Six New Industrial Parks Likely to push growth of plastic sector in India

The Indian government has announced its decision to set up six new plastic parks as part of the ongoing five-year plan which runs from 2012-2017. This is in addition to the four parks which are already under construction, thus making the total number to ten.

Six new industrial parks likely to push Indian plastic sector growth

Announcing the decision during a seminar held in North India, the Joint Secretary for Petrochemicals- Neelkamal Darbari stated that the newly proposed plastic parks would be set up in the states of Punjab, Haryana, Rajasthan, UP, Odisha and Andhra Pradesh. The works on four parks in Madhya Pradesh, Tamil Nadu, Odisha and Assam are already underway and are supposed to finish within two years.

Plastic parks are aimed at bringing together plastic reprocessing units, recycling units and waste management systems under one roof. The Indian government would provide grant funding up to 50% of the project cost subject to a ceiling of Rs. 40 crore per project.

The remaining contribution in the SPV will be from the State Government or State Industrial Development Corporation or similar agencies of State Government, beneficiary industries and loan from financial Institutions.

The estimated yearly consumption of plastic including PE, PP and PVC is nearly 9 million tonne in India. Almost 25% of the total plastic is being imported from other countries, especially from Asian countries such as Taiwan and China. As per statistics, the per capita plastic consumption in the country is around 7-8 kilograms, significantly lower when compared to 95 kg in USA and 65 kg in Europe.

Indian paper industry to grow at 6-8%

The market would expand by 0.7 million tonnes annually which would be sufficient to absorb the new capacities that will come up in the next 2-3 years.

The long-term demand outlook for the Indian paper industry remains favorable driven by increasing literacy levels, growth in print media (particularly in the vernacular languages), higher government spending on education sector, changing urban lifestyles as well as economic growth. Given that these factors are likely to be sustained, the paper industry is likely to continue growing at a rate of 6-8% in the medium to long term although there maybe aberrant years given the cyclical nature of the industry. In addition, the preparation for general elections will provide further fillip to paper demand in FY14, says ICRAin its study on Indian Paper Industry. 

According to ICRA, the low per capita consumption of paper provides tremendous potential for growth in paper demand. Further the capacity addition programme has now come to an end and there has been a considerable slowdown in new project announcement and completion. With the recent capacity additions coming to completion any fresh announcements is unlikely in the near term and with gestation period of 24-30 months for new capacities, supply side pressures have started easing. ICRA expects 0.35 million tonnes of capacities to be added during FY14 and 0.3 million tonnes in FY15 (as against current capacity of 13 million tonnes). 

Assuming a moderate growth of 6% per annum, in ICRA's view, the market would expand by 0.7 million tonnes annually which would be sufficient to absorb the new capacities that will come up in the next 2-3 years. However, the favourable demand-supply dynamics may not immediately translate into higher profits for paper companies. The cost for most of the key inputs is currently at a very high level and domestic coal and wood prices are still increasing at a rapid pace. The ability of the companies to pass on these costs will remain the key to profitability. Companies with better cost and capital structures and a diversified portfolio of products would be better placed to endure the pressures in the medium term. 

The paper industry reported robust growth in revenues during FY08-FY13 driven by steady growth in consumption levels and increase in realisations. This period also saw steady increase in the cost of inputs such as wood, chemicals, coal etc. Over-supply scenario, rising cost pressures and increasing competitive pressures from imports made it increasingly difficult for the paper mills to pass on these cost increases. As a result, the operating profitability of the industry came under pressure in FY12. 

According to ICRA's sample study, the average operating margins of the companies declined from 21.96% in FY08 to 15.87% in FY13. Though pricing flexibility has improved marginally with an improvement in demand-supply dynamics, in ICRA's view, the profitability of paper mills continues to remain under pressure due to rising costs of raw material, coal and chemicals. Further, high depreciation and interest costs on account of debt funded capital expenditure undertaken by the industry have resulted in pressure on net profitability of paper companies as reflected by decline in net profitability from 11.34% in FY08 to 1.44% in FY13 for companies in ICRA sample. The funding of capacity expansion projects through bank borrowings led to increase in gearing levels of paper companies from the lows of FY06. High gearing levels (in the range of 2-3 times as on March 31, 2012) coupled with decline in profitability has put pressure on the debt coverage indicators of the industry.

Cairn India will invest $3 billion in next 3yrs in Rajasthan oil fields

Cairn India will invest $3 billion (over Rs 16,000 crore) over the next three years in finding more oil and gas in its showpiece Rajasthan oilfields and other blocks in India, its Chairman Navin Agarwal said today. 

