Formalin Market Analysis in India
The relevance of research
Formalin is an aqueous solution of formaldehyde stabilized with methanol. Formalin is widely used in the production of synthetic resins, fibers, rubber, plastics, and organic dyes. It is used in metallurgy, oil and petrochemical industry, leather and fur production, agriculture and paper industry.
Purpose of the study
Analysis of the state of the formalin market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the formalin market
Content
Part 1. Overview of the Indian formalin market
1.1.Main characteristics of the market
1.2. Formalin market size dynamics 2017-2021 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Formalin Market Life Cycle Stage
1.5. Competition from substitute products
Part 2. Competitive analysis in the formalin market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of formalin production
3.1. Volume and dynamics of domestic production of formalin
3.2. Share of exports in formalin production
3.3. Segmentation of formalin production by regions
3.3.1. Production by Union Territories
3.3.2. Production by states of India
Part 4. Analysis of foreign trade supplies of formalin
4.1. Volume and dynamics of formalin imports
4.2. Import structure
4.3. Formalin export volume and dynamics
4.4. Export structure
Part 5. Formalin consumption analysis
5.1. Formalin Consumption Dynamics
5.2. Analysis of the results of tenders for the purchase
Part 6. Price Analysis
6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India
Part 7. Assessment of factors of investment attractiveness of the market
Part 8. Forecast for formalin market development up to 2026
Part 9. Recommendations and conclusions
Research excerpt
Part 1. Overview of the Indian formalin market
1.1. Main characteristics of the market
Formalin is an aqueous solution of formaldehyde stabilized with methanol. Formalin is widely used in the production of synthetic resins, fibers, rubber, plastics, and organic dyes. It is used in metallurgy, oil and petrochemical industry, leather and fur production, agriculture and paper industry.
In recent years, there has been a trend in the world market to reduce the consumption of 37% formalin and switch to concentrated 55% formalin produced at the point of consumption.
Formalin users are primarily Indian woodworking and chemical companies, ...
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Chart 1. The ratio of imported and domestic products in the formalin market, 2017-2021, %
1.2. Formalin market size dynamics 2017-2021 Potential market capacity
The volume of the formalin market is significantly influenced by production volumes.
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In the structure of revenue throughout the entire period under review, the leader is the Volga Federal District with shares within ...
1.3. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, demand.
- Economic
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation. The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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Industrial Production Index
The production index is a relative indicator that characterizes the change in the scale of total industrial production in India in the periods being compared.
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- Социальные
Population
During 2014–2017 India's population has shown a positive trend. However, in 2018, the vector changed – the population decreased due to the natural population decline in 2016–2019.
The current demographic situation in India is characterized by natural population decline (since 2017), which is accelerating, and migration growth, which does not compensate for natural decline.
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Real income of the population
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Diagram 8. Dynamics of real incomes of the population of India, 2013–Jun. 2022, %
- technological
Difficulty of transportation
Formalin is highly toxic and flammable. For its transportation, specialized transport is supplied. Temperature control is required. At 20–25 degrees Celsius, formalin begins to release toxic formaldehyde fumes. The complexity of transporting formalin negatively affects the market.
Digitalization
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Formalin manufacturers develop their websites, maintain pages on social networks, talk in detail about their products. The use of Internet technologies helps to increase sales and improve visitor loyalty.
- Political
Support
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Concentrated formalin will primarily be used as a raw material for the production of paraformaldehyde, which is intended for the manufacture of plastics, paints, resins, adhesives and insulation. Currently, according to the company, paraformaldehyde is not produced in India and is completely imported from abroad. After launching its own plant for the production of paraformaldehyde, the company will completely satisfy India's needs for this product.
There are also measures to support entrepreneurs and enterprises in the face of sanctions. A regional commission has been created and is working to ensure the sustainable operation of the economy and social stability. It analyzes incoming signals from business and helps to find solutions, searches for and establishes new contacts at the interregional and international level.
Benefits for industry workers
Chemical production refers to an industry that poses a potential risk of occupational diseases and worker poisoning. The number of poisonings and occupational diseases, despite the growth of chemicalization of industry, is continuously decreasing, however, there are still individual cases of poisoning and occupational diseases, and their prevention remains the most important task of occupational health.
The work is characterized by the following hazards:
- Gas hazard. Methanol, formaldehyde, natural gas, nitric acid can create gas pollution and cause poisoning if their vapors are inhaled.
- Explosion and fire hazard. Formation of explosive mixtures of methanol, formaldehyde and natural gas with air is possible. For example, in the case of a decrease in the concentration of methanol in an alcohol-air mixture, as well as when methanol, formalin and natural gas pass through leaks in equipment and communications. Nitric acid, under certain conditions, nitrates materials, increasing their fire hazard.
- The possibility of obtaining chemical burns with caustic soda, nitric acid and formalin when they come into contact with the skin.
