Mumbai: Mukesh Ambani-led Reliance Industries Limited (RIL) has joined hands with Canadian plastics major Nova Chemicals for jointly designing and constructing energy-efficient buildings in India, starting with those to be used for the Indian conglomerate’s retail venture.
The New York Stock Exchange-listed Nova said in a statement that it has signed a letter of intent with RIL for the joint venture, which is expected to be operational by the third quarter of 2008 after finalising the formal agreements.
“Initial steps necessary to manufacture components in India are underway. The first activity of the venture will be construction of buildings for Reliance Retail in India,” Nova said.
Shares of Nova Chemicals rose 3.8% to $26.17 at the NYSE on 1 May, while that of RIL were trading 1.3% up at Rs2,649 at the Bombay Stock Exchange on 2 May.
Nova said that the proposed JV plans to leverage its “green building and construction technology to design, engineer and build a range of high-efficiency structures for the Indian sub-continent.”
The venture would enable Nova to work with RIL to build a large, profitable business based on its “proprietary performance styrenics building and construction systems,” Nova said.
“India has a $60 billion construction market that is growing at about 20% per year. The potential for energy-efficient buildings in India is very exciting and these systems are an excellent fit for Reliance Retail’s strategy,” Nova President and Chief Operating Officer Chris Pappas said in the statement.
These buildings, construction systems and component parts minimise the resource consumption, while cutting down the on-going energy demand by as much as one third, Nova said, adding that the components of the system include structural and non-structural roof, decking and wall panels.
Nova Chemicals is a plastics and chemical company whose products are used in a range of applications, including food and electronics packaging, industrial materials, appliances and a range of consumer goods.
RIL had said earlier this month, while announcing its financial results for the fiscal ended March 2008, that Reliance Retail operates 590 stores in 57 cities with 3.5 million square feet of trading space.
It operates through about a dozen store formats, such as a neighbour store format Reliance Fresh, non-vegetarian concept Reliance Delight, Reliance Digital for consumer electronics and IT products, hyper market format Reliance Mart, apparel concept Reliance Trends, and automotive specialty format Reliance AutoZone.
Reliance Retail’s joint ventures, include European optical retail Pearle Europe and UK’s Marks and Spencer.