Foraying into petrochemicals, the Adani group
has announced a joint venture with German major BASF SE for setting up manufacturing units in acrylics at Rs 16,000 crore at the former’s Mundra port in Gujarat.
Signed as a memorandum of understanding (MoU) at the Vibrant Gujarat
Global Summit, the JV will see BASF hold the majority of equity, apparently its largest investment in India to date. Adani says a feasibility study will be completed by the end of 2019.
The investment being envisaged is for development, construction and operation of factories for propane dehydrogenation (PDH), oxo C4 complex products (butanols and 2-ethylhexanol), glacial acrylic acid (GAA), butyl acrylate (BA) and other downstream products. Meant predominantly for the Indian markets, these are aimed at a wide range of local industries, including construction, automotives and coatings, whose growing demand is currently supplied via import. “India continues to be a very large importer of petrochemicals, given the rapid expansion of the middle class, and this leads to a significant outflow of precious foreign exchange. Our partnership with BASF will allow us to produce in Mundra several of the chemicals along the C3 chemical value chain that we are currently importing," said Gautam Adani, chairman, Adani Group.
The site in Mundra would be BASF’s first carbon dioxide-neutral one. The two firms say they jointly developed an overall plan for supplying only renewable energy. As a result, in addition to the investment outlined in this MoU, BASF also plans to co-invest as a minority partner in a wind and solar energy park.