The unit will be set up at RIL's massive integrated petrochemical site in Jamnagar, Gujarat. It will produce 60,000 tonnes of halogenated butyl rubber every year under Reliance Sibur Elastomers Pvt. Ltd (RSEPL) in which RIL owns 74.9 per cent and Sibur the remaining 25.1 per cent. Under Indian laws, a stake of over 24 per cent automatically qualifies the investor to a position on the company's board.
Halogenated butyl rubber is used to manufacture tubeless tyres. Apart from the planned halogenation unit, the joint venture has a butyl rubber plant at the same venue. It will provide the necessary butyl rubber feed to the halogenation unit.
"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 domestic and international tyre majors lining up INR 150 billion ($2.2 billion) of investment," PTI quoted Nikhil Meswani, Executive Director, RIL.
"Sibur has a long track record of successful cooperation with RIL and Gujarat government, which has provided us with a solid basis for expanding our footprint in India," he said.
Halogenated butyl rubber is a key ingredient for manufacturing inner liner of tubeless tyres.
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 manufacturing of pharma stoppers and inner liner of storage tanks.
RIL and Sibur set up RSEPL joint venture in February 2012 to produce 1,20,000 tonnes of butyl rubber per year at former's integrated petrochemical site in Jamnagar.