India Phenolic Resins Market Outlook to 2028

Market Overview

In 2023, the India Phenolic Resins Market was volumed at 58.84 thousand metric tonnes, driven by the increasing demand from the construction and automotive industries. The market's expansion is largely due to the material's superior properties, including high mechanical strength and thermal stability, which make it indispensable in producing laminates, coatings, and adhesives.

The key players dominating the market include Kanoria Chemicals & Industries, Bakelite Hylam Ltd., Atul Ltd., Aditya Birla Chemicals, and Sumitomo Bakelite Co., Ltd. These companies are pivotal in shaping the market landscape, offering a wide range of phenolic resin products to cater to various industries such as construction, automotive, and electronics.

In May 2023, Atul Ltd. announced the expansion of its phenolic resins production capacity in Gujarat, increasing its output by 20,000 metric tons annually. This expansion aligns with the company's strategy to meet the rising demand in the domestic market and reduce reliance on imports. This move is expected to significantly boost local supply, ensuring stability in pricing and availability, which is critical for maintaining India's competitive edge in the global market.

Cities like Mumbai, Pune, and Chennai dominate the market due to their strategic location as industrial hubs. Mumbai and Pune, in particular, host numerous automotive and construction companies that are major consumers of phenolic resins.

India Phenolic Resins Market Segmentation

By Application: The market is segmented by application into automotive, construction, electronics, and others. In 2023, the automotive segment held the dominant market share, driven by the widespread use of phenolic resins in manufacturing brake linings, clutch plates, and various under-the-hood components. The demand for high-performance materials that offer thermal stability and wear resistance is particularly strong in this segment.

Application Segment

Market Share (2023)

Automotive

40%

Construction

30%

Electronics

20%

Others

10%

By Type: The market is segmented by type into novolac, resol, and others. In 2023, the novolac segment dominated the market attributed to its widespread use in the production of moulded products, laminates, and adhesives. Novolac resins are preferred for their superior mechanical properties and resistance to heat and chemicals, making them ideal for demanding applications across various industries.

Type Segment

Market Share (2023)

Novolac

45%

Resol

40%

Others

15%

By Region: The market is segmented by region into North, South, East, and West. In 2023, the Western region, dominated the market, driven by the presence of a large number of manufacturing industries and favourable government policies. The regions strong industrial base, coupled with the availability of raw materials and a skilled workforce, makes it a hub for phenolic resin production and consumption.

India Phenolic Resins Market Competitive Landscape

Company Name

Establishment Year

Headquarters

Kanoria Chemicals & Industries

1960

Kolkata, India

Bakelite Hylam Ltd.

1947

Hyderabad, India

Atul Ltd.

1947

Valsad, India

Aditya Birla Chemicals

1996

Mumbai, India

Sumitomo Bakelite Co., Ltd.

1955

Tokyo, Japan

Kanoria Chemicals & Industries launched eco-friendly products: In June 2023, Kanoria Chemicals & Industries launched a new line of eco-friendly phenolic resins with reduced formaldehyde content, catering to the growing demand for sustainable materials in the construction sector. This product line is expected to generate additional revenue of INR 200 crores annually, reflecting the companys commitment to environmental sustainability.

Investment by Atul Ltd.: In March 2024, Atul Ltd. invested INR 250 crores to expand its phenolic resins production capacity in Valsad, Gujarat. This expansion aims to meet the rising domestic demand and explore export opportunities in the Asia- Pacific region, positioning the company as a key player in the global market.

India Phenolic Resins Market Analysis

Growth Drivers

Rising Demand from Automotive Sector: In 2024, the Indian automotive industry has seen a significant uptick, with over 4.3 million vehicles produced in the first half of the year. Phenolic resins are critical in manufacturing various automotive components, including brake pads, clutch plates, and under-the-hood parts. The governments push for electric vehicles, with an allocation of INR 1,000 crores under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, is expected to further boost this demand, as these resins are essential for battery insulation and other EV-specific components.

Infrastructure Development Projects: India's infrastructure sector has been a key driver for the phenolic resins market, with the Union Budget 2024 allocating INR 10,000 crores specifically for urban infrastructure development. The ongoing construction of the Delhi- Mumbai Industrial Corridor (DMIC) alone is expected to generate a demand of 50,000 metric tons of phenolic resins by the end of 2024, supporting the market's robust growth in the construction sector.

Expansion of Manufacturing Capacities: In 2024, major players in the Indian phenolic resins market are focusing on expanding their manufacturing capacities to meet rising domestic demand. For example, Aditya Birla Chemicals announced a new production facility in Gujarat, with an investment of INR 500 crores, expected to add 15,000 metric tons of phenolic resin production capacity annually. This expansion aligns with the growing demand from the automotive and construction sectors and is expected to be operational by Q4 2024.

Challenges

Volatile Raw Material Prices: The phenolic resins market in India faces significant challenges due to the volatility in raw material prices, particularly for phenol and formaldehyde, which are petrochemical derivatives. In 2024, crude oil prices have fluctuated per barrel, directly impacting the cost of raw materials. The unpredictability in pricing creates challenges for manufacturers in maintaining profitability and passing on the cost to end-users.

Environmental and Regulatory Pressures: The Indian governments increasing focus on environmental sustainability poses a challenge for the phenolic resins market. In 2024, the Ministry of Environment, Forest and Climate Change (MoE FCC) introduced stricter regulations on the emission of volatile organic compounds (VOCs) from chemical manufacturing plants. Phenolic resins production, which involves the use of formaldehyde, a known VOC, is directly affected.

Government Initiatives

Make in India 2.0 Initiative: In 2024, the Government of India launched the Make in India 2.0 initiative, focusing on boosting domestic manufacturing, including chemicals and resins. This initiative includes financial incentives worth INR 5,000 crores aimed at reducing dependency on imports and enhancing local production capacities. Phenolic resin manufacturers have benefited from this initiative, increasing domestic production capacity by 10,000 metric tons.

Production Linked Incentive (PLI) Scheme for Electronics: The Production Linked Incentive (PLI) scheme, introduced in 2024, has earmarked INR 8,282 crores for the electronics sector, which is a significant consumer of phenolic resins. The scheme is designed to boost domestic manufacturing of electronic components, thereby increasing the demand for phenolic resins used in circuit boards and insulation materials.

India Phenolic Resin Market Future Outlook

The India Phenolic Resin Market is expected to grow exponentially by 2028, driven by increasing demand from the construction, automotive, and electronics sectors. Rising infrastructure projects, advancements in resin technology, and the expanding manufacturing industry are key growth factors. Environmental concerns and regulatory pressures are also pushing for more sustainable resin solutions, which could shape future market dynamics and innovations.

Future Trends

Integration of Phenolic Resins in Electric Vehicles (EVs): The future of the India phenolic resins market is expected to be closely tied to the growth of the electric vehicle (EV) sector. With the government targeting a production of 10 million EVs by 2028, phenolic resins are set to play a crucial role in battery insulation and other key components.

Growth in Infrastructure Projects: India's infrastructure development is expected to continue as a major driver for the phenolic resins market. By 2028, with an expected cumulative investment of INR 50,000 crores in projects like Smart Cities and industrial corridors, the demand for phenolic resins is anticipated to double.
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