Bitumen market demand marketing channels
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BITUMEN Market Demand/ Marketing Channels. Agenda. World Bitumen Demand Indian Bitumen Demand in the Past Short Term Bitumen Demand outlook Long Term Bitumen demand Outlook Market Channels Conclusions. World Bitumen Demand. In Million MT.

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Bitumen market demand marketing channels

BITUMENMarket Demand/ Marketing Channels


Agenda

Agenda

  • World Bitumen Demand

  • Indian Bitumen Demand in the Past

  • Short Term Bitumen Demand outlook

  • Long Term Bitumen demand Outlook

  • Market Channels

  • Conclusions


World bitumen demand

World Bitumen Demand

In Million MT

  • World Bitumen Demand expected to grow @ 2.1% Fastest gains expected in Asia Pacific @ 3.3%

115

104

95

87


World bitumen demand1

  • Fastest Gain in Emulsion

World Bitumen Demand

In Million MT


Bitumen demand in neighboring countries

Bitumen Demand in Neighboring Countries


Bitumen market demand marketing channels

MOST OTHER MARKETS SHIFTED AWAY FROM PAVING BITUMEN

  • % Usage

  • TMTPA

  • Mexico

  • France

  • Thailand

  • Spain

  • USA

  • Brazil

  • Japan

  • UK

  • Germany

  • Italy

  • India


Road dominated economy

Road Dominated Economy

Share of Road Traffic has increased


Our highways

Our Highways

  • Highway length only 2nd to USA but has many deficiencies.

  • National Highways: Only 2% of Indian Road Network but carry 45% traffic.

  • State Highways: Only 4% of Indian Road Network but carry 40 % traffic.


Paradigm shift in development of road sector

Paradigm Shift in Development of Road Sector

  • Road development in the last five years has increased tremendously - 23,000 Kms of Highways added during this period.

  • The length of rural roads increased from 2 lakh Kms in 1951 to 30 lakh Kms in 2001.


Bitumen market demand marketing channels

National Highways Development Project

  • India’s largest ever highways project

  • Major initiative for capacity enhancement of NHs

  • World class roads with uninterrupted traffic flow

  • 4/6 laning of around 13,150 km

  • Total cost Rs. 54,000 crs.

  • Consumption @ 300 MT/ Km


Bitumen market demand marketing channels

National Highways Development Project Map


Benefits of programs nhdp pmgsy etc

Benefits of programs NHDP, PMGSY etc

  • Improved accessibility and mobility

  • Reduced travel time.

  • Enhanced efficiency of road transport.

  • Overall feel good factor for roads in public perception.

  • Growth of 8.5% in Cement Industry and 7.8% in Steel Industry with implementation of NHDP.

  • Employment generation: 18 crore man days.

    As per WB there will be saving of Rs 8000 crore per annum on fuel and maintenance of vehicle on GQ alone.


However following issues will have to be addressed

However following issues will have to be addressed

  • Seasonality of Demand

  • Regional Balance of Demand


Seasonality of demand 2006 07

Seasonality of Demand (2006-07)

1320

1160

1000

520


Seasonality of bulk bitumen demand 2006 07

Seasonality of Bulk Bitumen Demand (2006-07)


Solution to the seasonality gaps

Solution to the seasonality gaps

  • Meet the Bulk Bitumen Demand First.

  • Pack the remaining available Bitumen.

  • Packing Capacity to be enhanced to pack during lean seasons.

  • Storage of Packed Bitumen to be augmented.

  • Logistics of Packed Bitumen to be arranged.


Regional imbalances 2006 07

TMT 

Demand

Capacity

Gap

NR

1492

1050

-442

ER

1158

465

-693

WR

836

1655

819

SR

514

1020

506

AI

4000

4190

190

Regional Imbalances (2006-07)


