Reliance & Russia's Sibur to set up halogenated butyl rubber unit in India

The unit, located in Gujarat, will meet the growing demand for product from tyre & pharma industries

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Last Updated : Jan 18 2017 | 10:43 AM IST

Reliance Industries Ltd (RIL) and Russian petrochemical giant Sibur will jointly set up South Asia’s first butyl rubber halogenation unit at RIL’s integrated petrochemical site in Jamnagar, Gujarat. An MoU to this effect was signed by the two companies at the recently-concluded Vibrant Gujarat Summit at Gandhinagar.

The unit will produce 60,000 metric tonne (MT) of halogenated butyl rubber every year under Reliance Sibur Elastomers Private Limited (RSEPL) - a joint venture (JV) formed in February 2012 in which RIL and Sibur have 74.9 percent and 25.1 percent stake, respectively.

Apart from the planned halogenation unit, the JV owns a 1,20,000 MT per annum butyl rubber plant, currently under construction at the same venue which will provide the necessary butyl rubber feed to the halogenation unit.

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.”

“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,” commented Nikhil Meswani, executive director, Reliance Industries Ltd.

Dmitry Konov, chairman of Sibur’s Management Board, added, “India offers attractive investment opportunities given the growing local demand for synthetic rubbers and Gujarat’s favourable investment environment coupled with the well-developed infrastructure and raw material availability at a world-class Industrial site owned by RIL. Sibur has a long track record of successful cooperation with RIL and Gujarat’s government, which has provided us with a solid basis for expanding our footprint in India.”

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

Construction of the butyl rubber plant is in full swing at Jamnagar and its commissioning is targeted for 2018.

“Production from RSEPL will substitute imports and reduce outflow of valuable foreign exchange from India, providing impetus to the government’s Make in India initiative,” added RIL in a press statement.