Vinod Mathew

Mumbai, Aug 3

RELIANCE Industries Ltd (RIL) will be pumping Rs 3,900 crore into its Hazira petrochemicals plant in the next one year. This is over and above the Rs 42,600-crore capital expenditure in the petroleum refining and E&P sectors announced by Mr Mukesh Amabani, Chairman and Managing Director of RIL, at the company's AGM on Wednesday.

The investment will go into three facilities polyester, ethylene and purified terephthalic acid (PTA) as also some downstream facilities and a captive power plant. RIL has already got the Central Government's nod for this investment that will be completed by next year.

The polyester manufacturing capacity enhancement will be to the tune of 5.5 lakh tonnes, taking up its overall polyester capacity to 20 lakh tonnes a year. This project will be completed during the current fiscal.

The ethylene cracker de-bottlenecking at Hazira will see a 33 per cent capacity expansion from the present 7.5 lakh tonnes a year to one million tonnes. While 50 per cent of this project would be completed during the current fiscal, the rest of the facility would come next year.

As part of the polyester fibre intermediate manufacturing facility expansion, RIL is also setting up a new PTA plant at Hazira with a capacity of 6.3 lakh tonnes a year. This would take up the company's consolidated PTA capacity to 19 lakh tonnes and is scheduled for completion next year.

The company is pursuing a three-pronged strategy to consolidate its leadership in the domestic and international petrochemical markets. The strategy provides for enhancing market share through new capacity additions and acquisitions, increasing profit margins by focusing production of premium-grade plastics and polyesters, and pursuing new technology development initiatives.

Ethylene is the building block for downstream products such as daily use plastics, high-density polyethylene and linear low-density polyethylene. It also serves as precursor to the next stage of petrochemicals building blocks such as mono-ethylene glycol, which is used as an intermediate for production of polyester staple fibre. The de-bottlenecking will also lead to capacity expansion of other building blocks such as propylene.

RIL is also expected to start commercial production at an upcoming 125,000-tpa butadiene plant at Hazira during the current financial year. Butadiene is building block for synthetic rubbers.

(This article was published in the Business Line print edition dated August 4, 2005)
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