The Telegraph
Since 1st March, 1999
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Reliance sells the global dream
- Mega investment plan for core areas

Mumbai, Aug. 3: Big is certainly beautiful for Reliance Industries. Chairman Mukesh Ambani today unveiled a massive Rs 46,700-crore investment plan in the core business of oil and petrochemicals.

The move is aimed at not only attaining but also consolidating a global character for the company.

Life sciences, including innovation-led biotechnology and healthcare, will be the next major initiative.

Addressing shareholders at Reliance’s annual general meeting for the first time since the settlement with younger brother Anil, Mukesh made no secret of his global ambitions. Reliance, he said, would not only grow through the organic route in key businesses, it would also go for acquisitions.

Capacity hike

Reliance will invest Rs 25,000 crore to double refining capacity in Jamnagar to 60 million tonnes per annum by 2008-09. The expansion would make it the largest petroleum refinery at any single location, anywhere in the world, Mukesh said.

The expansion will be completed by the second half of 2008-09. However, the full benefit of the new capacity will be available from 2009-10.

“Given Reliance’s unassailable position, successful commissioning of the enhanced capacity will lay grounds for exponential growth,” Mukesh told thousands of shareholders, among whom Anil was also present.

Oil and gas hunt

Reliance will invest close to Rs 17,600 crore in upstream oil and gas exploration and production over the next four to five years.

On the exploration front, Reliance has made 10 more oil and gas discoveries in the last 12 months, taking the count to 23, each named after Dhirubhai Ambani.

“I look forward to the day when we will have a Dhirubhai 100 discovery,” Mukesh said, indicating the possibility of more such finds.

Five wells have been drilled in the KG D6 block since Mukesh spoke to Reliance shareholders at the last meeting.

“These wells have hit two new gas bearing geological plays, which have greatly increased the gas potential of this block,” Mukesh added.

Reliance hopes to complete the development of the KG D6 in 2008-09 and the first full year of commercial production will be in 2009-10.

The company has identified several customers. In the first phase, it will produce 40 million cubic metres of gas per day, which can be stepped up in phases.

Polyester plan

Another Rs 3,000 crore will be spent to consolidate the polyester and fibre intermediates business.

Mukesh said the acquisition of German firm Trevira last year has made Reliance the largest polyester fibre and yarn producer in the world.

Reliance is now planning to build on this position by setting up new capacities for value-added differentiated polyesters and bringing about greater innovation.

Consistent with this view and given the opportunities that the removal of quotas bring, Reliance will increase its polyester manufacturing capacity by 5.50 lakh tonnes annually this fiscal. This will take the company’s total polyester capacity to 2 million tonnes per year.


In petrochemicals too, the immediate strategy is to go in for organic growth. A new polypropylene plant with a capacity of 2.80 lakh tonnes per year will be set up at Jamnagar. The new unit will take the company’s total capacity to 1.43 million tonnes annually.


On the petroleum retailing front, about 2,500 outlets will be added by March next year. At present, Reliance operates 550 petroleum retail outlets across the country.

Mukesh said even as these outlets compete on the basis of a differentiation strategy hinging on technology and superior customer experience, their thruput was four times the national average. Ambani also allayed any fears that the massive investment plans would affect the company's profits or erode shareholders wealth.

“Reliance’s cash flow over the next few years would be spent on oil and gas, petroleum refining and petrochemical businesses. Equally, it would be used in opening new avenues of growth,” he said.

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