The important role of Intermediates across Industries

Vandita Jadeja

04 Jul 2017

Intermediates, or semi finished products form the base for the finished goods. Used as an input for the production of other goods, intermediates is an utmost necessity for the majority of the final products. For every product you consume, there are various intermediates that go into the process of production. Intermediates not necessarily need to be a semi finished product, a finished product can also work as an intermediate for another good. Intermediate goods form an integral part of every industry and it constitutes a major raw material for the production process.

The dyes and dyestuff industries play a major role in the growth of the chemical industry. Dyes intermediates are products that are transformed to finished dyes and pigments. The dye intermediates serve various industries like plastics, paint, textiles, printing inks and paper.

The overall capacity of dyestuff is 2,00,000 tonnes per annum and the Indian dyestuff industry meets about 95% of the domestic requirements.

Out of which about 60% is consumed by the textile industry and the remaining by other industries. The dyes can be classified based on the dyeing process, on chromophore, based on application and on colour index. The global market for dyes has been witnessing a significant growth due to the expansion of various industries. India and Indonesia are gradually taking the lead in manufacturing dyes due to the availability of the raw materials and organic intermediate chemicals.

The global dye market is expected to witness a growth of USD 8.75 billion by 2023 with a CAGR of 8.13%.

Developing economies like India, Brazil and Indonesia are expected to play a significant role in the growth and development of the industry.
  In 2016, there was a closure of many dyes and dye industries across China, due to the strict environmental norms. This was a ‘blessing in disguise’ for the Indian industries who took over the major demand for dye intermediates and catered to the requirements across different sectors. The major players across the industry include Kiri Industries, Bodal Chemicals, Vipul Dyechem and Sudarshan Chem. The growth of the dye sector is dependent on the performance of the end user industry. With a growth in the GDP and consolidation of industries, the organized players are poised to take a lead in the market.

The drug intermediate industry is a prominent industry for the pharmaceutical sector. Until recently, India was heavily dependent on China for the drug intermediates. The Government aims to reduce this over dependence and establish three bulk drug parks that will enable low cost manufacturing of drugs in India. The Indian pharmaceutical industry has about 70% of the country’s demand for bulk drugs, pharmaceutical formulations, orals and injectibles. To cater to this need, there are 250 large units and 8000 small scale units in the country. There are various industries that provide the required drug intermediates for the medicines. With the pharmaceutical industry expected to grow faster than ever, the drug intermediate industries will see a similar growth in their business. India and China are the two countries that produce the majority of the drug intermediates and supply to various countries. The low cost of labour and the abundance of raw material makes it possible for India to produce a large quantity of drug intermediates. Manufacturing companies usually purchase the drug intermediates in order to avoid the extensive investment. The growing R&D acitivities across the major players in the industry indicate a growth and expansion of the sector in the current year. The drug intermediate industry is only expected to enlarge in the coming period.