The Hindu Business Line : Essar, Eastman sign pact for chemical plant

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Mumbai Jan. 27 The Essar Group, which is into steel, oil and gas, power, telecom and the BPO sector, is slowly sharpening its focus on petrochemicals to further the value chain integration of its refining business.

Essar Chemicals, part of Essar Global Ltd, which will be spearheading the group's entry into value-added chemicals business, announced the signing of a MoU with Eastman Chemical Co of the US for setting up a $125-million oxo and oxo-derivatives production facility in India to cater to the domestic market.

This comes close on the heels of the company recently signing a MoU with the French company, Arkema, to study the feasibility of a 50:50 joint venture in India for production and commercialisation of acrylic acid and esters.

For Essar, this venture signified adding value to streams coming out of its recently commissioned oil refinery.

The acrylic acid plant is slated to be located at Vadinar, using propylene from Essar's refinery as feedstock, and is scheduled to go on-stream in 2010.

The Essar-Eastman joint venture has completed a joint feasibility study to set up a 1.5-lakh-tonne plant for production of oxo aldehyde and its derivatives. These intermediaries are used to manufacture a wide variety of end-use products like coatings and paints, solvents and plasticizers.

Eastman, with sales touching $7 billion in 2005, manufactures and markets chemicals, fibres and plastics worldwide and is a major supplier of cellulose acetate fibres.

Mr Anshuman Ruia, Director of Essar Group, said the company's entry into this business would further enhance the potential of its oil refinery, from where the main feedstock propylene will be supplied for the oxo-derivatives production.

Mr Robert J Preston, Vice-President and Managing Director of Eastman's Asia Pacific Region, said "We have the oxo and oxo derivatives technology and Essar has refinery products upstream of oxo processes."

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