Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Polypropylene 2001 - 10th Annual World Congress
64 slides from Reliance Industries's conference presentation, September 2001
Slide 1: Polypropylene – The Material of the Millennium
POLYPROPYLENE – 2001 10th Annual World Congress Zurich, September 11-13, 2001 Polypropylene – The Material of the Millennium KAMAL KAMAL NANAVATY NANAVATY President President –– Cracker Cracker && Polymer Polymer Division Division Reliance Reliance Industries, Industries, Mumbai Mumbai
Slide 2: Polypropylene: Most Versatile Polymer
Polypropylene Most Versatile Polymer
Slide 3: PP - A Versatile Polymer: The Genesis
PP - A Versatile Polymer The Genesis Serendipity Polymers ■ 1872: Exposure of VCM to Sunlight PVC ■ 1933: Ethylene under pressure with O2 LDPE ■ 1935: Polymerization of Aminononanoic Ester Nylon 1954 : Design of stereospecific catalyst PP . . . PP a Designer’s material of choice 3
Slide 4: PP – A Versatile Polymer: Macromolecules
PP – A Versatile Polymer Macromolecules Isotactic • Presence of tertiary methyl group leads to • Lower density & Higher Yield • Better stiffness • Higher melting point • Exclusive hinge property Designed for diverse applications…. 4
Slide 5: PP – Catalyst developments
PP – A Versatile Polymer Catalyst developments Polymerization − New generation Z-N catalysts provide • Enhanced yield up to 70,000 kg of PP/ kg of catalyst • Improved impact / Stiffness Balance − High selectivity high activity catalysts • Yield up to 100,000 kg of PP/kg of catalyst (using diethers a
Slide 6: PP – Performance Enhancements
PP – A Versatile Polymer Performance Enhancements ■ Alloys − Styrenic-olefinic / acrylic-olefinic alloys for automotive, industrial/ consumer applications ■ Fillers − Conductive plastics ■ Nanocomposites − Automotive and appliance applications Delivering customized solutions to demanding markets 6
Slide 7: PP – New applications / sectors
PP – A Versatile Polymer New applications / sectors Speciality Engineering ABS Nylon Modified PP Commodity PVC PS PP PE Amorphous Crystalline Major potential exists to replace ETP’s 7
Slide 8: Volumetric Price Spreads
PP PP -- A A Versatile Versatile Polymer Polymer Volumetric Volumetric Price Price Spreads Spreads PET 1.18 ABS 0.9 PVC 0.63 PS 0.61 LDPE 0.57 HDPE 0.55 LLDPE 0.55 PP 0.5 0 0.2 0.4 0.6 0.8 1 1.2 US $ / cc . . . PP: Lowest Volume Cost material driving growth in innovative applications & usage globall
Slide 9: Maximum flexibility in feedstock - Propylene
PP - A Versatile Polymer Maximum flexibility in feedstock - Propylene Propylene sources ( Capacity in 2000 - (60 MMT) ■ PP derives its low cost advantage from linkage of Refinery 35% Propylene availability with petroleum refining – FCC 5.5% ■ Further potential to reduce Steam Cracking costs exists w
Slide 10: With the widest Performance Envelope
PP - A Versatile Polymer …With the widest Performance Envelope Optimum impact-stiffness balance Izod impact at RT, J/m2 60 40 2 0 1000 2000 Flexural modulus, MPa PP provides best cost performance ratio in diverse range of applications – key growth driver 10
Slide 11: Polypropylene Global Prospects
Polypropylene Global Prospects 11
Slide 12: Global polymer consumption grows faster than GDP
Global Polymer consumption continues to register higher growth than GDP . . . mn tons 130 PS PVC PP HDPE LLDPE LDPE 123 120 CARG 110 90/80 00/90 100 PP 10.0% 8.5% 90 PO 7.1% 6.2% All Polymers 6.9% 5.7% 80 GDP 4.2% 4.6% 71 70 60 50 36 40 30 20 10 0 FY 80 FY 90 FY 00 . . . Polypropylene growth outshin
