“Salt Asia 2018”The International Conference for the Salt Industry

atHong Kong

Presentation on Indian Salt Industry

ByBharat C. Raval

Vice President – Aditya Birla Group, Grasim Industries Ltd.-Chemical DivisionPresident – The Indian Salt Manufacturers’ Association

73 years old premier association.

Total 70 members across the India.

Supported by 10 Regional Associations

History

Started importing Salt in 18th Century.

In 1922, government allowed to produce & export Salt.

In 1924 Salt production started in Okha, Gujarat by Tata Chemicals.

In 1924, first soda ash plant started by DCW & In 1940 Tata Group.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000World Salt Production (‘000 tonnes)

2016 2015 2014 2013 2012 2011

World Scenario of Salt DemandParticulars Salt Demand (Lac Tonnes) % Annual Growth

Year 2008 2013 2018 2008-13 2013-18

North America 720.75 747 750 0.7 0.1Western Europe 426.3 426.05 412.5 0 -0.6Asia/Pacific 1106.1 1317.3 1525 3.6 3Central & South America 107.45 115.65 125.5 1.5 1.6Eastern Europe 254.25 253.6 263.5 -0.1 0.8Africa/Mid East 133.65 154.9 169 3 1.8

Total Salt Demand 2748.5 3014.5 3245.5 1.9 1.5

North America Western Europe Asia/Pacific Central & South America Eastern Europe Africa/Mid East

Salt Demand (Lac Tonnes) 720.75 426.3 1106.1 107.45 254.25 133.65Salt Demand (Lac Tonnes) 747 426.05 1317.3 115.65 253.6 154.9Salt Demand (Lac Tonnes) 750 412.5 1525 125.5 263.5 169

0

200

400

600

800

1000

1200

1400

1600

1800in

Lac T

onne

sWorld Scenario of Salt Demand

Present Status

Indian Salt manufacturers catering to Edible, Industrial & Export Industries.

80% of Salt produced alone in Gujarat and contributing vital role in Indian economy.

Salt production in 2017-18 at a glance…

1 Total salt production in India 289.49 LT

2 Supplies of salt ( segment wise)A) Edible B) IndustrialC) Export

82.00 LT96.67 LT

102.00 LT

India is the 3rd largest producer of salt globallyProduction of salt is concentrated in 4 states, which Gujarat contributing ~80% of production

• 1/4th of India’s salt consumption is used for edible purpose and 1/4th is exported

• Half of the salt produced is used for industrial usage, primarily in Caustic soda (20%) and in Soda Ash (18%)

• Others industrial usage includes usage in textiles, soaps and detergents, dyes and chemicals, food processing, water softening, leather curing etc.

4.7%

4.9%

7.5%

16.5%

22.7%

Australia

Germany

India

USA

China

Salt Production by Countries (2016) India: Salt production by State (FY16)

Gujarat82%

Rajasthan9%

Tamil Nadu

7%

Others2%

India: End Uses of Salt (FY16)

Source: US Geological Survey, India Salt Department

Caustic Soda20%

Soda Ash18%

Other Industrial

10%

Edible25%

Exports27%

Production of salt is concentrated in 4 states

263

43 22 18

Guj. TN AP Raj.

Cultivated land (‘000 acres)

545

47 21 2

Guj. TN AP Raj.

Number of units > 100 acres

Rajasthan: High yield but quality not suitable for Caustic (Higher Mg, Ca, Sulphatecontent

Gujarat: High yield, ideal topography and soil condition

Andhra Pradesh: Low yield (high rainfall, cyclones etc.) and limited availability of large plots

Tamil Nadu: High yield in some pockets, good quality

Regional dynamics of Salt Production in India

Source: India Salt Department (FY16) Indian saltworks Industry Structure

Indian salt works industry structure

No. of units

% of Production Key players

Total: 11,800 276 lakh MT • Captive salt works of Caustic and Soda Ash companies (~Estimated production: 50 lakh MTPA, ~18% of domestic production)

• Others: Archean, Friends Group, Neelkanthetc.

