New Delhi: Reliance Industries Ltd has tied up with Rohm & Haas Co., the world’s largest producer of acrylic-paint ingredients to build a chemical plant in India. This hopes to meet the region’s rising demand for paint.
The companies will explore the possibility of setting up a plant to make 200,000 tonnes a year of acrylic acid in Jamnagar.
Reliance’s chairman, Mukesh Ambani, is consolidating and expanding the company’s chemical operations after prices of the ingredient for packaging, detergents and adhesives rose as much as 27% last year. The new plant may help Reliance, India’s biggest chemical maker to boost overseas sales.
“While the key objective would be to serve the domestic market needs, the complex could also export acrylic acid and derivatives,” Reliance said in the statement. Chemicals make up about 45% of the company’s earnings.
Reliance shares rose as much as Rs 79.95 or 6%, to Rs1,420 apiece on the Bombay Stock Exchange. The stock was last seen trading at Rs1,360.
Reliance may spend $12 billion (Rs54,000 crore) to buy a majority stake in a venture with Dow Chemical Co. Reliance could borrow about $6.5 billion to fund any investment with Dow, the biggest chemicals company in the US, according to a report published by Macquarie Securities Ltd.
The Indian company has about $6 billion of treasury stock and a $3.7 billion issue pending with the owners of the group.