Slide 13: Polypropylene consumption on a high growth path
Polypropylene consumption on a high growth path Continued high growth in the last two decades . . . mmt 30.0 LDPE LLDPE mmt 30.0 25.0 25.0 20.0 1.8 15.9 20.0 2.9 14.1 15.0 11.2 12.6 15.0 7.9 10.0 10.0 5.0 4.7 5.0 4.2 0.0 0.0 0.4 FY 80 FY 90 FY 00 FY 80 FY 90 FY 00 PP- Phenomenol growth 29.1 mmt mmt
Slide 14: High growth in PP driven by developing EOS region
High growth in PP contributed significantly by accelerated growth in developing EOS region Decadal Growth: 1990-2000 % PP PO 20 16 13 11 12 10 8 6 World EOS China India . . . as it fulfils the Socio-economic concerns not only of the developed world , but also of developing Asia Source: POPS 2000 14
Slide 15: PP addresses key concerns facing global economies
Polypropylene addresses the key concerns facing the global economies in the context of . . . Concomitant Demands / Pressure on − Arable Land for food resources − Food Chain security − Health and Hygiene − Clothing & Textiles − Infrastructure including shelter and housing stocks ■ Environmental degra
Slide 16: Life Indices of Select Global Metal Resources
Life Indices of Select Global Metal Resources • Bauxite - 190 years • Iron Ore - 165 years • Nickel - 42 years • Copper - 26 years • Tin - 17 years • Lead - 11 years … resource crunch inevitable- higher polymer usage can significantly increase life indices of scarce global resources Source: World re
Slide 17: PP usage leads to energy conservation
PP usage leads to energy conservation . . . Kcal/cm3 PP Energy vis-à-vis PP 36 Steel + 127 % 82 Tinplate 102 + 183 % Copper + 211 % 112 Aluminium + 339 % 158 0 50 100 150 200 . . . many developing societies need to be educated on the well known energy saving benefits of polymers - PP Source: The Eco
Slide 18: Polypropylene: A solution provider
Polypropylene A solution provider 18
Slide 19: PP as a solution provider
PP as a solution provider ■ Food & Health Security ■ Clothing & Textiles ■ Infrastructure ■ Ecological Sustainability 19
Slide 20: Food & Health Security
PP : A Solution Provider Food & Health Security ■ PP will play critical & Dominant role in supporting & sustaining Food & Modern Health care security − Non-wovens for Medical & Hygiene − Processed food & Medical packaging − Medical Disposables − Bulk packing and Woven sacks By 2020, ~27.5 MMT of PP
Slide 21: Clothing & Textiles
PP : A Solution Provider Clothing & Textiles ■ Increasing pressure on land resources − Cash crops will yield space to food crops − Consequent shortage of natural fibres/textiles ■ PP fibres / textiles (Woven and Non-woven) will supplement the polyester textile chain − Next to skin/inner garments, pr
Slide 22: Infra-structure
PP : A Solution Provider Infra-structure ■ Road Construction Needs Increase in vehicular cyclical loadings leading to interlayer soil movements, thereby eroding soil ■ Solution − PP Geotextiles ■ Functions − Prevents Soil erosion − Prevents leaching of hazardous chemicals from land-fills By 2020, ~1
Slide 23: Ecological sustainability
PP : A Solution Provider Ecological sustainability Global depletion of 9.4mn hectares of Forest cover in last decade (1990 - 2000) Where does PP fit into this conundrum? If only 10% of PP is used in wood replacement markets (furniture/crate) over the next 2 decades (2000 - 2020) Globally we can save
Slide 24: Ecological sustainability
