Dow Europe Enters into Joint Venture Agreement for Chloromethane Production

Dow Europe GmbH (Dow), a wholly owned subsidiary of The Dow Chemical Company, and Gujarat Alkalies and Chemicals Ltd (GACL), a company promoted by Government of Gujarat, announced today the signing of a Joint Venture Agreement (JVA) for the construction, operation and ownership of a 200 kilotons per year chloromethanes manufacturing facility in Gujarat, India.

The agreement allows Dow and GACL to complete a study, begin work on definitive agreements and work towards financial closure which is estimated to be completed by late 2008. Estimated to be operational in 2011, the new production unit would be located at Dahej, Gujarat on the western coast of India. The parties will form a 50:50 joint venture company to manage local permitting processes.

“Being here in India, and understanding the growth prospects for both our companies, as well as this region, is very exciting. This is yet another example of our commitment to meeting the needs of our customers through establishing joint ventures with strategic partners, using an asset-light investment approach,” said Michael R. Gambrell, executive vice president, Basic Chemicals and Plastics for Dow. “As GACL – India’s largest chlor-alkali producer, and Dow –the world’s largest producer of chemicals and plastics and the world's largest supplier of chlorinated organic products and services, form a joint venture company and enter into negotiation of the definitive agreements for this project, we do so against the all-important backdrop of sustainability.”

“The new investment through this Joint Venture between Gujarat Alkalies and Chemicals Ltd. (GACL) and Dow Europe GmbH is a significant development. This will give a push to the down stream users in the pharmaceuticals, paints and grease removal, refrigerant and solvent sector by making raw materials available at more competitive rates and bringing valuable Forex to the country,” said Shri Saurabhbhai Patel, Minister Of State for Energy & Petrochemicals, Government Of Gujarat.

“We are happy to be associated with Dow to work on this project, which will help the country to achieve its commitments as a part of the Montreal Protocol, to which India is a signatory,” said Dr. Manjula Subramaniam, Chairperson, GACL and Chief Secretary, the Government of Gujarat. She further informed that the association of GACL with Dow would result in various business avenues for the State. “Dow’s best-in-class process technology to produce chloromethanes will help to minimize production of carbon tetrachloride (CTC). The JV will also be able to convert the total CTC production, not only from this facility, but CTC produced in India, into a valuable product, a major breakthrough for India’s chemical industry.”

“It also gives me pleasure to announce today that, in keeping with Dow’s 2015 Sustainability Goal to Contribute to Community Success, we are contributing Rs. 75 Lakh to purchase the equipment to provide clean drinking water to over 10,000 residents of three neighboring villages of Jolwa, Suva and Vadadla by using Dow technology. We plan to offer this facility to other neighboring villages in the months to come,” Gambrell continued.

Chloromethanes are used as an intermediate in the production of fluorocarbons and fluoropolymers, and as a solvent in pharmaceutical manufacturing, metal cleaning/degreasing, and other chemical processing applications. GACL will supply feedstock and power and lease land to the joint venture, while Dow will license its production technology and marketing and sales expertise. The joint venture will market its products primarily to countries who are members of the South Asian Association for Regional Cooperation (SAARC).

Posted April 16th,2008

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback
Your comment type