FROM India’s plan to plumb in over 100 million toilets in six years to China’s ambitious new Silk Road network and the continued movement of millions of people into cities across Asia, plastic makers face years of strong demand.

    And, because they are closer to end-users and manufacturing hubs, Asian petrochemical makers are best placed to ride the boom. Their profits and share prices are rising and they’re investing in new projects to expand their business.

    Chinese futures prices for PVC (polyvinyl chloride), used in products from pipes to bank cards, have risen more than 80 percent this year.

    Petrochemicals, seen as a niche business in the oil industry, are used in 70 percent of manufactured goods — from mobile phones and yoga pants to cars and food packaging — and bring in valuable revenue for a sector otherwise battling over-supply.

    Annual demand for ethylene, the most used compound among many petrochemical products, is expected to grow at over 10 percent in the coming decade, analysts say.

    In just one illustration of how demand is set to grow, the “Clean India” program, seeking to end open defecation by 2022, has been welcomed by the Indian Petrochemical Industry group as a “boon for the plastics industry” — requiring building hundreds of millions of toilets, waste pipes and water supply systems to bring clean sanitation to more than 700 million people.

    “There is tremendous potential for petrochemical demand to go up because per capita consumption is so low. There is a plastic usage in every utility,” said B. Ashok, chairman of Indian Oil Corp.

    “Demand is strong not only for toilets. India is short of domestic PVC supplies and has been sourcing from countries including South Korea, so Korean export volumes are growing,” said Hwang Kyu-won, analyst at Yuanta Securities in Seoul.

    China’s “One Belt, One Road” project — to build a vast rail, road, shipping and factory network between China, central Asia, Africa and Europe — will also require millions of tons of plastic materials, noted Luna Kim, principal consultant at Chemical Market Research Inc.

    This, together with the urbanization of tens of millions of people across Asia each year, means the region will have as many as 650 million new petrochemical customers within two decades, predicts research firm IHS Markit.

    Mark Eramo, vice president for global chemical business development at IHS Markit, said the Asia Pacific region will “have the lion’s share of the total investments” in petrochemicals until 2025.(SD-Agencies)