Dow plans Rs 5,000 cr unit in RPL complex

The Dow Chemical Company, one of the world's largest polymer producers, plans to invest Rs 5,000 crore (Rs 50 billion) to set up a facility at the petrochemicals complex being set up by Reliance Petroleum in the Jamnagar special economic zone.

The zone was notified by the government on Wednesday.

A host of other companies including Exxon, Mitsubishi Chemicals, Nippon and Huntman and Borealisy, had shown interest in setting up shop in the SEZ.

Meanwhile, Chevron has become a co-promoter of RPL exactly a week after acquiring a 5 per cent stake in the company, with the Securities and Exchange Board of India clearing the proposal.

Though Reliance executives refused to comment, sources close to the developments said the $46 billion Dow had applied to the Foreign Investment Promotion Board for a downstream facility in the Jamnagar SEZ which has several advantages, including the opportunity to source raw material from RPL and export the finished products to China and European markets through the world-class port.

However, the investments would not take place immediately, the sources said.

RPL's 29-million-tonne (mt)-per-annum refinery plans to export jet fuel, diesel, gasoline and alkylates to North America and Europe. Naphtha, paraxylene, petcoke and aromatics to be produced by the refinery could be used by Dow as feedstock.

On Chevron becoming the a co-promoter, the sources said the development showed Chevron's commitment to work with RPL and set up a base in the world's fourth largest market - India. Chevron could team up with RPL for both upstream and downstream projects in emerging countries.

Chevron had picked up a 5 per cent stake for Rs 1320 crore (Rs 13.20 billion) last week and had the flexibility of ramping it up to 29 per cent. In addition, the US firm would supply a third of crude oil that the new refinery needs from the spot market and help market high-octane fuel produced at the unit in US and other western markets.

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