 "RIL plans to invest Rs 1.5 lakh cr over 3 years")
Addressing shareholders at RIL’s 39th annual general meeting (AGM) in Mumbai, Ambani said most economies were faced with a slowdown, high unemployment and lack of visible growth triggers, but RIL had the conviction to look through the cycle and make investments. “Based on our strong faith in India’s potential, we are making investments in excess of Rs 1,50,000 crore over the next three years. It is our belief that our new projects will come on stream as the global economy recovers; margins in our core businesses are on an upswing,” he said.
Replying to shareholders’ question on workforce, he said: “We now have 35,000 employees; we are preparing to take this strength to 120,000 in the next three years.”
At last year’s AGM, Ambani had announced an investment of Rs 1 lakh crore in five years. According to a
Deutsche Bank AG report, issued on March 11, RIL would invest $11 bn in exploration & production, $4 bn in refining, $8 bn in petrochemicals, $3 billion in infocom and $1 bn in retail.
The company has set aside around 15 per cent of its capex plan for telecom and retail segments, while 85 per cent would be for oil, gas and petrochemical businesses.
For 2012-13, RIL reported a turnover of Rs 371,119 crore and net profit of Rs 21,003 crore. It also achieved exports of Rs 239,226 crore — the highest ever — to 116 countries, which accounted for 64 per cent of turnover. RIL has cash and cash equivalents of around Rs 80,000 crore. “Our new investments across manufacturing, retail and 4G digital services will spur our growth in India,” Ambani said on Thursday.
The company, he said, planned to increase its petrochemical capacity from 15 million tonnes per annum (mtpa) to 25 mtpa and had undertaken the single largest expansion in the petrochemicals sector. In polyester, it was expanding capacity by 1.5 mtpa to reach four mtpa. After the expansion, the company was likely to figure among the top five producers globally in terms of earnings, he added.
“RIL is building one of the world’s largest ethylene crackers, taking advantage of refinery integration at Jamnagar. This project will be commissioned in the second half of 2015-16 and would nearly double the ethylene capacity to 3.3 mtpa,” Ambani said.
He added RIL’s partnership of about two years with BP had achieved its first success in the MJ1 well of the KG-D6 block, exhibiting very good potential during the flow test. “All efforts shall be made to expedite the appraisal and development of this discovery.”
“Various production augmentation efforts are underway, including to maximise recovery from the existing fields in the KG-D6 block. Additional hydrocarbon resources in the KG-D6 and NEC25 blocks are planned to be developed over the next few years, subject to necessary regulatory approvals, he said.
RIL is also set to proceed with the development of two coal-bed methane blocks in Sohagpur, Madhya Pradesh, despite various execution and infrastructure challenges. It is targeting first gas in the next two years. The company is awaiting approvals to build a pipeline to connect to the major pipeline grid of the country for immediate utilisation of this gas by various consumers.
“We believe production from our projects would significantly help India reduce energy imports, with savings of nearly $100 billion,” Ambani added.
On the retail front, he said, the business would undertake multi-fold growth in the next few years by delivering over 50 per cent revenue growth in various format sectors year-on-year, achieving a revenue target of Rs 40,000-50,000 crore.
“Our multi-format strategy is paying huge dividends with most formats having positioned themselves as market leaders and poised for strong growth in the future,” he added. RIL operates around 1,500 stores across 130 cities of India and covering an area of over nine million square feet. RIL’s telecom venture, Reliance Jio Infocomm, Ambani claimed, would transform the lives of 1.2 billion Indians. “I see a new India that will create a whole new generation of entrepreneurs leveraging these digital assets. It will use digital currency, instead of paper money for a more secure and more convenient way to transact. Teachers, students and researchers from far-flung areas can connect with each other, and lift the level of education and knowledge creation to a completely different plane,” he said.
RIL has more than quadrupled its Reliance Jio team — from less than 700 last year to over 3,000 professionals on Thursday. And, over the next year, it plans to grow the team further to a national strength of nearly 10,000.
The company has also finalised the key vendor and supplier partnerships required for the initial launch of services.“Since all investment in our core energy and material businesses are in brownfield sites, these will be among the most competitive projects being executed anywhere in the world,” Ambani said.