Chatterjee Group eyes Basell assets

The Chatterjee Group, the promoter of Haldia Petrochemicals Ltd, is looking to become a global supplier of petrochemicals technology through the acquisition of the knowledge and research & development assets of Basell, a global major in petrochemical technology and products.

The acquisition will be done through a consortium comprising TCG, HPL and ICICI Bank. Basell has close to 1,000 patents and thousands of branded inventions in use worldwide.

If it succeeds, the TCG consortium will be the first Indian entity to acquire the knowledge and research & development assets rather than the physical infrastructure or brands of a global entity.

"The sale of the Shell-BASF stake in Basell represents an opportunity for an Indian venture to become a global repository of know-how and very advanced research facilities besides a booming business model," top TCG sources told Business Standard.

Basell has cutting-edge technology in petrochemicals and rare catalysts used in process industries worldwide and the estimated value of its sale has been put at euro 4.2 billion by global petrochemical analysts.

This would make it one of the largest deals ever signed by an Indian consortium.

"HPL and TCG can acquire basic science capability and up the value chain as Basell offers engineering, marketing, plant building and research expertise under one roof," said the source.

"Basell is driven by materials scientists, and India is globally recognised as one of the most cost-competitive countries with such skills, so the opportunity is to take forward the vast knowledge at expensive European research labs by using cost-competitive Indian skills and infrastructure," said the source.

"Globally, the race to acquire knowledge and research capabilities is hotting up because barriers are coming down and new technology and brands are the only drivers of value in commodity plastics business," said a petrochemicals analyst.

While thousands of patents and inventions ensure healthy fundamentals, Basell is on sale because the beleaguered Shell is keen to liquidate its non-energy holdings while BASF is refocussing on its core chemicals business.

BASF and Shell formed Basell in October 2000 as a 50-50 joint venture.

It is the largest producer of polypropylene in the world besides being a leading supplier of polyethylene and advanced polyolefin products, polyolefin processes and related catalysts.

Basell creates polyolefin materials and technology and has customers in more than 120 countries and operations in 26 countries across five continents.

Basell has three businesses - technology comprising licensing, catalysts, R&D and new projects, advanced polyolefins comprising polypropylene-based compounds, resins from the Catalloy process, polybutene-1 and specialty polyethylene products; polyolefins like polypropylene and polyethylene.

Its annual turnover is euro 5.7 billion and it has 6,700 employees.

Its polypropylene capacity is 7,850 kt (including joint ventures) and polyethylene capacity of approximately 2,500 kt.

Based in The Netherlands, it has regional offices at Brussels, Belgium; Mainz, Germany; Elkton, Maryland, US; Sao Paolo, Brazil, and Hong Kong.

Recently, ExxonMobil Chemical acquired Basell's PP and compounding plants in Lillebonne (France), including a 250,000-tonne-per-year PP polymerization facility that produces homopolymers and impact copolymers and a 130,000-tonne-per-year compounding plant that produces materials mainly used in applications for the automotive and appliance markets.

Basell sold the units in order to resolve competition concerns raised by the European Commission.