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This has left BPCL scouting for other partners to either form a joint venture company in the segment for the project or source technology from licensors in the field. Business Standard had reported that BPCL was in talks with Chennai-based Manali Petrochemicals, to set up India’s single largest Polyurethane (PU) manufacturing plant in Kerala.
The project would be spread over 150 acres, next to BPCL’s existing refining facility. The project would cater to automotives, white goods and other. Both companies would have a 50 per cent stake each in the new JV. A pre-feasibility report is being prepared.
“We are in preliminary talks with Manali Petrochemicals for propelynoxide,” confirmed a senior BPCL official.
BPCL had last June, signed a joint venture pact with South Korea’s LG Chem Limited, to set up a petrochemical plant near BPCL’s Kochi refinery complex. The company, had last year said it planned to spend up to $2.51 billion over the next five years to expand its Kochi refinery. Under its expansion plan, the company decided to set up a petrochemical fluid catalytic cracker, which would generate 500,000 metric tonnes per annum of propylene, to help the company diversify into petrochemicals.The cracker project would be set up via the joint venture at an additional cost of Rs 40-50 billion, and is expected to be completed in the next four years alongside the refinery expansion plan.
Technology for the new PU project, is tested and successfully implemented in Korea, though its origin from Europe.
If the pact with Manali comes through, the propylene would be imported by BPCL, the conversion and market expertise comes from Manali Petro, which has got more than 25 years of experience now.
The new indigenous plant is expected to go on stream by January 2017 and would cater to industries such as automobile, foams & mattresses, ancillaries, paints & inks, insulations, refrigeration and a host of other applications. It was estimated the current requirement of PU in India is 2.50 lakh tonnes, largely imported.
The PU market in India, is currently being serviced by imports from some of the world’s leading petrochemical as well as Oil & Gas companies.
Sources said that the plant would provide revenues to the tune of about Rs 4,000 crore to the government in terms of taxes and would also help strengthen the highly fragmented PU industry in India by utilising its economies of scale.
This facility would provide employment to 900 people directly and seven times indirectly.
Bina IPO next year subject to market conditions
BPCL might launch an initial public offering for its Bina refinery if the refinery begins making profits next year and if market conditions get better. “Bina is making profit on a monthly basis. In a year's time we are hopeful of declaring annual profits. If all goes well and market conditions are suitable, we will consider an IPO for Bina next year,” said RK Singh, CMD.
