Kanoria Chemicals & Industries Ltd (KCI) has agreed to form an equal joint venture with US-based Momentive Specialty Chemicals.
Both firms have signed a memorandum of understanding (MoU) for the venture, according to a statement from KCI.
The JV firm, which will construct a new phenolic resin plant at KCI's existing facility at Visakhapatnam in Andhra Pradesh, will make and sell formaldehyde and hexamine.
KCI will also transfer its existing manufacturing unit in Visakhapatnam to the proposed venture for cash, according to the statement.
"The end markets for specialty phenolics and formaldehyde continues to grow rapidly in India and the proposed JV would leverage the proven approach of combining technology and application development with world-class manufacturing expertise," KCI Chairman & Managing Director R V Kanoria said in the statement.
Momentive Specialty will provide technology supporting its specialty phenolic resins, as well as its current business in India, to the JV.
"India is a critical market for specialty chemicals and the MoU represents another example of our commitment to strategically invest in the region," Momentive Specialty Chemicals Inc Chairman, President and CEO Craig O Morrison said.
Both companies will work to identify and evaluate growth opportunities for specialty chemicals in areas such as automotives, industry and construction, it said.
Formaldehyde is used to make products such as artificial silk, dyes, organic chemicals, glass mirrors and explosives, while hexamine is used in adhesives, coatings and sealing compounds, among others, according to KCI's website.
