GACL scraps JV plans with German firm Evonik

Differences over shareholding pattern led to discontinuation of the polyols project

In yet another instance of discontinuation of a joint venture with foreign firm, Gujarat Alkalies and Chemicals Ltd (GACL) has scrapped its JV plans with German specialty chemicals major, Evonik-Degussa GmbH.

Earlier, the state-run alkali player had snapped its ties with US chemical major Dow Chemicals' subsidiary in India.

"There were differences over shareholding pattern. We wanted a 50:50 JV with Evonik, while they were interested to have a controlling stake in the JV. Hence, it did not workout and eventually, the plan to form the JV for the polyols project had to be scrapped," said a top GACL official.

The company was planning to set up a Rs 2,500-crore JV project to set up a plant to manufacture polyols at its Dahej complex in Bharuch. GACL was looking to diversify its existing product portfolio and reduce its dependence on imported caustic soda.

"Although, we have not dropped our plans to set up the polyols plant at Dahej. Currently, we are exploring right partner for the technical collaboration," the official stated. The company intended to set up the polyols plant with an annual capacity of 150,000 tonnes.

It may be noted that Evonik and GACl had entered into a memorandum of understanding for the project at the Vibrant Gujarat Global Investors' Summit held at Gandhinagar in January 2011 and the facility was expected to start commercial production from 2014 onwards.

GACL shares traded at Rs 135.15 during afternoon trades on Friday with a marginal loss of 0.04 per cent from its previous close on the Bombay Stock Exchange (BSE).