The Adani Group, led by billionaire Gautam Adani, has announced a significant foray into the petrochemical sector through a joint venture with Thailand's Indorama Resources Ltd. This strategic partnership aims to establish a comprehensive refinery, petrochemical, and chemical business.

Adani Petrochemicals Ltd, a subsidiary of Adani Enterprises Ltd, has finalized the incorporation of Valor Petrochemicals Ltd (VPL) in collaboration with Indorama Resources. Both companies will hold a 50% stake in the newly formed entity. The primary objective of VPL is to develop a robust refinery, petrochemical, and chemical business, signaling Adani's ambitious expansion plans in this sector.  

This move aligns with Gautam Adani's previously stated intentions to invest over USD 4 billion in a petrochemical complex in Gujarat. The group's initial project is a large-scale polyvinyl chloride (PVC) plant in Mundra, Gujarat, with a planned capacity of 2 million tonnes. The project will be developed in two phases. Phase I, focusing on establishing a 1 million tonne PVC plant, is expected to be completed by 2026, while Phase II, adding another 1 million tonnes of capacity, is slated for commissioning by early 2027. This facility is projected to become India's largest PVC manufacturing plant, with a total estimated cost of approximately Rs 35,000 crore.  

The PVC plant project faced a temporary setback in March 2023 following the release of a critical report by US short-seller Hindenburg Research, which alleged financial and accounting irregularities within the Adani Group. This led to a temporary halt in construction due to financial concerns. However, work on the project resumed in July 2023 after the group addressed the concerns raised. Adani Group has consistently denied all allegations made by Hindenburg Research.  

The Mundra petrochemical cluster, which houses the PVC plant, will also incorporate wind and solar power plants to fulfill its electricity requirements. This commitment to renewable energy underscores the group's focus on sustainable operations.  

This is not Adani’s first foray into partnerships within the chemical sector. The group previously collaborated with German chemical giant BASF to establish a chemical factory in Mundra. However, the current status of that partnership remains unclear.  

The partnership with Indorama Resources brings significant expertise and resources to the table. Indorama is a global chemical producer with a strong presence in various petrochemical segments. This collaboration is expected to accelerate Adani's entry into the petrochemical market and enhance its competitive position.  

The development of the Mundra petrochemical cluster represents a significant investment in India's manufacturing capabilities and is expected to create numerous jobs and contribute to the region's economic growth. The project also demonstrates Adani’s commitment to expanding its business into new and strategic sectors, reinforcing its position as a major player in the Indian economy. The combination of Adani’s infrastructure development expertise and Indorama’s chemical production knowledge positions VPL for substantial success in the growing petrochemical market.