Archive for March, 2010

Reliance ramps up production at Jamnagar

March 31, 2010

India’s top privately run refiner Reliance is expected to raise crude oil imports by about 22 percent this year as it ramps up production at its giant complex, further stamping its mark on world markets.

To maximise profit margins with its sophisticated refining capability, Reliance Industries is also set to limit African crude imports this year in favour of Middle East grades, if light crude prices continue to strengthen against heavy-sour grades, traders and analysts said.

“I expect Reliance refineries to run at full steam, even if in between there is a small shutdown, they can easily run at about 65 million tonnes,” said a trader familiar with refining operations. Reliance declined comment on traders’ estimates.

This means that the company’s two refineries — the largest facility in the world — will run above their full combined capacity of 1.24 million barrels per day (bpd), higher than last year when its second plant began operating at full rate in the second half.

After the world first saw increasing flows from Reliance in the summer of 2008, with the start of its new 580,000 barrel-per-day (bpd) plant, this year will see the full blast of exports of high-value diesel and gasoline made from a diverse slate of the cheapest available crudes.



Reliance Retail’s Office Depot JV

March 25, 2010

Reliance Retail will soon pilot the retail venture of Office Depot and open the first Hamleys toy store as the Mukesh Ambani-led retailer beefs up its portfolio and expansion plans. Its offerings under the lifestyle umbrella range from books & music, apparel, toys and opticals to jewels and office supplies. ET caught up with Reliance Retail’s president & chief executive-Lifestyle Bijou Kurien for an exclusive interview. Edited Excerpts:

Are the multiple verticals under the Lifestyle division operating profitably?
Both Reliance Time Out, which will grow to 20 stores by 2011, and the relatively smaller-store-sized Reliance Jewels, which will have 50 stores by 2011, broke even last year. Almost half of our 46-odd optical retail stores Vision Express have also broken even. The Marks & Spencer brand has now been repositioned to compete in the mid-market segment in India. We intend to open bigger stores of around 15, 000 to 20, 000 sq ft where merchandise will be extended from apparel to personal care, home ware and accessories. India will also account for a larger sourcing component for Marks & Spencer.

Over a year after joining hands with US-based Office Depot how has the JV progressed?
The Office Depot JV currently operates through a business-to-business relationship where we’ve focused on the small, medium and large office supplies space so far through our joint acquisition of eOfficePlanet, a supplier of office products and services to corporates. We are testing our first retail foray through an Office Depot store in Bangalore.

Has the lifestyle division also set its sights on smaller cities yet?
Reliance Jewels is positioned as a mid-market retailer which doesn’t cater to the everyday low-priced diamond jewellery segment but targets the occasion (wedding, births etc) and adornment-led jewellery segments. Given the fact that the Reliance brand is strong, we’ve positioned some formats such that it can tap into the potential of rural retail without creating a separate brand for smaller markets like Dhanbad and Jamnagar. Vision Express also holds relevance because like jewellery there are few national optical retailers and sight correction is a need that cuts across population strata.
The lifestyle division will also make inroads into smaller cities by co-locating with Reliance Hypermart’s roll out. Classically, hypermarkets are designed in a manner where the area in front of the cash till is allocated for several independent stores. So, in areas such as Rajahmundry and Kolhapur we’ve opted for co-location opportunities for Reliance Jewels and Vision Express with the hypermart. From a cost point of view too, drumming traffic towards independent formats and affordability of standalone rent often becomes a challenge within smaller cities.

How did the discretionary-purchase driven Reliance Time Out perform in a year when consumer sentiment took a beating?
Time Out was the only format within Reliance Retail that grew substantially in the slowdown period. Although, the sheer market size of our offerings is only around Rs 10, 000 crore, as the categories are highly underpenetrated, sales can be strengthened by creating occasions that lend themselves for purchases. This is why we had 200 events across three of our stores within 11 months.
We’ve performed better than competitors because our stores are built on architecting merchandise in line with people’s lives as opposed to being in a purely product-selling mode. Products are just the ambassadors, if you go beyond that by building an exciting store experience then sales don’t get dictated by macro trends. In fact, despite being a discretionary category it clocked 47% like-for-like growth this January.

Time Out corners now also feature within Pantaloon Retail’s Central formats across Bangalore and Ahmedabad. What is the rationale of being present in a rival’s format?

It’s a win-win partnership for both retailers. Central is a premium format where the consumer traffic is relevant to Time Out and the offerings appeal to the audience. Being wants and aspiration-driven, the format’s presence itself drives consumption. From a competitor’s point of view, it offers the option of partnering with a competent player to add to other categories.

Will there be a product overlap given your franchisee agreement with British toy retailer Hamleys?
Given the size of the population, the toy category is fairly underdeveloped in India. If you don’t show toys through large stores, you won’t sell enough of this impulse-driven segment. Most Indian retailers have included toys only as an aspect of multi-category stores so far. Our experience with Reliance Time Out showed that there existed a larger opportunity in having a full-fledged toy store. We will open the first store in Mumbai this month, followed by Chennai.


