Owner Blog
Ladies and Gentleman,
I wanted to introduce ggChem to you whose mandate is to meet the unmet requirements of the next generation.
The chemical industry is at cross roads as it emerges from Covid - 19.
The size of the global chemical industry exceeded United States dollars 5 trillion in 2017.
It is projected to double by 2030.
Consumption and production are rapidly increasing in usa and emerging economies. Global supply chains, and the trade of chemicals and products, are becoming increasingly complex.
We are clearly aware of the supply chain shortages for Semi conductor chips.
Understanding these demand drivers growth in chemical-intensive industry sectors (e.g. construction, agriculture, electronics) creates risks, but also opportunities to advance sustainable consumption, production and product innovation.
ggChem owns coal mines, coal wagons, coal transportation ships and chemical product tankers. Using these assets and synthesis gas we have positioned ggChem to seize this opportunity and really become the platform owner for chemicals. As you will learn about our vertically integrated business model and coal gasification you will note how easily it can be scaled to meet the demands whilst overcoming some of the problems plaguing our competitors i.e. Feedstock Volatility, Demand Uncertainty, Profitability and Reliability
Our initial plan i.e. Phase 1 comprises of state of the art clean coal gasification plant to make ethylene, propylene, methanol and butadiene
IHS Markit estimates that total basic chemicals demand in 2018 increased to 515 million metric tons, a 20-million metric ton increase over 2017 total demand (see Figure 1). The strongest growth (in 2018) was reported in the ethylene (8 million tons), propylene (5 million tons), benzene (1.6 million tons), and parax-ylene (3 million tons) markets. Starting in 2015, basic chemicals demand growth averaged 19.6 million metric tons per year, being fueled by a global economy that has been expanding in recent years at an annual rate of more than 3%. For the past three years, all major regions of the world have been growing and urbanization is on the rise. This combination results in strong consumer spending on durable and non-durable goods.
These chemical products represent the basic building blocks from which a significant amount of durable and non-durable consumer goods are produced. Roughly half of these chemicals are converted into plastics materials, which have been a primary growth engine for the chemical industry for decades. Plastics represent one of the foundations of modern living, enabling basic requirements. Consumer goods are more durable, lighter, energy efficient, and environmentally sustainable thanks to plastics. Demand for commodity plastics (such as polyethylene, polypropylene, polyethylene terephthalate, polystyrene, and polyvinyl chloride) in 2018 is estimated at 255 million metric tons, representing about 50% of basic chemicals demand and expected to double by 2030.
GDP elasticity is a measure of the rate of growth in a market (such as propylene) relative to global GDP growth. For example, propylene GDP elasticity, represented by the gray bars in Figure 2, is sustained at 1.5 or higher. This means that global propylene demand has been growing at a rate of 1.5 times global GDP growth in the period from 2000 to 2017. IHS Markit is forecasting this growth level will be sustained from 2018 through 2025. The forecast results in an average demand growth for propylene of more than 5.0 million tons per year (or an average of more than 4% per year). Five of the six basic chemical markets are forecast to grow at a rate equal to or above GDP for the near term.
Preparing to meet the global challenges of 2030 and beyond is not for the cowardly.
ggChem is clearly positioned to embrace the challenges emanating over the next decade and beyond head-on.
In a volatile economy, fast reactions to unexpected changes are decisive. The business model of ggChem itself is a huge advantage that very few if not any chemical organization offers that.
This scalable use of synthesis gas can be used for acting fast capture opportunities and ensure reliable profits while gaining agility up and down the entire value chain.
As we continue to develop ggChem we feel good about ggChem and its future. As you will note from our future plans we are one of the very few organizations that offers that scalability and is a clear competitive advantage.
All in all we feel good about what we have achieved and the debt funding approvals are clear vindication of the direction we are heading. We are off to a good start and we will continue to strive to keep this momentum going.
We have really positioned ggChem for the long haul
I would like to close by thanking our partners Gustaine, uop, Haldor Topsoe, ihs, ecust and equipment owners which have been of tremendous help to us.
In the event of any further questions that you may have about, please do not hesitate to write to me at guptaneel@gustaine.com
So long for now and please stay safe :)
Neel C Gupta
I wanted to introduce ggChem to you whose mandate is to meet the unmet requirements of the next generation.
