Gujarat exports raw material dyes to China
The Dollar Business Bureau
Gujarat’s dyes and intermediates industry is getting benefitted due to the Chinese government's crackdown on its chemical manufacturers. Earlier, vinyl sulphone which is the main intermediate in dye-manufacturing was regularly imported from China. But now, chemical companies from Gujarat are exporting vinyl sulphone to China in huge quantities.
According to the new President of Gujarat Dyestuff Manufacturers' Association (GDMA) Bhupendra Patel, chemical companies from the state have exported over 1,000 tonnes of vinyl sulphone to China in the previous year. India has exported such a huge quantity of this chemical for the first time to its competitor in the chemical sector, he said.
Currently, there is limited availability of vinyl sulphone in China as a large chemical manufacturing plant in the country had shut down. Former President of GDMA Shanker Patel informed that there is a shortage of 3,000 tonnes of this chemical due to the closure of Hubei Chuyuan plant over environmental issues in March 2016. This company has 30% share in the international market for chemical intermediates and dyestuffs.
Gujarat companies have enough capacity to export vinyl sulphone to China. Around 10,000 tonnes of this intermediate is produced per month worldwide. Out of this, China produces 6,000 tonnes and the rest in India, mainly in Gujarat. From their production, China’s dye manufacturers consume 5,000 tonnes of vinyl sulphone per month, exporting the balance to India.
Domestic market price of the chemical is Rs.350-360 per kg, while the export price of the same is around Rs.400 per kg. This indicates the demand for the product manufactured in India, he added.
Indian chemical manufacturing companies are being benefitted from the lower production in China due to stricter environment rules. The closure of Hubei Chuyuan plant led to an increasing demand for dye intermediates. This has also resulted in pushing the prices upwards. H-acid, another chemical used in dyes manufacturing, also witnessed a price rise.
Dyes and intermediates industry in India has a turnover of Rs.20,000 crore per year. More than 4.53 lakh metric tonnes of dyes and intermediates worth Rs.13,601 crore has been exported from India during 2015-16. Out of this, 60% of the exports are from Gujarat alone.