In an informal chat with press persons TPL vice-chairman AC Muthiah said that the Saudi government is keen that the project be put up by TPL in association with local firm Al-Raja. TPL's technical expertise in lab manufacture clinched the proposal in its favour but Al-Raja had financial clout. So the JV with them will make the project viable, he said. Of the $250 million, total cost of the project, 65 per cent will be debt, while 35 per cent will be equity. TPL will be willing to pick up 50 per cent of this equity as other players too are keen on joining as equity partners, he said. The lab project in Saudi Arabia will have a capacity of 100,000 tonnes per annum - 80,000 tonnes of lab and 20,000 tonnes of liquid paraffin. According to Muthiah, the paraffin can be brought back to either India or sold in another JV for manufacture of paraffin which TPL is considering in Vietnam.

The Vietnam project too will have a similar investments, but the Vietnam government has not yet given the clearance for the project.The TPL vice-chairman said the lab industry is growing at the rate of 10 per cent to 12 per cent per annum. Once the Saudi Arabian project goes on stream in the next four years, TPL will become, he said, the third largest manufacturer of lab in the world. Funds required for the expansion project of TPL will be sourced partly from internal accruals and partly from external borro-wings. Details are being worked out to structure the TPL contribution in this lab expansion project.