A unit of Mukesh Ambani-controlled Reliance Industries Ltd. (RIL) has entered into an agreement with BP to acquire the British company’s petrochemical plant in Malaysia for $230 million.
A RIL spokesperson here confirmed the deal.
“It has agreed to sell all its interests in purified terephthalic acid (PTA) production in Malaysia to Reliance Global Holdings Pte. Ltd., a unit of RIL,” BP said in a statement.
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The RIL subsidiary will acquire BP’s 100 per cent equity in BP Chemicals (Malaysia) Sdn Bhd (BPCM), located at Kuantan on the east coast of Malaysia.
The all-cash deal is planned to be completed in 2012, the company said in the statment.
For a cash rich RIL, this acquisition is considered small. The existing employees of BPCM will be transferred to RIL’s unit under equivalent terms and conditions. The plant, commissioned in 1996, has a production capacity of 6.10 lakh tonnes a year.
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“This is an efficient plant with a good market position in the region. RECRON Malaysia, part of the Reliance Group, is already our largest customer in Malaysia and RIL is a significant feedstock supplier at Kuantan, so Reliance is a natural owner of this plant,” James Yim, Head, aromatics business (Asia), BP, said.
BP has a major global PTA business with around one fifth of global production capacity. Now, it will continue to concentrate on its PTA strategy into high-growth markets such as China and in OECD markets, Nick Elmslie, Chief Executive of BP Petrochemicals, said in a statement.