BASF SE and Adani Group signed a Memorandum of Understanding on the eve of the Vibrant Gujarat Global Summit 2019 to evaluate a major joint investment in the acrylics value chain.

This will be BASF’s largest investment in India to date. The designated site would be located at Mundra port in Gujarat, India.
 
A feasibility study will be completed by the end of 2019.

According to the MoU, BASF and Adani want to establish a joint venture with an investment totaling about €2 billion (approximately INR 16,000 crore), in which BASF will hold the majority. The potential investment comprises the development, construction and operation of production plants including propane dehydrogenation, oxo C4 complex (butanols and 2-ethylhexanol), glacial acrylic acid, butyl acrylate and potentially other downstream products. The products are predominantly for the Indian market to serve a wide range of local industries, including construction, automotive and coatings, whose growing demand is currently supplied via imports, thus supporting the “Make in India” initiative.

“India continues to be a very large importer of petrochemicals given the rapid expansion of the middle class, and this leads to a significant outflow of precious foreign exchange,” said Gautam Adani, chairman of the Adani Group. “Our partnership with BASF is a big step forward in enabling our country’s ‘Make in India’ program, as this partnership will allow us to produce in Mundra several of the chemicals along the C3 chemical value chain that we are currently importing. Mundra’s infrastructure is ideally suited to enable chemicals production, and our ability to deliver renewable power makes this a unique partnership on several fronts.”

“Together with the Adani Group, we would have the opportunity to provide our customers with high-quality chemicals and support them in growing their business. With our production powered by renewable energy, we would be able to minimize our impact on the environment,” added Dr. Martin Brudermüller, chairman of the board of executive directors, BASF SE.

In line with BASF’s carbon neutral growth strategy, the chemical site in Mundra would be the company’s first CO₂-neutral production site. The companies have developed an overall plan including new technologies and the supply of the site with 100 percent renewable energy. Therefore, in addition to the investment outlined in this MoU, BASF plans to co-invest as a minority partner in a wind and solar park.