Evolution & Growth of Reliance : Full Integration along Materials & Energy Value Chain
Nikhil R MeswaniMember of Board
Reliance Industries Ltd
37
Contents
• India: At Inflection Point
• Reliance: History & Evolution
• Reliance: Growth Plan
• Conclusion
38
India : Foundation of Growth
• Democracy
– World’s largest democracy
– Reducing regulatory hurdles as reforms kick-in
• Diversity
– 22 official languages, >1600 dialects
– 7 major religions
– Distinct culture in every province
39Unity in Diversity
• Demography
– 65% of population below 35 years
– Half of population below 25 years
– Growing middle class to touch 50% of population
• Digitisation
– Among top software development centers
– Large English speaking population
– 5 million graduates pass out every year
40
India : Foundation of Growth
Becoming Richer before getting Older
• Development
– Historic political mandate
– Focus on manufacturing, infrastructure
development & job creation
– Emergence of Digital India with 4G
– Swaach Bharat / Clean India to improve
quality of life
41
India’s Hour has Arrived
GDP: US$ 1.8 trillion (2013) US$ 5.0 trillion (2025)
“Growth is Life”
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Founder Chairman
$0.03
8
$61
1977 2014
23%
Total Assets
US$ billion
$0.08
$67
1977 2014
Revenues
$0.0
1
$50
1977 2014
26%
Market Cap
37 Year CAGR
Fortune 500 ranking for 2014: 114
20%
“Growth has no limit at Reliance, I keep revising my vision”
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Textiles Polyester Plastics
Refining &Markets Oil & Gas
Infrastructure & Services
1970s 1980s 1990s 2000s 2010s
FabricsPillows
Fibre & YarnAromaticsLAB
Polymers Transportation fuels
Crude oilNatural gas
TelecomRetail
Massive expansion
“What is good for India is good for Reliance”
“Give youth proper environment. Motivate them. Each one of them has infinite source of energy”
Tenets of Value Creation
• Ability to identify and pursue high growth businesses
• Execution capabilities in setting up world-class projects in record time
• Global competitiveness and leadership position in most businesses
• Low cost manufacturer and quality service provider
• Integration across the value chain
• Financial conservatism and prudent financing norms
• High standards of Health, Safety and Environment
44Average Age ~30 years
“Think big. Think fast and think ahead. Ideas are no one’s monopoly”
““““To continuously grow on a To continuously grow on a To continuously grow on a To continuously grow on a
sustainable basis and be the largest,sustainable basis and be the largest,sustainable basis and be the largest,sustainable basis and be the largest,
the most innovative, the most profitable andthe most innovative, the most profitable andthe most innovative, the most profitable andthe most innovative, the most profitable and
the most admired producer in the worldthe most admired producer in the worldthe most admired producer in the worldthe most admired producer in the world””””
Captive
Availability of
Raw materials
Cost Leadership
Green Field
Expansions /
Acquisition
Market Leadership
Best Practices
Responsible Care
Global Acceptance
R&D
Product / Technology
Leadership
Innovation Leadership
"If you work with determination and perfection, success will follow."
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� Integrated petrochemicals player� World’s largest polyester fibre and yarn producer� Amongst world’s top 10 producers of PP, PTA & MEG
� To become leading player in digital space
� Among the world’s largest deep-water operators
� Operator of two of world’s largest & most complex refineries
� World’s largest refining capacity in one location
Organic Growth Story
�Retail market leader
�More than 11 Mn sq. ft of retail space
“Pursue goals even in the face of difficulties, & convert adversities into opportunities”
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Petrochemical Cycle
Polyester
start up
Polyester /
PP/ PVC/ PE
start up
Cracker/ PET/
MEG/ PTA
start up
Refinery/
Polyester / PP
reinvestment
Acquisition
of IPCL
Refinery
start up
Shale gas
investment
Investments timed to Capture Opportunities
$ 15 Bn new investments in
Petchem
“Meeting the deadlines is not enough, beating the deadline is my expectation”
48Scale, Complexity and Cost to withstand Swings
�Petcoke gasification
�Double petchem capacity
�Feedstock integration
�Launch of digital infrastructure
�World class convention center
New capacity
$ 25 Bn
Reliance in India Today
49Conservative Financial Approach
• Strong operating cash flows
• Net debt 0.01%
• 15% of Indian exports
• 4% of Indian market capitalisation
• Two notches above India’s sovereign credit rating
• First Asian company to issue 100 year bond
US$ bn FY 2014
Revenue 67
EBITDA 6.6
Net Profit 3.7
• Largest recycler of PET bottles in India
– 1.5 billion bottles recycled every year
• All polyester sites are zero waste plants
• Product development geared to environment protection
• Zero discharge at Jamnagar, 100% use of treated effluent
• 0.5 Million mango trees planted at refinery forming largest orchard in the world
• Reliance Foundation supports Education, Health, Rural development and Sports
50
Societal Value Creation
A “Responsible Care” Company
“What is good for World is good for Reliance”
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Global scale of operations, Cost of funds at international prices, Exports to more than 100 countries, Multi ethnic workforce and global standards
To pursue those opportunities
that create value for the
society, consumer, employees
and shareholder in that order
Mukesh AmbaniGrowth aligned to Society’s needs