SOURAV MAJUMDAR, FINANCIAL EXPRESS, JULY 10, 2006
MUMBAI, JULY 9: Close on the heels of its partnership with Chevron for refining, Reliance Industries Ltd (RIL) has begun talks with The Dow Chemical Company for a major strategic alliance in the petrochemicals and polymers businesses.
While talks were still at an early stage, sources said the strategic alliance could include RIL taking over and running some of Dow’s units in Asia and eastern Europe, apart from the two majors working together on research and development and technology. They are also looking at forging ties for petrochemicals complexes overseas. The $46-billion Dow Chemical has a presence in 175 countries and is a major player in the world in plastics and petrochemicals.
For RIL, an alliance with a name like Dow will be another step forward in marking its entry into the global arena in a bigger way. Already, with Chevron taking a 5% equity stake in Reliance Petroleum Ltd, the two sides have decided to work together on a wide range of areas, including on overseas projects.
“For RIL, an alliance with Dow will bring in enormous benefits in its global ambitions. For Dow, on the other hand, a tie-up with RIL will help since RIL has proven execution capabilities and these can optimize costs,” sources explained.
While all options on the form the alliance could take were open, sources said it might be too early to talk of an equity tie-up between the two sides. When contacted, RIL executives refused to comment.
• RIL may take over and run some of Dow’s units in Asia and eastern Europe
• They seek tie-ups in R&D, technology, and petrochem complexes overseas
• An alliance will open doors for RIL globally, as Dow is present in 175 countries
Dow’s product suite includes performance plastics, performance chemicals and basic plastics like polyethylene, polypropylene and polystyrene. In Europe, Dow also has a presence in Bulgaria, Croatia, the Czech Republic, the Slovak Republic, Romania and Ukraine. In the Asia-Pacific region, the company is present in Indonesia, Japan, South Korea, Thailand and the Philippines, among others.
The Dow-RIL relationship is already evident in the fact that Dow is also looking at investing about Rs 5,000 crore in RIL’s Jamnagar SEZ.