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The Integrated PET PlayerB Arun

Reliance Industries Limited

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Contents

India: An Emerging Economic Super Power

Reliance a preferred supplier in Russia

Reliance: Largest Indian Private Company

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India: A Glimpse

Land of opportunities

Population 1050 Mn

Middle Class ~310 Mn

Teenagers 150 Mn

Urban Workers 120 Mn

Million plus Cities 23

Small Retailers 2.3 Mn

GDP US $ 730 bn

Growth % 8

PPP US $ 2863 bn (4th)

India

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India’s Glory

Even though the world has just discovered it,

the India growth story is not new.

It has been going on for 25 years old

What is the India story?

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India StoryAaverage

Annual GDP growth

Average Annual population

growthLiteracy

Middle Class

1950 – 1980 3.5 2.2 52 8

1980 – 2002 6.0 2.0 65 22

2002 – 2006 8.0 1.5 80 32

%

- Rising GDP growth- Population growth is slowing- Increase in Literacy level- Exploding Middle class

India is now the 4th largest economy And it will cross Japan between 2012 and 2014 to become the 3rd largest

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India: Knowledge Capital

• Young & skilled manpower

• Largest number of Engineers

• 200,000 Scientific professionals & 300,000 Engineers added every year

• R&D base for 100 of Fortune 500 companies

• 1300 R&D units, 244 Universities, 200 National Laboratories

• Cost of 1 Engineer in US = 11 Engineers in India

India Provides an Opportunity as R & D Hub

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Growth Drivers

India East and S.E. Asia

Domestic ExportsServices ManufacturingConsumption InvestmentHigh tech, capital Low tech, labourintensive industry intensive industry

- India’s success is market led whereas China’s is state induced.

- The entrepreneur is at centre of the Indian model

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Reliance – India’s Proxy• Revenues of US$ 20 billion• Cash Profit of US$ 3 billion• Net Profit of US$ 2 billion• 98% of revenues from Refining and

Petrochemicals, 2% from E&P & others

India and Reliance• Revenues equivalent to 2.8% of India’s

GDP• 8.2% of India’s total exports, ~ US$ 8 billion• Contributing 8% India’s indirect taxes• 4.7% of the total market capitalization,

11.5% weightage in Sensex

What’s good for India is good for Reliance

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Reliance – Vertical IntegrationVa

lue

Add

ed

1970sTextiles

1980sFibers

Olefins Aromatics

FiberIntermediatesPolymers Chemicals 1990s

2000sPetroleum Refining

Oil & Gas E & P

Backward vertical integration has been the cornerstone

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Delta - Naphtha to PX

0

200

400

600

800

1000

Q1 '01

Q3 '01

Q1 '02

Q3 '02

Q1 '03

Q3 '03

Q1 '04

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Threshold Delta PX Delta

$/MT

Delta based on South East Asian prices

2 out of 24 quarters below threshold

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Delta - PX to PTA

0

100

200

300

400

500

Q1 '01

Q3 '01

Q1 '02

Q3 '02

Q1 '03

Q3 '03

Q1 '04

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Threshold Delta PTA Delta

$/MT

Delta based on South East Asian prices

6 out of 24 quarters below threshold

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Delta - PTA/MEG to PET

0

100

200

300

400

500

Q1 '01

Q3 '01

Q1 '02

Q3 '02

Q1 '03

Q3 '03

Q1 '04

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Threshold Delta PET Delta

$/MT

Delta based on South East Asian prices

7 out of 24 quarters below threshold

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Delta - Naphtha to PET

0100

200300400

500600

700800

Q1 '00

Q3 '00

Q1 '01

Q3 '01

Q1 '02

Q3 '02

Q1 '03

Q3 '03

Q1 '04

Q3 '04

Q1 '05

Q3 '05

Q1 '06

Q3 '06

Threshold Delta Naphtha - PET Delta

The last man standing will be an integrated player

Competitive Advantage from Integration !

