The Adani Group plans to launch the first phase of its USD 4 billion PVC project by December 2026, marking its entry into the petrochemicals sector. This move aims to address the gap between India’s PVC demand and domestic supply.
PVC (polyvinyl chloride) is a widely used synthetic plastic polymer found in products like raincoats, pipes, medical equipment, and credit cards. India currently needs about 4 million tonnes of PVC annually but can only produce 1.5 million tonnes locally. With demand expected to rise, Adani Group sees an opportunity in this sector.
Adani Enterprises is setting up a petrochemical cluster in Mundra, Gujarat. Within this cluster, they plan to build a PVC plant with a capacity of 2 million tonnes per year, to be completed in phases. The first phase, with a capacity of 1 million tonnes per year, is set to be ready by December 2026.
The project had been paused in March last year due to financial issues following allegations of fraud by Hindenburg Research. Although Adani Group denied these allegations, it led to a drop in their stock prices. The group then focused on its core areas, raised over USD 5 billion in equity and more in debt, and repaid some debts.
With the market regaining confidence in Adani, the group has resumed work on the petrochemical plant. A consortium led by the State Bank of India (SBI) will finance the project. The group plans to use Acetylene and Carbide-based PVC production processes for the Mundra project. They have already received environmental clearance and consent to establish the project.
Globally, PVC is the third most produced synthetic plastic polymer after polyethylene and polypropylene. By 2027, India is expected to add the most PVC capacity, followed by China and the US. The construction and agriculture sectors are major drivers of PVC demand in India.
Government programs like PMKSY, AMRUT, and Housing for All are increasing the demand for pipes and tubes, with PVC demand expected to grow by 8-10% annually from 2023 to 2026 due to increased infrastructure spending and various government initiatives.
