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RIL to form JV with Russia's SIBUR to set up US $450mn butyl rubber venture
RIL and leading Russian petrochemical company SIBUR have entered into a joint venture
(JV) for the production of butyl rubber in India. The estimated investment in the project will
be US $450mn, with RIL holding a majority stake in the venture. The agreement was
signed during the visit of the Russian President, Mr. Dmitry Medvedev, on Tuesday. The
facility will have an initial production capacity of 100,000 tonnes of butyl rubber at RIL's
Jamnagar facility and is expected to be commissioned by 2013. The setting up of domestic
manufacturing of butyl rubber will fulfill a long-standing demand of the Indian tyre and
rubber industry, and this investment is part of RIL's vision of emerging as a significant
global player in the synthetic rubber business. The plant will initially produce regular butyl
rubber and is expected to manufacture other types of butyl rubber specialties in the future.
In the JV, SIBUR will provide its proprietary technology for butyl rubber polymerisation and
finishing, while RIL will supply monomers and provide the JV with world-class infrastructure
and utilities. We maintain Buy on RIL with a Target Price of `1,260.
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