Assam Petro-chemicals Limited was conceived for productive utilization of natural gas, which was being flared up in the Upper Assam oil fields. Only a small quantum of natural gas was then used in fertilizer industry and power generation. To prevent this colossal wastage, the company was set up by the State Government of Assam with joint participation of Assam Industrial Development Corporation Ltd (AIDC) and the public. Incorporated in 1971, the company was a pioneer in the field as it was the first to manufacture petrochemicals in India using natural gas as feedstock. It started with a small Methanol plant with Formaldehyde and a few Urea Formaldehyde resins as downstream projects with technology supplied by Mitsubishi Gas Chemicals Co. Inc, Japan. Commercial production began in 1976.
To augment its capacities to meet increasing demand for its products, a bigger Methanol plant with 100TPD capacity was commissioned in 1989 with technology supplied by ICI, UK and a 100 TPD Formaldehyde Plant in 1998 with technology from Derivados Forestales of Nederland.
The company was hard hit by the Supreme Court ban in 1996 on wood based industries in the North Eastern region, which were its major consumers. Further, closure of the DMT plant of BRPL in 2000 closed the doors on another important consumer. Despite these twin blows that almost completely dried up its market within the state where it earned maximum profit, the company was able to overcome the challenge by marketing its products in far off places like Bengal, Delhi, Haryana, Uttaranchal, Bihar, Nepal Bhutan etc.