Adani Group’s USD 4 Billion Push Into Gujarat’s Petrochemical Market

Billionaire Gautam Adani's group has forged a partnership with Thailand's Indorama Resources Ltd to enter the petrochemical sector, marking a big step forward for the sprawling Adani empire.

Adani Petrochemicals Ltd, a part of Adani Enterprises Ltd (AEL), recently announced its new joint venture with Indorama Resources, called Valor Petrochemicals Ltd (VPL). According to an official filing, both companies will hold equal shares in the venture, each owning 50 per cent.

The goal of this partnership? To build a thriving business focused on refining, petrochemicals, and chemicals. Adani Petrochemicals is set on expanding its reach, planning to develop refineries, petrochemical complexes, specialty chemical units, and hydrogen production facilities in the long run.

In 2022, Gautam Adani revealed that his conglomerate intends to invest over USD 4 billion in a new petrochemical complex in Gujarat. The first phase of this ambitious project will see the construction of a polyvinyl chloride (PVC) plant, with a capacity of 2 million tonnes. The first part of this plant is expected to be up and running by 2026, with the second part slated for 2027.

The PVC plant did face some delays after a report from U.S. short-seller Hindenburg Research accused the Adani Group of financial and accounting fraud. Due to these allegations, construction was paused in March 2023 over financial concerns, but work resumed in July 2023. The Adani Group has strongly denied the accusations.

In addition to the PVC plant, Adani Petrochemicals is also working on a petrochemical hub in Mundra, Gujarat, which will house the new facility. The investment for this massive project is estimated to be around Rs 35,000 crore, making it India's largest PVC manufacturing unit once complete.

To further diversify its portfolio, the Adani Group has also teamed up with German chemical giant BASF to establish a chemical factory in Mundra, though specific details about this partnership remain unclear. The new venture will also incorporate wind and solar energy to meet its power needs, showcasing Adani's commitment to sustainable practices.