PP : A Solution Provider Ecological sustainability ■ PP will continue to play vital role in Environmental management − Pollution control devices − Effluent Disposal − Geomembranes / Geotextiles − Water Purification/ Filtration Devices Ensuring a safer Environment for future Society… 24
Slide 25: Polypropylene: Future outlook
Polypropylene Future outlook 25
Slide 26: PP per capita consumption comparison across regions
PP per capita consumption comparison across regions 6 5 4.8 4 3.3 World China 3 2.6 EOS India 2 1.0 1 0 . . . Low per capita consumption- a pointer to huge growth potential in the coming decades 26
Slide 27: PP Millennium - World Economy Outlook
PP Millennium - World Economy Outlook ■ GDP in PPP terms at 44 trillion USD in 2000 Africa & Middle East 2% ■ World GDP growth in 10 years Asia & Australasia W. Europe 28% at 3.2% ( 1990-2000) 27% ■ US, WE & Japan contribute around 70 % of global GDP C & E Europe 2% L. America ■ World GDP by 2025 in
Slide 28: Global PP consumption to treble by 2020
Global consumption of Polypropylene to treble - 29 MMT (2000) to 90 MMT (2020) PP consumption (MMT) PP's % share in Polyolefins Regions 1990 2000 2020 1990 2000 2020 World 12.8 29.1 90.0 29% 37% 41% EOS 2.8 9.6 38.0 34% 39% 43% China 0.6 4.2 15.0 32% 41% 48% India 0.2 1.1 13.0 32% 45% 53% EOS share
Slide 29: Emerging Trends & Developments
PP as a solution provider Emerging Trends & Developments ■ New applications / sectors ■ Replacement of metal ■ Industry structure 29
Slide 30: New applications / sectors (cont'd)
Emerging Trends & Developments : New applications / sectors (cont’d…) ■ Construction Profiles ■ Optical fiber cables ■ I. V. Bags ■ Sequential co-extrusion: Automotive parts/mechanical engineering products Development will be driven by Major players 30
Slide 31: Replacement of Metal
PP : A Solution Provider Replacement of Metal ■ PP due to − high strength to weight ratio − chemical & corrosion resistance and − low volume cost ■ provides techno-commercial advantages for replacement of metals in applications like − Car bumpers - weight reduction − Washing machine components in Ap
Slide 32: The PP Millennium - Industry Structure
The PP Millennium- Industry Structure • Drivers for restructuring –Accumulation of “critical mass “ –Improvement in overall cost position –Establishing global presence –Leveraging efficient resources/synergies –Increase in shareholder value – M&As in last 5 years have resulted in dominant share for
Slide 33: Top PP Producers
Top 10 PP Producers 2000 MMTA 0 2 4 6 8 10 Basell 8.0 1 Atofina 2.1 2 BP 2.1 3 Exxon-Mobil 1.6 4 Dow 1.5 5 Borealis 1.4 6 Reliance 1.0 7 Formosa .9 8 DSM .9 9 Solvay .7 10 …account for 60% global capacity & drive technological Source : Chem Systems POPS developments 33
Slide 34: Polypropylene: Growth prospects - India
Polypropylene Growth prospects - India
Slide 35: Polymers displaying consistently high double digit growth
Polymers displaying consistently high double digit growth - Consumption trebling every decade !! . 3322 kT 3400 CARG of Polymer demand 3200 70-80 80-90 90-00 3000 LD/LLD 14% 8% 10% 2800 2600 HDPE 11% 12% 16% PP 41% 24% 21% 2400 2200 PVC 10% 11% 10% 2000 PS 1% 17% 14% 1800 All Polym ers 11% 12% 14% 1
Slide 36: Household income distribution
Household income distribution - Opportunity created through higher economic growth % Households (HHLD’s (HHLD’s)) Beyond the Threshold Level (Middle Income Group : (Rs. 70000 & above-per HHLD 1999 prices) 70 1989-90 1993-94 1998-99 All India 60 In (%) HHLDs (Mn) 50 1989-90 14.2 20.2 1993-94 16.6 26.
