One of the first concrete steps towards billionaire investor Warren Buffett's investment in India through Ohio, US-based speciality chemicals maker Lubrizol Corporation, a wholly owned subsidiary of Buffett’s investment company, Berkshire Hathaway Inc is likely to be taken by March 2012.
Even as Lubrizol plans to set up a chlorinated polyvinyl chloride (CPVC) compound industrial unit, in partnership with Ahmedabad-based Astral Poly Technik, a joint venture agreement (JV) between the two firms is likely to be finalised by March 2012.
According to sources close to the development, a feasibility study for the proposed plant in Dahej is underway, post completion of which a JV agreement will be signed between Astral Poly Technik and Lubrizol.
Earlier in September, in a notification to the Bombay Stock Exchange (BSE), Astral had stated that the company had preliminary meetings with representatives of Lubrizol and Government of Gujarat to inform the latter about Buffett and Astral's decision to invest in the state. Apparently, Tom Frubus, chief of Lubrizol Corporation (USA), and Sandeep Engineer, managing director of Astral Poly Technik, had met Gujarat chief minister Narendra Modi and other state government officials in Gandhinagar in September.
"CPVC products have great demand in Southeast Asia, West Asia and Africa. Considering the investor-friendly environment, transparent policies and best infrastructure facilities in Gujarat, we have chosen the state for setting up of the first unit," Frubus had then stated.
While so far Astral used to import CPVC pipes from Lubrizol, under the new JV, both the companies will set up a CPVC compound and CPVC pipe manufacturing plant in Dahej. For this, Lubrizol will initially pump $245 million (Rs 1,177 crore) into the venture in Gujarat, construction work of which was expected to start in January 2013 and the production from October 2014.
Headquartered in Ahmedabad, Astral Poly Technik manufactures plumbing systems for residential and industrial applications. It specialises in a range of plastic products like Astral FlowGuard CPVC, FlowGuard Bendable, Astral Aquarius uPVC and Astral Under Ground, and also has technical tie-ups with global majors like Tyco, Spears and Wavin.
Once commenced, this will be the second investment by Berkshire in India and arguably the largest, after the company invested in Bangalore-based tool maker TaeguTec India, whose parent I-M-C is also controlled by it. TaeguTec specialises in tungsten carbide cutting tools, tungsten carbide rolls and industrial products.
Meanwhile, Buffett's Berkshire had acquired Lubrizol Corporation for about $9.7 billion (Rs 46,613 crore) earlier in March.