Of this, the company will invest more than Rs 13,000 crore in the prolofic Rajasthan block alone, Agarwal told the company's annual shareholders meeting. 

The investment will be fully funded from the firm's cash resources and will target adding 530 million barrels of oil to its reserves. 

"Over the next three years, through the end of FY2016, your company will invest more than Rs 16,000 crore ($3 billion) in pursuit of finding and producing more oil," he said. "In Rajasthan, as an example, your company will invest more than Rs 13,000 crore ($2.4 billion) and drill more than 450 wells." 

Cairn plans to raise crude oil production from Rajasthan fields by as much as 23 per cent to 215,000 barrels per day by March, 2014. 

Rajasthan block currently produces under 175,000 bpd from five fields --- Mangala, Bhagyam, Aishwariya, Raageshwari and Saraswati. 

The company plans to drill more than 450 wells in Rajasthan block over a three year period, a significant increase from the current rate of 25 wells drilled in FY'2013. The wells planned include 100 exploration and appraisal (E&A) wells, while balance will be development wells to sustain and enhance production volumes. 

The E&A wells are aimed to target gross recoverable risked prospective resource of 530 million barrels of oil equivalent. 

"We have a well-balanced portfolio of exploration, development and producing assets and a clear plan, which will see us aggressively pursue exploration and development opportunities in the months and years ahead," Agarwal said. 

In the Rajasthan block, Mangala field is producing at plateau rates of 150,000 bpd. Aishwariya commenced production in March and is expected to ramp up to approved rate of 10,000 bpd over the next few months. 

Bhagyam, the second biggest oilfield behind Mangala, is expected to ramp up to the approved rate of 40,000 bpd by the second half of current fiscal. 

The aggressive exploration and fast-track development is designed to bring new fields into production in a region where Cairn India has already discovered around 1.3 billion barrels of oil equivalent resources but has drilled only a part of its acreage. 

Agarwal said Cairn's operations contributed Rs 20,000 crore to the government, perhaps the highest in private sector. The company contributed more than 80 per cent of India's crude oil production growth last year, saving Rs 38,500 crore ($7 billion) in foreign exchange. 

Cairn recommenced exploration in Rajasthan after a gap of five years, that resulted in its 26th discovery. 

"We committed investment of about $3 billion on further exploration and increase in production," he said. 

Cairn is seeking approval of an Integrated Field Development Plan for Rajasthan discoveries. "An early approval will substantially expedite production ramp up," he said adding the company had also submitted a formal application for an extension of Rajasthan block licence. 

"In addition to sustaining and increasing production from five oil producing fields, your company is also working towards commercialising 20 other discoveries," he said. 

Further renewed exploration will help realise an estimated 530 million barrels of oil equivalent of gross recoverable risked prospective resource, he said. 

Over the last year, Petroleum Ministry announced numerous positive policy changes - most significantly, policy clarity on exploration in development blocks allowing continued exploration in discovered field or Mining Lease areas. 

"Exploration has been, and will continue to be, central to our growth plans. As we embark on the next stage of our growth journey, I could not be more excited about our future," he said.

Jindal Power ties up Rs 5,418 crore loans for Chhattisgarh plant

The company is targeting 10,000 MW of generation capacity by 2020 at an investment of about Rs 70,000 to 80,000 crore, Raman said.

Jindal Power, a subsidiary of Jindal Steel and Power, has tied up Rs 5,418 crore in loans for two units of its upcoming 2,400 MW generation plant in Chhattisgarh, a top company official said today. 

The project at Tamnar consists of four units of 600 MW each and will cost about Rs 13,500 crore. The first two units will cost about Rs 7,740 crore and are being funded with a debt-equity mix of 70:30. 

"All the clearances are in place for the project. The first two units are near commissioning. They (the first two units) will cost approximately Rs 7,740 crore, of which debt is Rs 5,418 crore. This is being funded by a consortium of nine banks, led by State Bank of India," Jindal Power's Director ( Finance) B S Raman told reporters here. 

The two units due to be commissioned will get 65 per cent of their coal requirement from Coal India, while the remainder will be met through imports. 

Jindal Power is also trying to start at least one additional 600 MW unit in the current financial year, though it is yet to secure a coal linkage, Raman said. Overall, the project will need 4 million tonnes of coal annually. 

Jindal Power currently has a generation capacity of 1,000 MW at the same location. The station has been operating at a plant load factor of over 95 per cent for the past two years and its power is sold mostly through short and medium term power purchase agreements. 

The company is targeting 10,000 MW of generation capacity by 2020 at an investment of about Rs 70,000 to 80,000 crore, Raman said. 

