No plans to merge IPCL with RIL: Mukesh

Indian Petrohemicals Corporation Limited Chairman Mukesh Ambani has ruled out any immediate plans to merge the company with Reliance Industries Ltd.

"Various options are open but at this stage we have no plans to merge IPCL with RIL," he said while addressing IPCL shareholders at the company's 36th annual general meeting (AGM) held here today.

This was Mukesh's first visit to the city after the separation with his younger brother, Anil Ambani, on June 19.

He also said IPCL would expand its capacity at various facilities with an investment of Rs 485 crore. The expansion projects initiated by the company, in view of growing demands in the international markets, are likely to be completed by mid-2006.

Meanwhile, the shareholders of IPCL approved the board of directors' proposal for a 45 per cent dividend, which would result in a payout of Rs 112 crore.

The company had reported a net profit of Rs 786 crore for the financial year 2004-05, which is a seven-fold increase in net profits from Rs 107 crore in 2001-02, resulting in earnings per share to Rs 31.65.

"The global petrochemical industry today presents a picture of buoyancy. Demand is strong, supply is tight and inventories are low. Strong economic growth, particularly in the US and China, has contributed to optimism in industry. Demand in domestic markets is also envisaged to grow strongly, on the back of increases in per capita income," said Mukesh.

However, the company has not announced its plans to raise money from the finance markets.

The expansion projects include increase in the Vadodara cracker capacity by 12,000 tonne per year of ethylene capacity, expansion of Benzene capacity by 14,000 tonne per day and expansion of PVC plant to 3,15,000 tonne per year with corresponding increase in Vinyl Chloride Monomer plant capacity. At present, PVC plant of IPCL has capacity of 2,45,000 tonne per annum at Gandhar complex.

During 2004-05, the company completed three expansion projects worth Rs 125 crore.

In view of increasing gas prices in the international markets, IPCL has migrated its Captive Power Plant at Gandhar from naphtha to natural gas.

Commenting on the market opportunities for IPCL, Mukesh said, "Sectoral growth in automobiles, appliances, packaging, agriculture, water management, housing and infrastructure will lead to strong growth in IPCL's primary business of polymers."