Oil major Bharat Petroleum Corporation Ltd (BPCL) is in the process of exploring a 50:50 polyurethane joint venture in Kochi with city-based Manali Petrochemicals Ltd. involving an outlay of around Rs.2,500 crore, officials said.
"We are in the process of exploring a joint venture with Manali Petrochemicals to set up a polyurethane project in Kochi. A joint study is being made," a senior BPCL official, not wanting to be identified, told IANS from Kochi on the phone.
BPCL is expanding its refinery capacity at Kochi to around 15.5 million tonnes per annum (mtpa) from the current 9.5 mtpa. Once the expansion goes on stream, the company will have propylene capacity of 500,000 tpa - a quantum jump from its existing 50,000 tpa, said the official.
Propylene is the raw material for polyurethane and BPCL plans to get into value added petrochemical products at Kochi.
"The preliminary study has been completed and the boards of two companies have been informed. The next step is to start on a detailed feasibility report," a senior official of the Rs.522 crore Manali Petrochemicals told IANS on condition of anonymity.
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Officials said in the current situation, there will not be any foreign equity partner in the proposed joint venture.
"The plant capacity will be dependent on the availability of propylene. A 300,000 tpa plant will be ideal," officials said.
According to officials some 100 acres would be required for the proposed project, which would generate direct employment for around 1,000 people.
Industry officials said the Indian market for polyurethane is currently around 325,000 tpa and is growing at a healthy rate. Nearly 80 percent of the demand is met by imports.
The product is used by industries making mattresses, automobile components, paints, inks and insulations, among a host of other applications.
"India is strategically located and a mega unit in the country can cater to the demands of nations in the Indian Ocean region. The country has the necessary technical manpower and there are no grassroot units in several countries," K. Ramamurthy, secretary of the Indian Polyurethane Association, told IANS.
"With the project in a port city, we can ship the product to users in western India and also to other countries. Further, Kochi is not far from the automotive hub of Chennai," a Manali Petrochemicals official said.
(V. Jagannathan can be contacted at v.jagannathan@ians.in)
