The Reliance Sibur Elastomers, the Gujarat (India)-based $450million joint venture between India’s largest private company Reliance Industries and Russia’s synthetic rubber major Sibur to manufacture butyl rubber, is a giant step towards creating a domestic manufacturing base for butyl rubber, says Reliance Industries Executive Director Nikhil R Meswani in an interview
When Reliance Sibur Elastomers was set up to produce butyl rubber in India, the priorities were clear: Crate a manufacturing giant that will meet the increasing demand of the domestic tyre and automobile industries for butyl rubber.
Reliance already enjoys excellent relationship with the Indian tyre industry by virtue of being a reliable supplier of quality polybutadiene rubber, according to Reliance Industries Executive Director Nikhil R Meswani. “Reliance believes in setting up world-scale manufacturing facilities to cater to the ever growing demand of Indian industries,” he said in an interview.
The butyl rubber plant that is coming up at Jamnagar in the western Indian State of Gujarat will have world-scale capacity of 100,000 tonnes per annum. The project is expected to be fully commissioned by mid-2014.
Reliance's Jamnagar facility represents the largest industrial project ever implemented in the Indian corporate sector. The fully integrated manufacturing complex has a petroleum refinery, an aromatics/petrochemical facility, a power generation unit, a port and terminal complex as well as access to a pipeline network.
RIL, under the stewardship of Mukesh D Ambani, is the first private sector company from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and ranked the 119th among the world's Top 200 companies in terms of profits. It is placed at the 68th in the Financial ‘Times FT Global 500’ list of the world's largest companies. RIL is also ranked among the ’50 Most Innovative Companies - 2010' in the world in a survey conducted by Business Week in collaboration with the Boston Consulting Group (BCG).
The Sibur Elastomers chief said that the demand for synthetic rubber from the Indian tyre and automotive industries is of over 75,000 tonnes a year.
Reliance, which has 74.9% stake in the company with the rest with Sibur, plans to become a significant player in the global SR market. It also has a technology licence agreement facilitating the use of Sibur's proprietary butyl rubber production technology.
“We at Reliance are very excited to see the unfulfilled desire of the Indian industry
to have a domestic manufacturing base for butyl rubber is satisfied. Globally, a very
limited number of players have commercialised complex butyl rubber manufacturing technology,” he said.
Reliance Sibur joint venture will benefit from feedstock integration with one of the largest single-site refinery in the world and proven butyl rubber technology of Sibur.
Sibur operates across the entire petrochemical process chain from gas processing, production of monomers, plastics and synthetic rubbers to the processing of plastics. It is a vertically integrated company with its gas processing facilities providing feedstock for its petrochemical production.
Reliance operates the world’s largest refining complex and associated chemical plants at Jamnagar. The partnership with Sibur, Eastern Europe’s biggest petrochemicals producer, was first announced in May 2010 and the project holds a lot of opportunities for continual growth.
Says Meswani: “Our plan in elastomer business goes beyond investment in butyl rubber plant. In addition to our existing PBR capacities, Reliance on its own is setting up 150,000 tonnes per annum emulsion styrene butadiene rubber (ESBR) and an additional 40,000 tonnes per annum of polybutadiene rubber (PBR) plant at Hazira.
The Reliance Industries Hazira complex near Surat in Gujarat is spread over 1,000 acres near the banks of the river Tapi and manufactures a wide range of polymers, polyesters, fibre intermediates and petrochemicals.
With the commissioning of Sibur/Reliance joint venture, Reliance will emerge as a one-stop-shop for all elastomer needs of the downstream industry.
He said the Indian rubber industry is one of the fastest growing in the world. “With increasing demand for butyl rubber, we expect the entire production from the planned capacity would be consumed domestically.”
More importantly, by virtue of being integrated and co-located with large and highly complex refineries at a single site, the joint venture has access to large quantities of isobutylene to meet future requirements for further expansions.
Future is now
Meswani said Reliance is committed to a green and safe environment. “Our new polybutadiene rubber facility coming up at Hazira will have capability to make neodymium catalyst-based polybutadiene rubber as well,” he said.
With this, Reliance will have a unique advantage of being a producer with the capability to produce polybutadiene rubber from three different catalyst systems, namely, cobalt, nickel as well as neodymium, to cater to the varied needs of the downstream customers.
He said the joint venture’s butyl rubber plant will be benchmarked with the best in the world and will cater to the consumption of butyl rubber in India as well as to quality conscious customers globally.
The global demand for rubber, natural as well synthetic, is rising at 5% per annum, Meswani points out. Rising demand could be met efficiently by balanced usage of natural and synthetic rubber in suitable proportion for optimal end product quality.
“Natural and synthetic rubbers complement each other in terms of their application. I’m sure, with the state-of- the-art plant coupled with feedstock integration, cost competitive manufacturing is assured,” he asserted.
With adequate raw material at cost-competitive prices, downstream Indian rubber and tyre industry can aggressively expand their operations, he explained.