New energy, AI infra to drive USD 50 bn market value rise for Reliance
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Time of India
26 minutes ago
- Time of India
Adani to rival Reliance with PVC plant by 2028
Billionaire Gautam Adani's conglomerate will build a 1 million tonne a year PVC plant at Mundra in Gujarat, marking its foray into the petrochemicals sector where Reliance Industries Ltd is the main player, sources said. PVC, or Polyvinyl Chloride, is a synthetic plastic polymer that is widely used to make an array of products - from pipes and fittings to window and door frames, cable insulation, vinyl flooring and wall coverings, credit cards and toys. India's annual PVC demand is about 4 million tonnes, while domestic production capacity stands around 1.59 million tonnes, half of which is with Reliance. PVC demand is projected to grow at a CAGR of 8-10 per cent, driven by sectors such as agriculture as land under irrigation increases, infrastructure aided by water supply and sanitation, housing and pharmaceutical and packaging segments. Adani Group's flagship Adani Enterprises Ltd is setting up a petrochemical cluster in Mundra. Within this cluster, it is constructing a PVC manufacturing plant with a capacity of 1 million tonnes per annum, two sources aware of the matter said. The facility is slated for commissioning by fiscal 2028 (April 2027 to March 2028 financial year). The PVC Project is expected to include capabilities for manufacturing PVC, chlor-alkali, calcium carbide and acetylene units. Adani group is looking to implement the Acetylene and Carbide-based PVC production process, with environment clearance and consent to establish the project, having already been received, sources said. Given the current higher demand and lower supply of PVC in India, the Adani project will help reduce the supply gap and import dependency. The project will pit the group against Reliance, which is currently India's largest PVC producer, with an estimated capacity of around 7,50,000 tonnes per annum. Reliance has PVC plants at Hazira, Dahej and Vadodara in Gujarat. It is looking to double its capacity by 2027. Adani's group and Mukesh Ambani's Reliance had for long moved in non-overlapping orbits, but first clean energy and now petrochemicals would be sectors where they could be competing against each other. Sources said Adani's Mundra plant could in the future be expanded to 2 million tonnes per annum capacity on demand growth. Initially halted in March 2023 due to financial uncertainties and allegations from US short-seller Hindenburg Research, work on the project was resumed last year. The Adani Group has since refocused its resources, raising over USD 5 billion in equity and additional debt, and fully repaid share-backed financing. Financed by an SBI-led consortium, the project will utilise acetylene and carbide-based PVC production processes. Sources said the Adani group is confident of sourcing feedstock given that its portfolio companies have expertise in trading in domestic and international markets. Also, the group's synergy benefits and availability of large land parcels in Mundra, together with access to port facilities will optimise the logistics cost for sourcing of raw material/inventory handling cost as well as for transportation of the final products to the prospective domestic and overseas markets and ensure smooth implementation of the project. They said the Adani portfolio has a proven track record in successfully commissioning and managing large-scale infrastructure and industrial projects, encompassing areas like ports, power, and logistics. It has an abundance of science and engineering graduates, along with a well-trained workforce proficient in various skills.
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Business Standard
2 hours ago
- Business Standard
Mukesh Ambani bets big on US ethane amid shifting global trade dynamics
From Ottawa to Beijing, President Donald Trump's trade war has made many enemies. But it has also won America some allies. Asia's richest tycoon is preparing to welcome US cargo originally meant for China but rerouted to India. The ship Mukesh Ambani is waiting for is laden with ethane. This colorless, odorless component of natural gas is shipped in liquefied form in special carriers such as STL Qianjiang, which is currently on its way from the US Gulf Coast to billionaire Ambani's terminal in Dahej, Gujarat, on India's western seaboard. There, his flagship Reliance Industries Ltd. has an ethane cracker to produce ethylene, a key building block of plastic products. The unit, completed in 2017, made Reliance 'the first company to globally conceptualise large-scale imports of ethane from North America as feedstock,' it boasted in a press release back then. Eight years later, that foresight may come in handy to trade negotiators in New Delhi. 'Stop obsessing over your $43 billion trade deficit with us,' they might like to tell their counterparts in Washington, as both sides try to close a deal ahead of the July 9 US deadline for 26 per cent reciprocal tariffs. 