The ongoing chemical downstream expansion of Haldia Petrochemicals Ltd (HPL) is already beginning to yield results.

Drawn by the chemical HPL will produce, Matix Group, which operates one of the largest fertiliser plants in eastern India, has decided to set up a unit to manufacture a chemical used in the pharmaceutical and personal care industry.

The Matix plant, entailing an investment of ₹2,600 crore, will make iso-propyl alcohol (IPA) with an annual planned capacity of 50,000 tonnes in Burdwan. The facility will be located within Matix’s existing complex at Panagarh Industrial Park which also houses its 1.27 million tonne urea plant.

The IPA unit, touted to be eastern India’s first, is expected to be commissioned in FY27. A key raw material for Matix will be acetone, which will be produced by AdPlus Chemicals and Polymers Private Limited, a step-down subsidiary of HPL.

AdPlus is in the process of setting up a phenol and acetone manufacturing unit at Haldia, entailing an investment of ₹5,000 crore, which is expected to commence production by the first quarter of 2026.

Matix and AdPlus have entered into a memorandum of understanding, whereby the latter will supply 50,000-70,000 tonnes of acetone from its 214,000 tonne acetone facility, which is under construction. Following the MoU, the companies will sign a definitive sale purchase agreement within two years.

Commenting on the development, Nishant Kanodia, chairman of Matix Fertilisers and Chemicals Ltd, said in a statement, “The foray into industrial and specialty chemicals aims to leverage our existing infrastructure and build on years of operational expertise to meet the rising domestic demand in this critical sector. This expansion is in line with Matix’s long-term vision of responsible diversification beyond fertilisers into the high-growth chemical sectors.”

The proposed product (IPA) portfolio has been arrived at based on the study initiated by Matix along with McKinsey.

Industry observers pointed out investments undertaken by AdPlus and announced by Matix in chemical downstream will encourage more players to join the value chain by setting up industries here.

When HPL had put up its naphtha cracker and polymer manufacturing unit a quarter of a century ago, it encouraged hundreds of plastic processing units to set up shop in Bengal as a downstream unit.

The same playbook may pan out now. Apart from acetone, Adplus will also manufacture phenol, which are base raw materials for multiple downstream products such as polycarbonate.

HPL itself is considering setting up a polycarbonate plant, which may require a $1 billion investment, as a forward integration plan.

Polycarbonate is a key thermoplastic compound which finds use in many industries, especially automobile and packaging due to its durability under heat, impact and chemicals.

However, India meets the requirement of the material by import.