Russia’s leading petrochemicals group Sibur Holding is planning to join forces with Reliance Industries (RIL), India’s top private sector company, to produce synthetic rubber in India.

Moscow-based Sibur and Reliance Industries (RIL) of Mumbai, India have signed a preliminary agreement to form a joint venture butyl rubber plant at Reliance’s integrated petrochemicals complex in Jamnagar. The partners aim to feed Asia’s rapidly growing rubber consumption, led mainly by the expansion of automotive tyre manufacturing.

Under the terms of a memorandum of understanding the firms signed, Sibur will provide proprietary technology for butyl rubber polymerization and its finishing. Reliance is to contribute a new raw materials unit and the necessary infrastructure, the partners said in a joint statement.

“The creation of new capacity in close proximity to the Asian markets provides both Sibur and Reliance with exciting opportunities. Rubber consumption in Asia has shown strong growth in recent years,” commented Sibur’s president Dmitry Konov.

A Reliance spokesman said the move was “the right step towards strengthening the company’s position in the Indian market of synthetic rubber” as well as “an important step” in implementing the elastomers strategy formulated by its chairman Mukesh Ambani.

The Indian group has recorded an annual profit equal to $6.2bn on sales equivalent to more than $44bn as of March 2010.

Sibur manufactures 23% of all propylene and polypropylene, 17% of all polyethylene, 30% – 49% of different synthetic rubbers and 34% of all tyres in Russia.