Hoc-Chematur Joint Venture For Mdi Plant

Hindustan Organic Chemicals (HOC) is setting up a Rs 400 crore joint venture with Chematur Engineering AB of Sweden to manufacture diphenyl methane disocyanate (MDI).

The 20,000 tonne per annum MDI plant, the first one in the country, will be set up at HOC's Rasyani complex and is expected to be completed in 36 months. The total project cost of Rs 400 crore would be funded through a debt equity ratio of 1.5:1.

Of the total equity of Rs 159 crore, HOC and Chematur Engineering will invest 51 per cent in the ratio of 60:40. The joint venture is a part of the HOC's plans to invest in value added downstream products. MDI requires aniline and formaldehyde as raw materials and both the products are being already produced by HOC.

 

The indigenous supply of MDI is expected to increase the demand for a variety of polyurethane (PU) applications which in turn will contribute to conservation of forest resources. Chematur is one of the few manufacturers of MDI in the world.

The company has acquired the right of licensing MDI technology from Dupont, USA.

HOC Chematur Ltd will have 12 members on its board, including nominees of financial institutions and banks with the chairman of HOC as chairman of the newly formed company. As per the agreement, a quarter of the production of the company would be exported.