By Indian Chemical News
Reliance Industries Ltd formally announced a $450-million joint venture with Russian petrochemical company Sibur, for setting up a one-lakh tonne butyl rubber plant at Reliance’s Jamnagar refinery. The plant is expected to be commissioned in mid-2014. While Reliance will hold a 74.9 per cent stake in the venture, the rest would be held by Sibur. The plant is expected to be commissioned by the second half of 2014 (calendar). The joint venture has been named as Reliance Sibur Elastomers Pvt Ltd. The JV will be the first manufacturer of butyl rubber in India and the fourth largest supplier of butyl rubber in the world. The JV will cater to the demand for synthetic rubber from the Indian automotive industry of over 75,000 tonnes per year, which is currently satisfied by imports. Investment in the JV is in line with Reliance’s vision of emerging as a significant player in the global synthetic rubber market.
Reliance and SIBUR also signed a technology licence agreement facilitating use by the JV of SIBUR’s proprietary butyl rubber production technology at the new production facility. SIBUR will develop basic engineering design for the facility and also train the JV’s personnel at SIBUR’s production site in Togliatti, Russia.
In December 2010, during the state visit of the Russian President, Dmitry Medvedev, the initial agreement for the joint venture was made by RIL. Butyl rubber is a variety of synthetic rubber with many industrial applications ranging from inner tubes for tyres to adhesives and sealants. Sibur has proprietary technology for making the rubber, which would be made available to the joint venture.
, addressing the media said that the venture will cater to the demand for synthetic rubber from the Indian tyre industry of over 75,000 tonnes a year,
“Today, the whole demand is being met only by imports with prices ranging from $4,000 to $7,000 a tonne,” Nikhil Meswani, Executive Director of RIL, said. According to him, the joint venture will have a turnover of about Rs 2,500 crore after a full year of production. RIL will have to pay a ‘certain’ royalty to Sibur for accessing the proprietary technology for rubber making, he said.