Slide 37: PP: Driver of Indian Economy - Demographics
PP: PP: Driver Driver of of Indian Indian Economy Economy Demographics Demographics Population by age group by year 2020 65+ ~70 mn 5% ~565 mn 25-64 41% 0-14 34% ~470 mn 15-24 20% ~275 mn Working Population ~ 840 mn Source:- Technical Committee Report on Population Projections Constituted by Plannin
Slide 38: PP demand to ride economic growth
PP demand to ride economic growth Thanks to : • Rising disposable income • Increasing consumerism • Significant infrastructure need • Greater brand awareness • Growing aspiration • Transplantation of transnational brands Economy expected to grow at 6+ % p.a. through 2010 38
Slide 39: Double digit growth in consumer durables
Double digit growth in consumer durables 1989-93 1993-00 40 27 (%) 24 23 19 18 14 12 10 9 7 6 4 3 3 2 0 -1 Airconditioner TV Passenger cars Motor cycles Commercial Mobile Phones vehicles . . . India ‘s passenger car production at 669,000 outpaces that of China at 565,000 in 1999 39
Slide 40: By 2020, India would consume ~23 MMT more polyolefins
By By 2020, 2020, India India would would additionally additionally consume consume ~~ 23 23 MMT MMT of of Polyolefins Polyolefins Demand (In kT) 25000 PP Polyolefins 13200 8000 4200 2218 507 1003 160 FY 1990 FY 2000 FY 2010 FY 2020 PP Consumption growth @ 2.5 times of Indian GDP at CARG of 14 % ove
Slide 41: India to be 3rd largest polymer consumer by 2010
High growth will make India the 3rd largest polymer consumer, globally by 2010 Global Rank in Polymer Consumption Rank Country 1988 Country 2000 Country 2010 2010/ (MMT) (MMT) (MMT) 2000 1 USA 16.6 USA 27.3 USA 38.9 3.6% 2 Japan 6.4 China 14.4 China 31.3 8.1% 3 Germany 4.3 Japan 9.1 India 12.5 14.0%
Slide 42: PP growth prospects: per capita consumption
PP PP growth growth prospects prospects Per Per Capita Capita Consumption Consumption to to grow grow 10 10 folds folds .. .. .. India China World 12 10 10 8 6 5 4 3 1 FY 2000 FY 2010 FY 2020 . . . India’s per capita consumption to catch up with RoW in the coming two decades Source : Chem Systems PO
Slide 43: Polypropylene - Key growth sectors
Polypropylene - Key growth sectors . . . ■ Raffia (woven sacks) ■ Furniture ■ Retail Packaging (IPP) ■ Automobiles ■ Consumer Goods ■ Fibres . . . fuelling robust growth !! 43
Slide 44: Woven Sacks: Catering to core sectors
PP : India Woven Sacks : Catering to core sectors Food grains / Cement / Sugar Oilseeds/ etc…. PP consumption in kT Growing @ ~ 14% p.a 3200 1000 495 240 2000 2005 2010 2020 Potential for 10 Global Sized PP Plants by 2020 44
Slide 45: Furniture: Transforming seating habits
PP : India Furniture : Transforming seating habits PP consumption in kT Growing @ ~ 16% p.a 2700 1250 385 125 2000 2005 2010 2020 Potential for ~ 9 Global Sized PP Plants by 2020 45
Slide 46: IPP Films: Application versatile to India / Asia
PP : India IPP Films : Application Versatile to India / Asia PP consumption in kT Growing @ ~ 14% p.a 2600 700 375 190 2000 2005 2010 2020 Potential for ~ 8 Global Sized PP Plants by 2020 46
Slide 47: Automobile: Driving Consumerism Boom
PP : India Automobile : Driving Consumerism Boom • Presence of Automobile Majors PP consumption in kT • An USD 8 bn auto industry Growth rate: ~ 14% pa • 5.6 Mn production capacity • Emerging global production base 300 115 50 22 2000 2005 2010 2020 Potential for 1 Global Sized PP Plant by 2020 47
Slide 48: Consumer Durables: Untapped Rural Markets
PP : India Consumer Durables : Untapped Rural Markets PP consumption in kT Growth rate: ~ 16% pa 350 135 50 19 2000 2005 2010 2020 Potential for 1 Global Sized PP Plant by 2020 48
Slide 49: Horticulture: Changing Trends
PP : Driver of Indian economy Horticulture : Changing Trends • Top global producer but… PP consumption in kT • Lack of post – harvest & SCM leads to annual losses ~ 7 bn $ Growth rate: ~ 16% pa 66 21 12 3.5 2000 2005 2010 2020 Cost effective packaging solutions 49
