BPCL, Manali Petro To Float JV For PolyUrethane Project
BPCL is in talks with Chennai based Manali PetroChemicals to float a 50:50 JV for developing R3000 Cr polyurethane project in Kerela, says Business Standard.
The plant will be spread over 150 acres of land next to the BPCL's existing facility at Kochi, Kerala and is expected to be operative by Jan 2017 with a capacity of 3,50,000 tonnes making it India’s single-largest polyurethane (PU) manufacturing plant.
The responsibility of importing the propylene (raw material) would rest with BPCL while Manali would be looking after the conversion as it has the market expertise for the product.
The plant will be providing the tax official revenues to the tune of around R4,000 crore and serving the automobile industry, foams and mattresses, ancillaries, paints and inks, insulations, refrigeration and a host of other applications.
The JV company would be further divesting minority stakes to induct a technology partner who will be providing the technology for conversion of hydrogen peroxide to propylene oxide (HPPO) and another marginal stake to a trading company. The report states this stake to be around 5%.
Globally there are only two companies with such technological expertise - Dow Polyurethanes, a business group of The Dow Chemical Company, and BASF.
It was estimated the current requirement of PU in India is around 2.50 lakh tonnes, largely imported and the plant is seen as major entity to strengthen the highly fragmented PU industry in India by utilising its economies of scale.
The news comes after LG Chemicals a South Korean company backed out from the 5,000-crore petrochemicals project in Kochi, which was being planned with BPCL, citing global economic issues.
The state owned company operates in two segments: downstream petroleum, which is engaged in refining and marketing of petroleum products, and exploration and production of hydrocarbons (E&P).
Recently BPCL and its partners had made a major natural gas discovery in offshore Mozambique, the third natural gas discovery, the earlier ones being Windjammer and Barquentine.
The other JV partner Manali Petrochemicalas Limited MPL operates two grass route production facilities at Manali near Chennai to manufacturer Propylene oxide (PO), Propylele Glycol (PG) and polyol.
The BSE-NSE listed company had revenues of R522 Cr with a PAT of R27.32 Cr for the fiscal ended 2013.