India's polyethylene terephthalate demand is expected to rise at a compound annual growth rate of 12%-14% over the next five years on the back of strong economic and population growth -- far outpacing the expected growth of 4%-5% in global demand, said a company official at Reliance Industries Limited.
The fast pace in India's demand growth is also expected to lift the compound annual growth rate of Asia's PET consumption to 6%-8% over the same period, said Rajesh Gera, assistant vice-president of business development in RIL's PET division at the Masterbatch Asia 2017 conference in Singapore on Wednesday.
India's PET demand has surged significantly in recent years, rising to 710,000 mt/year over 2014-2015, from 600,000 mt/year over 2012-2013. And demand is forecast to surge to 925,000 mt/year in 2016-2017, according to Gera.
At the same conference, Plastiblends India CEO Rohit Vashistha had also attributed India's GDP growth as one of the key drivers behind the country's domestic consumption of plastics and derivatives such as PET, noting that the International Monetary Fund had projected India's GDP growth rate at 7.1% for 2017 -- double the rate of projected global GDP growth at 3.1%.
Another main driver behind India's PET demand growth is more widespread use of PET packaging in the beverage sector in India, as most non-alcoholic beverages are currently packaged in PET bottles across Asia, said Vashistha.
Further growth is also seen from an expected large increase in PET processing and its applications within Asia, Vashistha added.
Currently, PET bottles are used primarily in the pharmaceutical sector for over-the-counter medicine such as cough syrups, antacids and vitamins, where demand is around 80,000 mt/year in 2015-2016 in India, Gera said.
In the food and beverage sector, it can be used to package milk, edible oil, ketchup, juices and ensure a longer shelf life, and would be more effective if other PET additives were added, Gera explained.
Globally, consumption of PET was more than 300 million mt/year which has led to more than 15 trillion bottles packaged and consumed, Mr Gera said.
Future growth opportunities for PET were also abundant as it had many other potential packaging applications such as for non-bottle applications and thin-wall moulded items. PET could also potentially replace polypropylene if its characteristics could be modified further.
