Steel-to-oil conglomerate Essar group and US-based Eastman Chemicals have announced plans to jointly invest $125 million to set up an oxo-chemicals plant as a first step in the value chain integration of Essar’s refining business.
The two companies have signed a Memorandum of Understanding (MoU) to set up a 50:50 joint venture for a 150,000 tonne per year oxo-aldehyde plant and its derivatives.
Oxo-aldehyde is a bi-product of the crude oil refining process and is used to manufacture a variety of end-use products such as coatings and paints, solvents and plasticisers.
Oxo and oxo derivatives are part of Eastman’s performance chemicals and intermediates segment.
Essar and Eastman had conducted a feasibility study regarding the potential opportunities for this venture. The plant would be operational in 3-4 years.
"Entry into this business would further enhance potential of Essar Oil’s refinery from where main feedstock propylene will be supplied for oxo and oxo derivatives complex. We look forward to the establishment of a world-scale oxo chemicals plant at Essar’s refinery site at Vadinar," Essar group director Anshuman Ruia said.
Essar has invested close to Rs 11,000 crore to set up a 10.5 million tonne oil refinery at Vadinar, which will be fully operational by March.