Solutions to regional imbalances

Solutions to Regional Imbalances

  • Logistics- Low Cost Alternatives

  • Inland Depots


Agenda1

Agenda

  • World Bitumen Demand

  • Indian Bitumen Demand in the Past

  • Short Term Bitumen Demand outlook

  • Long Term Bitumen demand Outlook

  • Market Channels

  • Conclusions


Economic indicators expected population growth rate

Economic Indicators: Expected Population Growth Rate

Population in 2021: 1625 Million


Economic indicators urbanization

Economic Indicators : Urbanization

Urban Population in 2021: 650 Million


Economic indicators food grain production

Economic Indicators : Food grain Production

Increase in Foodgrain movement


Economic indicators growth in vehicular population

Economic Indicators : Growth in Vehicular Population

Growth w.r.t. base figures of 2001


Vision 2021 for express ways

Vision 2021 for Express-ways

Kms

Assuming 80% Bitumen Roads

Bitumen Demand

2001-11 : 1200 TMT

2011-21 : 2800 TMT


Vision 2021 for national highways

Kms

2001-11

2012-21

Four/ Six Laning

16000

19000

Two Laning

15000

7000

Strengthening of Weak Pavements

20000

24000

Expansion of Highways

10000

12000

Vision 2021 for National Highways

Bitumen Demand

2001-11 : 12900 TMT

2011-21 : 13500 TMT

Assuming 90% Bitumen Roads


Vision 2021 for state highways

Kms

2001-11

2012-21

Four/ Six Laning

3000

7000

Two Laning

35000

60000

Strengthening of Weak Pavements

30000

40000

Expansion of Highways

10000

20000

Vision 2021 for State Highways

Bitumen Demand

2001-11 : 7700 TMT

2011-21 : 13500 TMT

Assuming 90% Bitumen Roads


Vision 2021 for mdr

Kms

2001-11

2012-21

Two Laning

20000

40000

Strengthening of Weak Pavements

30000

40000

Improving Riding quality

50000

50000

Expansion of Highways

6000

12000

Vision 2021 for MDR

Bitumen Demand

2001-11 : 4100 TMT

2011-21 : 6700 TMT

Assuming 90% Bitumen Roads


Lr bitumen demand outlook

TMT

2001-11

2012-21

Express-way

1200

2800

National Highways

12900

13500

State Highways

7700

13500

MDR

4100

6700

Rural Roads

4100

5000

Total

30000

41500

LR Bitumen Demand Outlook

Bitumen Requirement will be maximum for National Highway segment

2001-03:6100 TMT


Value added bituminous products

Value Added Bituminous Products

Bitumen Emulsion market to grow to minimum 5% of Bitumen demand by 2007 i.e.

Market Size of 200 TMTPA

Modified Bitumen market to grow to minimum 10% of Bitumen demand by 2007 i.e

Market Size of 400 TMTPA

Current Market Size: 100 TMT

Current Market Size: 60-80 TMT


Bitumen demand outlook

Bitumen Demand Outlook

  • In 2nd decade of the century (i.e. 2011-21) Bitumen demand is likely to grow by 38% if the road development takes place as per Vision 2021.

  • Bitumen Production Capacity Augmentation will be required.


Agenda2

Agenda

  • World Bitumen Demand

  • Indian Bitumen Demand in the Past

  • Short Term Bitumen Demand outlook

  • Long Term Bitumen demand Outlook

  • Market Channels

  • Conclusions


Marketing channels

Marketing Channels

  • The demand of Bitumen for Express-highways. National Highways and State Highways will be more than 70% of total demand.

  • These customers will be multi-location and large volume customers.

  • They will like to deal directly with the suppliers due to large size procurements.

  • The balance demand will consist of few large size customers and balance small size customers.

  • Channels can be developed for small size customers.

  • Channels can be Middle-men, Third party Logistic etc.


Agenda3

Agenda

  • World Bitumen Demand

  • Indian Bitumen Demand in the Past

  • Short Term Bitumen Demand outlook

  • Long Term Bitumen demand Outlook

  • Market Channels

  • Conclusions


Conclusions

Conclusions

  • The economy of the country is set to grow at high rate of 6-9% in next two decades.

  • The growing economy will require the developed infrastructure to support. Thus road development and hence growth in Bitumen demand is expected.

  • Bitumen demand is likely to touch 4 Million MT mark by 2007. The current production capacity is 4.2 Million MT.

  • Demand of value added bituminous products will also go up. Modified Bitumen market may gorw up to 400 TMTPA and Emulsion market may grow to 200 TMTPA.

    …..Cont


Conclusions1

Conclusions

  • In short term i.e. upto 2007 supply of Bulk Bitumen will take priority and packing will have to be done in lean demand season.

  • This will require augmentation of packing capacity to meet packing in non-paving season and packed storage facilities.

  • Logistics of packed Bitumen will have to be

    …..Cont


Conclusions2

Conclusions

  • In short term i.e. upto 2007 North and East may face product shortage while West and South may be surplus.

  • This will require innovative multi-modal logistic solutions for bulk and packed Bitumen.

  • On long term basis Bitumen demand will grow and require augmentation of Bitumen Production capacity by 2012.

  • Channels may be used to reach small size customers.


Bitumen market demand marketing channels

THANK YOU


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