BASF SE, the world's largest chemical producer, will set up a petrochemical production hub at a cost of $2.25 billion (Rs 16,000 crore) in Gujarat in a joint venture (JV) with Ahmedabad-based Adani Group, the two companies said after signing a memorandum of understanding last week. The German company will hold the majority in the joint venture, which will invest in the “acrylics value chain”, they said. The designated site would be at Mundra port in Gujarat and a feasibility study will be completed by the end of 2019. The investment will go into the development, construction and operation of production plants including propane dehydrogenation (PDH), oxo C4 complex (butanols and 2-ethylhexanol), glacial acrylic acid (GAA), butyl acrylate (BA) and potentially other downstream products. The products are predominantly for the Indian market to serve a wide range of local industries, including construction, automotive and coatings, whose growing demand is currently supplied via imports. In line with BASF's carbon neutral growth strategy, the chemical site in Mundra would be the firm's first CO2-neutral production site. The companies have developed an overall plan including new technologies and the supply of the site with 100 per cent renewable energy. Therefore, in addition to the investment outlined in this MoU, BASF plans to co-invest as a minority partner in a wind and solar park, according to the media statement.