Archive for June, 2013

RIL To Rebuild Its Textile Brand Vimal

June 25, 2013

In order to infuse life in its heritage textile brand, Vimal, Reliance Industries Limited (RIL) will reinforce its presence in the fashion and lifestyle sector of the country. It will cling unto the fabric segment with a range of new offerings from the brand.

To create a unique place in the cluttered fabric environment of the country for Vimal, Mukesh Ambani led RIL is refurbishing the entire brand by giving it a new look and roping a new creative agency for the same purpose. “We are taking a new and fresh look in the area of fabrics which comprises nearly 80 percent of the textile business. Since the apparel segment is going to take a longer time to grow, it will be fabrics which will continue to be our mainstay,” said Mr. Anand Parekh, President,Textile Divisions, RIL. He added that the company intends to come up with several innovations in the area of fashion and value added fabrics. The new creative agency will revive the brand’s value by putting fresh ideas to promote the brand in the fabrics category. “Every year we try to do something extra in the fabric area and with a new agency we will also be unleashing a new campaign in the next 3-4 months with the launch of several types of fabrics in formal wear and fashion,” added Parekh.

According to the current market trends, the yester-year tailored fabrics are highly in demand. The textile players have moved back to the bespoke or customized model of tailored fabrics. Mr. Parekh feels that fabrics segment has unexplored opportunities for tailoring in areas of ethnic wear and jackets.Vimal is in plans to commence a dedicated line of fabrics sub branded as “Fashion” fabrics for producing ethnic wear, blazer and sportswear.

Vimal is also further planning to expand its store range. Currently, the textile brand owns 20-exclusive stores, 1,700-franchise stores, out of which 400 stores exclusively stock suiting, shirts, trousers and accessories of Vimal. “Expanding through exclusive franchises has been tough. Today, we have a presence across multi-brand retail formats,” said Parekh. The company also imparts tailoring services at all its stores, where the professionals are trained by experts from Italy.

“With the demand for tailored clothing on the rise, Reliance is rebuilding Vimal with renewed focus and trying to make acomeback in the fabric segment,” said Saloni Nagia, President, Technopak.

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RIL Plans To Become Largest Global Polyester Producer

June 13, 2013

In the 39th Annual General Meeting of Reliance Industries Limited (RIL), Mukesh Ambani discussed his plans to increase their polyester production capacity from the current 2.5 million tons per year (tpy) to 4 million tpy. He further added that the company would invest Rs 1500 billion over the next three years spread across all its five business segments – exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G.

Reliance had set a stupendous fleet to become a market player in oil and gas in the past years. But now recognizing the increasing demand in the industry, it is willing to accelerate its polyester manufacturing capacities. It has commenced the planned implementation of world-scale projects in India across the polyester chain. RIL has the largest capacity to expand in this sector and it is aiming to reinforce its position as the largest polyester producer across the world. Mukesh Ambani laid out the roadmap for its massive expansion. “These investments in new polyester capacity will also strengthen India’s position as a global manufacturing hub for textiles and fibre. It is expected that polyester will capture around 80 percent of incremental global fibre demand of around 2.9 million tons per annum over the medium to long term,” RIL said. Mukesh Ambani said the company is currently focusing solely on increasing its production capacity by 1.5 million tpy from the current rate of production. He also added that an additional polyester filament yarn plant will be set up at Silvassa September in this year. This plant will function in an eco-friendly way, producing zero-waste from day one. In addition to this, a polyester resin plant would be set in Dahej which will alleviate RIL to become seventh largest manufacturer of polyester resin in the world. Capturing the polyester market is a good move for RIL owing to the market scenario currently. There are global supply constraints, inflation and variable outlook for cotton availability has led to creation of opportunities for polyester products like polyester filament yarn (PFY) and polyester staple fibre (PSF). RIL in this case has an upper hand as it has strong manufacturing presence in India and Malaysia. It also an unique position in the market owing to its cost leadership and wide range of products.

According to the plans of RIL in the first half of 2014-15 would commission one million ton purified terephthalic acid (PTA) plant, followed by another 1 million ton plant within the next six months. This will elongate the company’s total capacity to 4.3 million tpy , making the company the third largest PTA producer in the world. Mr.Ambani also added that RIL will double its production of paraxylene (PX) capacity in near future and become world’s second largest producer of PX. PX is used as a feedstock for PTA and polyester manufacturing.