About 7,000 MW of the new capacity will be added in India, either by setting up a new plant or acquiring one, while the remainder will be developed overseas, mostly in Africa. 

The company is in talks with government agencies in Botswana and Senegal for setting up plants, he said. 

The cost of generating power in African countries is about Rs 11-12 crore per megawatt, compared with the Indian average of Rs 7-8 crore per megawatt, Raman said.

The Heavy Industries Ministries seeks higher duty on imported power equipment

The Heavy Industries Ministry has sought an additional levy of 5 per cent on imported power gear to protect the strugglingdomestic power equipment players. 

The latest move comes against the backdrop of local power equipment makers, including state-run Bhel, facing tough market conditions due to overall economic sluggishness and cheaper imports mainly from China. 

Heavy Industries and Public Enterprises MinisterPraful Patel has written to Finance Minister P Chidambaram seeking higher import duty on power gear, which currently attracts 21 per cent levy. 

"We have sought 5 per cent additional customs duty on imported power equipment from theFinance Ministry to protect the interest of domestic industry," Patel said here today. 

He was speaking to reporters on the sidelines of an event organised by the Indian Electrical and Electronics Manufacturers Association (IEEMA). 

Patel said: "I think the government has recognised that import of power equipment is needed to be at least arrested and for that reason there has been a duty now on imports of electrical equipment. 

"As a result of which we are seeing that all the IPPs specially the private sector ones are coming to the private ones like Bhel and L&T and others for placing their equipment orders." 

A government official said additional duty on overseas power equipment would help the domestic industry "which is in a bad shape". 

In July last year, the government had slapped 21 per cent import duty on power equipment. 

The Cabinet, last year, had approved 5 per cent basic customs duty, 12 per cent counter-veiling duty and 4 per cent special additional duty on import of power gear. 

Stressing upon the need for government intervention to protect the domestic industry, the Minister said that every country looks at its own interest. 

"Countries like the US and China exercise control to protect the interest of their domestic industry. We also have a huge responsibility in developing our nation and should look at new ways. 

"Some government intervention is required to protect domestic industry," he added. 

Patel noted that domestic players like Bhel and L&T have actually added huge capacities but the slowdown in power sector resulted in an adverse impact. 

Understanding Pump Curves # 3, Centrifugal Pumps in parallel

By Ron Astall, Union Pumps Australia

Centrifugal pumps are frequently operated in parallel to achieve higher system flows, to enhance system flexibility or to provide greater pump redundancy and hence better system availability.  For very large projects, limited availability of sufficiently large pumps or limits on driver size or electrical starting current may dictate the use of multiple pumps. There are traps for the unwary.  Simply running an additional pump in parallel may not provide the expected results.

In our last article Stable & Unstable Curves, we looked at what makes a centrifugal pump curve "stable or "unstable". We also discussed the importance of understanding your system and, in particular, how the system will only operate where the pump curve intersects the system curve, and the differences between "steep" system curves and "flat" system curves. These preceding concepts are absolutely crucial to understanding many of the issues associated with operating pumps in parallel.

To begin, we will define parallel operation and outline how to predict system performance when two or more pumps are operated in parallel. We will discuss selection rules for parallel operation and then look at how different system characteristics react to parallel pump operation.

Parallel operation

"Parallel" operation means that two or more pumps are operating with common inlet and outlet systems. This means that each pump will have the same differential head. The total flow is the sum of the individual pump flows. See Fig 1.

Predicting performance

To predict the system performance, a combined curve for all pumps can be produced by adding the individual flows from each pump curve at a common head. This is illustrated in Fig 2 below :

As with any pumping system, the system will operate where the combined curve intersects the system curve.

In this example, the Pump curves used are not identical and this highlights a likely serious operating problem. Because Pump 'A' has a higher head at zero flow, this pump will overpower Pump 'B' at low system flows. This is highlighted in Fig 3.

In this scenario, the pump with the lower head will be stalled, and assuming that a non return valve has been fitted, it will be running at closed valve with all the attendant risks and damage.

Matching pump curves for parallel operation – selection rules

The primary concern when running centrifugal pumps together in parallel is that pumps share the load safely at lower flows.

This does not mean that pumps must have identical characteristics. Groups of low flow pumps and high flow pumps are often operated together in parallel to match variable system demand. The aim is that all pumps have matching heads at low flow to prevent pumps being stalled or blocked in by the others.