• These smaller players either supply to larger salt works or sell in the open market

27%

6%

1%

66%

Category IV

Category III

Category II

Category I

88%

1%

5%

6%

Source: India Salt Department (FY16)

(>100 acres)

(10-100 acres)

(Co-op Soc)

(< 10 acres)

[675]

[570]

[158]

[10,392]

~1.11 lakh laborers are employed in the salt works in IndiaBack

Within Gujarat, salt production is concentrated in 6 regions

Key Salt Producing Regions in GujaratRegion Area Avg

Prod.(%)

Availability for Open

Sales*

Kutch Gandhidham, Kandla, Chirai

(67.7)34%

Medium (Refined salt,

Exports)

Jamnagar

Jamnagar,Singach, Dwarka,Porbandar

(35.4)18%

Low (Primarily Captive)

SaurashtraBhavnagar,Amreli,Junagadh

(35.6)18%

Medium (Some

captive)

Little Rannof Kutch

Surendranaga,Patan,Banaskantha

(24.8)13% High

South Gujarat

Anand, Bharuch,Surat, Valsad

(20.0)10% High

Maliya Rajkot, Morbi, Maliya

(14.6)7% High

XYZ Salt production (Avg. FY12-16, lakh MT)

High metal content; Quality not suitable for

Chloralkali

67.7

14.6

35.4

35.6 20.0

24.8

*Open sales = Total production adjusted for Captive salt usage, Exports and Edible / refined Salt ~75-80 lakh MT

Kutch

Jamnagar

Little Ran of Kutch

South Gujarat

~198 lakh MT

Maliya

Saurashtra

Annexure: Captive Salt Works

Current volume split: ~26% on rail, ~62% on road and ~12% via coastal shipping mode

Region Area Access to Jetty / Port Access to Railhead

KutchKandla Y Y

Chirai Y Y

MaliyaLavanpur, Vavania Y Y

Maliya - Y

Jamnagar Singach Y N

SaurashtraBhavnagar Y Y

Amreli / Rajula Y -

South Gujarat Dahej / Gandhar / Nada Y Y

• Port: Nearest port from Chirai is Kandla (30 km), For Lavanpur / Vavania, the nearest port is Navlakhi, which is primarily coal handling port anddoes not have direct berthing facility, Bhavnagar port does not have direct berthing facility. Amreli and Rajula has low salt availability from openmarket.

• Bhavnagar railhead does not have availability of labor, while rake loading expenses are higher in South Gujarat

Road62%

Railway26%

Sea12%

Transport Mix (FY17)

Solar salt production involves crystallization of salt from sea water that has been concentrated by solar evaporation

Sea water Brine pumps Brine reservoir Condensers(evaporation ponds)

Washing/Refining (depending on end use)

Loading &outbound transport

Salt consumer(e.g. caustic soda & Soda Ash)

Harvesting ofsalt crystals

Internal transportation(to salt heap)

Salt heap (Raw salt)

Crystallizers(crystallization ponds)

Residual liquid (bittern) used for bromine production

Gypsum precipitatesin condensers

1

3

2

4

Pumping Evaporation

Harvesting & Handling

Salt production is highly variable, dependent on uncontrollable factorsSupply outlook is likely to be in line with past trend and would be constrained by stagnant land assigned for salt production

Source: India Salt Department (FY16)

India: Salt Production in India (lakh MT)

190 178

240

186

242 231

269 276292

341

FY06 FY08 FY10 FY11 FY13 FY14 FY15 FY16 FY17 FY21E

Heavy rainfall in all salt producing states

CAGR: 4%

• Land allotted for salt production has been stagnant

Below average rainfall

Area assigned for salt production (‘000 acres)

610 613 615 616 611

FY12 FY13 FY14 FY15 FY16

• Yield is dependent on uncontrollable factors

- No. of available dry days (rainfall) - Others: Density of sea water, type of soil (rate of

percolation), rate of evaporation (intensity of solar radiation), humidity and wind velocity

- Degree of mechanization

The Union ministry of environment and forests no longer considers salt pans to be "wetlands'', a move that could open up these eco-sensitive tracts (~5,300 acres) in Mumbai for development

- Times of India, Oct 2017

Refer annexure for relation between Rainfall and Salt Production

Production of Salt in 2017-18

S.No State Production ( Lakh Tonnes)

1 Andhra Pradesh 4.192 Goa 0.013 Gujarat 232.994 Karnataka 0.105 Maharashtra 1.306 Odisha 0.037 Rajasthan 27.188 Tamil Nadu 23.629 West Bengal 0.07

Total 289.49 Lakh Tonnes

Growth of Chlor-Alkali Industry of India

Salt is basic raw material for Caustic & Soda Ash industry.

