Adani, BASF announce plans for ₹16000 crore petrochemicals project

Ahmedabad: In what would be its largest investment in India till date, BASF SE, headquartered in Ludwigshafen, Germany, today signed a memorandum of understanding (MoU) with the Ahmedabad-based Adani group to evaluate a major joint investment in the acrylics value chain, according to a joint media statement issued by the companies. According to the pact, BASF and Adani want to establish a joint venture with an investment of about €2 billion (approximately ₹ 16,000 crore), in which BASF will hold the majority stake, according to the press statement.

The designated site would be located at Mundra port in Gujarat. A feasibility study will be completed by the end of 2019, it said.

The potential investment comprises the development, construction and operation of production plants, including propane dehydrogenation (PDH), oxo C4 complex (butanols and 2-ethylhexanol), glacial acrylic acid (GAA), butyl acrylate (BA) and potentially other downstream products.

The products are predominantly for the Indian market to serve a wide range of local industries, including construction, automotive and coatings, whose growing demand is currently supplied via imports.

“India continues to be a very large importer of petrochemicals given the rapid expansion of the middle class, and this leads to a significant outflow of precious foreign exchange. Our partnership with BASF is a big step forward in enabling our country’s ‘Make in India’ programme, as this partnership will allow us to produce in Mundra several of the chemicals along the C3 chemical value chain that we are currently importing. Mundra’s infrastructure is ideally suited to enable chemicals production, and our ability to deliver renewable power makes this a unique partnership on several fronts,” Gautam Adani, chairman of the Adani group, said in a statement.

In line with BASF’s carbon neutral growth strategy, the chemical site in Mundra would be the company’s first CO2-neutral production site. The companies have developed an overall plan, including new technologies, and the supply of 100% renewable energy. In addition to the investment outlined in this MoU, BASF plans to co-invest as a minority partner in a wind and solar park, according to the media statement.

“BASF’s intention to invest in a major new site for the acrylics value chain in India clearly demonstrates our strong and long-term commitment to our Indian customers. Together with the Adani group, we would have the opportunity to provide our customers with high-quality chemicals and support them in growing their business. With our production powered by renewable energy, we would be able to minimize our impact on the environment,” Martin Brudermüller, Chairman of the Board of Executive Directors, BASF SE, said in the media statement.