New Delhi: Reliance Industries and Russian petrochemical giant Sibur have signed an agreement to set up South Asia's first butyl rubber halogenation unit at Jamnagar in Gujarat.
The two signed a memorandum of understanding (MoU) for the same at last week's Vibrant Gujarat Summit in Gandhinagar, RIL said in a statement without giving investment details.
The unit, to be set up at RIL's integrated petrochemical site in Jamnagar, Gujarat, "will produce 60,000 tonnes of halogenated butyl rubber every year under Reliance Sibur Elastomers Pvt Ltd (RSEPL), a joint venture in which RIL owns 74.9 per cent and Sibur 25.1 per cent", it said.
Halogenated butyl rubber is used to manufacture tubeless tyres.
Apart from the planned halogenation unit, the joint venture owns a 1,20,000-tonne per annum butyl rubber plant, currently under construction at the same venue which will provide the necessary butyl rubber feed to the halogenation unit.
Nikhil Meswani, Executive Director, RIL, said, "RSEPL's halogenated butyl rubber plant will be well-poised to capitalise on the significant surge in regional demand in tyre and pharmaceutical industries."
India, he said, is expected to see a quantum jump in tyre production, with domestic and international tyre majors lining up Rs 15,000 crore of investment.
"The halogenated butyl rubber demand is expected to grow at a rapid pace of 8-10 per cent CAGR over the next few years, driven by increasing customer preference for tubeless tyres in India and neighbouring countries, and significant investments in manufacturing of pharmaceutical closures and tank inner liners," he said.
Sibur Chairman Dmitry Konov said India offers attractive investment opportunities, given the growing local demand for synthetic rubbers and Gujarat's favourable investment environment, coupled with the well-developed infrastructure and raw material.
"Sibur has a long track record of successful cooperation with RIL and Gujarat government, which has provided us with a solid basis for expanding our footprint in India," he said.
Halogenated butyl rubber is a key ingredient for manufacturing inner liner of tubeless tyre.
With the Indian automobile trend aligning with global trends, penetration of tubeless tyres is expected to accelerate in the Indian market, resulting in an increased demand of halogenated butyl rubber.
The ingredient is also used in the manufacturing of pharma stoppers and inner liner of storage tanks.
"Construction of the butyl rubber plant is in full swing at Jamnagar, its commissioning targeted for 2018," the statement said, adding that production from RSEPL will substitute imports and reduce outflow of valuable foreign exchange from India.
RIL and Sibur set up RSEPL joint venture in February 2012 to produce 1,20,000 tonnes of butyl rubber per year at former's integrated petrochemical site in Jamnagar.
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