Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Investor Presentation (December 2000)
51 slides from Reliance Industries's investor presentation, Dec 15, 2000
Slide 1: Reliance Family Welcomes OPPI Delegates to Jamnagar
Reliance Family Welcomes OPPI Delegates to Jamnagar 15th December 2000 1
Slide 2: Agenda
Agenda ■ Global Plastics Industry ■ Overview of Indian Plastics Industry ■ Prospects & Opportunities in Indian Plastic processing sector ■ About Reliance Group ■ OPPI - Reliance Partnership in the Marketplace ■ OPPI - Reliance Strategic Industry Initiatives via Collaborative Partnership Platform 2
Slide 3: Global Plastics Industry
Global Plastics Industry 3
Slide 4: Plastics
Plastics Plastics •• Global GDP – Global GDP – US US $$ 31 31 Trillion Trillion •• Value Value of of Chemical Output-- US Chemical Output US $$ 1.6 1.6 Trillion Trillion -5% -5% ofof Global Global GDP GDP •• Commodity Commodity Plastics Output – Plastics Output – US US $$ 90 90 Billion Billion –– 5.
Slide 5: Global Demand for Major Polymers
Global Global Demand Demand for for Major Major Polymers Polymers 180 Polymer Growth - ~ 2 times Global GDP 162 MMTA 160 CARG: CARG: 140 Polymer: Polymer: 5.2% 5.2% 126 120 PO: PO: 5.5% 5.5% 120 105 100 100 88 76 80 80 67 58 60 40 20 0 1995 1997 1999 2000 2005 Polymer Demand Polyolefin Demand Polyol
Slide 6: World Polymer Capacity
World World Polymer Polymer Capacity Capacity 139 Figures in million tpa 126 106 79 38 1986 1990 1995 1998 1999 Capacity expanding by 10.5% p.a. 6
Slide 7: Changing Face of the Global Plastics Industry
Changing Changing Face Face ofof the the Global Global Plastics Plastics Industry Industry Beyond 1945-50 1950-79 1979-91 1991-99 2000 Rapid USA, NWE Emergence Emergence India & its Neighbors Growth in and of Middle of ASEAN, West East the US emergence East, China, Qatar China and NWE of Japan Korea
Slide 8: Asia Pacific: The Changing Dimension
Asia Asia Pacific: Pacific: The The Changing Changing Dimension Dimension 26% share in Global GDP of USD 31 Trillion S.America 5% W.Europe 29% N.America 29% E.Europe 5% Africa/M.E 6% Asia/Pacific 26% 8
Slide 9: Asia Pacific: High Growth Performer
Asia Asia Pacific: Pacific: High High Growth Growth Performer Performer Asia is one of world’s fastest growing regions Real GDP growth: Asia (w/o Japan) vis-à-vis World Asia (w/o Japan) 9.6% 9.3% 9.0% World 8.2% 6.6% 6.1% 3.9% 4.2% 4.1% 3.8% 3.7% 2.6% 3.0% 3.2% 1.8% 2.0% 1993 1994 1995 1996 1997 199
Slide 10: In Asia Pacific, India and China are the Growth Centers
In In Asia Asia Pacific, Pacific, India India and and China China are are the the Growth Growth Centers Centers Demand Share of A/P in World Demand Share of India & China in A/P 38% ROAP India & China 100% 36% 90% 34% 80% 32% 70% 30% 60% 28% 26% 50% 24% 40% 1986 1991 1993 1995 1997 1999 1990 1991 19
Slide 11: Overview of Indian Plastics Industry
Overview of Indian Plastics Industry 11
Slide 12: Post Reforms Polymer Demand: Spectacular Growth
Post Reforms Polymer Demand: Spectacular Growth 5000 PP CARG 1980-91 1993-99 LD/LLD 8% 10% 4000 HD 12% 14% Linear PE 13% 16% PP 24% 23% 3000 PVC 11% 10% PS 18% 16% GDP 6% 7% 2000 PS HDPE 1000 PVC LD/ LLDPE 0 FY 80 FY 81 FY 82 FY 83 FY 84 FY 85 FY 86 FY 87 FY 88 FY 89 FY 90 FY 91 FY 92 FY 93 FY 94 FY
Slide 13: Consumption trebling every decade
Consumption trebling every decade cycle getting even shorter 12,500 Figures in kT 3,003 902 290 FY 80 FY 90 FY 99 FY 2010 To cross 12.5 Million tonnes by 2010 13
Slide 14: India is one of the highest-growth centers of polymer demand
