RIL to invest Rs 1.5L crore over 3 years: Mukesh Ambani
Mumbai: Reliance Industries will invest Rs 1.5 lakh crore across energy, petrochem and telecom businesses over the next three years as it looks at expansions to supplement falling natural gas production.
RIL Chairman Mukesh Ambani, the world's richest energy billionaire, however gave few details on plans for its long-anticipated launch of 4G telecom services.
Reliance, India's fourth-largest company by market value, is eyeing a four-fold increase in revenues from retail business and a sustainable growth in its shale gas business in US, he told company shareholders here Thursday.
The company plans to increase capacity at its existing petrochemical plants and build new ones, drill more wells to boost flagging oil and gas production, open more retail stores and shortly start high-speed broadband service, Ambani said.
"Reliance has embarked on the largest investment programme in its history. We are committed to investing Rs 150,000 crore in the next three years," said Ambani, as his mother Kokila Ambani, wife Nita Ambani and children watched.
"Reliance is making significant investments in all five businesses simultaneously - exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G," he added.
Reliance Jio Infocomm, its telecoms unit, is the only company to have nationwide permits for 4G services but has not started operations even after three years of acquiring the spectrum.
Ambani said he was bullish on the potential for digital services in India, and the unit would more than triple its headcount to 10,000 over next year, but did not say when services will be launched.
Reliance, he said, has invested about Rs 18,000 crore in the telecom venture so far, mostly in acquisition of spectrum and details about "the product and the launch" will be shared at the next Annual General Meeting (AGM) in June 2014.
"Together with our partners, we have charted an ambitious plan for the next 12 months, and we at Reliance Jio foresee making rapid progress over this period towards launching our services across India," Ambani said at the company's 39th AGM.
He had, at the last AGM a year back, announced investment of Rs 1,00,000 crore over 4-5 years, which has now been expanded to Rs 1.5 lakh crore and time-compressed to 3 years.
Describing petrochemicals as the foundation of Reliance's growth strategy over the last 35 years, he said petrochem capacity will increase from 15 million tons per year to 25 million tons, while polyester capacity will rise by 1.5 million tons to 4 million tons per year.
With output at its flagship KG-D6 fields dipping to an all-time low of less than 15 million standard cubic meters, Ambani said the east coast was full of geological challenges but saw bright side in a significant gas and condensate discovery 2 km below the currently producing field.
He said various "production augmentation efforts" were underway to maximise recovery from existing fields in KG D6 block, where output has disappointed expectations.
While the new find "significantly add to resource base," the company plans to being production of coal-bed methane (CBM) from its Sohagpur blocks in Madhya Pradesh by 2015 if subject to "fair regulatory environemnt and timely approvals".
Reliance, the nation's second biggest retailer behind Future group, is aiming to achieve Rs 40,000-50,000 crore in sales from its retail business in 3-4 years.
With Rs 10,000 crore revenue in 2012-13, the retail business achieved cash breakeven, Ambani said.
Reliance operates around 1,500 stores in 130 cities under its retail business that sells consumer goods, including apparel, food and electronics.
Reliance Industries is investing USD 8 billion, the most since it completed a second oil refinery in 2008, in expansion of its petrochemical business to meet rising demand of plastics and polyester.
Also, it is setting up a USD 4 billion petroleum coke gasification project that will produce synthetic natural gas that will replace expensive LNG as fuel, thereby lowering cost. The company has started drilling for new oil and gas pools off east coast with its partner BP Plc.
The company's shares, meanwhile, ended 1.03 per cent down on the Bombay Stock Exchange (BSE) to close at Rs 792.30.
On telecom plans, Ambani said Reliance Jio will "radically transform the lives of 1.2 billion Indians.
"Let me assure sceptics that my continued optimism is based on the significant strides that we at Reliance have taken in the past year - towards engineering and testing a world-class broadband network, and in developing a suite of compelling and synergistic digital services," he said.
The company has finalised the key vendor and supplier partnerships that are required for the initial launch of 4G services, he said.
"Our impatience to reach our goal demands a sense of urgency, but not careless haste," Ambani said, amid speculation that the 4G services may be launched this year.