Oracle of Omaha will initially invest Rs 1,177 crore in the venture.
Billionaire investor Warren Buffett, the Oracle of Omaha, is back in India doing what he does best: investing.
Ohio, US-based speciality chemicals maker Lubrizol Corporation, a wholly owned subsidiary of Buffett’s investment company, Berkshire Hathaway Inc, will be setting up a chlorinated polyvinyl chloride (CPVC) industrial unit, in partnership with Astral Poly Technik, at the Gujarat Industrial Development Corporation complex in Dahej.
This will be the second investment by Berkshire in India and arguably the largest so far. So far, Berkshire’s sole investment in India is Bangalore-based tool maker TaeguTec India, whose parent I-M-C is also controlled by it. TaeguTec specialises in tungsten carbide cutting tools, tungsten carbide rolls and industrial products.
During his maiden trip to India earlier this year, Buffett did predict he would “make one big investment a year in India”.
Lubrizol will initially pump $245 million (Rs 1,177 crore) into the venture in Gujarat. The construction work was expected to start in January 2013 and the production from October 2014, the state government stated in a statement on Wednesday.
Tom Frubus, chief of Lubrizol Corporation (USA), and Sandip Engineer, managing director of Astral Poly Technik, on Wednesday met Gujarat chief minister Narendra Modi and other state government officials in Gandhinagar to inform them about their decision to invest in the state.
Frubus said, “CPVC products have great demand in Southeast Asia, West Asia and Africa. Considering the investor-friendly environment, transparent policies and best infrastructure facilities in Gujarat, we have chosen the state for setting up of the first unit.”
Dahej is already a major chemical hub, with India’s largest Petroleum, Chemicals and Petrochemicals Investment Region being developed here. Berkshire had acquired Lubrizol Corporation for about $9.7 billion (Rs 46,613 crore) in March.
Headquartered in Ahmedabad, Astral Poly Technik manufactures plumbing systems for residential and industrial applications. It specialises in a range of plastic products like Astral FlowGuard CPVC, FlowGuard Bendable, Astral Aquarius uPVC and Astral Under Ground, and also has technical tie-ups with global majors like Tyco, Spears and Wavin.
But the market seemed to be less enthusiastic about the development. Astral stocks closed 2.7 per cent lower at Rs 182.1 on the Bombay Stock Exchange.