Reliance Sibur JV to build 60,000 MT/yr halogenated butyl rubber unit in Jamnagar

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Updated: January 18, 2017 11:20:24 AM

Reliance Sibur Elastomers Pvt Ltd (RSEPL) - a 74.9/25.1 joint venture between Reliance and SIBUR - expects to commission the facility by the next year 2018.

halogenated butyl rubber - butyl rubber - tyre making - rubber inner linerThe new halogenation unit will be in addition to its under-construction butyl rubber plant at the same venue.

Reliance Sibur – a joint venture between Reliance Industries and Russia’s SIBUR – will build a new 60,000 metric tonne per annum halogenated butyl rubber plant near its under-construction 120,000 MT butyl rubber plant at the Indian company’s integrated petrochemical site in Jamnagar, it said Wednesday.

Reliance Sibur Elastomers Pvt Ltd (RSEPL) – a 74.9/25.1 joint venture between Reliance and SIBUR – expects to commission the facility by the next year 2018, it said.

Both companies signed the Memorandum of Understanding (MoU) for the setting up this halogenation plant at the recently concluded Vibrant Gujarat Summit, which was attended by the Prime Minister Narendra Modi.

Halogenated butyl rubber is a key ingredient for manufacturing inner liner of tubeless tyres, and is also used in the manufacture of pharma stoppers, inner liner of storage tanks, etc.

Reliance Sibur JV was formed in February 2012 to produce 120,000 tonnes of butyl rubber per year at RIL’s integrated petrochemical site in Jamnagar. Earlier September, the JV had signed an agreement for availing a term loan facility of $330 million by way of External Commercial Borrowings to part finance the capital expenditure for this butyl rubber facility. The proposed new halogenation unit will be in addition to the said butyl rubber plant, which is currently under construction at the same venue.

With the Indian automobile trend aligning with global trends, penetration of tubeless tyres is expected to accelerate in the Indian market, resulting in an increased demand for halogenated butyl rubber, the company said.

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“RSEPL’s halogenated butyl rubber plant will be well-poised to capitalise on the significant surge in regional demand in tyre and pharmaceutical industries. India is expected to see a quantum jump in tyre production, with Indian and International tyre majors gearing up to make capital investments of Rs 15,000 crore. The halogenated butyl rubber demand is expected to grow at a rapid pace of 8-10% CAGR over the next few years, driven by increasing customer preference for tubeless tyres in India and neighbouring countries, and significant investments in the manufacture of pharmaceutical closures and tank inner liners,” Reliance Industries’ Executive Director Nikhil Meswani said.

Reliance Industries shares were trading almost flat at Rs 1,042 amid strong markets.


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