In In fact, fact, India India is is one one of of the the highest- highest- growth growth center's center's of of polymer polymer demand demand ... ... Cumulative annual growth in Polymer demand World North Asia / China India Am erica Pacific* 1996/90 5.5% 4.8% 8.4% 19.4% 13.7% 1999/97 3.5% 3.3% 2.3
Slide 15: Low per capita consumption in India will be the major driver of demand
Low Low per per capita capita consumption consumption in in India India will will be be the the major major driver driver of of demand demand …… Polymer Per capita Consumption, 1999/2000 World Average (20) E. Europe (10) N.America W. Europe (65) (117) China (15) India (3.0) SEA (10) L. America (18)
Slide 16: High growth in these diverse sectors
High High growth growth in in these these diverse diverse sectors sectors Polymer Consumption in Major Sectors kTA Market Size Growth Rate 2000 (%) Wire & Cables 210 16% Consumer Packaging 1020 14% Bulk packaging 420 14% Building & Construction 320 16% Transporation 110 13% Plasticulture 170 18% Con
Slide 17: India the 3rd largest polymer consumer by 2010
… … and and will will make make India India the the 3rd 3rd largest largest polymer polymer consumer, consumer, globally globally by by 2010 2010 Global Rank in Polymer Consumption Rank Country 1988 Country 2000 Country 2010 2010/ (MMT) (MMT) (MMT) 2000 1 USA 16.6 USA 27.3 USA 38.9 3.6% 2 Japan 6.4
Slide 18: However To Achieve This ...
However To Achieve This ... … Investments in downstream Fabrication Capacity Has to Keep Pace 18
Slide 19: Why importance to plastic processing industry?
Why importance to plastic processing industry? ? Investment in Downstream not in sync with upstream capacities Capacity growth has been 1.4 times consumption growth – required 2 times Post WTO - threat of fulfillment of the demand through imports - could hit our domestic market … accelerate investme
Slide 20: Plastic Processing Industry - Vital Statistics
Plastic Processing Industry - Vital Statistics Upto Mar-2000 No. of Units 21,700 No. of Machines 49,500 Installed Capacity (kT) 7,400 Consumption (Virgin + Recycled) 4,100 Investment (Rs. Crs.) 9,000 Average operating rate 55% No. of Machines (CARG) - 9% Installed Capacity (CARG) - 14 % 20
Slide 21: Significant opportunities in the Indian Plastic Processing Sector
Significant opportunities in the Indian Plastic Processing Sector Unit 1999 2010 Reqd. Installed Nos. 49,500 101,100 51,600 Machines Investm ent in Processing Rs. Crs. 9,000 27,585 18,585 Machinery Project Rs. Crs. 15,525 65,970 50,445 Investm ents ~Rs. 18.6 bn required in hardware alone and another
Slide 22: Sectoral new machine requirement
Sectoral new machine requirement Addl. Sect or 1999 2010 Machines Inject ion Molding 27,600 52,200 24,600 Blow Molding 4,400 11,700 7,300 Ext rusion 14,000 29,400 15,400 Ot hers 3,500 7,800 4,300 Tot al 49,500 101,100 51,600 Need to add ~52,000 new machines by 2010 22
Slide 23: Reliance Group
Reliance Group 23
Slide 24: Reliance Group
Reliance Group Reliance Industries Ltd. (RIL) India’s largest private sector company and a global ranking producer of petrochemicals Reliance Petroleum Ltd. (RPL) World’s largest grassroots refinery, accounting for over 25% of India’s total refining capacity (27 MMTA) Power, Telecom, Infrastructure,
Slide 25: Group Financials
Group Financials Assets US $ 15 billion Revenues US $ 15 billion Cash Profit US $ 2 billion Net Income US $ 1 billion 25
Slide 26: Reliance Industries Limited Financials - 1999-2000
