Reliance Industries Ltd (RIL) said on Wednesday that it has commenced implementation of its planned world-scale projects in India across the polyester chain.
“This is RIL’s largest capacity expansion in the sector and is aimed at consolidating its position as the world’s largest integrated polyester producer,” RIL said in a press statement.
While RIL did not indicate any details of the investment plans, RIL chairman Mukesh Ambani had announced at the company’s last AGM that in the next five years, the total investment in all the new polyester and petrochemical manufacturing facilities by RIL will be the largest in this sector to be made anywhere in the world.
RIL is sitting on huge cash and it is estimated to peak up to $15 billion (R67,500 crore).
The company has secured a cash commitment of $7.2 billion (R32,400 crore) for a 30% stakes in 23 of its oil and gas fields to UK energy major, BP Plc. Besides, at the end of December 31, 2010, RIL had a cash worth $7.1 billion on its books and while announcing the deal with BP, Ambani had said the $7.2 billion inflow from BP will figure in RIL’s books by 2011-12.
“The global supply constraints, substantial price increase and uncertain outlook for cotton availability is creating considerable substitution opportunities for polyester products like polyester filament yarn (PFY) and polyester staple fibre (PSF),” the RIL release said.
RIL said it is expected that polyester will capture around 80% of incremental global fibre demand of around 2.9 million tonnes per annum over the medium to long term.