In what marks the foray of the Gautam Adani-led Adani Group in the rapidly growing petrochemical sector, the company has recently inked a MoU (Memorandum of Understanding) with the German specialty chemical giant BASF SE to investment in the acrylics value chain.

The move, reportedly is set to fortify Adani Group to take competition head-on with India’s biggest corporate Reliance Industries, and that too from its home ground in Gujarat.

According to Livemint, Adani Group has signed a definitive agreement with BASF to invest around Rs 16,000 crore (approx. euro 2 billion) in establishing a chemical plant in Gujarat.

Under the terms of the agreement, besides setting up a chemical factory in Mundra, Gujarat, Adani Group and BASF will also be developing a solar and wind power plant at the site for meeting the power requirements of the unit, while making it its first CO2-netural site.

The two companies revealed that the new chemical facility will see BASF holding the majority stakes and marking its largest investment in India to date. The German player however, will be holding minority share in the power venture.

If sources are to be believed, Reliance dominates the Indian petrochemical sector and this will be for the first time that two industrialists hailing from same state will be directly competing in any business. The Mukesh Ambani-run oil-to-telecom conglomerate Reliance Industries Ltd, for the record, completed a colossal USD 16 billion expansion of its petrochemical production capacity, in January 2018. The investment is likely to help the company to pave its way in the league of top five petrochemical producers globally.

It has been reported that the Adani-BASF venture will manufacture chemicals finding applications in automotive, coatings, and construction business. This is said to be lot smaller from Reliance that produces a gamut of products, however, is expected to largely cater to the domestic market and serve a range of local industries and business whose high demand is currently matched through imports.