1.6 MT is basic ratio for chlor-alkali production.

42% raw Salt of total production consumed in chlor-alkali Industry.

Growth of chlor alkali industry is 6-7% in past 5 years.

Current year requirement of salt will be 12.3 Million Tons In this backbone sector of salt.

235

245

254

264

274

284

4.26

3.67

3.94

3.79

3.65

0 50 100 150 200 250 300

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

India's Salt Demand

% Increase Salt Demand (in Lac MT)

India's Salt DemandSr.

No. Year Salt Demand (Lacs MT)

% Increase

1 2014-15 2352 2015-16 245 4.263 2016-17 254 3.674 2017-18 264 3.945 2018-19 274 3.796 2019-20 284 3.65

Every Year demand is increasing @ 4-5%

Demand, however, expected to see more robust growthDemand likely to grow faster than supply, thereby reducing the demand-supply gap

• Salt consumption driven by increasing exports and consumption in Chlor alkali

• New Capacities in Caustic:• Grasim (2,000 TPD by FY21)• GACL-Nalco JV (800 TPD)• Kutch Chemicals (450 TPD)• Meghmani (500 TPD) etc.

• New Capacities in Soda Ash:• RSPL / Ghari (1,500 TPD)

India: Salt Demand (lakh MT)

62 73

66

103

49

68 46

58

25

28

FY16 FY21

Edible

Exports

Industrial –Caustic

Industrial –Others

India: Salt Demand-Supply (lakh MT)

CAGR % (FY17-21)

3.2%

9.5%

6.8%Industrial –Soda Ash

5.0%*247

3305.8%

Production Gap Demand

247

Production Gap Demand

276 29 340 10 330

FY16 FY21

* Source: DCW Annual Report FY17

Demand forecast for Salt

• Global demand for salt is foreseen to climb 1.5% annually through 2018 to 324 million metric tons

• Cleveland (Ohio), USA based Freedonia Group foresees Global Salt consumption to grow by 1.9 % annually through 2020 to 335 million metric tonnes from 304.7 million tonne in 2015.

• Technavio’s market research analysts estimate that the global industrial salt market to grow at a steady rate of more than 2% by 2020

Expected Growth of Indian Salt Industry

Every year demand is increasing @ 4-5%Demand forecast at a glance…

S. No Year Salt Demand ( Lacs MT )

1 2014-15 235

2 2015-16 245

3 2016-17 268

4 2017-18 279

5 2018-19 283

6 2019-20 310

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

By Sea 3620055 4785151 5796770 5471767 6374630 8068046 8994414By Rail 151695 218506 164211 204170 192855 206742 168616Total 3771750 5003657 5960981 5675937 6567485 8274788 9163030

36.2005547.85151

57.9677 54.7176763.7463

80.6804689.94414

1.51695 2.18506 1.64211 2.0417 1.92855 2.06742 1.68616

37.7175

50.0365759.60981 56.75937

65.67485

82.7478891.6303

0102030405060708090

100in

Lac T

onne

s

Export of Salt from India

India's Salt Export (in tonnes)Year By Sea By Rail Total

2011-12 3620055 151695 37717502012-13 4785151 218506 50036572013-14 5796770 164211 59609812014-15 5471767 204170 56759372015-16 6374630 192855 65674852016-17 8068046 206742 82747882017-18 8994414 168616 9163030

Export of Salt From Gujarat(In Lac Tonnes)