'We're going to buy your gas.' The 68-year-old petrochemicals czar bet on North American ethane more than a decade ago. His father Dhirubhai Ambani, the founder of the empire, was the original 'Polyester Prince.' And although the son has ventured into new areas and added $57 billon in retail and digital services, the annual revenue from the legacy oils-to-chemicals business is still bigger at $74 billion. Historically, Reliance and other refiners have cracked naphtha — obtained by distilling crude oil — to make ethylene. The conversion efficiency is low at around 30 per cent, compared with 80 per cent for ethane. But since crude oil had to be imported anyway to produce motor spirits, it made sense to use it for making polyester and other polymers as well. Ethane, which on an energy-equivalent basis is half as expensive as naphtha, hasn't been popular until now. In fact, Qatar didn't even bother to separate it from the natural gas it supplied to India. But even that is changing. Under a new agreement with India's Oil & Natural Gas Corp., QatarEnergy will only provide 'lean' gas. If the buyer wants ethane, it will have to pay for it. ONGC recently entered into a deal with Mitsui OSK Lines Ltd., which will build, own and operate two very large carriers for the state-owned firm to import ethane. Here, too, Ambani wrote the template. Reliance co-owns a fleet of six such vessels. It now wants to lay a 100-kilometer (62-mile) pipeline to bring ethane from the terminal to another of its processing units in Gujarat. New capacities for ethane cracking are coming up, too, including by GAIL India Ltd., a public-sector firm like ONGC. It isn't clear if this entanglement with North American feedstock will expand indefinitely. Just how much more ethane could Reliance and others handle? After all, it's still an oil-centric economy they serve. But if the dependence grows, it could profoundly alter India's fuel economics. For one thing, Indian state-owned refiners may become unprofitable dumping grounds for Middle Eastern crude. Any residual use for the naphtha they churn out alongside transport fuels won't compensate for the loss of its central role in making everything from polyester and detergents to fertilizers, cosmetics and pharmaceuticals. Oil is on extra time in India. A third of the vehicles sold last year by the nation's largest carmaker run on compressed natural gas. To manage pollution, and reduce dependence on imported fossil fuels, New Delhi has mandated the addition of 20 per cent bio-ethanol in gasoline. Mass adoption of electric vehicles will further cut into gasoline demand. Even then, a government-controlled firm is setting up a 9-million-ton-a-year crude refinery in the southern state of Andhra Pradesh. I suspect the reason the project is going ahead is because the state, eager to attract capital and create jobs, is offering lavish subsidies. Otherwise, the investment case is weak. Meanwhile, Ambani plans to add three more ethane carriers to its fleet. Now that Trump has fallen out with Elon Musk, the White House may have room for a new centi-billionaire guest. Both parties may gain from a closer friendship. While the trade war with China is on pause, the fate of US ethane still hangs in limbo. Although India can't match the much larger Chinese appetite for cracking ethane, it can certainly absorb some of the oversupply. Trump will get to brag about how his trade policies are making America great again — and his sons may get some tips on how to run their telecom startup. Ambani will fight off the pressure on his margins by shifting to a cheaper feedstock. The tycoon runs India's biggest telecommunications and retail networks, but it's only now that his family has started climbing up on the list of global celebrities. First came the glitzy, five-month-long, $600-million-dollar wedding celebration last year of the youngest of the three Ambani children, the heir apparent of Reliance's energy business. Ivanka Trump and Jared Kushner were among the attendees. Then Trump met Ambani and his wife, Nita, at his pre-inauguration party. This fall, Nita Ambani will take over New York's Lincoln Center for a 'Slice of India' weekend.
Mint
7 hours ago
- Mint
Mukesh Ambani bets big on US gas as Trump's trade war reshapes global energy, all you need to know
Mukesh Ambani, Asia's richest man, is racing to buy American ethane gas as a shield against President Trump's trade war. His company Reliance Industries imports 1.6 million tonnes yearly from US shale fields, shipped in giant tankers to Gujarat factories. This cheap gas replaces costlier oil-based naphtha for making plastics, saving $450 million annually. With Trump threatening 26% 'reciprocal tariffs' on Indian goods by July 9, Ambani's bet positions India as a key buyer of US energy, potentially easing tensions over India's $43 billion trade surplus with America. His fleet of six specialized ethane tankers now anchors this strategy, according to a Bloomberg report. India's state-run GAIL is also trying to replicate Ambani's tactics to stay ahead in the race. It just sought 20-year contracts for US ethane tankers after government policies slashed its natural gas supply, hurting profits. Like Reliance, GAIL will pipe ethane to its chemical plants to replace naphtha. The shift is urgent: Ethane costs half as much as naphtha and produces more plastic per tonne. Even Qatar now charges extra for ethane in gas sold to India, forcing firms like GAIL to seek US alternatives. Analysts call this a 'permanent shift' as shale gas floods global markets. Trump's trade wars make Ambani's move timely. China once bought most US ethane, but Trump's tariffs and 'decoupling' push have stalled deals. India now grabs this surplus, though it can't match China's Apple's plan to make iPhones in India faces Trump's wrath over 'massive tariffs,' showing New Delhi's precarious position. By boosting US energy purchases, India hopes to avoid auto and textile tariffs. Reliance's pipeline network and new ships strengthen its role as a 'pressure valve' in US-India trade talks. The Ambani-Trump connection runs deep. Ivanka attended Ambani's son's $600 million wedding, while Trump hosted the family at his pre-inauguration gala. Now, their interests align commercially: Trump needs foreign buyers for US shale gas, while Ambani seeks cheap raw materials. As Reliance orders three more ethane tankers, experts warn India's oil refineries may become obsolete.
