Mumbai: JBF Petrochemicals, a wholly-owned subsidiary of JBF Industries, has signed an agreement for licensing BP's latest generation purified terephthalic acid (PTA) technology for setting up a Rs 3,000 crore PTA unit in Mangalore.
"We are setting up Rs 3,000 crore (USD 600 million) facility with a capacity of 1.25 million tonnes per annum (tpa) at Mangalore SEZ to produce PTA, the primary feedstock for polyesters used in textiles and packaging. We expect plant to go on stream by the end of 2014," JBF Industries managing director Rakesh Gothi told PTI here.
The project will be financed through one-third equity and two-third debt. It will be financed through internal accruals and we have completed the financial closure, Gothi said.
B C Arya, Chairman, JBF Industries, said the investment would meet the company's requirements for captive PTA at the lowest possible cost. It would also make the integrated operations in India and the UAE competitive for a long-term and underpin our position as one of the world's leading polyester producers.
The proposed backward integration facility will help the company to meet its 1 million tonne per annum PTA demand, Gothi said, adding that the project will be ready by the end of 2014 and will generate production of Rs 7,000 crore in the first year of operations.
Commenting on BP's technology, Gothi said that the British petrochemical company is offering low cost option. BP's PTA technology has significantly lower capital and operating costs as compared to conventional PTA plants and is more energy-efficient, uses less water and produces less solid waste than its competitors.
Over the years the PTA market has continued to grow at a high rate, over 80 percent of the demand is now in Asia, with around 50 percent in China alone.
"The market is now of such scale-- greater than 50 million tonnes a year and continuing to grow at close to 7 percent-- that three of four new world-scale plants per year will be needed," BP's global petrochemicals business chief executive Nick Elmslie said.
JBF Industries is a global polyester producer with annual capacity of 1.1 MTPA with three manufacturing facilities in India and UAE.
In October 2011, BP and JBF reached an agreement on the construction of JBF's 390,000 tpa PET (polyester resin) plant at Geel, Belgium, alongside BP's 1.4 million tpa asset, Europe's largest PTA facility.
First Published: Friday, July 06, 2012, 23:15