Mumbai, Nov. 26: Reliance Industries Ltd (RIL) is building a 40,0000-tonne plant at Hazira in Gujarat to expand its polyester staple fibre (PSF) capacity. The plant, which will be set up in association with Zimmer AG of Germany, will take Reliance’s total capacity of PSF and polyester yarn to 8.5 lakh tonnes.
Zimmer will supply the technology, basic engineering and equipment and supervise the erection and commissioning activities, a company statement said here today.
Reliance is the world’s second largest polyester yarn and fibre producer with facilities across the country. The company, which focuses on speciality fibre grades and colours, exports its products to countries like USA, Europe, Turkey and many developing and emerging markets.
Reliance said the plant to be set up with latest technology from Zimmer will open a new chapter of co-operation with the German firm.
For the year ended March 31, 2002, Reliance’s polyester yarn capacity stood at 3.73 lakh tonnes and that of PSF at 3.61 lakh tonnes. Polyester production volumes increased 12 per cent during the year to 8,12,000 tonnes, which was higher than the industry growth rates. In the polyester category that also includes PET, Reliance is the largest manufacturer with a market share nudging 55 per cent.
The industry is a fragmented one, with a large number of players operating with relatively small capacities. Industry circles point out that one of the major reasons for the company posting above industry growth rates is its well-integrated nature of operations and global size capacities. Demand for polyester yarn, PSF and PET in the country crossed 1.3 million tonnes last fiscal, reflecting a growth of 5 per cent, despite the global slowdown.
In addition to its large capacities, RIL also has been focussing on dishing out speciality grades to raise margins. In fact, speciality grades accounted for 58 per cent of PSF production, while 29 per cent of PFY production represented niche products, contributing a premium of 5 per cent to 25 per cent over commodity prices last fiscal.
The previous year saw the RIL launch a new speciality product, Recron–3S, for the asbestos and construction industry. It happens to be the only domestic manufacturer of this product, which is used as a reinforcement agent.
It also entered into a strategic alliance with DuPont for exclusive distribution of lycra— the most widely used stretch fibre and a registered trademark of DuPont. The alliance is expected to enable Indian textile and garment manufacturers to link up, through DuPont, with overseas distribution and marketing networks.