MOSCOW (MRC) -- Reliance Industries (RIL) plans to invest Rs 75,000 crore in its oil-to-chemical (O2C) business over the next five years to expand capacities in polyester & vinyl verticals and also set up the country’s first carbon fibre plant at Hazira, said Financialexpress.
Carbon fibre, used in mobility and renewable energy because of its lightweight properties, promises to be a multi-decade growth engine for the O2C segment, RIL chairman Mukesh Ambani told shareholders at the company’s annual general meeting.
Ambani said RIL’s share of domestic gas production would go up to 30% by the end of the year from 20% currently with the commissioning of the MJ field in the KG-D6 basin. Apart from meeting India’s growing demand, the higher production will help the country save $9 billion a year.
In FY22, RIL’s O2C revenues crossed Rs 5 trillion while the earnings before interest, tax, depreciation and amortisation (Ebitda) crossed Rs 50,000 crore.
"We are committed to maximise O2C integration and convert our advantageous feedstock streams to high-value chemicals and green materials. I am pleased to share that over the next five years, we will invest Rs 75,000 crore and expand capacities in existing and new value chains,” Ambani said.
In the polyester value chain the company will build a three million tonne per annum (mtpa) capacity of purified terepthalic acid (PTA) plant and a 1 mtpa polyethylene terephthalate (PET) plant at Dahej.
“Both PTA and PET will be targeted for completion by 2026. We will also reinvest in polyester filament yarn (PFY) and polyester staple fibre (PSF). Polyester expansion with capacity of over 1 mtpa will be completed in phases by 2026,” he said.
In the vinyl chain, RIL plans to more than triple its existing capacity by adding world-scale plants at Dahej and Jamnagar, and in the UAE. The proposed expansion at Dahej and Jamnagar will be completed in phases by 2026.
“We will also add capacities to make EDC and PVC at Ruwais, in the UAE, as part of Ta’ziz Chemical Zone. With these expansions, Reliance will rank among the top five producers of PVC globally,” he said. The company will also build, in phases, India’s first carbon fibre plant at Hazira with a capacity of 20,000 tonne per annum (tpa), based on acrylonitrile feedstock.
“We will commence acrylonitrile production next year and aim to complete the first phase of the carbon fibre plant in 2025. We will further integrate our composites business with carbon fibre to produce carbon fibre composites,” Ambani said.
While the company’s O2C business in Q1FY23 was expected to benefit from record refining margins and the E&P segment from the sharp rise in gas prices, the numbers were disappointing. The stand-alone earnings before interest and tax from the O2C business of Rs 18,100 crore, up 41% q-o-q, came in below estimates.
As MRC informed before, in November 2021, Reliance Industries and Saudi Aramco decided to re-evaluate their agreement for the Middle Eastern producer to buy a stake in the refining and petrochemical business of India's biggest private refiner, and both companies would look at broader areas of cooperation due to the changing energy scenario. Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
Reliance Industries is one of the world's largest producers of polymers. The company produces polypropylene, polyethylene and polyvinyl chloride and other petrochemical products.