MCPI and IOCL Join Hands for ₹5,000-Crore Polyester Project in Odisha

09 Sep 2026, 08:02 by Vinay Kakkad · KalingaTV

Bhubaneswar: A polyester yarn project that Indian Oil Corporation Limited (IOCL) approved for Bhadrak nearly two years ago has moved closer to execution, with MCPI Private Limited and IOCL now formally entering into a joint venture agreement for the facility.

The two companies will develop a ₹5,000-crore polyester yarn manufacturing facility in Bhadrak, Odisha, marking a significant expansion of their respective interests in the polyester and textile value chain. 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 project is the result of more than a year of collaboration between the companies. It follows IOCL Board approval in December 2024 and final clearance from the Government of India in June 2026. The immediate next step is incorporation of the JV, after which implementation of the project will begin.

900-tonne-per-day polymerisation unit at the core

The proposed facility will be built around a 900 tonnes-per-day Continuous Polymerisation (CP) unit.

Downstream facilities will manufacture Fully Drawn Yarn (FDY), Draw Textured Yarn (DTY) and polyester chips. These products serve applications across apparel, home textiles and industrial textiles.

The project therefore covers multiple stages of polyester manufacturing, bringing polymerisation and downstream yarn production into the same facility.

Project cost has increased from the 2024 estimate

The present ₹5,000-crore investment represents an increase from the cost approved when the project was first cleared by IOCL.

In its December 20, 2024 disclosure to the stock exchanges, IOCL said its Board had approved the Bhadrak yarn project at an estimated cost of ₹4,382.21 crore. The project was structured as a 50:50 joint venture with MCPI, with IOCL’s equity contribution set at ₹657.33 crore.

MCPI’s own announcement issued in December 2024 also confirmed the 50:50 structure. It said the two promoters would each contribute ₹657.33 crore in equity towards the project.

The latest JV agreement places the project investment at approximately ₹5,000 crore.

MCPI brings downstream polyester experience

The partnership gives IOCL a specialised textile and polyester partner as it expands further into downstream manufacturing.

MCPI is an affiliate of The Chatterjee Group (TCG) and has been building its presence in the downstream polyester business. The company entered the segment through its acquisition of Garden Silk Mills Private Limited in February 2021.

That expansion was followed by its investment in an FDY facility at Surat. MCPI had previously said its experience from executing the ₹1,250-crore FDY expansion project would place it in a strong position to support the Bhadrak textile JV.

The FDY plant at Garden Silk Mills was inaugurated in February 2024. MCPI said the project represented a ₹1,250-crore expansion, with a capacity of 272 tonnes per day.

IOCL’s longer-term textile strategy

The Bhadrak project is part of IOCL’s broader effort to use its petrochemical capabilities in downstream sectors.

IOCL has previously identified polyester and textile manufacturing as areas for diversification. Its plans for Bhadrak date back several years, with the company earlier describing a 300 KTA textile yarn project at the location. In 2020, IOCL said its planned PX-PTA complex and MEG facility at Paradip would provide feedstock for the proposed Bhadrak textile yarn project.

IOCL’s 2024 approval subsequently gave the project a defined configuration: the 900 TPD Continuous Polymerisation unit, along with DTY, FDY, polyester chips and associated facilities.

The corporation’s annual report for 2024-25 also records Board approval for execution of the JV agreement with MCPI for the 300 KTA yarn project at Bhadrak.

MCPI has credited Dr Purnendu Chatterjee, Chairman of The Chatterjee Group, with providing the vision and hands-on guidance that helped bring the partnership together.

The company has also acknowledged IOCL’s leadership for choosing MCPI as its partner for the project.

For MCPI, the venture extends its move from PTA manufacturing into downstream polyester products. For IOCL, it provides a route to build on its petrochemical operations while entering further into textile manufacturing.

Once implemented, the facility will add polyester manufacturing capacity to Odisha through an integrated setup covering polymerisation, yarn and polyester-chip production.

The project is also expected to generate employment and contribute to industrial development in the state, while creating additional polyester manufacturing capacity in eastern India.

The integration of the different production stages is a key feature of the project. Rather than focusing on a single polyester product, the facility will combine the 900 TPD CP unit with FDY, DTY and polyester-chip production, giving the JV a wider presence across the polyester value chain.

With the JV agreement now signed, the project has moved beyond the approval stage. Formal incorporation of the joint venture and project implementation are the next steps, putting the Bhadrak facility on course to become a major new polyester manufacturing investment in Odisha.