Gujarat Alkalies and Chemicals Ltd (GACL) has signed an agreement for a 50:50 joint venture (JV) with Dow Europe GmbH, a wholly owned subsidiary of the $54 billion Dow Chemical Company.
AHMEDABAD: Gujarat Alkalies and Chemicals Ltd (GACL) has signed an agreement for a 50:50 joint venture (JV) with Dow Europe GmbH, a wholly owned subsidiary of the $54 billion Dow Chemical Company.
The JV will invest Rs 600 crore to set up a 200,000 tonnes per annum (tpa) capacity chloromethanes manufacturing unit. This is Dow’s largest investment in a greenfield project in India.
Chloromethanes are used as intermediates in the production of fluorocarbons and fluoropolymers, and as solvents in pharmaceutical manufacturing and other chemical processing applications.
India imports around one lakh tonne of chloromethane annually, valued at Rs 200 crore, the bulk of which comes from regions such as the US and Europe. These imports are growing at 12% per year.
Michael Gambrell, executive VP, Dow said it is also considering further investments in Gujarat and elsewhere in India. “We are planning to double sales in India from the current $500 million to $1 billion by 2010.”
The GACL stock rose following the announcement, and ended the day 7% higher on the BSE.
The proposed project will come up in Dahej. It will help cut down the cost of the
chemical, which is used as a raw material in pharmaceutical, refrigerant and solvents industries, making it available at more competitive rates.
The unit is scheduled to begin commercial operations by January 2011, with an expected turnover of Rs 500 crore. It will be funded in an equity-debt ratio of 30:70 or less, in favour of equity.
The project will cater mostly to the domestic market, although some portion will be exported.
Meanwhile, Gujarat Alkalies plans to invest Rs 2,600 crore over the next couple of years in various projects. Guruprasad Mohapatra, managing director of GACL, told DNA it will invest around Rs 600 crore to expand its caustic soda capacity by another 500 tonnes per day (tpd), Rs 600 crore in a 90 MW captive power plant, Rs 200 crore to set up a 75 TPD hydrogen peroxide project, and Rs 220 crore to set up a 40 MW wind power project in Kutch.
m_gopal@dnaindia.net
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