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The fate of US $ 245-million (approx. Rs 1,356 crore at current exchange rates) chlorinated polyvinyl chloride (CPVC) unit, proposed to be set up through a joint venture between billionaire investor Warren Buffet's firm, Lubrizol Corporation and Ahmedabad-based Astral Poly Technik Ltd, is hanging in the balance as there is no progress on the project since the announcement was made in September last year.
According to sources closely monitoring the development, the project at present looks uncertain.
"There is uncertainty about the Dahej project. A feasibility study was done, but no progress has been made thereafter. We were to sign a joint venture agreement but so far they (Lubrizol) have not come back to us for the same," said an Astral Poly Technik official said requesting anonymity.
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A joint venture (JV) agreement between Astral and Lubrizol was slated to be signed by March 2012, while the terms of partnership and equity sharing model was slated to be decided after the formation of JV, informed the official.
Lubrizol Corporation, managed by Buffet's company Berkshire Hathaway Inc (BH) was planning to invest about US $ 245 million for setting up a CPVC compound and CPVC pipe manufacturing plant in Dahej jointly with Astral, which was already associated with Lubrizol as an importer of CPVC pipes.
It may be mentioned here that Tom Frubus, chief of Lubrizol Corporation and Sandeep Engineer, managing director of Astral Poly Technik had met Gujarat chief minister Narendra Modi in Gandhinagar on September 21, 2011 to acquaint him about their decision to jointly set up a CPVC industrial unit Dahej GIDC of Bharuch district.
The construction work of the unit was expected to start in January 2013 and the production was slated to start from October 2014.
"We have not received any further communication (after their meeting with CM) from either of the companies regarding the project at Dahej," said a state government official.
An emailed query to Lubrizol regarding its Gujarat plans remained unanswered.
"CPVC products have great demand in Southeast Asia, West Asia and Africa. Considering the investor-friendly environment, transparent policies and best infrastructure facilities in Gujarat, we have chosen the state for setting up of the first unit," Frubus had stated then.
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The buzz about Buffet's firm investing in an Indian company had brought a storm in the Astral scrip on the stock exchanges.
The stock had hit an all-time high level of Rs 218.50 on the Bombay Stock Exchange (BSE) on September 22, 2012 as a fall out of the news. The stock had jumped by 19.49 per cent during the intra-day trade.
On Wednesday, Astral stocks closed positive at Rs 184.95 on BSE.
The project in Dahej was considered as second investment by BH in India and potentially the largest after its investment in a Bangalore-based tool maker TaeguTec India, which specialises in tungsten carbide cutting tools, tungsten carbide rolls and industrial products. During his visit to Bangalore in March, 2011 Buffet had stated, "I'll make one big investment a year in India."
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BH had acquired Lubrizol Corporation for about US $ 9.7 billion (approx. Rs 53,684 crore) in March 2011.
Astral Poly Technik manufactures plumbing systems for residential and industrial applications.
It offers a range of plastic products including Astral FlowGuard CPVC, FlowGuard Bendable, Astral Aquarius uPVC and Astral Under Ground, and also has technical tie-ups with global majors like Tyco, Spears and Wavin.