India’s Reliance unveils priorities for polymers, polyesters

24 April 2009 17:39  [Source: ICIS news]

NEW DELHI (ICIS news)--India’s Reliance Industries Ltd plans to “follow a proactive pricing and operating strategy” in its polymers business during 2009-2010, the company said on Friday.

Listing its priorities in the polymers and chemicals business for 2009-2010, Reliance said it wanted to “ensure low inventories and protect deltas”.

A delta is an indicator of the changing relationship between the price of a product (polypropylene, for example) and the price of its intermediate (such as propylene).

In a presentation, the company said it would leverage high domestic demand for polymers and sustain its high operating margins.

Polymer demand in the domestic market recovered in the fourth quarter of 2008-2009, registering 15% quarter-on-quarter growth due to lower prices, Reliance said.

Polypropylene demand grew by 22% in the fourth quarter, with a revival in the markets for automobiles and consumer durables.

The total demand for all commodity polymers, however, grew by 4% in 2008-2009, Reliance said.

Reliance said the margins were likely to remain under pressure due to capacity additions in the Middle East and China. It foresaw a “challenging global environment with volatile prices and [a] demand slowdown” in 2009-2010.

The company said it would stabilise operations at its 900,000 tonne/year polypropylene plant, which has been set up in a special economic zone at Jamnagar, in Gujarat state.

Regarding its polyester business priorities, Reliance said it would focus on value-added products such as self-coloured, anti-microbial and moisture management yarns.

The company said it also plans to focus on new market segments, such as medical, comfort, defence and transport textiles.

In addition, Reliance said it would also invest in a next-generation structural fibre for the infrastructure sector.

Reliance said it would try to strengthen its position in India and China, both of which are high growth markets. 

The company would work to reduce energy costs at its polyester plants and “slow down capacity additions”, it said.

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By: Naresh Minocha
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