India's $360 million imports of synthetic butyl rubber, used mainly to make tyres, may soon be rendered unnecessary after a Russian joint venture with Reliance Industries starts production end-2015, a top official has said.
Russian gas processing and petrochemicals major Sibur has a 25:75 joint venture with Reliance and the upcoming plant at Jamnagar is set to commence production by the end of next year, said Evgeny Griva, chief executive of Sibur Petrochemical India.
"Sibur believes that once production begins at Jamnagar, India will stop importing butyl rubber," Griva told IANS, adding the current imports were estimated at 60,000 tonnes per annum as against the plant's capacity of 100,000 tonnes.
The $7.6-billion Sibur's projections for India are based on a conservative medium-term growth in demand for butyl rubber at around 6.3 percent per annum, thanks to India emerging as a major hub for small cars.
"Production of small cars in India increased eight percent last year and is expected to maintain the same growth rate over the next there years. We anticipate a similar growth in demand for butyl rubbers as in tyre production," Griva said.
According to him, Russia has a leading position as a supplier of butyl rubber to the global market. "We at Sibur are among a few companies with technology to produce butyl rubber and the practical experience to produce and sell our product," he said.
"We are using a unique solution polymerization technology in Jamnagar. It is consistent in product quality and is also eco-friendly since it uses non-toxic solvents," the Russian chief executive said.
The technology is currently only being used at at Sibur's Togliattikauchuk plant in Togliatti in the Samara region of central Russia which has been operating since the early 1980s.
India's tyre output is expected to expand rapidly, with the credit ratings agency ICRA estimating growth at 8-10 percent a year to drive the Indian synthetic rubber industry forward.
"Once domestic demand is being satisfied in India, Reliance Sibur Elastomers may export its remaining output to neighbouring countries. But our joint venture's prime focus will be India", Griva said.
Sibur Petrochemical India, the group's subsidiary since in 2012, is also conducting detailed research on the country's petrochemical market and the related business development to tap the demand.
"India's per capita consumption of polyolefins lags well behind that in other countries in Southeast Asia and further behind Western Europe or North America. The demand will only grow as personal incomes are rising and consumption patterns changing," Griva said.
(Biswajit Choudhury can be reached at biswajit.c@ians.in)
