In an interview Bhuwan Purohit, Executive Director & COO – Zinc, Rubin Limited with Chemical Today magazine opens up about the ever-changing market dynamics of zinc oxide, the plethora of opportunities for the Indian market and the global technological advancements that will rule the industry in the near future.
By Debarati Das
Global market dynamics of zinc oxide.
Zinc oxide is a surprisingly versatile chemical that finds application in rubber, ceramics, agriculture, coatings, chemicals, construction, food, animal nutrition, pharmaceutical, glass, personal care, electronics, lubricants and several more. The world consumes about 1.5 million tonnes of zinc oxide annually with almost 60 percent being consumed in Asia followed by EU.
Its demand is driven by the rubber industry as nearly 50 percent of zinc oxide is consumed by automotive tyres and industrial rubber. The second large consumer is ceramics, which together with rubber accounts for around 75 to 80 percent of the consumption. The prices are impacted by a change in zinc metal prices. Also, growth in steel production or galvanising is an important factor as key raw materials are zinc wastes from galvanising industry that we recycle.
Being a commodity chemical with lean investment requirement there are producers in all regions and couple that with freight & tariff barriers, zinc oxide has some amount of regional or geographical constraint.
Growth potential of zinc oxide in emerging markets.
Asia-Pacific is expected to dominate the zinc oxide markets with the capacity addition in countries like China, Taiwan, Korea and India driven by the rubber, ceramic, animal feed and agriculture.
In India, zinc oxide was growing at 10 percent till a couple of years back. However, now this growth has slowed down. It is expected that over the next 5 years’ global zinc oxide market will grow at ~ 6 percent with larger growth coming from Asia Pacific region due to increasing automotive sales in China & India. There is significant capacity addition by Indian tyre makers like Apollo, Ceat, J K Tyres, etc. Also, international tyre companies like Yokohama and Michelin have recently established manufacturing operations in India.
Thailand, Indonesia, Malaysia and Sri Lanka are important export markets if tariff barriers are reduced.
One good development is that ceramics market has taken off in India and is expected to grow at 10 percent year on year. There is impressive growth in the coating segment, which accounts for around 10 percent of the market.
Processes used in your company for manufacturing zinc oxide.
We have three production facilities in Gujarat using three different processes, namely - French Process, Calcination Process and Chemical Process, to produce different grades of zinc oxide. These processes make us one of the most versatile producer globally and the largest manufacturer and exporter from India with a capacity of 30,000 mt zinc chemicals.
Trends in the zinc oxide market.
India is a market consuming approximately 125,000 mt of zinc oxide annually with about 80 manufacturing units of which only 10-15 are large size units. The industry is highly fragmented and there is high competition, which creates the pricing.
The customers are demanding lower heavy metal impurities and are placing greater emphasis on overall product consistency and good manufacturing practices. They are looking at particle size, particle morphology and also asking for some pretreatment for ease of usage.
Use of nanotechnology in the Indian Zinc Oxide industry.
In India, there are a lot of research papers on nanotechnology but there is little happening on the ground and in the markets for Nano Zinc Oxide. MNCs that invested heavily in the R&D have Nano Zinc Oxide in their portfolio and these early movers have created markets with significant entry barriers. They have tie ups with cosmetic and speciality material companies but the supply chain to these users is rather opaque. Coatings and rubber are potential applications but not fully active at present. Work is also being carried out in agriculture but it is yet to reach conclusive results.
Globally, Nano Zinc Oxide is expected to grow at CAGR of around 20 percent. However, we understand that the annual consumption in India is below 10 mt. Due to a presence of hi-tech MNCs with global approvals, there is significant gestation and increased the market risk even if you have a good quality product at hand. As the technology is expensive Indian producers will need more time to be able to invest in Nano Zinc Oxide.
We evaluated nanotechnology in 2011 but back then the market was in a pilot stage and needed time to emerge into a commercially viable proposition. We will now need to evaluate the opportunities once again.
Key market drivers for the industry.
When it comes to industrial use consistent quality and lowest cost is what drives the markets. Customers do pay some premiumfor unique physio-chemical properties. However, going forward the firms with a capability to manufacture consistent quality zinc oxide from difficult to handle zinc wastes through environmentally sound technologies will carry the cake.
Challenges faced by manufacturers.
Sourcing of zinc wastes and scrap is a major challenge. Zinc waste availability is low in India as a galvanizing industry is under performing. On the other hand, user segments are growing which is exerting pressure on raw material prices.
At the same time, infrastructure bottlenecks, testing delays and administrative issues at Indian ports are adding to the logistics bill. For instance, at the Indian ports, zinc dross is still being cleared under the ‘first check procedure’ even though a pre-inspection procedure by an authorised agency is in place. This is leading to heavy detention costs.
While environmental legislations are putting pressure on the cost of handling and treating waste, on the market side, tariff barriers are holding Indian capacities from exporting, as bilateral treaties have not been of help.
Growth opportunities for the market.
China is exporting lesser due to their domestic demand, the green movement and reduced export benefits. This opens up opportunities for the Indian producers. But we need to rationalise import tariff in Thailand, Malaysia & Indonesia through well-negotiated bilateral arrangement covering tariff lines pertaining to zinc oxide and other zinc chemicals. The government needs to provide certain additional benefits for exports or achieve duty-free trade to boost export to this region.
There is an opportunity in agriculture as India and some Asian / African nations are suffering from severe zinc deficiency calling for an enrichment of soil with zinc oxide as well as food fortification. There is a need to recognise zinc oxide under Fertilizer Control Order and provide the much-needed price support to fertiliser industry in India to cure the imbalance in the soil nutrition.
Technology advancement in the zinc oxide segment related to the rubber industry.
Apart from reduced impurity levels customers are seeking lower zinc oxide dosage as it is considered hazardous to aquatic life. These requirements are driving technological changes.
Our company, for instance, has created Acti. Z - Active Zinc Oxide from its Hydromet facility which reduces the dosage up to 50 percent in rubber while improving the rubber properties and is being exported to several countries. It is made using chemical precipitation of zinc oxide after selective purification of a zinc solution. We are working on coated zinc oxide, which can facilitate better mixing.
There is also the need for reduced dustiness while making it more free-flowing for auto dosing to maintain the workmen health, improve cleanliness and minimise wastage. In line with this, we have launched Zinc Oxide MicroPrills – a non-dusty, free flowing zinc oxide.
Innovative technologies developed by your company.
Rubamin has almost 30 years of experience in zinc oxide and expertise in pyro as well as hydro-metallurgy operations. Our scientists in corporate R&D cell and engineers at the units have been able to create unique products for specific applications. ScavenZink is a zinc oxide with modified surface area and particle size to cater for applications that value high reactivity and high purity. We have introduced Truzox - an exceptionally low lead zinc oxide for food supplements.
We are expanding our portfolio through an introduction of more zinc chemicals using hydro metallurgy. We have recently launched Firesafe - zinc borate as a fire retardant for PVC cables / plastics and engineered wood industry and ZedGuard- a lamellar zinc Phosphate for anti-corrosive coatings.
Our company is recycling over 20,000 mt of hazardous waste in responsible and environmentally sound manner - there can be no App for what we do.
The team is working diligently to make the manufacturing operations more sustainable through initiatives in the area of waste management, energy conservation and water recycling which will go a long way to maintaining our dominant position in this region.
Read More: Expanding the chemistry of Zinc
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