Shell plans bitumen plant in Gujarat

The Royal/Dutch Shell will soon become the first multinational to make foray into bitumen manufacturing in India as the huge bitumen market estimated at around 3,000 TMT in the country has been witnessing a sharp rise, thanks the ongoing mega road projects.

Shell was marketing its bitumen products under the banner of Bharat Shell, and it has recently formed a new entity""Shell Bitumen India Pvt Ltd (SBIPL) for the purpose.

"Last year, we got the clearance from the Foreign Investment Promotion Board (FIPB) for setting up a wholly owned subsidiary following which we initiated process of creating a new entity which finally led to the creation of Shell Bitumen. The company will start functioning with a capital of Rs 12 crore which will be hiked subsequently.

"We may set up a plant in Gujarat where we already have business interests," said a company source.

Shell under the banner of Shell Hazira Gas Pvt Ltd has set up a 2.5 million metric tonne per annum (MMTPA) liquefied natural gas (LNG) terminal at Hazira industrial belt of Surat and the plant is expected to begin commercial operation in the last quarter of the current calendar year.

Interestingly, for the construction of National Highway-8, bitumen products of Bharat Shell, ShelMacPR, was extensively used and found to be a success for such road conditions.

This led to Shell management expediting the process of creating a new entity for establishing the bitumen manufacturing plant.

"Shell's range of bitumen and binders enhance the performance of asphalt and spray-sealed surfaces and the range of pavement grade binders of Shell offer superior performance for a range of applications for light and heavy-duty traffic areas with a range of load-carrying capacities. Its bitumen products globally are Multiphate, a binder with a low temperature susceptibility, Mexphalte, a range of special binders formulated for specific customer benefit and there are three products under this range while Shell also has Cariphalte, a range of polymer modified binders targeted to very high loading and wide range in operational temperatures," said a company source adding that Shell also will be developing customised products for particular applications in India.

The estimated 3,000 TMT bitumen market in the country so far has been dominated by oil PSUs Indian Oil Corporation (IOCL) and Hindustan Petroleum Corporation (HPCL).

Other companies such as Bharat Petroleum Corporation (BPCL), Koci Refineries Ltd (KRL), Chennai Petroleum Corporation (CPCL) and Mangalore Refinery and Petrochemicals (MRPL), are also known players in the Indian bitumen market.

As per the statistics of the ministry of oil and natural gas, during the year 1999-2000, IOCL produced 1,369 TMT of bitumen while HPCL produced 334 TMT and BPCL produced 274 TMT.

CRL manufactured 66 TMT while CPCL and MRPL produced 306 and 137 TMT, respectively, during the year.

Though the latest production figures are not available, industry sources said that the market reached 3,000 TMT by the last fiscal end and may cross 7,000 TMT in the next two years, with projects such as Rs 60,000 crore Golden Quadrilateral and Prime Minister's Gramin Sadak Yojana going on in full swing.