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Reliance Retail to Become Major Growth Engine for RIL

June 7, 2013

Reliance Retail, the retail arm of Reliance Industries Limited (RIL) is slated to become one of its most profitable sectors. Mukesh Ambani, Chairman of RIL, in the company’s 39th Annual General Meeting (AGM) held on 6th June shared this above plan with his shareholders. He said, “We want to make retail business as one of our growth engines over the next few years. I am confident that our retail business would undertake multi-fold growth in the next few years by delivering over 50 percent revenue growth in various format sectors year-on-year and is on its way to achieve revenue target of Rs 40,000- 50,000 crore as shared by me in our last AGM.”

He further added that the results will demonstrate the underlying strength of our business and strategies to offer unparalleled choice of products and services to Indian customers. As a part of its expansion strategy, RIL has added 184 stores across format sectors. It is also planning to capture the consumers in tier-2 and tier-3 cities. Currently, the company owns around 1,500 stores in 130 cities across the country. With Rs.10,000 crore revenue in 2012-13, the retail business achieved cash breakeven said Ambani. It aims to become the largest retail chain in India. “Our multi-format strategy is paying huge dividends with most of the formats having positioned themselves as market leaders and is poised for strong growth in the future.” added Ambani. The second largest retail chain looks after consumer goods like apparels, jewellery, footwear, electronic appliances and food.

Reliance Retail is introducing novel ideas for promotion. Recently, Reliance One loyalty programme gathered over 13 million customers and contributed 65 percent to the sales during the year. “The value format has further consolidated its position as the largest grocery retailer in the country.” Ambani said. Reliance mart, the grocery arm of retail chain has introduced cash and carry concept, under which local traders and institutions are provided with complete packages which benefit them in price, service and range of products.

“Our Digital and Xpress stores continue to be the benchmark in product range, solutions and services offered in the market,” added Ambani.

He also said that the company will pursue growth in all parts of the business with greater efficiency and increased customer orientation. It will work relentlessly to make all the formats the most favored shopping destination for Indian customers.

Apart from this, RIL is planning to focus on its core-energy business. It plans to expand the gas and oil production from the wells located in the eastern coast of the country. The company will also invest a good amount of fortune on its upcoming 4G services under the brand name Reliance Jio Infocom.

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US Shale to Become Profit Engine For RIL

June 3, 2013

The investment of Reliance Industries Limited (RIL) in US Shale oil and gas are bearing healthy returns. RIL, owned by Mukesh Ambani, has spent last three years wagering $5.7 billion on North American shale oil and gas. For the first time, those earnings from US output eclipses with those in India. RIL holds the world’s largest oil refinery at Jamnagar, in the western part of India. Since 2010, the production of natural gas and liquids had doubled.According to Mumbai-based Executive Director P.M.S Prasad said the company bought the US Shale assets in 2010. “Earnings from oil and gas sales in the U.S will be sustained. In the next two years, we may not be able to raise gas production in India, while in the U.S output will continue to gain.” Prasad said in an interview.

“US Shale will become a significant contributor to Reliance’s profit in the next five years because higher prices there will lead to higher output,” said Neelabh Sharma, a Mumbai based analyst at BOB Capital Markets Ltd. On this Prasad said.” Gas prices in the US are sustainable at $5.5 to $6 per unit, and at these prices, drilling and production of gas will start buzzing.” If the prices rise to these levels in future, RIL will acquire more assets, drill more and increase the production, Prasad added.

Currently, RIL sells gas from its biggest field in India at a government-mandated price of $4.2 per million British thermal units, a tariff that comes up for renewal in April. In US, the production costs are low as compared to that in India, as the oil-fields in India are in sea bed while in US, the fields are on the land. Also, the drilling in India has to be mile deep while in US the gas is closer to the surface.

Apart from this, RIL is set to invest a part of $30 billion over three years on exploration to expand its shale business. It has also acquired permission for further expansion of the natural gas and oil fields located in KG-D6 fields in eastern coast of India. It will deepen the present oil fields and discover more fields located in the area. According to a study, by 2020, RIL will be contributing almost half to the country’s energy demands. Mukesh Ambani , world’s richest energy tycoon , wants to decrease the dependency of India on energy imports.

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