Digitalization: the Way Ahead for Chemical Industry
Mr. P L PalaniswamyDirector
Danfoss Drives, Danfoss India

On its way to more improved dynamism, Chemical Industry these days has been witnessing a multitude of rapid changes in demand with various orders viz. potential to change value chains, lead to hire productivity and innovation, create new channels to market, and many more. This article comprehensively unfolds how digitalization has become a game changer for the industry.

Positioning of the Indian Chemical Industry: Classified amongst the most dynamic businesses of the World, the Indian Chemical industry is one of the largest and most diversified sectors covering over 80,000 commercial products, making it the 6th largest producer of chemicals globally. The prosperity of the chemical industry in today's booming economy is in tandem with the development of industries like engineering, construction, clothing, automotive, making it the backbone for the growth of the industrial and agricultural sectors.

India has been one of the preferred destinations for investment in the chemical industry and this is expected to double to USD 300 billion by 2025, clocking an annual growth rate of 15-20 percent. In order to reach this target, the government is working on a draft chemical policy, which focuses on meeting the rising demand for chemicals and reducing imports. Apart from investment allowances and tax deductions, the government has drafted a number of schemes to support the development of the chemical industry. To begin with, it permits 100 per cent foreign direct investment (FDI) in the sector. Moreover, manufacturing most chemical products inter-alia covering organic/inorganic, dyestuff and pesticides is de-licensed in the country.

Underpinning Challenges and the Possibilities:Though the Indian Chemical industry has shown tremendous growth records with a 2.62 per cent increase from 2016-17 to 2017-18, the industry faces a lot of challenges in terms of availability of raw materials. For Instance, the chief feedstock in India is high priced as compared to the other countries, thus making it difficult for the manufacturers to procure them, and thereby impacting the production. While the country has vast investment opportunities in the sector, imposition of heavy duty tax on various raw materials discourages manufacturing and encourages import. Apart from this, there is a lack of infrastructure facilities in terms of logistics, poor pipeline connectivity, and insufficient power supply making it difficult to source raw materials from various product suppliers in India.

However, due to the continuous rise in environmental concerns, there is a high demand for biodegradable polymers, performance plastics, and other value added chemical products. The PCPIR(Petroleum, Chemical and Petrochemical Investment Region) approach by the Government to promote PCP sectors in an integrated and environmental friendly manner has been adopted by several states; and has attracted a lot of investments in the country.

Digitalization - a Game Changer:
When it comes to an environmentfriendly approach, one concept that has promoted sustainability in the industry is - 'Digitalization'. Referred to as Industry 4.0, digitalization is being redesigning all facets of the manufacturing industry leading to the next Industrial revolution in the sector. Owing to its potential in offering quick turnaround time and its healthy sync with latest market conditions that improve the supply chain, digitalization has become a vital need. With the rationalized process provided by digitalization, companies are now willing to make heavy investments in key technologies like- artificial intelligence, IoT, robotics , big data, etc - which bring down the time taken for manufacturing by half through efficient product lines. These technologies are improving the business productivity while reducing the worldwide energy consumption, hence making digitalization the key to sustainability and attaining maximum energy efficiency.

Digitalization has transformed functions at every level. Using the digitally enabled chemical plants,
  • Manufacturers are able to optimize production network
  • Companies are able to maintain financial transparency
  • Real time control of all processes in supply chain
  • Improvise productivity and reliability of production lines
  • Companies are able to integrate better waste management system with improved workforce safety
  • Customers are well informed about the trends and the cyclicality of the market
All of the above enables access to greater amounts of in-depth data and new communications technology between systems and operators; smart factories are able to bring a higher level of automation and digitization to the production line and supply chain. Industrial manufacturing in an Industry 4.0 environment enables the provision of better quality, and improved sales results.

The Concluding Take-away:
Digitalization has been a game changer for companies in transforming the manufacturing processes, through devices being inter-connected, processes being streamlined, and ensuring greater productivity from design & development to services & logistics. The biggest achievement of digitalization in the chemical industry is the evolution and facilitation of a digital manufacturing with better collaboration which leads to improved financial decisions, energy savings and better asset management. Institutions that are quickly adapting to the digital world are embracing rapid changes and moving towards a mature stage of being energy efficient with the use of technology. The need of the hour is for companies to synchronize their business plans with digital solutions and streamlining functions in the new ecosystem for better efficiency and improved visibility. With a bundle of opportunities for expansion, innovation, and growth in the chemical industry, - digitalization is the key for improving business models, functional excellence, and fulfilling the industry's rising demands all the while conserving energy and maintaining sustainability.