reliance pet presentation
TRANSCRIPT
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The Integrated PET PlayerB Arun
Reliance Industries Limited
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Contents
India: An Emerging Economic Super Power
Reliance a preferred supplier in Russia
Reliance: Largest Indian Private Company
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India: A Glimpse
Land of opportunities
Population 1050 Mn
Middle Class ~310 Mn
Teenagers 150 Mn
Urban Workers 120 Mn
Million plus Cities 23
Small Retailers 2.3 Mn
GDP US $ 730 bn
Growth % 8
PPP US $ 2863 bn (4th)
India
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India’s Glory
Even though the world has just discovered it,
the India growth story is not new.
It has been going on for 25 years old
What is the India story?
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India StoryAaverage
Annual GDP growth
Average Annual population
growthLiteracy
Middle Class
1950 – 1980 3.5 2.2 52 8
1980 – 2002 6.0 2.0 65 22
2002 – 2006 8.0 1.5 80 32
%
- Rising GDP growth- Population growth is slowing- Increase in Literacy level- Exploding Middle class
India is now the 4th largest economy And it will cross Japan between 2012 and 2014 to become the 3rd largest
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India: Knowledge Capital
• Young & skilled manpower
• Largest number of Engineers
• 200,000 Scientific professionals & 300,000 Engineers added every year
• R&D base for 100 of Fortune 500 companies
• 1300 R&D units, 244 Universities, 200 National Laboratories
• Cost of 1 Engineer in US = 11 Engineers in India
India Provides an Opportunity as R & D Hub
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Growth Drivers
India East and S.E. Asia
Domestic ExportsServices ManufacturingConsumption InvestmentHigh tech, capital Low tech, labourintensive industry intensive industry
- India’s success is market led whereas China’s is state induced.
- The entrepreneur is at centre of the Indian model
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Reliance – India’s Proxy• Revenues of US$ 20 billion• Cash Profit of US$ 3 billion• Net Profit of US$ 2 billion• 98% of revenues from Refining and
Petrochemicals, 2% from E&P & others
India and Reliance• Revenues equivalent to 2.8% of India’s
GDP• 8.2% of India’s total exports, ~ US$ 8 billion• Contributing 8% India’s indirect taxes• 4.7% of the total market capitalization,
11.5% weightage in Sensex
What’s good for India is good for Reliance
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Reliance – Vertical IntegrationVa
lue
Add
ed
1970sTextiles
1980sFibers
Olefins Aromatics
FiberIntermediatesPolymers Chemicals 1990s
2000sPetroleum Refining
Oil & Gas E & P
Backward vertical integration has been the cornerstone
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Delta - Naphtha to PX
0
200
400
600
800
1000
Q1 '01
Q3 '01
Q1 '02
Q3 '02
Q1 '03
Q3 '03
Q1 '04
Q3 '04
Q1 '05
Q3 '05
Q1 '06
Q3 '06
Threshold Delta PX Delta
$/MT
Delta based on South East Asian prices
2 out of 24 quarters below threshold
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Delta - PX to PTA
0
100
200
300
400
500
Q1 '01
Q3 '01
Q1 '02
Q3 '02
Q1 '03
Q3 '03
Q1 '04
Q3 '04
Q1 '05
Q3 '05
Q1 '06
Q3 '06
Threshold Delta PTA Delta
$/MT
Delta based on South East Asian prices
6 out of 24 quarters below threshold
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Delta - PTA/MEG to PET
0
100
200
300
400
500
Q1 '01
Q3 '01
Q1 '02
Q3 '02
Q1 '03
Q3 '03
Q1 '04
Q3 '04
Q1 '05
Q3 '05
Q1 '06
Q3 '06
Threshold Delta PET Delta
$/MT
Delta based on South East Asian prices
7 out of 24 quarters below threshold
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Delta - Naphtha to PET
0100
200300400
500600
700800
Q1 '00
Q3 '00
Q1 '01
Q3 '01
Q1 '02
Q3 '02
Q1 '03
Q3 '03
Q1 '04
Q3 '04
Q1 '05
Q3 '05
Q1 '06
Q3 '06
Threshold Delta Naphtha - PET Delta
The last man standing will be an integrated player
Competitive Advantage from Integration !