The chemical industry is at cross roads as it emerges from Covid - 19.
The size of the global chemical industry exceeded United States dollars 5 trillion in 2017.
It is projected to double by 2030.
Consumption and production are rapidly increasing in usa and emerging economies. Global supply chains, and the trade of chemicals and products, are becoming increasingly complex.
We are clearly aware of the supply chain shortages for Semi conductor chips.
Understanding these demand drivers growth in chemical-intensive industry sectors (e.g. construction, agriculture, electronics) creates risks, but also opportunities to advance sustainable consumption, production and product innovation.
ggChem owns coal mines, coal wagons, coal transportation ships and chemical product tankers. Using these assets and synthesis gas we have positioned ggChem to seize this opportunity and really become the platform owner for chemicals. As you will learn about our vertically integrated business model and coal gasification you will note how easily it can be scaled to meet the demands whilst overcoming some of the problems plaguing our competitors i.e. Feedstock Volatility, Demand Uncertainty, Profitability and Reliability
Our initial plan i.e. Phase 1 comprises of state of the art clean coal gasification plant to make ethylene, propylene, methanol and butadiene
IHS Markit estimates that total basic chemicals demand in 2018 increased to 515 million metric tons, a 20-million metric ton increase over 2017 total demand (see Figure 1). The strongest growth (in 2018) was reported in the ethylene (8 million tons), propylene (5 million tons), benzene (1.6 million tons), and parax-ylene (3 million tons) markets. Starting in 2015, basic chemicals demand growth averaged 19.6 million metric tons per year, being fueled by a global economy that has been expanding in recent years at an annual rate of more than 3%. For the past three years, all major regions of the world have been growing and urbanization is on the rise. This combination results in strong consumer spending on durable and non-durable goods.
These chemical products represent the basic building blocks from which a significant amount of durable and non-durable consumer goods are produced. Roughly half of these chemicals are converted into plastics materials, which have been a primary growth engine for the chemical industry for decades. Plastics represent one of the foundations of modern living, enabling basic requirements. Consumer goods are more durable, lighter, energy efficient, and environmentally sustainable thanks to plastics. Demand for commodity plastics (such as polyethylene, polypropylene, polyethylene terephthalate, polystyrene, and polyvinyl chloride) in 2018 is estimated at 255 million metric tons, representing about 50% of basic chemicals demand and expected to double by 2030.
GDP elasticity is a measure of the rate of growth in a market (such as propylene) relative to global GDP growth. For example, propylene GDP elasticity, represented by the gray bars in Figure 2, is sustained at 1.5 or higher. This means that global propylene demand has been growing at a rate of 1.5 times global GDP growth in the period from 2000 to 2017. IHS Markit is forecasting this growth level will be sustained from 2018 through 2025. The forecast results in an average demand growth for propylene of more than 5.0 million tons per year (or an average of more than 4% per year). Five of the six basic chemical markets are forecast to grow at a rate equal to or above GDP for the near term.
Preparing to meet the global challenges of 2030 and beyond is not for the cowardly.
ggChem is clearly positioned to embrace the challenges emanating over the next decade and beyond head-on.
In a volatile economy, fast reactions to unexpected changes are decisive. The business model of ggChem itself is a huge advantage that very few if not any chemical organization offers that.
This scalable use of synthesis gas can be used for acting fast capture opportunities and ensure reliable profits while gaining agility up and down the entire value chain.
As we continue to develop ggChem we feel good about ggChem and its future. As you will note from our future plans we are one of the very few organizations that offers that scalability and is a clear competitive advantage.
All in all we feel good about what we have achieved and the debt funding approvals are clear vindication of the direction we are heading. We are off to a good start and we will continue to strive to keep this momentum going.
We have really positioned ggChem for the long haul
I would like to close by thanking our partners Gustaine, uop, Haldor Topsoe, ihs, ecust and equipment owners which have been of tremendous help to us.
In the event of any further questions that you may have about, please do not hesitate to write to me at guptaneel@gustaine.com
So long for now and please stay safe :)
Neel C Gupta
