Reliance Industries has struck a joint venture deal with Russian petrochemicals major Sibur for producing butyl rubber in Jamnagar, Gujarat. Reliance Industries will own 74.9 per cent stake in the venture, which will absorb the total investment of $450 million from the JV partners.
The operations of the JV will be housed under Reliance Sibur Elastomers Pvt Ltd and would produce 1 lakh tonnes of butyl rubber annually. The plant is scheduled to be commissioned by 2014.
It would be the first manufacturer of butyl rubber in India and the world’s fourth largest supplier, the company said on Tuesday.
The JV would cater to the demand for synthetic rubber from the Indian automotive industry, which amounts to over 75,000 tonnes a year and is currently fed through imports. According to Reliance Industries, this deal is part of its plan to emerge as a significant player in the global synthetic rubber market.
The two partners have also signed a technology licence agreement, facilitating the use of the Russian company’s proprietary butyl rubber production technology at the new plant. Sibur would develop the basic engineering design for the facility and also train the JV staff at its plant in Russia.
Sibur is the largest petrochemicals company in Russia and Eastern Europe, and also counts itself among the top two European synthetic rubber producers.