Dahej Complex PVC Plastic Plant, India

Indian Petrochemicals Corporation Limited (IPCL) owns and operates three petrochemical complexes, a naphtha-based complex at Vadodara, a gas-based complex at Nagothane near Mumbai and a new chlor-alkali and petrochemicals complex at Dahej in Gujarat. The company also owns a catalyst manufacturing facility at Rable, Navimumbai.

The Dahej complex is a consequence of the discovery of an estimated 190 million tonnes of reserves of oil and gas in the Gandhar region, 73 million tonnes of which is recoverable. The availability of raw materials including salt and access to a sea, besides hydrocarbon feedstock and good water sources in river Narmada offer a favourable environment for petrochemicals industries in the region. As a result, a Gandhar taskforce was constituted in 1989. Rajiv Gandhi, Prime Minister of India, laid the foundation stone for the complex on 6 October 1989. The final investment clearance was granted on March 26 1992.

INTEGRATED PVC PRODUCTION

The special feature of this complex is that it has a fully integrated production of PVC, starting from captive chlorine and ethylene, with power drawn from a captive power plant. IPCL's entry as a producer of caustic soda, in synergy with fully integrated PVC plant, has proved a competitive advantage in the caustic soda and PVC business. Infrastructure development was taken up in tandem with the development of the manufacturing facilities. Exploitation of the waterfront for strategic advantage is a unique proposition for any commodity business that has large volumes to handle.

A captive jetty to handle liquid hydrocarbons, inclusive of those at cryogenic temperatures, has been set up and commissioned in the estuary of Narmda at Jageshwar near the Dahej Complex. The jetty is about 250m long and the water channel is 7-8m deep. This facilitates the berthing of ships up to 8,000DWT. The jetty was commissioned on 2 December 1996. The other jetty in the area which is nearly 2.5km long and belongs to Gujarat Chemical Port Terminal Company Ltd (GCPTCL). IPCL is one of the promoters of GCPTCL and owns 32% of equity of the company. The GCPTCL jetty is capable of handling ships up to 40,000 DWT.

IPCL has also networked its manufacturing facilities at Dahej and Vadodara through three product pipelines. This has provided the opportunity to optimise capacity utilisation at Vadodara and Dahej and source feedstocks and other raw materials at competitive prices from international sources.

VCM, PVC AND CHLOR-ALKALI PLANT EXPANSION

The Dahej complex project was implemented in two phases. The total estimated cost of the project is Rupee 35.05 billion (approximately $780m). The first phase consisted of 170,000t/yr vinyl chloride monomer (VCM) plant, 150,000t/yr polyvinyl chloride (PVC) plant (later expanded to 180,000t/yr), chlor-alkali plant with 115,000t/yr of chlorine and 130,000t/yr caustic soda (which will produce 40,000t of 50% lye, 45,000t flakes and 45,000t of prills) and 65MW power plant. These plants were all commissioned in the fourth quarter of 1996.

GAS CRACKER, ETHYLENE GLYCOL AND HDPE PLANTS

In the phase II, a gas cracker of 300,000t/yr of ethylene, 160,000t/yr HDPE and 100,000t/yr of ethylene oxide/glycol plants were built. The second phase plants have been commissioned during the accounting year 1999-2000. The last set of plants of the second phase; gas cracker and C2/C3 separation unit were commissioned in February 2000 (Vasant Panchmi). Flexibility to expand the cracker to 400,000t/yr of ethylene has also been built in during the design stage. After the addition of balancing equipment, this can also be raised to 500,000t/yr of ethylene.

THE INDIAN PETROCHEMICALS CORPORATION LIMITED

The Indian Petrochemicals Corporation Limited (IPCL) is the national petrochemical company of India. Its business comprises polymers, synthetic fibre, fibre intermediates, solvents, surfactants, industrial chemicals, catalysts and adsorbents. Backed by strong Research and Development, product application centres and technology management centres, the company is continuously expanding its processes and products. At present, the Indian government is in the process of divesting its stake in IPCL. Three corporate bodies, Mitsubishi of Japan, Reliance Industries Limited of India and Chatterjee Soros, the Indian oil corporation, have shown interest.

FINANCING DEVELOPMENT

IPCL offered bonds worth $175 million in February 1997, for financing the Gandhar project and the expansion to the Nagothane complex. The issue was priced at $13 per global share (GDS), with three underlying shares. All these issues proved popular with investors both within and outside of India. IPCL is the first corporation in Asia to have pierced the sovereign ceiling in any form of external borrowing. The bond issue considerably improved company's image in the international market. This enabled the corporation to tap a wide range of US-based investors. The bonds were due for redemption in February 2002. The Government of India's equity at the end of January 2002 was 59.47%, down from 100% in 1992.