Royal Dutch/Shell plans chemicals entry

Anglo-Dutch oil and petrochemicals giant Royal Dutch/Shell is planning to get into the chemicals business in India.

The company will set up a bitumen plant, and has applied to the Foreign Investment Promotion Board to set up a wholly owned subsidiary.

Vikram Singh Mehta, chairman of Shell group of companies in India said, "Shell has applied for a FIPB approval to set up bitumen company. We will be investing several million dollars to produce specialised bitumen for the Indian market which is huge."

He did not elaborate on the specific investment details.

Demand for bitumen is expected to zoom with the several road projects including the Rs 60,000 crore (Rs 600 billion) Golden Quadrilateral with North-South, East-West corridors and another Rs 60,000 crore, the Prime Minister's Gramin Sadak Yojana connecting the rural roadways across the country.

Bitumen is the basic raw material use in construction of roads and pavements  It also has many other industrial applications, from waterproofing for bridge decks to backing for carpet tiles.

Indian Oil Corporation is dominant player with 59 per cent market share followed by HPCL with over 18 per cent market share.

HPCL has also tied-up with Colas SA France to form Hindustan Colas Ltd to manufacture and market high quality bitumen emulsions for road construction.

This will be Shell's sixth business venture in the country. It already has five businesses with Bharat Shell, a joint venture between Royal Dutch/ Shell and Bharat Petroleum Corporation to produce and market lubricants in the India.

After buying BPCL's equity in LPG business, Shell floated a wholly owned subsidiary Shell Gas India Limited for bottling and marketing LPG.

The 5 million tonne per annum LNG project at Hazira in Gujarat and Shell Solar India,  in solar lighting systems in south India.

Besides the Shell India Pvt Limited, a holding company to identify and develop new businesses including setting up retail outlets, providing technical support to petrochemical projects and into trading activity.