RIL-Sibur joint venture to set up rubber unit at Jamnagar in Gujarat

Mumbai: Reliance Industries Ltd (RIL) and Russian petrochemical giant Sibur signed a memorandum of association at the recently-concluded Vibrant Gujarat Summit at Gandhinagar to set up South Asia’s first butyl rubber halogenation unit at RIL’s integrated petrochemical site in Jamnagar, Gujarat.

In a press statement, RIL said the unit will produce 60,000 million tonnes of halogenated butyl rubber every year under Reliance Sibur Elastomers Pvt. Ltd (RSEPL)—a joint venture (JV) of which RIL owns 74.9% and Sibur 25.1%. RIL and Sibur entered the JV in February 2012.

Halogenated butyl rubber is a key ingredient for manufacturing the 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 manufacture of pharma stoppers, inner liner of storage tanks, etc.

Construction of the butyl rubber plant is in full swing at Jamnagar, its commissioning targeted for 2018.

Production from RSEPL will substitute imports and reduce outflow of valuable foreign exchange from India, providing impetus to the government’s Make in India initiative, RIL said.

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 is expected to see a quantum jump in tyre production, with Indian and International tyre majors gearing up to make capital investments of Rs15,000 crore.”

In the press statement, RIL added that the halogenated butyl rubber demand is expected to grow at a rapid pace of 8-10% CAGR (compounded annual growth rate) over the next few years, driven by increasing customer preference for tubeless tyres in India and neighbouring countries, and significant investments in the manufacture of pharmaceutical closures and tank inner liners.

“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 availability at a world-class Industrial site owned by RIL. Sibur has a long track record of successful cooperation with RIL and Gujarat’s government, which has provided us with a solid basis for expanding our footprint in India,” said Dmitry Konov, chairman of Sibur’s management board.