IOC’s Rs 761-cr maiden SBR project at Panipat

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Mumbai, Jul 29 : IOC will soon set up a maiden styrene butadiene rubber (SBR) project at Panipat with an investment of Rs 761 crore. IOC plans to hold a stake of 48% and rope in two partners by offering 32% and 20% stake each. The JV will set up a 120 TMPTA emulsion SBR project at Panipat.

On the project cost, IOC’s equity contribution was Rs 182 crore in the SBR project. IOC will spend another Rs 307 crore to implement the butadiene extraction unit, with a capacity of 138 TMTPA of butadiene.

Four grades of emulsion SBR (two oil extended and two non-oil grades)will be produced in the plant. Due to the fact that India imports its entire SBR requirement, selling the grades in the market is not envisaged to be a problem.

According to sources, SBR will be produced by co-polymerisation of butadiene and styrene in a weight ratio of 3:1 in the presence of catalysts, chemicals and stabilisers. While the butadiene feedstock (about 72 TMPTA) will come from the Panipat refinery through an extraction unit, the other feedstock—styrene (about 22 TMTPA)—will be imported.

IOC has firmed up its plan for the project based on recommendations of its consultants, Nextant Chem Systems. SBR consumption during 2006-07 was 96 TMT and is expected to grow at an average annual rate of more than 10% per annum till 2015.

The estimated consumption level of SBR during 2007-08 is estimated at 110 TMTPA. The bulk of the demand comes from India’s automotive industry. Both automobile and two-wheeler out is projected to double during by 2014-15. Automotive industry constitutes around 92% of the consumption of SBR in the country.

Sources said that according to Nextant Chem Systems, India is likely to experience significant deficits in SBR in the years ahead. The deficit is expected to rise to 132 TMT in 2009 but will come down to 77 TMT with the commissioning of the IOC plant before going up to 122 TMT and 169 TMT in 2015 and 2016 respectively.