Adani to review 2-million tonnes proposed coal-to-PVC plant in Mundra

Adani Enterprises Ltd (AEL) is working on a strategy to review its 2-million tonnes coal-to-polyvinyl chloride (PVC) plant which was proposed to be set up at an investment of US$4 billion in Mundra, Gujarat. The Adani Group’s proposed PVC plant was expected to bridge a part of India’s deficit of plastic raw material on implementation.

AEL’s review of the PVC manufacturing plant comes after several small political parties led by the Congress attacked the ruling Bharatiya Janata Party (BJP) on the US-based short-selling firm Hindenburg report which alleges India’s leading business tycoon Gautam Adani for manipulating stock prices and violating several laws of the land. Adani Group companies’ valuations have crashed in Indian stock exchanges and share prices slumped resulting in the loss of shareholders worth crores.

In addition to the proposed PVC plant in Mundra, the Adani group is working on a strategy to go slow on other activities and prevent participation in the bidding process for India’s road projects. Further, it will also moderate certain accelerations budgeted in its earlier capital expenditure plans but will continue with the investment plans for its core infrastructure businesses.

Responding to a media query after earning calls, Jugeshinder Singh, Group CFO at Adani Group, said, “In relation to the coal-to-PVC which is one of our new commitments, we will review that commitment post-settlement of this volatility period. For the time being, we will not be making any commitments to new projects. Committed projects are continuing as per schedule. The company will not make any new commitments until the volatility is settled.”

Earlier in 2021, the company had planned to build a 2-million-tonnes per-annum coal-to-PVC plant in Mundra with an investment of US$4 billion. The project was expected to produce PVC grades such as suspension PVC resin, chlorinated PVC (CPVC), and emulsion PVC (paste). Feedstock coal of about 3.1 million tonnes per annum for the project will be sourced mainly from Australia, Russia, and other countries. The company expected this coal-to-PVC project to come on stream within four years for receiving all the necessary approvals.

Also, AEL has decided not to aggressively be bidding for road projects in the fourth quarter, when a number of Hybrid Annuity Mode (HAM) and Engineering, Procurement, and Construction (EPC) projects are expected to be awarded. Singh emphasized that the Adani Group will first want this volatility period to settle down before actually making new commitments. “So, we don’t expect any significant bidding in the road project,” he added.

The Adani Group however plans for setting up copper plants and data centers, among others that are going on as per schedule. AEL also plans to moderate certain accelerations budgeted in its earlier capex plans but will continue with the investment plans for its core infrastructure businesses. The company plans to take a couple of measures just to respond to the ongoing market volatility without making any significant effort to make new plans and enter into new businesses.

According to reports, AEL will continue investments in core infrastructure such as energy and utilities including green hydrogen, transport, and logistics portfolio as per the scheduled plan. However, given the current volatility, AEL will moderate certain accelerations that have a budget capex profile and will continue with the ordinary course of business-based capex.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com