengths
1. Industry leading position 0.10 4 0.40
2. Extensive Range of Solutions and product line 0.05 3 0.15
3. Strong customer relations 0.10 3 0.30
4. Vast presence across the value chain 0.15 4 0.60
5. Good corporate Image & established brand name.
0.05 3 0.15
6. Supportive operational factors .0.20 4 0.80
Weakness
1. Inaccessibility to cheap feedstock as compared tocounterparts from China and Middle East. 0.20 1 0.20
2. Forex movements which leads to loss in exports 0.15 1 0.15
3. Website doesnt support e-commerce. 0.05 2 0.10
Total 1 3.20
REMARKS Strong internal position
The score of 3.20 indicate that BHEL is above average in their overall internalstrategic position.
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4.4 Segment Analysis
Following five are top segments which Jubilant Life Sciences Ltd shouldfocus as they have been chosen with help of Product Life Cycle Analysis as shown in
following diagram
Figure 4.13 - Product Life Cycle Analysis
Segment 1Modif ied Starch
This segment is the most promising segment as its demands is expected to growexponentially. It witnessed slowdown in 2009 and 2010 due to global recession.However in 2012, It is expected 72 mn (2012) tons from 68 mn tons (2009). Cassavawill become leading commodity. Its Industrial demand is 5 times more than FPIdemand.
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Figure 4.14Segment Analysis
Segment 2Wood Preservati ves
After commercialization of Acetylated wood in 2007 as Accoya, the demand has goneup. They have increased plant production capacity to meet rising demand in 20011.Thus wood preservatives segment presents great opportunity.
Segment 3
Chemical I ndustry I nputThis was stable and high due to absence of chemical substitute earlier. However, dueto high manufacturing cost and prices of European manufacturers, the focus hasshifted to China, India and Middle East as importing destination, which offers at low
prices. The future presents intense competition for basic chemical with rise of Chinaand Middle East. Even, USAs manufacturers have started to manufacture from
China.Presently Middle East and China are seen as new manufacturing hub of AceticAnhydride and areas where development at cost effective ways are adopted followed
by India and Iran. Japan, Turkey and South Asia have emerged as new market withhuge potential followed by North America, Eastern Europe and Southern Europe.
Northern Europe and Western Europe are matured and saturated markets. This isdiagrammatically represented in Regional Market Life Cycle Analysis
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Figure 4.15 - Regional Market Life Cycle Analysis
Segment 4Pharmaceutical I ndustri es
Acetic anhydride finds its application in key drugs like Paracetemol and Aspirin. The
market demand is stable. The generics which are pushed in developed nations presentan opportunity for CRAMS division.
Segments 5Food and Food Processing I ndustr ies
The market size is big. However, the search for organic substitute is high like GumArabic and Green Pea which makes it least preferred segment to target.
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4.5 Porters FiveForces Model
Figure 4.16 -Porters 5 Forces Model Acetic Anhydride manufacturing industries
1) Threat of Substitu tesis highest due to availability of various manufacturersand suppliers.
2) Bargaining Power of Suppliersis medium as variation in cost isnt high andmost of manufacturers are vertically integrated.
3) Bargaining Power of Customers is low due to almost fixed or same pricesfollowed.
4) Thr eat of New Entrantis low to medium because of rise in Middle East andChina companies. However old manufacturers are shifting their bases to Chinato control the cost.
5) I ntensity of Rivalr y in Europe is medium with reasonable number ofmanufacturers present and huge market entry cost.
