2007/3/10 Reliance 解説
Board of Directors of
IPCL and RIL approve merger
IPCL shareholders to receive one share of RIL for five shares held in IPCL
Proposed merger is earnings accretive for shareholders of RIL
IPCL’s shareholdes set to benefit from RIL's superior performance and growth momentum
The Board of Directors of Reliance Industries Ltd (RIL) and Indian Petrochemicals Corporation Limited (IPCL) have unanimously approved the scheme of merger of IPCL with RIL, subject to the necessary regulatory & shareholder approvals.
RIL is India’s largest private sector company with a leadership position in the petrochemicals industry while IPCL is India’s second largest company in that sector. As part of the divestment program of the Government of India, RIL acquired 26% equity in IPCL in the year 2002 and thereafter increased its holding to 46% through an open offer.
RIL has a diversified portfolio of businesses in the form of oil and gas, refining and marketing, petrochemicals, organized retail and development of Special Economic Zones.
RIL has plans to make significant capital investments in all its core businesses to pursue growth opportunities. On the other hand, IPCL’s business portfolio predominantly consists of commodity polymers, which makes it prone to earnings volatility and cyclical risk. The merger provides shareholders of IPCL an opportunity to de-risk their investment by participating in the growth opportunities at RIL.
The merger will be earnings accretive for RIL’s shareholders at the proposed merger ratio.
Consolidated Production of Key Petrochemical products (‘000 tonnes)*
|Product||RIL||IPCL||RIL (post merger)|
* Production is based on production for the nine months period ended 31st Dec 2006, as annualized, for comparison purpose only.
Reliance Industries Limited:
IPCL operates three integrated petrochemicals complexes in India - a naphtha based cracker complex at Vadodara; a gas based cracker complex each at Gandhar and Nagothane. The polymer business of IPCL primarily encompasses commodity plastic raw materials namely Polypropylene (PP), Polyethylene (PE) and Poly Vinyl Chloride (PVC).
The fibre intermediates business of IPCL encompasses Mono Ethylene Glycol (MEG). In FY 2005-06, IPCL made its foray into Polyester by acquiring six polyester manufacturing companies and thereby changed its business model by becoming an integrated petrochemical company.
Effective April 1, 2005, the six polyester companies namely Appollo Fibres Limited (AFL), Central India Polyesters Limited (CIPL), India Polyfibres Limited (IPL), Orissa Polyfibres Limited (OPL), Recron Synthetics Limited (RSL) and Silvassa Industries Private Limited (SIPL) have been amalgamated with IPCL. This marks the entry of the Company in the polyester sector. The polyester units are based in Hoshiarpur (Punjab), Nagpur (Maharashtra), Barabanki (Uttar Pradesh), Baulpur (Orissa), Allahabad (Uttar Pradesh) and Silvassa (Gujarat).
Reliance Industries Limited operates world-class manufacturing facilities at Naroda, Patalganga, Hazira and Jamnagar, all in western India.
The Naroda facility, near Ahmedabad was commissioned in 1966. The synthetic textiles and fabrics manufacturing facility at Naroda manufactures and markets woven and knitted fabrics for home textiles, synthetic and worsted suiting and shirting, dress material, saris and ready to wear garments. The textile plant is spread over 150 acre site.
The Patalganga complex, near Mumbai, has polyester, fibre intermediates and linear alkyl benzene manufacturing plants. The manufacturing facility at Patalganga which was established in 1988 and is spread over 200 acres of land.
The Hazira complex, near Surat, has a naphtha cracker feeding downstream fibre intermediates, plastics and polyester plants. The manufacturing facility at Hazira which was established in 1991 and is spread over 700 acres of land.
The Jamnagar complex has a petroleum refinery and associated petrochemical plants making plastics and fibre intermediates. The manufacturing facility at Jamnagar was commissioned in 1999. It is spread over 7,400 acres of land.
The fiber intermediates manufacturing facility at Kurkumbh was the Glycol division of SM Dyechem Limited and was acquired by the Company in 2005.
Each of these complexes has world class manufacturing facilities.
