India’s Adani Group, an infrastructure conglomerate with businesses in sectors including coal, oil and gas, ports and power, has announced a foray into petrochemicals.

The company has signed a joint venture with German giant BASF SE for the setting up of acrylics manufacturing units costing 160 billion rupees (US$ 2.25 billion). Constituting BASF’s largest investment in India to date, the factories will be set up at Adani-owned Mundra Port in Gujarat state, Business Standard reports.

The German company will hold the majority stake in the joint venture and a feasibility study will be completed by the end of 2019.

The products will predominantly cater to the Indian market and serve a wide range of local industries, including construction, automotive and coatings. Currently many of the products required by these industries are imported.

BASF plans to make the Mundra plant CO2-neutral, with power supplied through 100% renewable energy. It also plans to co-invest as a minority partner in a wind and solar park.

The new project will pit Adani against Reliance Industries, owned by India’s richest man Mukesh Ambani. Reliance is a major player in the oil refining and petrochemicals sectors. It operates two refineries with a total capacity of over 68 million tonnes and has set up a huge petrochemical complex in Jamnagar, also in Gujarat state.

According to ratings agency CRISIL, India’s domestic demand for petrochemicals is expected to grow at a compounded annual rate of 8-9% through 2022-2023.