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Will New Projects End India’s Dependency on Butyl Rubber Import?
As some of the major projects are coming up in near future, India’s import dependency for synthetic rubber is expected to come down. Reliance Sibur Elastomers Private Limited is seen as the major project. Project by OPaL and IOCL are also like to boost the production of synthetic rubber and polymer in the country.

According to Chemicals and Petrochemicals ManufacturerÊs Association of India (CPMA), In India the total demand for Butyl rubber in 2011 was 0.087 MMT and is expected to touch 0.127 MMT in 2016-17. India is completely relying on import to meet its demand for butyl rubber as it does not have production or construction capabilities at this point of time.

Automotive Industry is the biggest end user of butyl rubber in the country. Tyre industry alone consumed about 90 per cent of total butyl rubber in 2010-2011. According to Research and Markets, one of the leading market research agencies, the global tyre market currently is estimated at USD 70 billion while the Indian market is around 100 million. The global market is dominated by Goodyear-Sumitomo with a share of 22 per cent. On the other hand, the domestic industry is dominated by MRF Ltd. In its 2012 annual report, Indian manufacturer MRF Ltd has also predicted that the countryÊs domestic tyre industry would grow by eight to ten per cent in the current financial year.

Reliance Sibur Begins Construction of Butyl Rubber Plant in Jamnagar
Reliance Sibur Elastomers Private Limited, (RSEPL), which is a joint venture between Reliance Industries Limited and SIBUR, is seen as a major tie up that will meet the demand for butyl rubber in the country. The JV has already begun construction of the new butyl rubber plant in Jamnagar.

According to CPMA, following the JV, India's import dependency is expected to come down subsequently. The majority of the global supply of butyl rubber is produced by just two companies, ExxonMobil and LANXESS. Global capacity for Butyl rubber in 2011 was 1.1 MMT and is expected to touch 1.6 MMT in 2016. In India the total capacity in 2016-17 is expected to reach 0.1 MMT from no production capacity currently.



When commissioned in 2015, the new plant will be IndiaÊs only manufacturer of butyl rubber and the JV will be amongst the worldÊs top five manufacturers of butyl rubber. RIL and SIBUR signed a technology licence agreement facilitating use of SIBURÊs proprietary butyl rubber production technology at the new facility. The licensing package includes development of a Basic Engineering Package (BEP) and full-time provision of highly-experienced technical personnel on both project and operational stages. RIL will supply monomer and provide the JV with world-class infrastructure and utilities. The project is progressing as per the original schedule. The BEP has already been completed in Nov 2012, and Detailed Engineering is underway. At present, RSEPL is placing orders for long-lead equipment. When complete, the Jamnagar plant will have the capacity to produce 100,000 tonnes annually. Reliance has already started market seeding butyl rubber from SIBUR in India. The response is very encouraging.

Nikhil Meswani, Executive Director, RIL, said, "Reliance is excited to join a select group of global Butyl Rubber producers. India, as a fast emerging auto hub, is a vast market for these products. We look forward to serving this market."

SIBUR is a vertically integrated company with its gas processing facilities providing feedstock for its petrochemical production. CompanyÊs CEO, Dmitry Konov said, "India is one of the most attractive petrochemicals markets right now due to the significant investment in infrastructure which has spurred demand. SIBURÊs technologies together with Reliance's infrastructure and resources will help establish a facility that will meet the demand for butyl rubber in Asian market."

Other Major Projects
Indian Oil Corporation will also commission a styrene butadiene rubber manufacturing plant at Panipat through its joint venture company Indian Synthetic Rubber Ltd by August 2013. The plant will produce 120,000 tonnes of styrene butadiene rubber annually.

Besides, OPaL is setting up a grass root Mega Petrochemical project in the PCPIR/SEZ zone at Port City of Dahej, Gujarat, India. The complex will have a 1.1 million tonnes Dual Feed cracker with an investment of USD 4.5 billion and is spread out in area of 507 hectares. It will mainly produce HDPE (Swing and Dedicated lines), LLDPE, PP, Benzene, Butadiene, Pygas and CBFS. OPaL is endeavoring to use the world-class new technologies from Linde AG, Germany for dual feed cracker unit. Downstream units technology licensing are from Ineos Technologies, UK and Mitsui Company Ltd, Japan. Currently OPaL's project is going on full swing, where more than 54 per cent of the construction activities are already completed.

Earlier, commenting on the new venture, in an exclusive interview with CEW, Dr PSV Rao, OPaL had revealed, "Polymers are used extensively and have replaced traditional materials like Metal, Wood, Paper, and Glass in day-to-day life style. Economy of any region and per capita income and spending power directly impact the polymer consumption. As you are aware that global per capita consumption of polymer is 26 Kg per person per year. However, India is lagging much behind in terms of per capita having just 5 kg per person per year. Recently, the forecasted growth of petrochemical product consumption in agriculture sector in India is 15 per cent annually and packaging sector is 12 per cent annually. Even though the demand in western countries is declining, the demand is increasing in India at the annual rate of 12.5 per cent. Growing Indian economy will push the Polymer consumption in near future and will be the major market to tap."

Quality: A Key Driver
Demand for Solution Styrene Butadiene Rubber (S-SBR) is increasing worldwide. According to a new market report published by Transparency Market Research „Solution Styrene Butadiene Rubber (S-SBR) Market for Tire, Polymer Modification, Footwear & Others - Global Industry Analysis, Size, Share, Growth and Forecast, 2012 - 2018,‰ global S-SBR demand was 550.0 kilo tonnes in 2011 and is expected to reach 1,062.0 kilo tonnes in 2018, growing at a CAGR of 9.98 per cent from 2012 to 2018. In terms of revenue, the market was valued at USD 1.5 billion in 2011 and is expected to grow at a CAGR of 11.27 per cent from 2012 to 2018. One of the primary reasons for the increased S-SBR demand has been the recently implemented tire labeling regulations in the European Union and other countries such as South Korea and China. The high performance tires that are required as per the new regulations can only be manufactured by using S-SBR. The implementation of this regulation may result in a domino effect where the remaining nations may follow suit which would further spur S-SBR demand. In addition, the growing disposable income in developing countries such as India, China and Brazil has led to substantial growth in automobile demand, which in turn boosts tire consumption. However, fluctuating raw material costs along with environmental concerns over the manufacture of S-SBR may have an adverse effect on this market. In addition, the demand for S-SBR currently outpaces the supply, which has resulted in major companies constructing new S-SBR facilities and expanding the existing ones.