Hazira Plants and Capacities
Plants Licensor Technology Startup Capacity ( KTA ) Installed Cracker S & W Mar. 1997 750 PE 1 Du Pont Jul. 1992 160 PE 2 Nova May 1997 200 PP UCC Sep. 1996 360 Aromatics HRI/Mobil Mar. 1997 350 MEG 1 Shell Sep. 1991 100 MEG 2 Shell Mar. 1997 120 MEG 3 Shell Oct. 1997 120 PVC Geon Dec. 1991 160 VCM Geon Apr. 1992 160 PTA 1 ICI Jan. 1997 350 PTA 2 ICI Nov. 1997 350 PET Sinco Oct. 1997 80 POY Du Pont Dec. 1995 120 PSF Du Pont Sep. 1996 160 PFF(Polyester Film/Foil.) Du Pont Oct. 1997 30
Plant Process Licenser Start up date Polyester Filament Yarn (PFY) Du Pont Oct.1982 Polyester Staple Fiber (PSF) Du Pont Mar.1986 Purified Terephthalic Acid (PTA) ICI (U K) Feb.1988 Paraxylene Plant (PX) U.O.P (USA) Nov.1988 Linear Alkyl Benzene Plant (LAB) U.O.P (USA) Nov. 1987 L A B (Front End) U.O.P (USA) Mar.1992 A-3 Tank Farm May 1992 Reliance Industrial Infrastructure Limited Pipe line from BPCL to PG May 1992
BARODA COMPLEX NAPHTHA CRACKER ABB Lummus, UK ETHYLENE :175,000 BUTADIENE UOP, USA 54,000 Benzene UOP, USA 55,000 LDPE ATO Fina, France 95,000 PP Bassel, Italy 100,000 PPCP Bassel, Italy 35,000 PBR-I Polysar, Switzerland 20,000 PBR-II JSR, Japan 40,000 PVC Oxyvinyls, USA 55,000 GANDHAR COMPLEX GAS CRACKER STONE & WEBSTER, USA ETHYLENE : 300,000 CHLOR ALKALI KRUPP UHDE GMBH,GERMANY CAUSTIC LYE 133,000
VCM INEOS Vinyls Ltd, UK
( Previous name was
INOVYL, BELGIUM )
170,000 PVC OXYVINYLS, USA 150,000 EO/EG SCIENTIFIC DESIGN, USA 120,000 HDPE BASELL, GERMANY 160,000 NAGOTHANE COMPLEX GAS CRACKER Stone & Webster, USA ETHYLENE : 400,000 EO/EG Union Carbide, USA EG : 50,000
EO : 5,000
LDPE CdF Chimie, France 80, 000 LLDPE/HDPE BP Chemicals, UK 220, 000 PP Himont, Italy (now Basell, Italy） 60, 000 BUTENE-1 IFP, France 15,000 Wire & cable compound B P Chemicals, UK 12, 500 DHC IPCL, R&D 60
Effective April 1, 2005, the six polyester companies namely AFL), Central India Polyesters Limited (CIPL), India Polyfibres Limited (IPL), (OPL), (RSL) and (SIPL) have been amalgamated with IPCL.
Recron Synthetics Limited Allahabad Unit, Uttar Pradesh PFY - 66.,000 India Polyfibres Limited Barabanki Unit, Uttar Pradesh PSF - 40,000 Orissa Polyfibres Limited Dhenkanal Unit, Orissa PSF - 35,000 Appollo Fibres Limited Hoshiarpur Unit, Punjab PSF - 51,681
POY - 14,870
Chips - 14,600
Central India Polyesters Limited Nagpur Unit, Maharashtra POY - 45,000 Silvassa Industries Private Limited Silvassa Unit, Union Territory of Dadra and Nagar Haveli PFY - 141,000
PTT - 600
and IPCL: A plastic merger
The Reliance Industries that we know today is an amalgam of Reliance Petrochemicals Ltd (which implemented a part of the Hazira complex), Reliance Polyethylene Ltd, Reliance Polypropylene Ltd (these two were floated to implement another part of the Hazira complex) and Reliance Petroleum Ltd (the original entity that was floated to implement the Jamnagar refinery).
Operational synergies achieved
The core function of marketing and sales was combined within a year of the acquisition of IPCL by Reliance in 2002, with agents selling both brands of polymers and fibre/fibre intermediates. Synergies have also been achieved in product exchanges between the two - Reliance supplies naphtha for the Vadodara cracker of IPCL and also minor quantities of ethylene to the Gandhar complex.
The merger will also diversify the feedstock profile of Reliance, which now runs its cracker - the mother unit of a petrochemical complex - on naphtha. IPCL's crackers at Nagothane (Maharashtra) and Gandhar (Gujarat) use natural gas as feedstock.
There is the question of what to do with the Vadodara complex of IPCL, which is about four decades old with capacities that do not help in deriving scale economies.