Petrochemicals major Saudi Basic Industries Corporation (Sabic) is planning big investments in India that may run into billions of dollars.
Sabic, which ranks among the world’s top five petrochemical companies, has been in talks with Indian petrochemical players for a joint venture to tap the huge potential of the Indian market with cracker projects and downstream refineries, Ahmed Alumar, vice president Asia Pacific and member of the board of directors of Sabic Asia Pacific, told Business Standard.
“India is an equally important market for us like China and we are looking at similar investments, if required, in India. It is early to reveal more details and names of companies we are discussing with.”
India, which imports over $22 billion of petrochemical products ever year, offers Sabic the perfect platform to tap the potential for its core business areas like chemicals, fertilizers, innovative plastics, polymers and performance chemicals, he said.
Mukesh Ambani-owned Reliance Industries is planning to investment about Rs 16,000 crore to set up a cracker unit at Jamnagar in Gujarat. The unit would produce ethylene, propylene, low-density polyethylene and mono ethylene glycol that have a wide range of applications in various industries. Sabic is the largest producer of mono-ethylene glycol in the world.
Two weeks ago, India’s largest refiner Indian Oil Corporation had commissioned the country’s largest naphtha cracker plant at Indian Oil’s Panipat Complex built at Rs 14, 439 crore. The plant has a capacity to produce 800,000 tonnes per annum (TPA) of ethylene. GAIL-promoted Brahmaputra Cracker and Polymer Limited (BCPL) is also setting up a Rs 5,600 crore project in Assam.
Sabic has been operating in India since 1994 and has about 530 employees in the country catering to 1,000 plus customers across various industries. However, they used to primarily import products from its facilities in Saudi Arabia and Europe into India. “Actually we started business with India before we did with China. India is very near to Saudi Arabia than China and it is like a home environment for us here,” said Alumar.
Sabic, which had revenues of $27 billion in 2009, had entered into a 50:50 joint venture with Chinese Government-controlled China Petroleum and Chemical Corporation (Sinopec) two years ago to construct a three million tonnes per annum capacity petrochemical complex at Tianjin. It had invested over $2.5 billion in the project.
Sabic and Sinopec are also planning further co-operation and investments in various areas. Sabic has ten manufacturing facilities in China, where as its investments in India are limited to facility and technology centres it acquired in Bangalore through its global acquisition of GE’s plastics division a few years ago. Sabic has eight offices in India.
Alumar said Sabic was planning to expand its research and technology centre in Bangalore by hiring more than 280 research staff. The facility will be ready by the year-end or early 2012. The company is also setting up a new muti wall sheet (MWS) facility in Baroda. This is expected to commence operations in July 2011.