$/MT
Delta based on South East Asian prices
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Domestic Leadership & Global Rankings
Dominant market share in India
Leading Global PositionLeading Market Shares in India
Leading domestic market shares and global positions
1
3
3
5
Polyester(Fibre & Yarn)
Refining (1)
Paraxylene
Purified Terephthalic Acid
7MEG
Amongst top 10 global players in all its core businesses
Polyester 55%
Fibre Intermediates 78%
Polymers 65%
Refining 28% 6 Polypropylene
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Reliance Growth Plan
• Committed to investing US$ 25 billion in core businesses
• Investing in the building of a high potential, high growth retail initiative
• Committed to creating value by building world class assets
• Management team expects to create significant value on successful
implementation of each of these initiatives
Growth is life at Reliance
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Polyester Production: Changing Trends
1980 2000 2006Producer KTA
DuPont 841
Celanese 605
Hoechst 395
AKZO 316
Eastman 302
Rhone Poulenc 248
Teijin 219
Toray 172
ICI 155
Monsanto 146
Producer KTA
Nan Ya 1035
Reliance 779KoSa 700
Teijin 698
Sam Yang/SS (Huvis) 658
Hualon 575
Far Eastern 604
DuPont 583
Tuntex 561
Toray 543
Producer KTA
Reliance 1700Nan Ya 1080
Sanfangxiang 1050
Yizheng 945
Yuandong 900
Tuntex 885
Far Eastern 781
Huvis 750
Rongsheng 650
Tongkun 640
US, EU, Japan Taiwan, Korea China, India
RIL: Leadership in two decades
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Growing Share of Polyester production
200129 Mn Tons
201053 Mn Tons
200540 Mn Tons
5%28% 39%
28%
30%
39%27%4%
2%26% 39%
33%
Staple PET FilmFilament
Source: PCI
One third of total Polyester production will be in PET
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PET Products
Product Range Aqua Grade Fast Reheat CSD Hot Fill General Purpose
Applications: Beverages- Aseptic filling & Hotfill, Cosmetics, Pharmaceuticals, Sheets, Food Stuffs, Agrochemicals, Lubricants etc.
The list of prestigious users of RELPET include Coca-cola, Pepsi Cola, Nestle, Danone, Cadbury, Wrigleys, Amcor, Tetrapack, Uni Levers, RC Cola, San Benedetto, Heineken………….
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Reliance Technology Centre
• World Class R & D facility
• Centre of excellence for Research and Development in polyester homo and co-polymer fibres, filaments and resins
Innovative products in pipeline
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Factors to Impact Russia PET market
• Ruling of EU for Korea and Taiwan?
Possible displacement of 160 KTA from EU
The Outlook of Euro ( Market netback Swing)
• China trade policy related to USD reserve
Could topple PET export dynamic
• Competitiveness of Lithuania PET plant’s in Russia ?
Korea will still dominate Russian PET market
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Reliance Russia Logistic reach
– India Iran Russia TreatyNorth South Corridor- Open up logistic solutions
– Western Ports-Better shipping performance
– Leveraging China Warehouse through TranssiberianRailways, conventional route ,MPS Containers
Map
Map
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The North South Corridor route
The Quicker Cheaper route- Multimodal challengeBack
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Russia- Reach through China Warehouse
From Reliance Shanghai Back
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India Russia ties
• Diamond Jubilee celebration of Indo Russian Diplomatic ties in Apr-07
•Indo Russian Economic relationship are at Cross roads
• Glorious strategic partnership in the past with the larger scope of Co-operation in future in political, scientific, trade, economics and defense.
• Indo Russian trade US$ 2.5 bn excluding arms
• It’s time for India-Russia CECA (Comprehensive Economic Cooperation Agreement)
“Strategic partnership should be cultivated like a garden”
Sergei Lunev, Doctor of History
Win win scenario for India & Russia
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Summary
Why India?• A democratic country with huge resource of
young, intelligent and dynamic workforce.Why Reliance?• The largest private sector company of India.• Vertical Integration.• World Scale Assets.• Globally Competitive. • Among world leaders in all its core businesses
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Thank You