IOCL, MCPI Sign JV For Rs 5,000-Crore Polyester Yarn Project In Odisha
Magma Chemicals & Polymers India (MCPI) and Indian Oil Corporation (IOCL) have signed a joint venture agreement to develop a Rs 5,000-crore polyester yarn manufacturing facility at Bhadrak in Odisha, moving the project closer to implementation nearly two years after it received IOCL Board approval.
The agreement was signed at IOCL’s Refinery Headquarters by Debi Prasad Patra, Managing Director and CEO of MCPI and S.K. Papneja, Executive Director, on behalf of IOCL.
The immediate next step is incorporation of the joint venture, following which implementation of the project will begin. The facility will be built around a 900-tonne-per-day Continuous Polymerisation (CP) unit, with downstream facilities for manufacturing Fully Drawn Yarn (FDY), Draw Textured Yarn (DTY) and polyester chips.
The products are expected to serve a range of applications across apparel, home textiles and industrial textiles, giving the proposed facility a presence across several stages of the polyester value chain.
The current project cost of approximately Rs 5,000 crore is higher than the estimate approved in December 2024. In its December 20, 2024 disclosure to the stock exchanges, IOCL had said its Board approved the Bhadrak project at an estimated cost of Rs 4,382.21 crore.
The project was structured as a 50:50 joint venture between IOCL and MCPI, with each partner originally expected to contribute Rs 657.33 crore as equity. MCPI had also confirmed the equal partnership structure in its announcement at the time.
The project received final clearance from the Government of India in June 2026, paving the way for the signing of the JV agreement.
For MCPI, the project strengthens its move into downstream polyester manufacturing. The company, an affiliate of The Chatterjee Group, entered the downstream polyester segment through its acquisition of Garden Silk Mills Private Limited in February 2021.
MCPI subsequently invested in an FDY facility at Surat. The Garden Silk Mills plant, inaugurated in February 2024, involved an investment of around Rs 1,250 crore and has a capacity of 272 tonnes per day. MCPI had earlier said the experience gained from executing the FDY expansion would support its participation in the Bhadrak project.
The company has credited Dr Purnendu Chatterjee, Chairman of The Chatterjee Group, with providing the vision and guidance behind the partnership, while acknowledging IOCL’s leadership for selecting MCPI as its partner.
For IOCL, the Bhadrak project is part of its broader push to expand its petrochemical operations into downstream manufacturing. The corporation’s plans for a textile yarn project at Bhadrak date back several years, with an earlier proposal envisaging a 300 KTA textile yarn project.
IOCL had previously said its planned PX-PTA complex and MEG facility at Paradip would provide feedstock for the proposed Bhadrak textile yarn project. The 2024 approval subsequently gave the project its present configuration, including the Continuous Polymerisation unit and downstream FDY, DTY and polyester-chip facilities.
The proposed facility is expected to add significant polyester manufacturing capacity in eastern India while supporting industrial activity and employment generation in Odisha..