Reliance Industries Limited Financials - 1999-2000 1998-99 1999-00 Rs. Crs. $ Mn. Rs. Crs. $ Mn. Growth Sales 14,553 3,430 20,301 4,654 40% Op. Profit 2,710 639 4,059 931 50% PBDIT 3,318 782 4,746 1,088 43% Net Profit 1,704 402 2,403 551 41% Record performance despite steep increase in feedstock pri
Slide 27: Growth Strategy
Growth Strategy CAPTURING VALUE ACROSS FULLY INTEGRATED CHAIN POWER TEXTILES PLASTICS POLYESTER FIBER INTERMEDIATES AROMATICS CHEMICALS PETROLEUM PRODUCTS OIL & GAS Well head to fabrics and plastics. 27
Slide 28: Growth Strategy: Emerging Opportunities
Growth Strategy EMERGING OPPORTUNITIES LIFE SCIENCES INFORMATION TECHNOLOGY RETAILING EPC SERVICES INSURANCE FOOD TRANSPORTATION ENERGY TELECOM Core themes - size of opportunity, play on Indian economy, annuity 28
Slide 29: Leadership Status
Leadership Status ! Among top 10 producers globally of all its major products ! Unique vertical integration from crude refining to fabrics and plastics - capturing value addition of over 1000% ! Over 95% of revenues derived from domestic market ! Market Leaders - market shares ranging between 40% an
Slide 30: Strategically Located Facilities
Strategically Located Facilities OIL REFINERY* & PETROCHEMICAL COMPLEX 7,500 Acres Jamnagar, Gujarat India INTEGRATED TEXTILES COMPLEX Naroda, Gujarat 100 Acres Mumbai PLASTICS & PETROCHEMICALS COMPLEX (Bombay) Hazira, Gujarat 1000 Acres BAY OF BENGAL ARABIAN SEA FIBERS & PETROCHEMICALS COMPLEX Pata
Slide 31: Jamnagar Complex Highlights
Jamnagar Complex Highlights •Largest investment ever made at a single location in India •Area : 7500 Acres •Concreting (1700 Cu. KM) :Equivalent to 140 Air India buildings in Mumbai •Structural work (267 KT) : Equivalent to 16 Eiffel Towers •Roads (150 KM) : Can connect Mumbai-Pune •Largest Rail & R
Slide 32: RIL Polymer Business
RIL Polymer Business 32
Slide 33: Reliance - The largest Indian Polymer Producer
Reliance Reliance -- The The largest largest Indian Indian Polymer Polymer Producer Producer Total Capacity FY2000: 4,200 kTA 300 PVC, Hazira IPCL RIL 400 22% 41% PE, Hazira Others 15% 600 PP, Jamnagar NOCIL 400 PP, Hazira 1% Haldia GAIL 15% 6% with plans for major expansions 33
Slide 34: No. 1 Polypropylene Producer in India
No. No. 1 1 Polypropylene Polypropylene Producer Producer in in India India 1999 Total Capacity - 1,370 kTA IPCL 12% HPL 15% Largest PP plant in the world at a single location: Reliance’s PP plant at Jamnagar, India - 600,000 m.t. / year. Reliance 73% 5th Largest PP producer in the world … strong co
Slide 35: Challenges for The Polymer Industry
Challenges for The Polymer Industry • Six Forces Changing the industry •Increasing globalisation of markets •Social demands for higher environmental performance •Demanding financial market for increased profitability & capital productivity •Higher customer expectations •Increased collaboration •Chan
Slide 36: Many Strategic Prescriptions are available
Many Strategic Prescriptions are available •Production •Markets Globalise •R & D •Tech. Support Objectives “ Co-opete” •Cooperation Grow revenues •Value Net Lower costs •Products Reduce competition Differentiate •Markets •Applications improve Margins •Regions Increase earnings •Commodity Specialise
Slide 37: OPPI - Reliance Partnerships in the Marketplace
OPPI - Reliance Partnerships in the Marketplace 37
Slide 38: OPPI - Reliance Synergies
OPPI - Reliance Synergies OPPI Reliance • Large representation • Largest plastics of the Indian Plastics producer in India, Processing Industry ~ 35% of the industry 1.7Mn T (Approx. Rs. consumption 7000 Cr.) (Turnover around • ~ 54% market share Rs.7700 Cr.) of processing industry • Platform for •
Slide 39: Reliance - Customer Integration ...
