Warren Buffett’s company Lubrizol Corporation intended to work on a joint venture chlorinated polyvinyl chloride (CPVC) project with the Ahmedabad based company Astral Poly Technik LTD. But they hit a legal hurdle recently. According to officials from the company, this project is no longer possible because of legal complexities that are associated with transporting liquid chlorine, which is one of the main component products for the CPVC project.
“Indian laws do not permit transportation of liquid chlorine through pipelines. Since we were planning to source liquid chlorine from nearby suppliers at Dahej through pipeline, it seems that the project is not viable considering the legal hurdle,” said Sandeep Engineer, MD, Astral Poly Technik mentions to Business Standard at a recent industry meeting that took place in Ahmedabad.
We also learned, according to Engineer, that the project has a possibility of still taking shape. They would have to take the extra step, and added investment to install a chlorine gasification plant at the end of the supplier, where they would then have to liquefy the gas on their own premises. “But such an agreement looks difficult, as it requires additional investments as well as suppliers readiness to install a gasification plant in their premises,” he said.
Lubrizol Corporation, a specialty chemical maker in the US, also a wholly owned subsidiary of Berkshire Hathaway, told us about their investments in Gujarat last September.
Senior staff members of Lubrizol Corporation visited with Narendra Modi, the state chief minister, and announced at the time that they would make a $245 million investment for the project at Dahej GIDC. The construction work for this unit was expected to begin in January of 2013, and overall production was slated to start in October of 2014.
Chief of Lubrizol Corporation, Tom Frubus, then mentions, “considering the investor friendly and transparent policies and best infrastructural facilities in Gujarat the company has chosen the state for setting up of its unit.”
The JV agreement between Lubrizol and Astral was expected to be signed by March of 2012. However, as of this point it has not happened so far.
Lubrizol Corporation had plans to set up a CPVC compound and CPVC pipe manufacturing plant jointly with Astral in Dahej, and they already had an association with Lubrizol as a CPVC pipe importer.
Astral Poly Technik is a manufacturer of plumbing systems for industrial and residential applications. They have a wide range of plastic products including FlowGuard Bendable, Astral Under Ground, Astral Aquarius uPVC, and Astral FlowGuard CPVC, plus many technical tieups with global majors such as Wavin, Tyco and Spears.