IndianOil to set up second paraxylene unit
New Delhi   25-Jul-2007
IndianOil, the country's largest refiner of crude oil and marketer of petroleum products, is likely to set up a second paraxylene plant at one of its refineries at an investment of Rs 2,500 crore. The Fortune 500 Company it recently improved its rank to 135 has identified forward integration into petrochemicals as its next big business opportunity. It is already operating a Rs 5,000 crore paraxylene and purified terephthalic acid plant at its 12 million tone per annum (mtpa) refinery at Panipat. The paraxylene plant uses naphtha from the refinery and converts it into purified terephthalic acid which is used to produce polymers. An Rs 6,300 crore naphtha cracker complex is also under construction at the refinery in Haryana. Besides, IndianOil is also planning a around Rs 6,000 crore petrochemical complex at its upcoming 15 mtpa refinery at Paradip in Orissa. "We are very bullish on the petrochemical sector. That is where we see our biggest business opportunities," IndianOil 's Business Development Director B M Bansal said. He added that the new paraxylene plant could come up at any of the company's major refineries Barauni, Panipat and Gujarat among others. "We are still in the process of studying the location," Bansal said. IndianOil , like the other auto fuel marketing companies Hindustan Petroleum and Bharat Petroleum, is also going slow on expanding its retail outlets in the country as a result of mounting losses from selling petrol, diesel at government controlled prices. IndianOil is currently losing around Rs 90 crore a day due to selling petrol, diesel, LPG and kerosene at government controlled prices. It is selling petrol at Rs 5.90 a litre below the desired selling price. The revenue loss, referred to as under-recoveries, for diesel is Rs 4.80 per litre. "Our auto fuel retail business is suffering, and so we are looking to integrate our refineries with the petrochemicals business, where the demand is expected to grow as the economy grows at a good pace," said a senior IndianOil official, who did not want to be named. The major petrochemical-producing companies in India are Reliance Industries and Indian Petrochemicals Ltd, which is in the process of being merged with Reliance. The two companies together control around 70 per cent of the market.