Reliance Industries Ltd (RIL) on Wednesday announced the signing of a joint venture agreement with Russian petrochemical giant SIBUR to set up South Asia’s first butyl rubber halogenation unit at RIL’s integrated petrochemical site in Jamnagar, Gujarat.

A memorandum of understanding (MoU) for the same was signed at the recently concluded Vibrant Gujarat Global Summit in Gandhinagar. However, the investment figures were not announced for the proposed project.

A statement from RIL stated that the unit will produce 60,000 mt of halogenated butyl rubber annually under Reliance Sibur Elastomers Pvt Ltd (RSEPL), a joint venture in which RIL owns 74.9 per cent, while SIBUR owns 25.1 per cent.

Apart from the planned halogenation unit, the JV owns a 1,20,000-mt per annum butyl rubber plant, currently under construction at the same venue. It will provide the necessary butyl rubber feed to the halogenation unit.

Construction of the plant is on in full swing at Jamnagar, and commissioning is targeted for 2018.

Nikhil Meswani, Executive Director, RIL, said, "RSEPL’s halogenated butyl rubber plant will be well-poised to capitalise on the significant surge in regional demand in tyre and pharmaceutical industries.

The halogenated butyl rubber demand is expected to grow at a rapid pace of 8-10 per cent CAGR over the next few years, driven by increasing customer preference for tubeless tyres in India and neighbouring countries."

Halogenated butyl rubber is a key ingredient for manufacturing inner liner of tubeless tyre.

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 manufacture of pharma stoppers, inner liner of storage tanks, and so on.

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