Reliance Takes Over Nocil's Petrochemical Units
Reliance Takes OverNocil's Petrochemicals Unit
India-based Reliance Industries Ltd. (RIL) has signed a Memorandum of Understanding to take
over the petrochemicals and plastic products business divisions of National Organic Chemical
Industries Ltd. (NOCIL).Through Sunbright Cement Agencies, a business associate of RIL, RIL will
buy the two divisions of NOCIL for an undisclosed amount. Under the proposal, the assets of NOCILs
petrochemical division and the business and undertaking of the plastic products division will be
separated from NOCIL and will be vested in Nocil Petrochemicals Ltd. (NPL), a wholly owned
subsidiary of NOCIL. Sunbright will invest in the equity of NPL after the process of separation is
completed.NOCILs petrochemicals business has a total annual capacity of 300,000 metric tons, which
include 80,000 tons of ethylene cracker, 90,000 tons of value-added chemicals, and 20,000 tons of
fiber intermediates. In addition, it has an annual polymer capacity of 80,000 tons. The plastic
products division in Akola, Maharashtra, has an annual capacity of about 10,000 metric tons of
processed polymer products. RIL said the takeover will provide significant synergies between its
existing petrochemical businesses and Indian Petrochemicals Corp. Ltd. (IPCL), which it took over
from the government.With the acquisition, RIL will have a near monopoly in most petrochemical
markets its share of the polyvinyl chloride market will reach nearly 100 percent and its share of
the polypropylene market will be about 87 percent.
Spring 2004