Haldia Petrochemicals Limited (HPL), a flagship company of The Chatterjee Group (TCG) having its manufacturing facility at Haldia, West Bengal, along with an international partner Rhone Capital, has acquired the US based Lummus Technology at an Enterprise Value (EV) of $ 2.725 Billion (approximately Rs. 20,590 crores) from McDermott International on the 30th of June, 2020.

With a heritage spanning 110 years, Lummus Technology is a leading master licensor of proprietary technologies in refining, petrochemicals, gas processing and coal gasification sectors, as well as a supplier of proprietary catalysts, equipment and related engineering services. Lummus Technology has around 130 licensed technologies and more than 3400 patents and trademarks.

The Chatterjee Group (TCG), with its Head Quarters in USA, has controlling stake in Haldia Petrochemicals Limited. The Group has an impressive track record as a strategic investor, with businesses spanning many sectors across geographies. Founded by Dr. Purnendu Chatterjee in mid 1980s, the Group has all along had overriding focus on investments in ‘knowledge based industries’. TCG owns and controls companies as ‘long-term investments’ in the following sectors: Petrochemicals, Pharmaceuticals, Biotech, Financial Services, Real Estate and Technology, serving global markets.

Rhone Capital, established in 1996, having offices in London and New York, is a global private equity firm, which specializes in investments in market leading businesses and has a pan-European and trans-Atlantic presence. The Company has stake in a diversified portfolio of companies in chemicals, consumer products, food, industrial materials, mining and shipping industries.

Highlights of the Deal

• This landmark development would significantly accelerate India’s progress towards ‘Self Reliance’ in materials technology space.
• Lummus Technology under the new dispensation would function as a ‘standalone’ autonomous entity and would have required flexibility and agility to further develop its core competencies.
• HPL, with its two decades of rich experience in manufacturing ‘best in class’ polymer products and downstream chemicals would partner with Lummus in evolving technological improvements for these segments.
• Lummus and HPL together would be in a position to provide a more compelling ‘value proposition’ to the clients of Lummus in India and abroad.
• HPL’s policy initiative to pivot upstream investments in ‘Oil to Chemical’ sector is likely to receive a major boost as a result of association with Lummus.

Welcoming this development, Mr. Leon de Bruyn, Head Lummus Technology, said “For our customers, employees and partners this is an important milestone. We would be able to focus exclusively on providing world class technologies and solutions and developing long term strategies that will allow Lummus to lead and shape the future of our industry”.

Dr. Purnendu Chatterjee, founder Chairman of TCG iterated “our investments are both strategic and long term, most of which span across 25 to 30 years. We have primarily focused on knowledge based enterprises, and as such Lummus is a great addition to our portfolio. Leading with innovation, it delivers sustainable value to clients in the areas of materials technology. HPL being a long term client of Lummus can share its customer experience and collaborate with Lummus to co-create innovations for the benefit of the industry.”

Mr. Rajnish Kumar, Chairman SBI, the lead banker in the deal, mentioned “Acquisition of Lummus, world’s premier Petrochemicals Company by Haldia Petrochemicals is a landmark achievement by an Indian company. I hope this acquisition will go a long way in furthering India’s strong footprint in technology space and support India’s mission of Atmanirbhar Bharat. State Bank of India is happy to be associated with this prestigious acquisition.”

Mr. Subhasendu Chatterjee, Whole Time Director, HPL said “it is indeed a proud privilege for HPL to be associated with Lummus Technology, the prestigious licensor of several proprietary technologies in the refining, petrochemicals and gas processing segments. We look forward to the exciting prospect of working with Lummus to foster innovations aimed at technological sophistication and enhanced investor satisfaction.”

HPL has successfully Commissioned the Butene-1 Plant in February, 2019 having a capacity of 30.2 kTA Butene-1 and 98.6 kTA MTBE on 4th Match . The project was set-up in a record 28 months’ time using Axens Technology in EPCM mode. It uses internally available intermediate C4 Raffinate stream and Methanol as feedstock to produce Butene-1 and MTBE.

Butene-1 is a co-monomer used in manufacturing of Linear Low Density Polyethylene (LLDPE). MTBE is used as fuel additive in Motor Spirit as Octane booster besides being used as a feedstock for manufacturing of high purity Isobutene and Methyl Methacrylate (MMA).

Butene 1 Plant has since been transferred to a wholly owned subsidiary of HPL, namely, Adperma

Haldia Petrochemicals Ltd (HPL) has successfully completed project "Supermax." This is the most complex revamp project in the history of Indian petrochemical Industry; even world has witnessed very few projects of a similar kind. Total investment in the project was more than 1230 Rs Cr, one of the largest investments in West Bengal in recent times. With this revamp project, the naphtha cracker plant of HPL can produce around 700 Kilo Tons Per Annum (KTA) of ethylene. Capacities of all downstream plants will also increase subsequently.

Project Supermax is the biggest project undertaken by HPL since its inception. The project involved installation of several large equipments and modification of existing equipment. The project was managed by internationally reputed contractors like M/s Toyo-India and involved major consultants from TEC-Japan, MHI-Japan, LG Chemicals-Korea, Honam-Korea, CBI Lummus-Germany. Two new cracking furnaces have been added to the existing seven during the revamp. Other critical jobs included line up of New Charge Gas Compressor, LLDPE Reactor, column modification (Ethylene Fractionator, Propylene Fractionator, Quench Tower, Gasoline Fractionator), modification of cold box etc. All these jobs were undertaken by renowned national & international contractors.

The integration of the new plant and machineries with the existing unit was the most complex activity of the project and it was managed efficiently by micro planning & scheduling. Team HPL, with their knowledge, efficiency, co-ordination and managerial efficiency executed the project successfully with an exceptional safety record. Employees across the organization worked as a single team and put-in enormous efforts to manage such a complex project.

With commissioning of additional capacity, HPL is set to emerge as a stronger company with greater product volume, higher turnover and better bottom-line.

The additional volume will give an opportunity to develop new downstream units in and around West Bengal with a potential to attract investment and generate employment.