- The possibility of getting thermal burns by steam condensate or in contact with heated surfaces of equipment and pipelines.
- Possibility of electric shock in case of contact with current-carrying parts of electrical equipment or in case of malfunction of insulation of electrical equipment and electrical wiring.
- The possibility of getting mechanical injuries when working at height, when servicing equipment and repairing mechanisms.
Despite the measures that exclude the ingress of harmful substances into the air of the working area, in production, the contact of service personnel with harmful substances is possible for the following reasons:
- in case of depressurization of equipment, pipelines, fittings;
- when repairing and cleaning devices;
- when replacing the contact mass.
Import substitution
In the context of the introduction of new, even more ambitious than before, Western sanctions and the complete withdrawal of certain foreign companies from the Indian market, in 2022 the issue of import substitution in the chemical industry, especially in its high-tech areas, has become particularly acute.
This means that Indian chemical enterprises will have to significantly increase the pace of work to increase the share of domestic ""chemistry"".
Concluding the assessment of the factors influencing the formalin market, let us summarize the key ones in the framework of the STEP-analysis.
Among the positive factors with a high level of influence, one can note the growth of the industrial production index, import substitution and government support. Thus, according to the results of the performed STEP-analysis, macro-environment factors have a more positive impact on the development of the formalin market.
Table 2. STEP analysis of factors affecting the formalin market
1.4. Formalin Market Life Cycle Stage
The formalin market is in the stage of maturity. The maturity stage is built on the consumption of conservative consumers, on the popularity and wide representation of the product, which ensures a stable level of sales over a long period.
The level of competition in the market is above average. A high value at the stage of maturity gets the speed of the company's reaction to the actions of competitors.
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1.5. Competition from substitute products
Instead of formalin, paraformaldehyde is also used in the production of urea-formaldehyde resins.
Unlike formalin, paraformaldehyde has better environmental, consumer and economic characteristics. The product can be stored at any temperature for a long period. Its transportation is less expensive due to the high content of the basic substance. In this case, the consumer will be able to prepare a fresh formalin solution in the required amount by diluting it with purified water.
In fact, paraformaldehyde is a polymerization product of formaldehyde. Thus, there is no competition from paraformaldehyde.
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The impact on the formalin market from safe analogues is weak, since these types are not yet common.
Part 2. Competitive analysis in the formalin market
2.1. Major players in the market
The market shares of the largest competitors are problematic to determine due to the variety of products produced, in addition to formalin, as well as the fact that most of the formalin produced is used by the manufacturers themselves for further processing.
Thus, in order to identify the largest players, both the company's revenue and the natural volume of output were taken into account.
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2.2. Market shares of the largest competitors
Estimating the shares of companies is complicated by the existing error, which is associated with the impossibility of dividing the proceeds from the sale of formalin and other categories of products.
However, the largest formalin market operators in India are...
2.3. Profiles of major players
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Part 3. Analysis of formalin production
3.1. Volume and dynamics of domestic production of formalin
In 2018, formalin production in India increased by ...%.
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Diagram 12. Dynamics of formalin production volumes in India for 2017-2021, thousand tons
The dynamics of the total revenue of the largest formalin producers in 2021, according to GidMarket, increased by ...% compared to 2020.
3.2. Share of exports in formalin production
The share of exports in the production of formalin is quite low and in the study period is within ...%. Almost all formalin produced is used domestically. Moreover, most of the formalin in India is consumed by its manufacturers - for the production of formaldehyde resins.
3.3. Segmentation of formalin production by regions
3.3.1. Production by Union Territories
The Volga Federal District is the main formalin producer in India.
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Table 5. Dynamics of formalin production in India by union territories, 2017-2021, thousand tons
3.3.2. Production by states of India
The distribution of shares between regions is due to the location of the production facilities of the largest market operators in them.
The leading regions in the formalin market in 2021 were:
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Part 4. Analysis of foreign trade supplies of formalin
4.1. Volume and dynamics of formalin imports
The maximum volume of formalin imports was observed in 2020-2021....
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4.2. Import structure
In the structure of formalin imports by importing countries, the key supplier is the United States, which accounted for ...% of all imported formalin in 2021.
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4.3. Formalin export volume and dynamics
Export of formalin for 2017–2021 shrunk...
The largest amount of formalin was sent ...
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Foreign trade balance in the formalin market in 2017–2021 is in the zone of positive values: export supplies exceed imports in value terms.
Diagram 19. Balance of exports and imports, 2017-2021, million Rs.
4.4. Export structure
The main volume of exported formalin in value terms in 2021 was supplied ...
Part 5. Formalin consumption analysis
5.1. Formalin Consumption Dynamics
Estimated volume of per capita consumption was made by GidMarket on the basis of the ratio of formalin market volume to the population of India.
