RIL picks up SM Dyechem unit for Rs 105 cr

Reliance Industries Ltd (RIL) today announced the acquisition of assets of SM Dyechem Ltd's glycol division from the Industrial Development Bank of India (IDBI) for around Rs 105 crore.

With the buyout, RIL's production capacity of mono ethylene glycol (MEG), including that of group firm Indian Petrochemicals Corporation Ltd, goes up to 832,000 tonne from 752,000 tonne, making it the world's fifth largest producer.

The Reliance group produces MEG at six locations in Gujarat and Maharashtra. The buyout will provide Reliance an opportunity to produce MEG from alcohol.

All other existing facilities of Reliance produce MEG from naphtha and natural gas. The SM Dyechem plant, which has a capacity to produce 80,000 tonne per annum of MEG, is located at Kurkumbh near Pune in the sugar belt of Maharashtra and, therefore, there is adequate availability of alcohol in the vicinity of the plant. RIL plans to re-commission the unit shortly, the company said in a media statement.

IDBI has sold the assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, after the company failed to pay its dues to secured creditors.

The plant has been shut since 1996.