State-run IOC in expansion mode, bets big on petrochemicals

India’s second largest petrochemical firm Indian Oil Corp (IOCL) is planning to add capacity across some of its refineries, besides expanding beyond its core business of pipeline, transportation and marketing, to gas, petrochemical and upstream.

“Our expansion bodes well for our future and will improve our bottomlines. It will also give us some amount of cushion in terms of volatility in one segment of the business," said Ashok Balasubramanian, chairman and managing director, IOCL.

IOCL currently operates 10 refineries with a capacity of 65.7 million metric tonnes (MMT) per annum and accounts for 31% of the national refining capacity and has a 19% share in the petrochemical segment. It already has petrochemical units alongside its Koyali refinery in Gujarat and Panipat refinery in Haryana.

“We think there is a lot of potential for polymer usage in India and as the petrochemical space expands, we are becoming more and more active,” said Balasubramanian. “We are considering petrochemical opportunities at various refineries of ours and thinking how we can extract value from our existing refineries. Though cyclic, petrochemical is a good business to be in."

IOCL is building a polypropylene plant in Paradip, Odisha, that is expected to be ready by mid-2017. It is also building a Rs 35,000 crore refinery there with a complexity index of 12.5 that is close to commissioning.

“The refinery is 97.3 per cent complete and we will start phased commissioning of the refinery in February or March 2015,” Balasubramanian said.

The company is still scouting for a location on the west coast to set up a greenfield refinery.

Indian Oil Corporation