Mumbai: Reliance Industries plans to invest up to $12 billion in the chemicals business to tap the market for hygiene and healthcare products and will look at developing a new rubber business, chairman Mukesh Ambani said in an interview to the Economic Times.
“We believe that hygiene will be a very big market in a rapidly prospering India where people’s aspirations are rising,” Ambani, the world’s ninth-richest man according to Forbes, said.
Reliance has been looking to expand beyond its core businesses into telecom, retail, power, financial services, hospitality and homeland security, the firm had said earlier.
“We will make RIL one of the world’s largest players in rubber as the whole tyre industry moves to Asia,” Ambani told the paper. The big trend is that if you look at next 10 years, the projections for automobile growth is all China, India and Asia focused,“ the billionaire said, adding that Reliance would be a supplier and not a tyre maker.
The company is also looking at strategic alliances in the energy and consumer sectors, Ambani said.
Reliance struck three shale gas joint ventures in the United States last year, including a $1.7 billion deal with Atlas Energy to own 40% of its Marcellus Shale operations in the eastern United States.
Ambani said he strongly believes India would be a $5-trillion economy well before 2025, and that it would have a $2.5-trillion consumption market.
“I think the India growth story is unstoppable. I look at it as an opportunity in the acceleration mode,” he said.
India needs a supportive governance environment at all levels and systemic reforms to reduce corruption, he said.
Ambani also said the company was confident of ramping up gas output at its key block off India’s east coast and that all gas prices, including D6, has to be market-determined.
On Monday, India’s upstream regulator said gas production from Reliance’s KG-D6 field had fallen further and the company had been asked to drill 11 new wells by 1 April, 2012, to boost output.
The concerns over Reliance’s gas production have for months dampened growth outlook for the Indian energy giant and kept its shares under pressure.
The company, which has agreed a broad partnership with multinational BP on field development in a deal worth $7.2 billion, said in March it wanted to work to overcome “the technical challenge involved in these complex reservoirs”.
Reliance, India’s largest listed firm, posted a record quarterly profit last month, but still missed forecasts due to flat production from gas blocks and lower-than-expected refining margins.