Industry News

BPCL & MPL Join Hands to Set up India's Single-Largest PU Manufacturing Plant for Various Industries

Published on 2014-01-10. Author : SpecialChem

Even though South Korean major LG Chemicals backed out of Bharat Petroleum Corporation Limited's (BPCL) Rs. 5,000-crore petrochemicals project in Kochi, the oil marketing company has found another partner in Chennai-based Manali Petrochemicals Limited (MPL) for another project in Kerala. BPCL and MPL would set up a Rs. 3,000-crore polyurethane project in Kerala, said a senior official involved in the project. The capacity of the project would be increased to 3,50,000 tonnes. The original plan was to set up a 250,000-3,00,000 tonnes capacity plant with a Rs. 2,500-3,000 crore investment.

"BPCL is in talks with MPL to float a joint venture in which a few foreign companies are expected to participate to set up the project. The project will be India's single-largest polyurethane (PU) manufacturing plant," said the official. BPCL had in June 2012, signed a joint venture pact with South Korea's LG Chem Limited, to set up a petrochemical plant near BPCL's Kochi refinery complex.

But due to the global economic situation, LG decided not to pursue the project further. Sources said MPL made a presentation before S Varadarajan, Chairman & Managing Director, BPCL, recently. Both partners would finalise the structure by mid-January or before January-end and will hold a 50 per cent stake each in the new JV. A pre-feasibility report is being prepared.

The JV partners are also considering to dilute around five per cent stake to the technology provider and similar per cent age stake to a trading company. The project will be spread over 150 acres of land next to the BPCL's existing facility at Kochi, Kerala. Another BPCL official said the company is in talks with global players to source technology from licensors for Polyurethane (PU) project.

There are two global players who can provide the technology-- hydrogen peroxide to propylene oxide (HPPO) -- once the JV finalise the partner, a marginal stake may be around five per cent will be diluted (in the JV company) to the technology provider.

According to industry sources, there are only two global players who have mastered HPPO, they are Dow Polyurethanes, a business group of The Dow Chemical Company, and BASF. The JV partners are also planning to rope in a Japanese trading company, who will help export PU and to whom again a minority stake will be diluted, said the official.

Interestingly, technology for the new PU project, is tested and successfully implemented in Korea, though its origin from Europe, said the source. While the propylene will be imported by BPCL, the conversion and market expertise comes from Manali Petro, which got over 25 years experience now.

The new indigenous plant is expected to go on stream by January 2017 and will cater to the automobile industry, foams and mattresses, ancillaries, paints and inks, insulations, refrigeration and a host of other applications. It was estimated the current requirement of PU in India is around 2.50 lakh tonnes, largely imported. The PU market in India currently being serviced by imports from some of the world's leading petrochemical as well as Oil & Gas companies.

Sources said that the plant will provide revenues to the tune of around Rs 4,000 crore to govt in terms of taxes and will also help strengthen the highly fragmented PU industry in India by utilising its economies of scale. This facility will provide employment to around 900 people directly and seven times indirectly.

About MPL

Manali Petrochemicals Limited (MPL) is one of the leaders in the production and marketing of Propylene Oxide, Propylene Glycols and Polyols in India. Located at Manali in Chennai, India, MPL is engaged in the manufacture of the above Petrochemical products. The Company operates two grassroot production facilities at Manali to manufacture Propylene oxide (PO), Propylene Glycol (PG) and Polyols. It markets its Polyols with isocyanates sourced indigenously as well as imported from Japan and China and the pre-polymers produced at MPL in meeting the demand of polyurethane industry in India.

About BPCL

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, Maharashtra. BPCL, a fortune 500 oil refining, exploration and marketing PSU with Navratna status. Following nationalization in 1976, BPCL changed its gears and embarked upon a Rapid growth path. Turnover, profitability and financial reserves grew by leaps and bounds.

Source: BPCL

K flex Coalescents
Channel Alerts

Receive weekly digests on hot topics

Back to Top