Dow Europe GmbH (Dow), the wholly owned European subsidiary of Dow Chemical Company, has signed a  joint venture agreement with the Gujarat-government promoted Gujarat Alkalies and Chemicals Ltd (GACL), to manufacture 200,000 metric tons of chloromethanes per year at Dahej in Gujarat.

Representatives from the two companies signed an agreement in Gandhinagar today to build a new manufacturing facility and said that they expected to achieve financial closure for the project later this year.

The plant, to be jointly owned and operated by the two companies, is scheduled to start production in 2011 at an estimated investment Rs600 crore.

Once the plant becomes operational GACL will supply approximately 600 MT of chlorine feedstock per day from its existing plant at Dahej,  while Dow will license its production technology, sales and marketing network for sales to SAARC countries. GACL will also make land available for the venture.

GACL is the largest maker of caustic soda with a combined 412,500 tonnes per annum capacity. It has two units located at Vadodara and Dahej in Gujarat, both of which are integrated facilities for manufacturing caustic soda, chlorine, hydrogen gas, hydrochloric acid, chloromethanes, hydrogen peroxide, phosphoric acid, potassium hydroxide, potassium carbonate, sodium cyanide, sodium ferrocyanide, aluminium chloride, poly aluminium chloride, CPW.

The Dahej unit also has 90 MW captive power plant, which will also supply power to the new facility.

Chloromethanes are used as an intermediate in the production of fluorocarbons and fluoropolymers, and as a solvent in pharmaceutical manufacturing, metal cleaning and degreasing, and other chemical processing applications.

 ''As GACL, India's largest chlor-alkali producer, and Dow, the world's largest producer of chemicals and plastics and the world's largest supplier of chlorinated organic products and services, form a joint venture company and enter into negotiation of the definitive agreements for this project, we do so against the all-important backdrop of sustainability,''said Michael R. Gambrell, executive vice president, basic chemicals and plastics for Dow.

He said that in keeping with Dow's 2015 Sustainability Goal to contribute to community success, Dow was contributing Rs75 Lakh to purchase the equipment to provide clean drinking water to over 10,000 residents of three neighbouring villages of Jolwa, Suva and Vadadla by using Dow technology. ''We plan to offer this facility to other neighbouring villages in the months to come,'' Gambrell added.

The new investment through this joint venture between Gujarat Alkalies and Chemicals Ltd. (GACL) and Dow Europe GmbH ''will give a push to the down stream users in the pharmaceuticals, paints and grease removal, refrigerant and solvent sector by making raw materials available at more competitive rates and bringing valuable Forex to the country,'' said Gujarat's minister of state for energy and petrochemicals Saurabhbhai Patel.

Dr. Manjula Subramaniam, chairperson, GACL and chief secretary, the government of Gujarat said that the association with Dow would result in various business avenues for the state. ''Dow's best-in-class process technology to produce chloromethanes will help to minimise production of carbon tetrachloride (CTC). The JV will also be able to convert the total CTC production, not only from this facility, but CTC produced in India, into a valuable product, a major breakthrough for India's chemical industry.''