RIL, SIBUR JV to invest $1 b for making butyl rubber

RIL, SIBUR JV to invest $1 b for making butyl rubber

Reliance Industries (RIL) and Russian petrochemical company SIBUR have agreed to form a joint venture named Reliance Sibur Elastomers to produce 100,000 tonne of butyl rubber per year in Jamnagar, Gujarat.

RIL said this JV will be the first manufacturer of butyl rubber in India and its fourth largest supplier in the world. It will cater to the demand for synthetic rubber from the Indian automotive industry of over 75,000 tonne per year, which is currently met through imports.

Reliance’s share in the JV will total 75 per cent, while Sibur will hold 25 per cent. Since both entities will invest $450 million to construct the facility, expected to be commissioned by the middle of 2014, total investment will be slightly less than $1 billion.

They also signed a technology licence agreement facilitating use by the JV of SIBUR’s proprietary butyl rubber production technology at the new production facility. SIBUR will develop basic engineering design for the facility and also train the JV’s personnel at SIBUR’s production site in Togliatti, Russia.  

RIL is India’s largest private sector company on all major financial parameters with a turnover of Rs 2,58,651 crore, while SIBUR is the largest petrochemical company in Russia and Eastern Europe producing over 2000 different brands of products and invested more than $2billion in further developments in 2011.