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The Adani Group is set to commission the first phase of a $4 billion polyvinyl chloride (PVC) project by December 2026, marking its entry into the petrochemicals sector, sources revealed. PVC, the third most common synthetic plastic polymer globally, is used in a wide range of products, including raincoats, shower curtains, window frames, indoor plumbing pipes, medical equipment, wire and cable insulation, bottles, credit cards, and flooring.
Indias annual PVC demand stands at approximately 4 million tonnes, while domestic production capacity is only about 1.5 million tonnes, leading to a significant supply-demand gap. With this disparity expected to widen as consumption increases, Adani Group is positioning itself to capitalize on the sectors growth potential.
Adani Enterprises, the groups flagship firm, is developing a petrochemical cluster in Mundra, Gujarat. Within this cluster, a PVC plant with a capacity of 2 million tonnes per annum will be established in phases, according to two sources with direct knowledge of the project. The initial phase, with a capacity of 1 million tonnes per annum, is scheduled for commissioning by December 2026.
The project had been put on hold in March last year, with the group delaying major equipment procurement and site construction activities pending financial closure. This decision followed allegations of financial and accounting fraud at Adani Group companies by US short-seller Hindenburg Research. Despite vehement denials by Adani Group, the allegations led to a significant drop in Adani stock prices and scrutiny of its governance practices.
In response, Adani Group refocused its resources on its core competencies and devised a comeback strategy, which included raising over $5 billion in equity and double that in debt, repaying some debt, and fully repaying share-backed financing. As market confidence in the ports-to-energy conglomerate was restored, Adani Group resumed work on the petrochemical plant.
Sources indicated that a consortium of lenders led by State Bank of India (SBI) would finance the project. Adani Group plans to use acetylene and carbide-based PVC production processes for the Mundra project, which has already received environmental clearance and consent for establishment.
Globally, PVC ranks third in production among synthetic plastic polymers, following polyethylene and polypropylene. By 2027, India is expected to add the most PVC production capacity, followed by China and the US, driven by demand from the construction and agriculture sectors. |
