BASF has signed a Memorandum of Understanding (MoU) with India’s Adani Group to study a €2 billion investment in a joint acrylics complex at Mundra port in Gujarat.  The investment would be BASF’s biggest in the country to date.

The companies expect to complete a feasibility study by the end of 2019. BASF would hold a majority stake in the jv, which would potentially build and operate plants for propane dehydrogenation (PDH), oxo C4s (butanols and 2-ethylhexanol), glacial acrylic acid (GAA), butyl acrylate (BA) and possibly other downstream products.

Output from the site would primarily serve the Indian market, supplying local industries that include construction, automotive and coatings, which currently rely on imports.

“India continues to be a very large importer of petrochemicals given the rapid expansion of the middle class, and this leads to a significant outflow of precious foreign exchange,” said Adani’s chairman, Gautam Adani. “Our partnership with BASF is a big step forward in enabling our country’s ‘Make in India’ program, as this partnership will allow us to produce in Mundra several of the chemicals along the C3 chemical value chain that we are currently importing. Mundra’s infrastructure is ideally suited to enable chemicals production, and our ability to deliver renewable power makes this a unique partnership on several fronts.”

Launched in September 2014, the Make in India initiative is designed to transform the country into a global design and manufacturing hub, driving investment in 25 key industrial sectors.

The Mundra site would also be BASF’s first CO₂-neutral production site, as energy supply would be 100% based on renewables. As such, and in addition to the acrylics investment, the Ludwigshafen-based group plans to co-invest as a minority partner in a wind and solar park.

BASF already operates several sites in India, with key locations at Dahej, Mangalore, Thane, Chennai, Turbhe, Bangalore, Nalagarh, Nellore, Kolkata and Ankleshwar.

Headquartered in Ahmedabad, the Adani Group is one of India’s largest integrated infrastructure conglomerates with interests in coal mining and trading, logistics, energy and agriculture, real estate, public transport infrastructure, consumer finance and defense.

The MoU comes just days after BASF signed a framework agreement with the government of Guangdong province for a second manufacturing complex in China. The German group plans to spend as much as $10 billion on the site in Zhanjiang, which will be the group’s third largest in the world, behind Ludwigshafen and Antwerp, Belgium, when it starts operating in 2030.