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Future bright for India's petrochemicals as industry adjusts to challenges, says Shell India chairman

"India's petrochemicals sector looks set to become a major global force over the longer term," Vikram Mehta, chairman of Shell India has told the Indian Plastics Federation.

However, it will need to overcome short-term economic difficulties and the longer term energy challenge of securing more energy while reducing carbon dioxide emissions to protect the environment.

India's petrochemical sector has been growing fast, the Shell India chairman noted. "For the past ten years, domestic demand growth has been strong, driven mainly by consumption of polymers and synthetic fibres, which has prompted a wave of planned investment in new capacity.

"A major driver for future growth is India's economic development program, which includes over $500-billion for infrastructure investment. India's consumers have apparently also been buying 2,500 cars, 5,200 washing machines and almost 20 million bottles of water every day," he said.

Government petrochemical policies in India are certainly focused on supporting demand and production growth. Good examples are the Petroleum, Chemicals & Petrochemical Investment Regions (PCPIRs), which are to be set up to promote investment and make India a petrochemical hub. But while clustered, integrated investments make both economic and environmental sense, the timing of new projects will be important to their profitability, the Shell executive suggested.

To meet its development goals, India will need a greatly expanded energy infrastructure, Mr Mehta noted. At the same time, the world faces a challenge of securing more energy while reducing carbon dioxide emissions to prevent catastrophic climate change.

India's petrochemicals sector - as part of a global sector - can play a key role in meeting that challenge, he suggested: Greater energy efficiency, carbon capture and storage, new feedstock sources - including clean coal and bio feeds - and a new generation of products and production technologies could hold the key. Certainly, India has the intellectual and creative capacity, and petrochemicals will need to compete effectively for that talent, he concluded.

For further information, please contact:

Shell Chemicals

Bianca Ruakere

Tel: +44 207 934 4506

email: bianca.ruakere@shell.com

Notes to Editors

Shell companies have their own separate identities but we may sometimes use "Shell", "Group, "we" or "us" when we refer to Shell companies in general or where no useful purpose is served by identifying any particular Shell company.

Shell Chemicals collectively refers to the companies of the Shell Group engaged in the chemicals business. Shell chemicals companies manufacture and deliver petrochemical building blocks and polyolefins to industrial customers. These products are widely used in plastics, coatings and detergents. For further information please visit www.shell.com/chemicals/news.

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