1. It is most important that the zero flow or "shut valve" heads are matched for pumps that will operate together in parallel.
2. Unstable pump curves must be avoided for parallel operation, particularly where there is any chance of operation anywhere near their point of instability. Unstable pump curves present a very real risk of surging when operating in parallel.
3. Steeper pump curves are preferred for parallel operation to assist with load sharing at low flows. Pump curves that are very flat at low flow are prone to wide flow variations with minor changes in head and may make load sharing difficult. See Fig 4.

4. Be aware of minor performance variations that may change the suitability of otherwise well matched pumps. If one pump has had more use and is worn, its curve may no longer match the other pumps. Pumps using different drivers such as a steam turbine driven pump operating in parallel with an electric motor driven unit may operate at sufficiently different speeds to cause mismatch of pump curves at low flow.

Will parallel operation suit your system?

This depends on what you are trying to achieve.

If the aim is to increase and decrease system flow by operating one, two or more pumps in parallel to meet changing demand then it is important to understand the type and limitations of your system.

If your system curve is relatively "flat"; ie. mostly static difference in levels and minimal pipe friction, then operating pumps in parallel will provide a useful performance variation.

If your system is mostly friction resistance (a steep system curve) such as a closed loop circuit or a lengthy pipeline, then performance variation will be minimal. This may be a good or a bad thing depending on what you are trying to achieve.

Flat system curves

Refer Fig 5.

When the system resistance is relatively flat (not much friction), operating additional pumps in parallel will produce a useful flow increase. Incorrectly, many operators expect that flow will double if two pumps are running in parallel. This cannot happen because, when added together, the combined pump curve intersects the system curve at a higher head due to increased frictional resistance and hence each pump will be operating at a higher head and lower individual flow than when operating alone.

Steep system curves

Refer Fig 6.

When the system curve is steep (mostly friction) this steep increase in friction head as system flow increases, means that each pump will be running at a significantly higher head and the individual pump flows will be much less than in single operation. Overall, the change in flow will be small when additional pumps are switched on.

This may be frustrating if you want to increase or vary system flow by switching pumps on and off.

Conversely, this particular aspect of steep systems; such as long pipelines and closed loop recirculating systems; is very useful to pump users that need to maximise system reliability.

These users will often specify multiple combinations of pumps operating in parallel to minimise system disruption in the event of a pump failure.

Typically, in critical applications such as cooling water circuits, three pumps may be installed with the normal operating mode being two running in parallel and the third being a standby unit. If it becomes necessary to shut one of the operating pumps down, the remaining operating pump will still provide a high percentage of the system flow until the standby pump can be started.

Is parallel operation good for you?

Installing pumps to operate in parallel can be an excellent strategy.

It is however very important to understand the aim of the exercise.

Parallel pump installations are a great idea in the following circumstances:

1. Where limited availability of sufficiently large pumps or limits on driver size or electrical starting current dictate the use of multiple pumps.
2. When flow needs to be varied according to varying system demand and when the system resistance characteristic is reasonably "flat".
3. Where the use of multiple combinations of pumps operating in parallel in a "steep" system resistance will minimise potential system disruption in the event of a pump failure.

Remember:

1. It is most important that the zero flow or "shut valve" heads are matched for pumps that are to operate together in parallel.
2. Unstable pump curves must be avoided for parallel operation.
3. Steeper pump curves are preferred for parallel operation.
4. Be aware of minor performance variations that may change the suitability of otherwise well matched pumps.

Most important of all; understand your system.

Daelim receives contract from KNPC to remodel FCC

Daelim held a contracting ceremony for the project to remodel KRW 200 billion FCC and construct acid water treatment facilities at the Kuwait National Petroleum Company (KNPC) head office on June 26, 2013. Ordered by KNPC, this project will be implemented by Daelim's Plant Business Division in EPC lump sum turnkey fashion wherein the company is responsible for engineering/design, procurement, construction, and test run.

This project is part of the Clean Fuels Project (CFP), which is expanding KNPC's large-scale refinery, and will be carried out at the Mina Al-Ahmadi refinery, part of Kuwait's largest oil refining industrial complex, about 35km away south of Kuwait City. Daelim will engage in construction to produce gasoline, LPG, and propylene by decomposing heavy crude oil with higher impurity content through the remodeling of FCC. The company will also build facilities to treat phenol acid water generated by the production and a cooling tower to supply cooling water. The project duration is 24 months.

TECHNIP awarded contract to supply Hydrogen Reformers to Puerto La Cruz refinery

Technip has been awarded by the Hyundai-Wison consortium(1) a significant(2) contract to supply its proprietary technology as well as engineering and procurement services for two hydrogen reformers in Venezuela. These 135-million standard cubic feet per day (151-thousand normal cubic meters per hour) reformers are part of the Deep Conversion project being executed by the consortium for Venezuela's state oil company, Petroleos de Venezuela SA (PDVSA), to upgrade the Puerto La Cruz refinery.

