Project feasibility study for starting a Caustic Soda Plant in India
Caustic Soda or NaOH (sodium hydroxide) is one of the most widely used chemicals in India. The alkali and odorless substance are used in numerous industries such as detergents & soaps, aluminum production from bauxite, textiles, dyes, pulp & paper, and much more. In FY 22, the total production of Caustic Soda in India amounted to 3.46 million tons against a total installed capacity of ~ 4.5 million tons. Most of the plants of Caustic Soda in India operate at a capacity of 78-86%. From FY 15 to 22, Caustic soda production in India has risen at a CAGR of 5.11% as per the market analysis by The India Watch.
The majority of the plants of caustic soda production in India are situated in the states of Maharashtra, Rajasthan, and Gujarat due to the preponderance of textile, chemical, petrochemical, detergent, pulp & paper businesses in these regions. The biggest manufacturer of Caustic Soda in India is Grasim India run by Aditya Birla Group. Other major producers include Gujarat Alkali, Tata Chemical, Reliance, DCM Shriram, Meghmani, etc.
Caustic soda in India is primarily available in two forms- liquid and solid. The liquid form is called caustic soda lye and is used in the aluminum industry mainly. The solid form is called a pallet or flake.
Factors Driving the Growth for the Caustic Soda Business in India
There are multiple factors that are driving the demand for caustic soda in India.
- Caustic soda is one of the major components used in the soap and detergent industry. Post-pandemic as the importance of hygiene has increased, there is a remarkable growth in categories such as detergent, soaps, fabric conditioners, etc. The total detergent production in India reached 1.86 million tons in FY 23. The detergent & soaps market which contributes 6-8% of the caustic soda usage in India will push the market forward.
- Caustic soda solution is one of the key elements used in extracting aluminum from Bauxite ores. India has one of the largest bauxite reserves in the world with the state of Odisha accounting for over 50% of the reserves. The Aluminum sector contributes around 16% of caustic soda consumption.
- The textile industry contributes 14% of the caustic soda consumption in India. The chemical is used to remove oil and other dirt from the textile fiber. It is also used for the bleaching of fabrics. The Indian textile sector is sized over USD 245 billion and is growing at a CAGR of 12.1% thereby fueling the growth of caustic soda as well.
- The paper and pulp industry contributes 5-6% of the overall caustic soda market in India. The sector with 900+ production units spread over the country and an annual capacity of over 30 million tons will create increased demand for caustic soda. Other industries such as petrochemical, chemical, pharma, etc. will also drive consumption.
- To further boost caustic production in India, the GOI has also increased import duty. This will delimit imports and support local manufacturing. In FY 22, already caustic soda imports in India dipped by 18%.
How India Watch can help in preparing the Project Feasibility Study
If you are an investor or a business, looking to start a caustic soda business or an existing manufacturer planning to expand the capacity, then a feasibility report or a market studycan be the right approach. Such a study can render a lot of valuable insights, actionable information, and practical advice to start and run a profitable business. Conducting feasibility is always a critical step before taking any major business decision as it enables informed decision-making by helping the business owner learn about the market in detail. Major steps encapsulated in a feasibility report or a market study involve:
- Market size of the caustic soda market, growth estimation, future projected market size, etc.
- Market share analysis (based on end-user industries/ channel types/ technology types/ lye & pallets, etc.)
- Detailed analysis of clients alongside their needs and wants
- Information on the overall ecosystem and value chain
- Pricing insights
- Information on vendors, distributors, supply chain, etc.
- Information on machinery and equipment
- Policy and regulatory insights
- Identification of key success factors and formulation of a strategic roadmap
- Financial analysis, revenue projection, and profitability analysis.
In addition to business, our custom studies can also be very helpful to other consultants, policymakers, and PE investors. If you are looking for such a tailor-made study, feel free to drop us a mail at firstname.lastname@example.org