West Coast 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18Jakhau 6.81 7.41 18.39 19.18 16.57 17.69 18.88Kandla 23.99 35.64 27.22 23.43 34.48 49.51 50.70Mundra 1.99 0.97 4.81 5.19 7.79 8.79 14.46Navlakhi 1.83 1.50 5.66 6.19 4.52 4.12 2.70Porbandar 0.00 0.10 0.00 0.00 0.00 0.00 0.00Pipavav 0.03 0.04 0.03 0.01 0.02 0.01 0.02Bhavnagar 0.00 0.60 0.26 0.00 0.00 0.00 1.12

Total 34.65 46.26 56.37 54.00 63.38 80.12 87.88

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Porbandar 0.00 0.10 0.00 0.00 0.00 0.00 0.00Bhavnagar 0.00 0.60 0.26 0.00 0.00 0.00 1.12Pipavav 0.03 0.04 0.03 0.01 0.02 0.01 0.02Navlakhi 1.83 1.50 5.66 6.19 4.52 4.12 2.70Mundra 1.99 0.97 4.81 5.19 7.79 8.79 14.46Jakhau 6.81 7.41 18.39 19.18 16.57 17.69 18.88Kandla 23.99 35.64 27.22 23.43 34.48 49.51 50.70Total 34.65 46.26 56.37 54.00 63.38 80.12 87.88

0102030405060708090

100

in La

c Ton

nes

Export of Salt From Gujarat

Our Challenges…

Modernization of Salt field to compete international market.

Infrastructure development. i.e. Port, Road, water & power.

New technology development to extract Bromine, Magnesia, Potashand also generation of solar power.

Skill development. Need to learn from Mexico, Brazil & China.

Involvement of CSMCRI to support salt manufacturer.

Stable and friendly lease agreement for at least 30 years leasetenure.

ISMA’s Objective

Salt manufacturing being a site specific activity & 3 states providing salt for fulfill saltdemand of remaining 30 states & dependable south Asian countries. Also required toprovide stability to salt industry by way of stable lease & 30 years tenure.

To Increase lease tenure from 10 years to 30 years minimum; if not 50 years Mininglease tenure made by Government in 2016.

To declare clear forest policy for wet land as such Salt manufacturing process &activities are an Environment friendly

To provide basic infrastructure to each salt works i.e Road, Rail & Sea route connectivity& Drinking water including Health of Salt Producers.

To encounter the energy bill; generation of solar power and availability of solar pumpand lights.

To develop common vendors for washery, pump and other equipments at standardprice.

To spread the wings of ISMA across the country and make sure pan India presence.

AIM on WORKING

To adopt Philosophy to work based on “Work distribution, contribution

from all by sharing knowledge & move together towards Common

Goals in each & every criteria of ISMA for betterment of INDIAN SALT

INDUSTRIES”.

Panel Formation of Expertise

Industries, Mines & Energy.

Revenue related matters.

Port, customs & exports.

Refined salt & BIS.

Forest & Environment.

Logistics-Rail & Road.

Technical & IT related matters.

Small scale manufacturers , Statutory Compliance & Labor welfare.

Inter-Associate’s Affairs.

Thank You

Office Bearers of ISMADesignation Name Company Mobile No.

Chairman Shri Ashish Desai Nirma Ltd. 9825320090

President Shri B. C. Raval Grasim Industries Ltd. 9825232329

Vice President Shri Shamji Kangad Ahir Salt & Allied Prod. (P) Ltd. 9825225711

Vice President Sultan Patel Munnawar Salt Industries . 9099053200

Hon. Secretary Shri P. R. Dhruve Saurashtra Salt Industry 9879011494

Jt. Secretary Shri Akash Patel Una Salt Works (Unit of GHCL Ltd.) 9723700056

Hon. Treasurer Shri Shamji Teja Ahir Shri Teja Mema Ahir Salt Works 9426819548

THANKS TO ALL

27

Lastly I will be missing in my duty if I forget to thank my company’s Chairman of ADITYA BIRLA Group:

Mr. Kumarmanglam_jee, for giving me the opportunity.

I also thank my previous Organizations NDDB, GHCL, SAUKEM, DCW, NIRMA & THE THAPAR’S who had given me the opportunity to serve them earlier.

Finally I Thank to ISMA & Roskill, from the forum of “Salt Asia 2018”

From :Bharat C. Raval

Vice President – Grasim Industries Ltd., Chemical Division President – ISMA