$/MT

Delta based on South East Asian prices

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Domestic Leadership & Global Rankings

Dominant market share in India

Leading Global PositionLeading Market Shares in India

Leading domestic market shares and global positions

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3

3

5

Polyester(Fibre & Yarn)

Refining (1)

Paraxylene

Purified Terephthalic Acid

7MEG

Amongst top 10 global players in all its core businesses

Polyester 55%

Fibre Intermediates 78%

Polymers 65%

Refining 28% 6 Polypropylene

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Reliance Growth Plan

• Committed to investing US$ 25 billion in core businesses

• Investing in the building of a high potential, high growth retail initiative

• Committed to creating value by building world class assets

• Management team expects to create significant value on successful

implementation of each of these initiatives

Growth is life at Reliance

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Polyester Production: Changing Trends

1980 2000 2006Producer KTA

DuPont 841

Celanese 605

Hoechst 395

AKZO 316

Eastman 302

Rhone Poulenc 248

Teijin 219

Toray 172

ICI 155

Monsanto 146

Producer KTA

Nan Ya 1035

Reliance 779KoSa 700

Teijin 698

Sam Yang/SS (Huvis) 658

Hualon 575

Far Eastern 604

DuPont 583

Tuntex 561

Toray 543

Producer KTA

Reliance 1700Nan Ya 1080

Sanfangxiang 1050

Yizheng 945

Yuandong 900

Tuntex 885

Far Eastern 781

Huvis 750

Rongsheng 650

Tongkun 640

US, EU, Japan Taiwan, Korea China, India

RIL: Leadership in two decades

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Growing Share of Polyester production

200129 Mn Tons

201053 Mn Tons

200540 Mn Tons

5%28% 39%

28%

30%

39%27%4%

2%26% 39%

33%

Staple PET FilmFilament

Source: PCI

One third of total Polyester production will be in PET

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PET Products

Product Range Aqua Grade Fast Reheat CSD Hot Fill General Purpose

Applications: Beverages- Aseptic filling & Hotfill, Cosmetics, Pharmaceuticals, Sheets, Food Stuffs, Agrochemicals, Lubricants etc.

The list of prestigious users of RELPET include Coca-cola, Pepsi Cola, Nestle, Danone, Cadbury, Wrigleys, Amcor, Tetrapack, Uni Levers, RC Cola, San Benedetto, Heineken………….

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Reliance Technology Centre

• World Class R & D facility

• Centre of excellence for Research and Development in polyester homo and co-polymer fibres, filaments and resins

Innovative products in pipeline

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Factors to Impact Russia PET market

• Ruling of EU for Korea and Taiwan?

Possible displacement of 160 KTA from EU

The Outlook of Euro ( Market netback Swing)

• China trade policy related to USD reserve

Could topple PET export dynamic

• Competitiveness of Lithuania PET plant’s in Russia ?

Korea will still dominate Russian PET market

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Reliance Russia Logistic reach

– India Iran Russia TreatyNorth South Corridor- Open up logistic solutions

– Western Ports-Better shipping performance

– Leveraging China Warehouse through TranssiberianRailways, conventional route ,MPS Containers

Map

Map

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The North South Corridor route

The Quicker Cheaper route- Multimodal challengeBack

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Russia- Reach through China Warehouse

From Reliance Shanghai Back

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India Russia ties

• Diamond Jubilee celebration of Indo Russian Diplomatic ties in Apr-07

•Indo Russian Economic relationship are at Cross roads

• Glorious strategic partnership in the past with the larger scope of Co-operation in future in political, scientific, trade, economics and defense.

• Indo Russian trade US$ 2.5 bn excluding arms

• It’s time for India-Russia CECA (Comprehensive Economic Cooperation Agreement)

“Strategic partnership should be cultivated like a garden”

Sergei Lunev, Doctor of History

Win win scenario for India & Russia

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Summary

Why India?• A democratic country with huge resource of

young, intelligent and dynamic workforce.Why Reliance?• The largest private sector company of India.• Vertical Integration.• World Scale Assets.• Globally Competitive. • Among world leaders in all its core businesses

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Thank You