India's Reliance, Dow Chemical set to form JV-paper
MUMBAI, March 15 (Reuters) - India's top petrochemicals maker, Reliance Industries Ltd. (RELI.BO), is set to form a joint venture with Dow Chemical Co. (DOW.N) for plastics and chemical businesses, the Economic Times said on Thursday.
"Talks are at an advanced stage and the two sides are expected to make a formal announcement by the weekend," the newspaper said, quoting unnamed sources.
Top Reliance officials led by Chairman Mukesh Ambani are scheduled to meet Dow Chief Executive Officer Andrew Liveris and a memorandum of understanding may be signed, it said.
A Reliance spokesman denied a deal was in the offing, the newspaper said, while a Dow spokesman said it was not the company's policy to comment on rumours about itself or its activities.
The newspaper said Dow was unable to unlock the full value of its huge commodity chemicals and plastics business because of rising cost of feedstock and raw materials in the West.
A deal will enable to move some of the manufacturing to Reliance's massive complex in Jamnagar in western India from high-cost locations in the United States and Europe, it said.
Reliance, the world's largest maker of polyester and fibre yarn, will prefer to hold a 51 percent stake in the joint venture while giving Dow management control, the newspaper said.
"Reliance reckons that a foreign partner will be far more adept at managing customer relationships at the front end, while its core competence will lie in manufacturing and supply chain management," it added.