Reliance - Customer Integration ... PRODUCT PRODUCT PRODUCT TRIALS/ TRIALS/ EVALUATION EVALUATION // CONCEPT DESIGN DESIGN PROCESSING PROCESSING TESTING TESTING QUALITY QUALITY VENDOR VENDOR NODAL NODAL AGENCY AGENCY BIS, BIS, ASSUARANCE ASSUARANCE DEVELOPMENT DEVELOPMENT CFTRI CFTRI APPROVAL APPROV
Slide 40: Partnership for Success
Partnership for Success Reliance Q Nodal Agencies/ Research Institutes/ FIs PROCESSORS End-Users 40
Slide 41: Some Projects currently being jointly developed / marketed by RIL
Some Projects currently being jointly developed / marketed by RIL Plastic Furniture Market PP Pipes ‘Tendu’ leaves / PVC as wood tobacco packaging replacement Edible Oil packaging Leno Bags for Onion Raffia Cloth for & Potato Packaging wrapping 41
Slide 42: RIL - Your total Solution provider
RIL- Your total Solution provider • Concept to Reality • Supply Chain • Service Chain Adding Value to your products 42
Slide 43: OPPI - RIL Strategic Industry Initiatives via Collaborative Partnership Platform
OPPI - RIL Strategic Industry Initiatives via Collaborative Partnership Platform 43
Slide 44: Upgradation of Economies of Scale
Upgradation of Economies of Scale Examples: Unit Size In kTA China / India ASEAN BO PP Upto 15 100 Injection M olding Upto 0.6 6 Small sized units unlikely to survive global competition at low tariffs and free imports 44
Slide 45: Development Issues
Development Issues • Technology upgradation/transplantation • Development of new applications • Introduce new products • Development of mould and tooling industry • Accelerate R & D efforts • End User/OEM networking 45
Slide 46: Build Strategic Relationships
Build Strategic Relationships ■ Between educational institutions and business enterprises ■ Convert basic research into commercially viable technology ■ Produce useful products Research Institutio ns Consumers Polymer Manufacturer s Polymer Processors Speed-up R& D process 46
Slide 47: Environmental Issues
Environmental Issues • Leverage ICPE to interface Green Brigade • Waste Management Strategies • Recycling & pilot project • Responsible Care • Natural Resources Conservation (Wood Substitution) 47
Slide 48: Regulatory Issues
Regulatory Issues • Rationalisation of duties/taxes/tariffs • WTO/Globalization related challenges • Restructuring of the processing industry • Intellectual Property Rights • Competitive cost of capital Unfriendly polices will sound the death-knell for the industry • Labour policy Reforms 48
Slide 49: E-Initiatives
E-Initiatives • E-Enabling Businesses • Entrepreneur Development Programme • Enterprise Resources Planning • Supply Chain Connectivity 49
Slide 50: To Sum Up
To Sum Up All collaborative initiatives will emerge into A Win-Win Situation Case for all stakeholders in the New Millenium 50
Slide 51: Thank You!
t, Thank You!
Reliance Industries — Investor Presentation (December 2000) on 6ix