By : Pranav Puri | 20 May 2013
Bhansali Engineering Polymers has formed a 50:50 JV with Nippon A&L Inc, to manufacture Nippon’s specialized grades of ABS polymer approved by the Japanese automobile manufacturers globally, ET states.
With this deal, all the buyers of BEPL could source their entire ABS requirement from a single source and Nippon would also direct its Indian customers to buy ABS from them.
This JV shall equip BEPL with rights to use intellectual property of Nippon and to use technical assistance from Nippon in manufacture, make and sell the licensed products.
It will also provide recipes, compounds, sales support, R&D support, new application development for manufacturing ABS and other resins.
Currently, country's annual ABS demand is currently estimated at 1.5 lac tonne, 25% is met through imports, mainly from Japan and JV plans to capture 50% of total imports.
This JV will become an integrated part of auto OEM's supply chain and help them procure ABS (Acrolynotrile Butadine Styrene) of international standard locally in a cost effective manner, he added
BEPL is a vertically integrated petrochemical company that manufacturs ABS which acts as a raw material for leading companies dealing in automobiles, home appliances, telecommunications, luggage, bus body and various other applications.
BEPL is among the country's largest producer of ABS with 51,000 tonne per annum capacity manufactured in Abu Road in Rajasthan and Satnoor in Madhya Pradesh.
The company also produces 600 tonne per month SAN (Styrene Acrylonitrile) and enjoys 40% market in this segment.
BEPL is planning to increase its capacity to 70,000 tonnes by April, 2014 and to 1,25,000 tonnes by September, 2015, with a total capex estimated at about R300 Cr, for which funds will be raised through a mix of equity and external commercial borrowing (ECB).
NIPPON A&L INC. was incorporated as a JV capitalized by Sumitomo Chemical Co., Ltd. and Mitsui Chemicals,INC.,by integrating the ABS resin business and SBR latex business of both Sumika A&L Inc. and Mitsui Chemicals, Inc.
Acrylonitrile Butadiene Styrene (ABS) is an engineering polymer, which finds application in home appliances as well as automobiles. Being a light weight material it typically replaces metal.
With automobile manufacturers using more of speciality polymers and expanding their domestic capacities, the demand for ABS is expected to grow in double digits in 3-5 years.
Last year in November, Auto component firm Anand India entered into a JV with Mando Corporation by acquiring a stake in Mando’s Indian arm Mando Steering Systems India.
Later in December, Japanese air brake component maker, Nabtesco Automotive Corporation, entered into a 49:51 JV with Uno Minda.
