RIL to invest Rs25,000 crore in retail
27 Jun 2006
Mumbai: In a major boost to retail, the Mukesh Ambani-controlled Reliance Industries proposes to invest around Rs25,000 crore in retail business.
Reliance is setting up a subsidiary retail arm, Reliance Retail Ltd, to handle the business. RIL has lined up overall investments of around Rs120,000 crore in new businesses.
Making an announcement to this effect at RIL's 32nd annual general meeting, and the first since the division of the businesses between Mukesh Ambani's and Anil Ambani's groups, in Mumbai on Tuesday, Ambani said retail would be the main growth driver for the company.
RIL's current plans include investment of between Rs70,000 and Rs80,000 crore in SEZs in Haryana, Jamnagar and Navi Mumbai, and Rs 10,000-14,000 crore in retail and agri-businesses. Over the next few years Reliance Retail will see investments of around Rs25,000 crore being made, Ambani said.
Reliance Retail would focus on an array of products across all verticals in the retail business, including integrated food and grocery, daily necessities, apparels and footwear, electronic goods, lifestyle products and services, home essentials and betterment products, farm implements and inputs, energy products and services, travel and financial services, entertainment and leisure, health and well-being products and services, educational products and services.
While it would help to develop linkages in agriculture and food processing, Reliance Retail would also develop partnerships to bring the best of luxury brands from all over the world to India.
RIL's big push into the country's consumer economy - Reliance has presence in 1,500 cities across the country and has an all-India image - will generate a million additional jobs, Ambani said. The Reliance initiative is aimed at bringing farmers, small shopkeepers and consumers in a partnership for prosperity, he added.
Reliance Retail, which would entail an initial equity investment of Rs10,000 crore, will see overall investments rise to Rs25,000 crore over the next few years.
"As the organised retailing gains momentum, Reliance is committed to make investments as necessary," Ambani said, adding that it would offer consumers products across several verticals like fruits, grocery, consumer durables, apparel, farm implements, travel service and footwear.
Oil and gas: Stating that gas exploration was an exciting new business for the company, he said RIL has recently discovered oil in the Krishna Godavari (KG Basin) while testing has been conducted in two zones in the KG basin.
Petrochemicals: Reliance Petroleum, Ambani said, is contemplating an additional propylene capacity of 900,000 tonnes. The expansion of the company's new export-oriented refinery would be completed by 2008. This would make Reliance the fourth- largest producer of polypropylene in the world.
In April, Reliance had expanded the propylene capacity at Jamnagar by 280,000 tonnes.
Refinery: Reliance is also setting up a new export-oriented refinery at Jamnagar. Ambani said the refinery would have the least capital cost in terms of dollar per complexity barrel and will produce high quality ultra clean transportation fuel.
The project would also propel Jamnagar to the big league, making it the largest hub for petroleum refining in the world, with a capacity to process 1.24-million barrels of crude oil per day.