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4.6 Ansoff Matrix
Ansoff matrix, also known as Ansoff Product-Market Grid, was developed byIgor Ansoff to focus on the firm's present and potential products and markets
(customers). By considering ways to grow via existing products and new products,and in existing markets and new markets, there are four possible product-marketcombinations. Ansoff Matrix for Jubilant Life Sciences Ltd follows as
Figure 4.17Ansoff Matrix
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4.7 Product Innovation Matrix
Figure 4.18 - Product Innovation Matrix
4.8 Market Impact of Top 10 Growth Trends of Acetic Anhydride
Figure 4.19 - Market Impact of Top 10 Growth Trends of Acetic Anhydride
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4.9 PESTEL Analysis
4.9.1 Poli tical F actors
With increased concern from environmental inspite of implementing REACH
and European sovereign debt, the political factors are not in favour of chemical
industry. Presently, chemical industry looks for a balanced chemicals policy,
incentives for innovation and non-bureaucratic regulations from the political side. The
Eurozone and European Union are on the edge with idea of disintegration becoming
dominant. However, stable political conditions with mostly democratic system makes
it suitable investment destination. With recent Greek election, it will stay in Eurozone
and will try to recover instead of immediately pulling out as proposed by opposition
party.
4.9.2 Economic Factors
4.9.2.1 European M arket for Acetic Anhydri de
As per EU Trade Monitor, European demand for Acetic Anhydride is flat to
declining due to its usage in cigarette. Its use in textile fibers is also slowly declining.
Smaller applications in wood preservatives, films and coatings are expected to follow
GDP growth rates in Europe, but these account for less than 20% of demand for
Acetic Anhydride. Ironically, Cigarette manufacturers reported improved profits
during H1 2010 compared to the previous year.
Tecnon OrbiChem has noted the closure of anhydride consuming plants in the
UK and Italy in recent months, and there is ongoing speculation regarding the future
of other European consumers as well. Market participants remain concerned about theinflux of imported anhydride derivatives from China. The trend seen is contraction in
downstream business during the past 12-18 months.
4.9.2.2 Ef fect of European Sovereign Debt Crisis
As per CEFIC report, The European chemical trade groups mid-year
summary forecast of chemicals sector economists predicts a standstill in EU
chemicals output in 2012, after a relatively weak 1.3 per cent increase in 2011. The
reason as per CEFIC Director General Hubert Mandery is decline in domestic demand
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as compared 2011 due to increase in austerity measures which dampen business order
and inventory build-up remains flat. Though theirs is an opportunity as weaker Euro
will boost exports. The demand for industrial end user usage i.e. Automobile (which
uses Dyes and various chemicals), Constructions has also dragged chemical industry
down. Overall, there is a decline in chemical industry.
4.9.2.3 Ef fect of Competi tion
European chemical industry faces competition from Middle East and China.
As per Figure 4.20.1, NAFTA growth has become steady whereas Asia Pacific
production growth is increasing exponentially.
Figure 4.20.1 International comparison of chemical production growth (Source -
CEFIC)
Figure 4.20.2 - Chemical Industry Profile - Chemical Sales by Country (Source -
CEFIC)
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This is further evident from the fact that production of chemical worldwide by
almost 40% from 1995 to 2005 but 95% of that growth was seen in developing
countries. In 1997-2007, EU global sales of chemical declined by 2.7% whereas
world saw increased by 60%. This can be attributed to strong demand in Asian
markets supports growth in production for domestic chemical companies in that
region. As a result, it has resulted in significant underutilization of capacity, plant
shutdowns and margin erosions.
4.9.3 Social Factors
Acetic anhydride finds it application in making heroin, a hallucinative drug,
which is illegal and has an adverse effect of society. It is used cigarette filter, which
demand is decreasing.
Figure 4.21PESTEL Analysis
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4.9.4 Technological F actors
EU operational expenses are increasing, which increases price of chemicals.
Recently, BP increased the price of Acetic Anhydride due to elevated operating costs,particularly in raw materials and freight. The cost of raw material feedstock is
significantly higher in Western Europe than in most other regions of the world. Due to
these feature, Europe is losing to China and Middle East. However, they have
advanced technology, know-how experience and knowledge, which put them in an
advantage.
4.9.5 Environmental Factors
REACH is implemented in European Union which also termed as World
Strictest Chemical law. REACH stands for registration, evaluation, authorization,
and restriction of chemicals. Despite REACH, environmentalist objected to REACH
due to some loopholes. The environmental laws are not relaxed and impose a cost on
manufacturers and importers.