Diagram 21. Formalin consumption dynamics in physical terms, 2017-2021, kg/person
5.2. Analysis of the results of tenders for the purchase
Taking into account the indication of OKPD2: (20.14.61) Compounds with an aldehyde functional group, for 2020–June. 2022 about 400 tenders for the purchase of formalin were held.
Often, in addition to formalin, other chemicals are present in one purchase. Due to the large number of tenders for the purchase of formalin, the table includes completed tenders with contract amounts of more than 300 thousand Rs. and with a share of formalin in the purchase of at least ...% of the total purchase of goods.
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Part 6. Price Analysis
6.1. Average producer prices by union territories
The price of formalin depends on raw materials and seasonal factors influencing its formation. Since formalin has the ability to thicken in winter, special additives are added to it to keep it in a liquid state. Conversely, during the summer period, these additives are not necessary, and therefore, at this time, this reagent is cheaper. Also, the final cost depends on the volume of the lot and the individual conditions of the order.
The price analysis presents formalin prices offered by exporters.
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6.2. Average consumer prices by states in India
Here are the average consumer prices for formalin in some regions of India according to customs and market operators.
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Part 7. Assessment of factors of investment attractiveness of the market
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Positive factors of the investment climate of the formalin market dominate over the negative ones. A comprehensive assessment of investment attractiveness factors is 0,09 points - a neutral investment climate. The assessment of investment attractiveness was made for companies considering the possibility of entering the market.
Part 8. Forecast for formalin market development up to 2026
The external environment for the Indian economy remains challenging and significantly limits economic activity.
The main feature of the current economic situation is that supply is shrinking more than demand. This is what creates the main inflationary pressure. The colossal uncertainty of the situation is expressed in an increased amount of risks for the forecast.
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Part 9. Recommendations and conclusions
The volume of the formalin market is significantly influenced by production volumes.
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Macro-environment factors have a more positive impact on the development of the formalin market. Among the positive factors with a high level of influence, one can note the growth of the industrial production index, import substitution and government support.
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A comprehensive assessment of investment attractiveness factors demonstrates a neutral investment climate.
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Diagrams
Chart 1. The ratio of imported and domestic products in the formalin market, 2017-2021, %
Diagram 2. Dynamics of the formalin market volume, 2017-2021, thousand tons
Diagram 3. Revenue (net) from the sale of formalin by union territories for 2017-2021, %
Chart 4. Dynamics of India's GDP, 2013–Jun. 2022, % to the previous year
Chart 5. Monthly dynamics of the US dollar against the rupee, 2017-Jul. 2022, Rs. for 1 US dollar
Chart 6. Indian Industrial Production Index, 2012–Oct. 2021, % to the previous year
Diagram 7. Population dynamics in India, as of 01 Jan. 2013–2022, million people
Diagram 8. Dynamics of real incomes of the population of India, 2013–Jun. 2022, %
Chart 9. Internet penetration in India, 2017–2021, %
Diagram 10. Industry life cycle stage
Diagram 11. Shares of the largest competitors in the formalin market in 2021, %
Diagram 12. Dynamics of formalin production volumes in India for 2017-2021, thousand tons
Diagram 13. Dynamics of the total revenue of the largest manufacturers (TOP-5) of formalin in India, 2017-2021, billion Rs.
Diagram 14. The share of exports in production for 2017-2021, %
Diagram 15. Volume and dynamics of formalin imports in physical terms, 2017-2021, tons
Diagram 16. Volume and dynamics of formalin imports in monetary terms, 2017-2021, thousand US dollars
Diagram 17. Formalin export dynamics in kind, 2017-2021, tons
Diagram 18. Formalin export dynamics in monetary terms, 2017-2021, thousand US dollars
Diagram 19. Balance of exports and imports, 2017-2021, million Rs.
Chart 20. Structure of exports by countries in 2021, %
Diagram 21. Formalin consumption dynamics in physical terms, 2017-2021, kg/person
Diagram 22. Structure of formalin supplies by customers among contracts worth more than 300 thousand Rs. in 2020–jun. 2022, %
Diagram 23. Forecast of market volume in 2022-2026, thousand tons
Tables
Table 1. Expert forecasts for the decline in real GDP in India in 2022, %
Table 2. STEP analysis of factors affecting the formalin market
Table 3. The main companies participating in the formalin market in 2021
Table 4. Profiles of companies participating in the formalin market in 2021
Table 5. Dynamics of formalin production in India by union territories, 2017-2021, thousand tons
Table 6. Structure of formalin imports by importing countries in 2017, 2021
Table 7. Data on completed tenders for the purchase of formalin with a contract amount of more than 300 thousand Rs., 2020–Jun. 2022
Table 8. Average producer prices on the formalin market in the Union Territories, 2019-2021, thousand Rs./ton
Table 9. Average consumer prices in the formalin market by Indian states, 2021, Rs./l
Table 10. Assessment of factors of investment attractiveness of the formalin market
Table 11. Forecast indicators of the development of the Indian economy
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