Adani to foray into petrochemicals in Mukesh's backyard

New Delhi: Billionaire Gautam Adani-led Adani Group Thursday announced a partnership with German chemical giant BASF for a Rs 16,000-crore factory that will mark its foray into the petrochemicals sector which is currently dominated by Mukesh Ambani-run Reliance Industries.

Adani Group and BASF will set up a chemical factory at Gujarat's Mundra district, besides putting up wind and solar power plant at the site to meet the electricity requirement of the unit, the two companies said in a statement.

BASF will hold a majority controlling stake in the new venture. It will, however, hold a minority interest in the power venture.

Reliance is the market leader in the Indian petrochemical sector and this will be the first time that the two billionaires hailing from Gujarat will be in direct competition in any business.

The oil-to-telecom conglomerate Reliance in January 2018 completed a massive $16 billion expansion of its petrochemical production capacity to enter the league of the top five producers globally.

While Ambani's firm produces products for a range of applications — packaging, agriculture, automotive, housing, and healthcare among others, the Adani-BASF combine will manufacture chemicals that will find application in construction, automotive and coatings businesses.

BASF SE and Adani Group signed a Memorandum of Understanding (MoU) on the eve of the Vibrant Gujarat Global Summit 2019 "to evaluate a major joint investment in the acrylics value chain", the joint statement by the two firms said.

This would be BASF's largest investment in India to date, it said without giving details.