4.9.6 Legal F actors
The legislation for REACH was proposed under dual reasoning: protection of
human health and protection of the environment. The Regulation was voted by the
European Parliament and of the Council on 18 December 2006, and came into force
on 1 June 2007. It applies to all categories of chemical substances manufactured,
imported, used as intermediates or placed on the market.
4.9.6.1 Objectives of REACH
1. Ensure protection of human health and the envir onmentby the registration and
testing of all existing and new chemical substances placed in the market and by
imposing authorization requirements and restrictions to substances that give rise to
high concern. The system is intended to promote the substitution of hazardous
chemical substances by less dangerous ones.
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2. Main tain and enhance the competi tiveness of the EU chemical industryby
stimulating innovation and minimizing, to the extent possible, the resource
implications of the implementation of the Regulation for industry.
3. Prevent the fragmentation of the in ternal market
4. I ncrease transparencyby enhancing access to information on chemicals for
consumers in order to make informed decisions about the substances.
5. Non-animal testing is encouraged.
6. Conform to EU international obligations under the WTO ensuring that no
unnecessary barriers to trade could be created and there would be no discrimination.
7. Ensure in tegration with in ternational eff orts in view of the global nature of the
chemicals industry and the trans-boundary impact of certain chemical substances and
in order to avoid the duplication of test efforts.
4.9.6.2 Benefits of REACH
1. Unlocks I nnovation - New substances will require similar testing to that forexisting ones. The new chemicals management system should also generate a
vast amount of information on the properties of the substances and their uses
down in the supply chain.
2. Economicall y Sustainable Chemical I ndustry - REACH was intended toincrease consumer and investor confidence, as well as employee and
community trust.
3. Social CostIt benefits environment and public health.4.9.6.3 Disadvantages of REACH
Termed as world's strictest chemical law, it might put SMEs in disadvantage
in lon run. Even though there is a discount on ECHA fees for SMEs, those discounts
are not that helpful when the price of letter of access is excessive. It is seen as barrier
to trade as it imposes an additional cost that did not exist in the past
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4.9.6.4 Substance I nformation Exchange Forum
Led by the Lead Registrant, Substance Information Exchange Forum (SIEF)
creation is mandatory by legislation. All parties who pre-registered for aceticanhydride are by definition members of the SIEF. Data holders may also choose to
join the SIEF.
The SIEF will promote, monitor, and keep its members aware of the following.
Progress towards registration. Data sharing arrangements amongst potential registrants. Compensation arrangements for data that will be used by others Joint submission.
4.9.6.5 Jubil ant L if e Sciences L td & REACH
Presently, Jubilant Life Sciences Ltd has 35 dossier filings in European Union of
which 31 are approved.
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Companies manufacturing or
importing chemical substances European
Market
Register
Deadlines
1/12/2010 - 1000 tonnes/a. &
Toxic chemicals producers
1/06/2013100 tonnes/a
1/06/2018 - 1 tonne/a.
Authorization
Evaluation
Quantity > 1 tonne/year
Figure 4.22 - Flow Diagram of REACH
European Chemicals Agency
(ECHA) inHelsinki, Finland
(Manages the technical, scientific and
administrative aspects of REACH)
NO
APPROACH SIEF IF MANY
REGISTRANTS FOR ONE
CHEMICAL
Restriction
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4.10 Observations in Modified Starch
4.10.1 Overal l M arket of Modifi ed Starch in Europe
Table 4.5Un-modified and modified starch market structure & opportunitiesMarket Structure Estimated Opportunity
Industrial 5.6 billion lbs.
Food and Food processing industries 1.4 billion lbs.
Total Around 6.9 billion lbs
Table 4.6Dry starch usage in End sectors segments
Segments Share
Paper and Paper Board 62%
Chemical and Pharmaceuticals 3%
Food and Food processing industries 32%
OthersAnimal Feeds etc. 3%
4.10.2 Major Players
National,Cargills, Staley, Amylum, Roquette, Avebe, CPI and Eastman.
4.10.3 Potenti al Threats fr om Substi tutes
Gum Arabic and Green Pea
4.11 Summary of Findings
To study the complete list