Indian oil and Russian technology could become the recipe for India's independence from foreign rubber imports: Sibur and Reliance Industries, two rising players in the global oil and petrochemical business, now join forces to build the world's fourth biggest butyl rubber production at Jamnagar, India.
Mumbai/India – India's largest private refiner Reliance Industries teams up with Russia's number one petrochemical company Sibur for a common produce butyl rubber project. Both companies agreed to form a the joint venture company Reliance Sibur Elastomers Private to produce 100,000 tons of butyl rubber per year in Jamnagar, India. This project marks the first butyl rubber production in the country and could well become the world's fourth biggest producers of the polymer when running at full capacity.
India's Automotive Industry Depends on Rubber Imports
The partner companies expect a big demand for butyl rubber from India's tires and automotive industries: According to recent figures, the regional industry needs about 75,000 tonnes per year, which is currently satisfied by imports. This project could be the consequence of Reliance's attempt to expand its business to the synthetic rubber markets, industry experts say.
US $ 700 Million Sales Within the First Year of Production
Both companies will invest US $ 450 million in the project. Reliance expects to see big results from this investments: Total sales volume of around US $ 700 million could be achieved within the first year of production, Nikhil Meswani, a Reliance executive director, said.
The joint-venture production will be located at the Special Economic Zone at Jamnagar, nicknamed 'Oil City of India'. There Reliance recently established the world's largest oil refinery (see box), supplying the raw materials for the rubber production. Commissioning of the facility is expected for mid–2014.
Technology License for Butyl Rubber: JV Uses Sibur Technology
First plans for a partnership between Reliance and Sibur were issued in 2010. Now the two companies also agreed on a technology licence agreement that allows the joint operation to use Sibur's proprietary butyl rubber production technology. The Russian company will also develop basic engineering design for the facility and train the operating personnel at its butyl rubber production in Togliatti, Russia.