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Reliance Petroleum setting up largest grassroot refinery, says Ambani

Reliance Petroleum is setting up the world's largest grassroot refinery adjacent to Reliance Industries' petrochemical complex in Jamnagar, Gujarat, announced Reliance Industries Limited Chairman Dhirubhai Ambani.

Addressing an extraordinary general meeting in Bombay on Thursday, he declared that Reliance Industries is the promoter of Reliance Petroleum and added that the latter's world class refinery will be globally competitive and profitable in the emerging scenario of the country's petroleum sector reforms.

Ambani assured the Reliance Industries shareholders that company will continue its present growth rate in the future and pointed to the record performance achieved by it in the first half of 1997-98.

Ambani said that in today's competitive world, no business was free of global pressures and that businesses in India were now truly integrated with the world.

He pointed out that there are new challenges in petrochemicals and that overall prices are still depressed. The currency crisis in Southeast Asia added to the turmoil in the petrochemicals industry.

However, Ambani said that he also believed in sustaining globally competitive positions and maintaining the leading market position through backward integration. He added this had helped Reliance deal successfully with different operating environments.

Ambani said the company was pursuing its strategy of reducing the cost of capital and extending debt maturities by tapping the international debt markets. He pointed out that RIL had raised US $405 million (Rs 14.5 billion) in a matter of 72 hours -- a feat unparalleled in Indian corporate history.

The Reliance chairman further said that in July last, Reliance became the first manufacturing company in Asia to tap the sterling market by raising sterling 150 million (US dollar 255 million, Rs 9 billion) in 10-year maturity debt, the highest tenor achieved by any Asian company.

Less than 72 hours after that, Reliance achieved yet another first by privately placing $150 million (Rs 5.4 billion) in 10-year maturity debt with sophisticated European institutional investors.

In the domestic debt markets, Reliance issued non-convertible debentures worth nearly Rs 2 billion and also successfully completed the largest domestic preference capital issue of Rs 2 billion.

Referring to the Hazira plant expansion, he said that Reliance has secured a slot among the top petrochemical producers in the world. The company has commissioned four new plants at Hazira in the past six months, he said.

"The company has just completed major expansion at the Hazira petrochemical complex and raised its capacity from 1.6 million tonnes to over 6 million tonnes per annum," the chairman told enthralled audience.

The chairman also announced that from the next financial year, RIL will declare its financial performance results on a quarterly basis.

Ambani ruled out any threat to the Reliance Telecom in Assam from the United Liberation Front of Asom.

Interrupting the speech of a company member who expressed concern over the fate of Reliance Telecom in Assam, Ambani told the large gathering of shareholders Reliance Industries is doing well in northeast India and it has not faced any threat from ULFA.

''Such things can happen. We should not worry about it,'' Ambani confidently said.

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