Panipat Prospects for SR
The commissioning of Indian Oil Corporation’s (IOC) Styrene Butadiene Rubber (SBR) plant at its Panipat refinery in December marks a major step in India’s synthetic rubber industry, which is buoyed by the increasing demand from the market, particularly tyre sector which uses around 40 per cent of SR.IOC is a top billing entrant into SR segment. The project named as Indian Synthetic Rubber Ltd (ISRL) is a joint venture initiative with TSRC Corporation of Taiwan and Marubeni Corporation of Japan are IOC’s partners.
The SBR manufacturing facility at the Panipat refinery is the largest naphtha-cracker plant. The Rs9.58 billion project has an annual capacity for producing 120,000 tonnes high-quality styrene butadiene rubber (SBR), which is in demand from the automobile and tyre industries. The current demand is mainly met by import.
According to IOC Chairman RS Butola, the technology used at the Panipat plant is closely guarded. “The Panipat refinery is our flagship refinery and here we have built the largest naphtha-cracker plant of world-class standards. The SBR project is a part of our strategy for value addition to butadiene in the C4 streams generated at the plant,” he was quoted by media as saying.
SBR is the largest tonnage synthetic rubber being made all over the world. It accounts for about 60% of the synthetic rubber production and more than 30% of all the rubber consumed. It is a copolymer of butadiene and styrene. The most common SBR is having approximately 25% styrene and 75% butadiene with a random distribution of monomers. There are about 500 grades of this rubber including a large proportion of oil-extended forms and master batches of SBR with carbon black.
SBR exhibits good abrasion resistance and hence its major application is in tyre sector, especially in passenger car tyres. Other important applications include soles and heels for the footwear, floorings, mats and other domestic items, conveyor belting, hose, rollers, cycle tyres, buffers, gaskets and a large number of other industrial components.
About 90% of the SBR produced is by emulsion polymerisation and the rest by solution polymerisation. In addition, about 10% of all the SBR produced is marketed in latex form and is used for applications such as carpet backing, paper coating and latex foam. There is also a small but growing quantity used in adhesives such as butadiene styrene vinyl pyridine for making tyre cord adhesives.
India’s synthetic rubber consumption rose by 6 per cent to 2.26 lakh tonnes in the first half of 2011-2012 fiscal, while, production rose marginally to 54,778 tonnes, says Rubber Board. The domestic consumption was 2.13 lakh tonnes in April—September of 2011—12 fiscal, while production was 54,750 tonnes. The consumption by the tyre industry rose by 8 per cent to 1.67 lakh tonnes during the period as against 1.55 lakh tonnes in the previous year. Rubber Board also said the imports of synthetic rubber declined by 3 per cent to 1.69 lakh tonnes from 1.75 lakh tonnes.
As per the records of All India Rubber Industries Association (AIRIA), synthetic rubber consumption in India is growing by a robust annual rate of 15-20 per cent as against a 5-7 per cent growth rate in natural rubber consumption, which shows the tremendous potential for growth. The perennial production issues with NR has strengthened SR’s growth curve. In 2011-12 NR production was around 900,000 tonnes while the consumption was around 970,000 tonnes. The production is expected to remain at a 900,000 tonnes per annum, leaving behind a demand-supply gap of around 100,000 tonnes, according to AIRIA.
The significance of ISRL lies in the fact that it will considerably help the government save foreign exchange since currently the entire demand of SBR is being met by import. The Panipat plant is the only one with operating capacity.
ISRL Chairman Rajkumar Ghosh says that strong market leaders are backing the company. “Our goal is to drive 100% import substitution for synthetic rubber in India’s current domestic E-SBR requirement, which is met solely through imports,” he added.
Over the years, IOC has made big strides in investments in petrochemical industry. “We have implemented mega projects like an Aromatics Complex, Naphtha Cracker and downstream polymer complex at Panipat. With a view to enhance the value addition to the intermediate streams, viz. the C4 and C5 streams, the Company has also developed a strategy for C4 and C5 complex at Panipat. The E-SBR project is a part of this strategy for value addition to Butadiene in the C4 stream,” Ghosh said.