JUNE 20248TOP STORIESJUPITER WAGONS DEDICATES RS.1,500 CRORES FOR DIVERSIFICATION OF ITS MANUFACTURINGPETROCHEMICALS DRIVING INDIA'S CHEMICALS MARKET GROWTHJupiter Wagons is planning a substantial expansion, with an investment of Rs 1,500 crore over the next two years to diversify its revenue streams beyond its core wagon manufacturing business. According to Vivek Lohia, managing director of Jupiter Wagons, Rs 1,200 crore of this investment will be allocated to increasing the company's train wheel manufacturing capacity, scaling up from 20,000 wheels annually to 100,000 wheels in the next two years.Additionally, Jupiter Wagons is set to enter the electric vehicle market by launching its first electric light commercial vehicle (ELCV). The initial ELCV, which has a one-ton payload capacity, is expected to be launched in July or August, with plans to introduce vehicles with up to two-ton payloads by the end of the year. This move is part of a broader strategy to introduce higher payload vehicles starting next year.The company's strategic shift aims to balance revenue equally between wagon manufacturing and high-margin sectors such as railway components, commercial vehicles, and container businesses. Currently, wagons contribute around 60-70% percent of the company's revenue, but this is expected to drop to below 50 percent as the other sectors grow. Jupiter Wagons is also increasing its wagon production capacity from 8,000 units annually to 12,000 and 15,000 units by 2025-26.This comprehensive expansion strategy highlights Jupiter Wagons' efforts to reduce dependency on wagon manufacturing and leverage higher margin opportunities in other business verticals. India's chemicals market, currently valued at $220 billion in 2023, is forecasted to soar to $383 billion by 2030, driven by an 8.1 percent anticipated compound annual growth rate (CAGR) from 2021 to 2030. This substantial growth positions India as the sixth largest market globally by chemical sales, which has been a magnet for foreign direct investment (FDI). From April 2000 to September 2023, the sector has attracted cumulative FDI inflows of $21.7 billion. This influx of investment is facilitated by the sector's allowance for 100 percent FDI under the automatic route, boosting investor confidence and supporting market expansion.The Petroleum, Chemical, and Petrochemical Investment Regions (PCPIRs) in India are expected to draw investments worth $420 billion, reflecting the sector's robust potential. Additionally, the establishment of seven Central Institutes of Petrochemicals Engineering & Technology (CIPET) and the Institute of Pesticide Formulation Technology (IPFT) is set to drive skill development, ensuring a skilled workforce to support industry growth. The chemicals sector's contribution to India's total exports stands at 12 percent, underscoring its global significance.Overall market output in the chemicals sector is anticipated to reach $143.3 billion by 2024, growing at a CAGR of 2.71 percent over the next five years. The output per enterprise is projected at $9.1 million. The number of enterprises operating in this market is expected to increase to 15,730 by 2024, with a CAGR of 4.70 percent from 2024 to 2029. This growth will result in a higher enterprise density of 11 enterprises per 100,000 population, highlighting the sector's expansion in both market value and enterprise numbers.
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