File photo of Mukesh Ambani.
Reliance Industries Limited (RIL) Chairman and Managing Director Mukesh Ambani today said the energy and petrochemicals major planned to invest more than Rs 180,000 crore during its current three-year investment cycle.
"We are currently at the mid-point of the largest investment programme in Reliance's history," he told the 40th Annual General Meeting (AGM) of RIL here.
"The next two years, 2014-15 and 2015-16, will see us focussed on executing and progressively bringing these projects on-stream in petrochemicals, refining, retail and Jio (digital services). The year 2016-17 will be the first full year in which the complete benefits of all these investments will be available to our shareholders, consumers and the society. The next three years are transformational in RIL's journey," he said.
Mr Ambani noted that RIL had, in the past 37 years since becoming a listed company, invested Rs 240,000 crore.
"By the time we finish four decades since our first public offering we will again be a radically different company. We hope to accomplish as much in the next three years as we have achieved in the past 37 years," he said.
He told the shareholders that RIL had, in the last year, become the first company in the private sector to record revenues of over Rs 400,000 crore, touching its highest ever consolidated revenue of Rs. 446,339 crore and net profit of Rs. 22,493 crore.
He said the company had achieved its highest ever exports of Rs. 275,825 crore, accounting for 69% of its turnover. It is India's largest exporter, accounting for 14.7% of the total exports from the country.
Mr Ambani said RIL accounted for 4.7% of India's total indirect tax revenues and the largest income tax payer amongst private sector companies.
He said RIL would strengthen its plastics business by building a new integrated cracker capacity which will rank amongst the most competitive being built in the world in this decade. The company will also add to the aromatics chain by upgrading refinery light-ends into new paraxylene facility and alongside commission downstream PTA and polyester capacity.
"We are also building a new business in rubbers capitalising on feedstock integration and rapidly growing domestic markets," he said.
Mr Ambani said the company had brought on-stream the polyester filament yarn facility of 395,000 MT capacity at Silvassa, which would strengthen India's position as a textile major.
He said the company had also commissioned a new world-scale facility of poly-butadiene rubber (PBR) of 40,000 MT capacity at Hazira, taking its total capacity to 115,000 MT.
"We are also making rapid progress on India's first butyl rubber joint venture project of 100,000 MT capacity at Jamnagar," he said.
He said that the company's refining and marketing business had processed more than 68 MMT of crude at the Jamnagar refinery.
"We continue to be the largest refiner in India and operate the largest refinery in the world at a single location. Jamnagar refinery continues to provide the much needed energy security for India. Today, a significant quantity of our products are exported to the world markets, from Australia to Brazil and the USA," he said.
He said the largest coke gasification project in the world being set up at Jamnagar would convert low-value petroleum coke from the refinery to useable, high-value fuel, making Jamnagar energy-efficient and self-sufficient.
Turning to the oil and gas business, Mr Ambani said the KGD6 fields had, over the past five years, supplied more than 2.3 trillion cubic feet of natural gas and about 25 million barrels of crude oil to various consumers in the country. They have substituted over US$ 33 billion of energy imports – saving the country precious foreign exchange, he said.
He said the RIL-BP joint venutre had stepped up its exploration campaign in the East Coast and made further discoveries in KGD6 and CYD5 blocks.
"Timely regulatory approvals and market-based gas prices are the key to developing these resources. We along with our partners BP and NIKO have initiated the arbitration process seeking implementation of the 'Domestic Natural Gas Pricing Guideline 2014'," he said.
"We have an ongoing arbitration with Government on the issue of disallowance of cost recovery. We will endeavour to work with the Government for both the arbitrations to achieve prompt and efficient resolution on the matter," he said.
"Last year, we saw several false allegations, outright lies and half-truths against this business. We addressed all of the allegations with the truth and facts pro-actively. We have with your support weathered these ill-informed campaigns. We have put out on social media platforms the facts for everyone to see," he said.
Mr Ambani said RIL was proceeding with the development of two coal bed methane blocks in Sohagpur, Madhya Pradesh and was on track to start production from them in 2015-16. "We have received the authorization for building natural gas pipeline from Shahdol in Madhya Pradesh to Phulpur in Uttar Pradesh to transport gas from our CBM blocks. This pipeline will connect to major pipeline grid of the country for immediate utilization of this gas by various consumers," he said.
"With the development of CBM Blocks, Reliance will become the largest player in the unconventional energy sector in India," he said.
Mr Ambani had, during the last year, become India's largest retailer by revenues, operaing 1691 stores covering an area of 11.7 million square feet across 146 cities.
On Reliance Jio, the company's digital services initiative, Mr Ambani said limited field trials for broad band services were already under way and expanded trials would commence in August across multiple cities and continue till early 2015.
"The year 2015 will see the phased launch of Reliance Jio across India. Millions of customers would have started to use the digital platform and services in their daily lives. The fruits of the tremendous value created by this Rs. 70,000 crore initiative would start to flow. This value creation would be on a base of 1.25 billion Indians, with an opportunity to include all sections of our society in the exciting promise of the digital economy," he said.
"Reliance Jio will be one of the largest job-creating and wealth-creating business initiatives in India," he said.
Mr Ambani said the network and broadband services would be ubiquitous - initially covering all states, all the 5000 towns and cities accounting for over 90% of urban India and over 215,000 villages in India. Eventually, the network will encompass each of India's over 600,000 villages.
"Besides providing the base broadband connectivity to all citizens, the digital infrastructure and digital services have the potential to add significantly to India's GDP growth. Millions of new entrepreneurs and jobs can be expected to spring up in secondary and tertiary sectors in new and innovative digital enterprises and services," he said.
"The acquisition through an Open Offer of Network 18 Media & Investments Limited and its subsidiary TV18 Broadcast Limited by Independent Media Trust, the sole beneficiary of which is Reliance Industries Limited, is one aspect of the digital services play. This will differentiate and strengthen our 4G business at the unique intersects of telecom, web and digital commerce, and the media through a suite of premier digital properties," he added.
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