Slide 50: Massive fabrication capacity needed to meet PP demand
To Meet the growing PP Demand massive fabrication capacity needed . . . Investments in downstream Fabrication Capacity Has to Keep Pace • Investment needs by 2010 ($ bn) • 8600 Machinery, Investment of ~ 2 •38000 Molds & dies, Investment of ~ 1.4 Business opportunities for overseas players – FDI / T
Slide 51: Reliance: A "G-local" Company
Reliance : A “G-local” Company
Slide 52: Reliance Group - Businesses
Reliance Group - Businesses Textiles Polyester Plastics Petroleum Products Oil & Gas Infrastructure Naroda Patalganga Hazira Jamnagar Bombay High Suiting PSF L LDPE,HDPE LPG Crude Oil Power Shirting PFY PP Gasoline Natural Gas Telecom Furnishings POY PVC Naphtha Port Pillows P. Chips MEG ATF Roads F
Slide 53: Reliance Group - Manufacturing Facilities
Reliance Group - Manufacturing Facilities Naroda - Gujarat Textile manufacturing India Jamnagar - Gujarat Refinery & Petrochem Hazira - Gujarat Petrochem & Polyester BAY OF BENGAL Panna Mukta & Tapti Oil & Gas ARABIAN SEA Patalganga-Mah Polyester & Intermediates INDIAN N OCEA Strategically located f
Slide 54: Reliance Group - Vertical Integration
Reliance Group - Vertical Integration Textiles Ducts Fibers Fiber Polymers Chemicals Intermediates Value Added Olefins Aromatics Petroleum Refining Oil & Gas E & P Fully integrated value chain from well head to fabrics. 54
Slide 55: Reliance Group - Revenues (Million USD)
Reliance Group - Revenues (Million USD) Reliance Petroleum Salgaokar Power 23 6,642 Others Telecom 162 570 * Utilities 114 Port 180 Infrastructure 23 Capital 68 Reliance Industries 0 50 100 150 200 6,008 Fig in USD Million * Full year estimate 2000-01 Revenues of USD 13,320 Million. 55
Slide 56: Reliance Group - Competitiveness
Reliance Group - Competitiveness ! Reliance Industries rated as among the top ten competitive companies across all sectors and most competitive chemical company in Asia. ! Reliance Petroleum recognised as one of the most competitive refineries in the world. Asia’s Most Competitive Companies Sony. Co
Slide 57: Reliance Group - Growth Strategy
Reliance Group - Growth Strategy NON-ASSOCIATED VENTURES RETAILING INFORMATION TECHNOLOGY INSURANCE EPC SERVICES AGRICULTURE TRANSPORTATION TELECOM FINANCIAL SERVICES Core themes - size of opportunity, annuity, cap intensity. 57
Slide 58: RIL Polymer Business
RIL Polymer Business
Slide 59: India's Largest Selling Polymers
India’s Largest Selling Polymers ... ■ Linear Low density Polyethylene (LLDPE) - Reclair ■ High density Polyethylene (HDPE) - Relene ■ Polypropylene (PP) - Repol − Homopolymer • Random copolymer • Impact copolymer ■ Polyvinyl Chloride (PVC) - Reon Global scale capacity, state-of-the-art technology a
Slide 60: Reliance - The largest Indian Polymer Producer
Reliance - The largest Indian Polymer Producer Total Capacity FY2000: 4,200 kTA 300 PVC, Hazira IPCL RIL 400 22% 41% PE, Hazira Others 15% 600 PP, Jamnagar NOCIL 400 PP, Hazira 1% Haldia GAIL 15% 6% with plans for major expansions 60
Slide 61: Largest PP Producer - EOS
Largest PP Producer - EOS 2000 Total Capacity - 1,370 kTA IPCL 12% HPL 15% Largest PP plant in the world at a single location: Reliance’s PP plant at Jamnagar, India - 600,000 m.t. / year. Reliance 73% 7th Largest PP producer in the world 61
Slide 62: Largest PP Producer - EOS
Largest PP Producer - EOS • Integrated with world’s largest grass root refinery(27MMT) • State of the art technology – current & future slate • Customized solutions via pilot plant facilities • Ambitious expansion plans on the anvil • Pioneer and leadership position in market • e – Enabled customer
Slide 63: RIL – Catalyzing the value chain
RIL – Catalyzing the value chain • Concept to Reality • Supply Chain • Service Chain Reliance geared to meet the future demand of Indian market 63
Slide 64: Thank You
(> Thank You
Reliance Industries — Polypropylene 2001 - 10th Annual World Congress on 6ix