The contract covers the complete engineering, fabrication, modularization, procurement as well as pre-commissioning and start-up assistance. This project will utilize Technip's high-efficiency top-fired steam reformers, to produce high-purity hydrogen and export steam, and the latest nitrogen oxide reduction technology to ensure minimum emissions.

Technip's operating center in Claremont, California will execute the contract, which is scheduled for completion in the second semester of 2014.

Afcons Infrastructure is setting up a Rs 250-crore fabrication yard at Mahua, Gujarat, for oil and gas platforms

Afcons Infrastructure is setting up a Rs 250-crore fabrication yard at Mahua, Gujarat, for oil and gas platforms.

Afcons is a Shapoorji Pallonji Group company.

A memorandum of understanding has been signed with the State Government after acceptance of its detailed project report.

The fabrication facility will come up on 120 hectares.

"We are going to build offshore jackets and the top side for well and process platforms there," said Pramod Kumar Johri, Director, Oil & Gas, Afcons.

Johri said ONGC was set to order out over $10 billion over the next five years and Afcons was gearing up to bag a fair share.

The orders are for offshore and onshore platforms, besides renovation of installations in the western and eastern region, he said.

Currently, Afcons is executing a Rs 1,800-crore order for the Heera field, off Mumbai. The order, awarded by ONGC, is being done in partnership with Technip of France and a Malaysian company.

Process platforms

Earlier, the first process platform order worth about Rs 2,200 crore from ONGC marked Afcons foray into the offshore market.

The project was executed in joint venture with PT Gunanusa of Indonesia. On the recent pipeline order executed by Afcons for ONGC, he said it was worth Rs 50 crore. Asked what expertise overseas partners bring in, he said partnerships helped to qualify in the first place.

The company also felt it was more competitive when it came to process platforms.

Process platforms orders stood at Rs 1,500 crore and the company considered it as the right size to work on.

Afcons holding company, Shapoorji Pallonji, is also focussing on oil and gas.

It had recently chartered a floating FPSO (floating, production, storage and offtake) platform to ONGC and has been contracted for another platform.

The FPSO is a floating process platform which can substitute a permanent one, he said.

Afcons is also scouting for overseas opportunities. It is looking to expand to West Asia, besides Myanmar and Indonesia.

The company wants to tap the potential for oil and gas exploration in North Africa.

Nordson acquired two polymer processing companies from Germany's Kreyenborg Group for a total of 135 million euros (US$176.5 mln

Nordson acquired two polymer processing companies from Germany's Kreyenborg Group for a total of 135 million euros (US$176.5 mln), according to a July 18 regulatory filing with the Securities and Exchange Commission. The two German companies Nordson acquired are Munster-based Kreyenborg and BKG Bruckmann & Kreyenborg Granuliertechnik, according to the July 16 SEC filing. Material terms of the transaction are being provided in required regulatory filings. The transaction is expected to close within the next 60 days pending customary closing conditions and regulatory reviews.

"These businesses are highly complementary to our other recent acquisitions in the polymer processing space and fit our strategy of providing our customers with high value, mission-critical melt stream components that will enhance the performance of their systems." "These businesses are highly complementary to our other recent acquisitions in the polymer processing space and fit our strategy of providing our customers with high value, mission-critical melt stream components that will enhance the performance of their systems," said Nordson President and CEO Michael F. Hilton. "These businesses also immediately strengthen our relationships with key European OEM customers, deepen and expand our product offering, enhance our overall application expertise, expand our addressable market, and add recurring revenue opportunities to the portfolio. We expect to build on the current strong performance of these companies by leveraging Nordson's scale, global footprint and continuous improvement competencies.

Nordson manufactures and distributes screen chargers, valves, pumps and components for processing polymers. Both the German companies are involved in the production of special polymers. The acquisition of the German companies will extend Nordson's business into pelletizers production, a component used in polymer recycling. The deal also will extend Nordson's footprint to the Asian markets of Shanghai and Kuala Lumpur, Malaysia. Over the past year, Nordson has strengthened its hold in the polymer market by seeking strategic add-ons. Nearly a year ago, on July 21, it purchased New Castle, Pa.-based Xaloy Superior Holdings Inc. for $200 million. Xaloy is involved in the production of melt delivery components used in plastic processing. Before that deal, Nordson on May 21, 2012, purchased Chippewa Falls, Wisc.-based EDI Holdings Inc. for $200 million. EDI is involved in the manufacture of polymers used for plastic processors and web converters.