Interview with Kamlesh Parwani

Kamlesh Parwani
Kamlesh Parwani
Commercial Director - METIP
MEGlobal International FZE
MEGlobal International FZE

China will remain the dominant force in polyester industry for next 10 years.
Kamlesh Parwani talks about the global market for Mono Ethylene Glycol (MEG) or Ethylene Glycol (EG) with Mary Christine Joy. Synopsis: MEGlobal is a world leader in manufacturing and marketing of Ethylene Glycol (EG) globally supplying more than 3.5 Million tons across the world. A petrochemical engineer by qualification, Mr. Kamlesh Parwani joined MEGlobal International FZE, Dubai as a global business development manager and within 2 years was promoted to his current role of Commercial Director for METIP region and additional responsibility as a Global Pricing Manager. Prior to joining MEGlobal, Kamlesh had an illustrious career with Dow Chemical, India from 2005 to 2011 managing their licensing technology business for the MEIP Region and various global marketing assignments in the personal care, food and pharmaceutical industry. Excerpts:

Being a joint venture between the Dow Chemical Company of USA and Petrochemical Industries Company (PIC) of Kuwait, how has the journey remained so far? What is your outlook for the company in future?

We at MEGlobal recently celebrated our 10th anniversary. The journey so far have been more than satisfying for both the parent companies as measured by our record on safety, earnings and growth. Now it is time for the next phase of growth. It all started when Dow embarked on the asset light strategy and moved towards more specialty products and PIC was exploring to strengthen their global footprint. Today, both have immensely benefited from MEGlobal's enhanced market leadership. Going forward, both parents are extremely supportive of MEGlobal's strategy and remain confident in the company's approach to the market.

MEG prices have remained low in the international markets. Do you agree? Please elaborate your answer.

Pricing is always determined by market forces. In terms of value creation, MEG prices are a bargain today. However, MEG has been one of the most attractive ethylene derivatives in the last five years. MEG is a global commodity that creates value in several downstream industries. As these downstream markets in PET and polyester grow, we will also see MEG grow.

In the near future, do you predict the prices for MEG to increase or decrease in the global market?

We are not in the prediction business. As long as our customers remain profitable, we will strive to serve them to create the most value for them.

China seems to be the biggest market for MEG. What are the reasons?

The two largest markets for MEG are polyester and PET bottle chips. China dominates the polyester industry and therefore MEG demand is the highest in China. However, when it comes to bottles, since shipment costs are high, regional dynamics come into play. Based on the large capacity and technology advancement, China will remain the dominant force in polyester industry for next 10 years.

Can you give us some emerging markets for MEG?

Overall, the global growth for polyester industry is hovering around 5 % with China, India, South America, Turkey and Middle East observing higher growth rates.

Other than polyester, where can MEG be used in the textile industry? Can you give some stats and figures behind this use in the global market?

Apart from the textile industry, MEG is also widely used in manufacturing of PET plastic bottles utilized in the bottling of water and carbonated drinks. The fact that PET has excellent water and moisture barrier properties makes it the obvious choice for bottled water and other juice drinks packaging. Also, PET does not contain Bisphenol A enables PET to challenge packaging material like polycarbonate. Also other leading application is PET films which are extensively used for food packaging and thermal insulation. Other critical MEG consumption is in antifreeze and other industrial applications.

Now that polyester consumption is continuously increasing in the global market, demand for MEG is also expected to rise, isn’t it? Why?

The growth of this industry is closely linked to consumerism. Applications are directly related to human consumption, be it in clothing, food and beverages, housing to advanced ones like solar panels and automobiles. The per capita consumption in some countries like China and India are way below the global average. With more and more of these middle class families emerge having higher incomes, evolving appetites for branded goods and more urbanization, the more would the glycols be consumed.

Currently, the supply for MEG as compared to its demand is quite uncertain. Do you agree with this statement? Please elaborate.

The global demand growth of roughly 5 % is precariously balanced with planned expansions in the next 2-3 years horizon. Here, the uncertainty arises from the fact that unconventional technologies operating rates are determined by the challenges it faces, and presently barely able to manage the demand growth.

MEGlobal also deals in DEG as a product. Can you explain a bit about this product, its demand and supply in the global supply chain?

Diethylene glycol (DEG) is a valuable chemical intermediate used in the production of unsaturated polyester resins (UPR), plasticizers, acrylate and methacrylate resins and urethanes. Other products that capitalize on DEG properties include Thermoplastic Polyurethanes, emulsifiers, glass-and-cement-grinding aids, furniture and shoe polishes and printing ink.

Toxicity in DEG is a widely recognized fact. In such conditions, how appropriate is the use of this component in synthetic fibers?

The safe use of MEG and DEG is very well documented and understood in the industry. MEGlobal has a document for non-supportive use of our material and we ensure our customers are aware of this product safety requirement.

How do you see the glycol market in India going ahead?

India in my opinion is on a re-bound. The sentiments are positive post the new government with economic development as main agenda. It has had sub par or below potential performance in the recent past, but we see it achieving a 7% GDP growth rate sustainably. With regards to glycol industry, India was and is a strategic market for us and we would continue to treat it like one.

What are the challenges the industry could face in your opinion?

As this industry matures, the nature of its challenges would become more intricate. Supply chain integration, feedstock to human resource issues, every stage poses its own difficulties. Even though the world is trying to be proactive by securing cheap feedstock supplies in the form of coal, chemicals or shale gas based plants, this may require a massive technological revamp and will need time and investment. Sustainability continues to be the mantra and every effort is being made to strike a balance.
Published on: 15/09/2014

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