RIL AGM 2023: Mukesh Ambani's Take On Improving Profits Of O2C Business

Reliance Industries (RIL) held its 46th annual general meeting (AGM) where chief Mukesh Ambani shed some light on key measures for improving profitability of its oil-to-chemical (O2C) business which has highest weightage in its topline. Ambani said, in the year gone by, its Oil-to-Chemicals business operated in a highly volatile global scenario.

He added despite all the challenges and a new one-time tax in the form of Special Additional Excise Duty (SAED), the O2C EBITDA for FY23 improved by 17.7% to a record high of Rs 62,075 crore.

"Our talented teams ensured that our asset utilisation remained higher than the industry average through robust planning and exceptional teamwork. We operated with the lowest level of feedstock inventory in our history to benefit from opportunities in a turbulent global oil market. Fully utilising the flexibility and integration of our assets, we added 13 new grades of crude oil and feedstocks," Ambani said.

Further, RIL chief highlighted that the company ensured high availability of the Gasification unit to minimize the purchase of high-cost LNG to lower our energy costs.
"Our partnership with bp in fuel retailing and mobility solutions continued to make steady progress," Ambani said.

Ambani revealed that RIL has embarked on a journey to transition its O2C business into a sustainable and green, circular and consumer-integrated, chemicals and materials business.

The key pillars of this transition, as per Ambani are:

1. We are accelerating e our journey to achieve Net Zero by 2035 through use of renewables and bioenergy for a sustainable and green business. We are well on our way to build the New Energy ecosystem of manufacturing solar, wind, batteries, hydrogen, and bioenergy platforms. This will enable us to speed up development of our renewable generation assets to deliver round-the-clock electricity for our captive requirements as well as to meet the growing needs of Indian consumers. As the cost of renewables will be significantly lower compared to fossil fuel-based energy, this will result in reduced energy costs and improved profitability for the O2C business.

2. We are accelerating Circularity and Consumer-integration. We have also been working on scaling up our chemical recycling technology to deliver application-specific green products. This is helping us access high value, high potential customers in new value chains.

3. With technology and innovation, our Refinery at Jamnagar will be progressively operated as a 'Chemicals and Materials Feedstock Production' engine. We started this by converting some low-value refinery streams to recently launched highly specialized Halo-Butyl Rubber grades and a new Purified Isophthalic Acid Plant, which is under commissioning.

As announced last year, Ambani added, "we are executing India's first and world-class Carbon Fibre facility in Hazira, Gujarat. Our Carbon Fibre platform will include Carbon Fibre and Carbon Fibre Reinforced Plastics. Our target is to be among the top three players globally in the Carbon Fibre and Carbon Fibre Reinforced Plastic composites."