Reliance first-half petchem production rises 7%

18 October 2007 16:51  [Source: ICIS news]

MUMBAI (ICIS news)--Reliance Industries Limited’s (RIL) petrochemicals production increased 7% to 9.8m tonnes for the first six months of fiscal 2007-2008 ended 30 September, it said on Thursday

"During the first half of the year, high feedstock prices impacted the petrochemicals business. However, strong demand from the end-user segments allowed for better prices across the value chain," RIL said.

The business also benefited from higher volumes through the integration of Indian Petrochemicals Corp Limited (IPCL), it added.

The company’s polyester business, which includes polyester filament yarn (PFY), polyester staple fibre (PSF) and polyethylene terephthalate (PET), increased 7% to 776,000 tonnes, RIL said.

"Production from the new polyester facility has been placed successfully in the market. RIL now has a domestic market share in excess of 51% in the polyester segment," it added.

RIL has maintained its focus on specialty products, which now account for 55% of PSF and 40% of PFY production, it said.

The company’s polyester intermediates, which include paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG) production grew 14% to nearly 2.4m tonnes.

"This significant increase in production is attributed to the new 730,000 tonne/year PTA plant at Hazira [in West Bengal state], which was commissioned in the second quarter of 2006-2007," Reliance said, adding its domestic market share in polyester intermediates stood at 78%.

"Polyester witnessed exciting demand growth in the domestic market at 20% over the corresponding period of the previous year," RIL said.

Robust growth at 28% was also seen in PET, and demand for partially oriented yarn (POY) grew 24%, while that for PSF grew 12%, it said.

"The increased demand for polyester was driven by robust downstream investments during the previous year," it added.

RIL’s agreement with Malaysian polyester producer Hualon will help its increase manufacturing capacity 25% to 2.5m tonnes/year.

"With this acquisition, RIL’s global market share in polyester fibre and yarn will exceed 7%," it said.

Reliance’s polymers business witnessed sustained growth, with aggregate production volumes of polypropylene (PP), polyethylene (PE) and polyvinyl chloride (PVC) growing 6% to 1.66m tonnes/year, it said.

The increase in production was attributed to the full impact of the new PP plant at Jamnagar in Gujarat, and to the scheduled maintenance shutdown of the Hazira cracker and downstream plants a year ago, it added.

RIL continues to be India’s largest polymers producer with a domestic market share of 69%, it said.

RIL produced 9% more ethylene at 931,000 tonnes and registered a rise of 8% in propylene production at 368,000 tonnes during the first six months of the fiscal year, it said.

The domestic polymers market witnessed demand growing at 16%. Robust growth was seen across polymers - PP demand grew 15%, PE 18% and PVC 15%, it added.

"The increased demand came largely from end-use segments like flexible packaging, infrastructure, cables, consumer durables and agriculture," RIL said.

Polymer margins improved primarily due to gas-based crackers outperforming naphtha-based crackers, which were impacted by high crude prices, it added.

In the chemicals segment, during the first six months of the fiscal year, linear alkyl benzene (LAB) output remained unchanged at 80,500 tonnes, while it manufactured 21% more butadiene at 86,000 tonnes.

RIL expects margins to remain stable in the short term due to a lack of capacity additions and rising demand.

However, incremental capacities coming on stream in the Middle from 2008 onwards could have an impact on operating rates and margins, it added.


By: Divya Chowdhury
+65 6780 4359



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