Reliance buys Gujarat government’s Land for Jamnagar SEZ

March 25, 2010

Mukesh Ambani‘s Reliance, Tata and Adani Group have emerged as the largest government land buyers of the state.

Together they have bought 4,830 hectare land from the state government in the last three years valued at Rs377.97 crore. This fact came to light in a written response given by revenue minister Anandi Patel to Congress MLA from Kalupur, Mohammed Farooq Shaikh.

Patel informe

Reliance Autozone Free Car Safety & Health Check Campaign in Bangalore

March 25, 2010

Taking forward the initiative to bring world class Auto retailing facilities in India, Reliance Autozone brings one of its kind ‘Free Car Safety & Health Check Campaign’ in the city of Bangalore. This campaign will kick start on Friday, 19th March and go on till Sunday, 21st March 2010 at the Reliance Autozone, Sector 5, Hosur Sarajpur Road (HSR) layout. Reliance Autozone has already successfully conducted this campaign in Jaipur and Hyderabad recentely.

During this Car Safety & Health Check Campaign, renowned brands like Michelin will do the free tyre check, Hella & Philips will carry out the free check on lighting systems & bulbs, Autocop will offer free check up & advice for Car Security Systems, Dupont will offer free advise for car care like minor scratch removal, Teflon coating, Upholstery cleaning, etc. and Amaron will offer free battery check. All this services will be available only at the Reliance Autozone store in Bangalore for its valuable customers.

Speaking on the occasion Arun Dey, chief executive Reliance Autozone said, “At Reliance Autozone, it has always been our endeavor to create customer delight by delivering world class automotive products and services with wide choice at best price. Reinforcing our vision, we have introduced this unique ‘Car Safety & Health Check campaign’ for our customers to benefit from this and gain more knowledge from the experts on Car Safety. We feel passionate about changing your experience of owning a vehicle.”

The Reliance Autozone store showcases more than 50 leading brands and 1400 products catering from mini segment to premium segment cars. This accessory store format offer consumers a comprehensive range of products in a pleasant and conducive retail ambience at best value along with quick fitment facility. There is also an amazing range of two wheeler accessories. The main features of the store are wide variety of accessories under one roof (from utilities, audio, videos, safety, car care, upholstery, navigation systems etc.), personalized service and competitive price positioning. The store also offers Fitment facility, Warranty & Service backup. The assortment includes an exciting range of accessories sourced from overseas as well.


Reliance in pursuit of stake in Atlas

March 19, 2010

Reliance Industries Ltd., the owner of the world’s largest fuel-making complex, is in talks with Atlas Energy Inc. to invest in the U.S. natural-gas producer’s shale assets. Reliance is seeking a joint venture with Atlas Energy to develop the U.S. firm’s Marcellus Shale gas operations.

Independent oil and gas company Atlas is looking for a partner for its operations in the booming Marcellus Shale in the eastern United States, which could bring in $1 billion or more for the firm.

Reliance, India’s largest listed firm, is eyeing a deal in trying to gain a foothold outside India, as it attempts to break into new markets and expand its various businesses including refining, oil and gas exploration and petrochemicals.

The Marcellus Shale, which spans parts of Pennsylvania, West Virginia and New York, could hold enough natural gas to satisfy U.S. demand for a decade, according to some geologists. “The sentiment is that the U.S. has a wall of gas that can be drilled at very low prices,” said Brian Lively, vice president of exploration and production research at Tudor Pickering Holt & Co. in Houston.

Atlas’ core Marcellus position consists of 266,000 acres largely in southwestern Pennsylvania. Bidders for the Atlas position should include large international integrated oil and gas companies as well as domestic independent oil and gas companies. Reliance Industries would be joining British, French, Japanese and Canadian rivals in investing in U.S. reserves trapped in rocks that until five years ago were considered too hard to be worth drilling.

Reliance Industries has raised about $2 billion selling shares since September and the funds may be used for capital expenditure, Chief Financial Officer Alok Agarwal said in Jan. Reliance had outstanding debt of 700 billion rupees ($15 billion) in cash and cash equivalent of 159.6 billion rupees as of Dec. 31, Mukesh Ambani, CMD, Reliance Industries said in the AGM in January. At the other end Marcellus Shale, Chief Executive Officer Edward Cohen said on a conference call on Feb. 26, “We’ve made clear that we are very alive and receptive to the joint venture situation. We’re well into the process.”


IMG & Reliance Foundation in JV to set up sports academy

March 17, 2010

Reliance Industries Limited (RIL) and IMG, the world’s leading sports marketing and management company, announced an equal joint venture to develop, market and manage sports and entertainment in India. The venture, IMG Reliance Pvt. Ltd., will have parallel complementary strategies: to provide and operate world class infrastructure and coaching facilities in the country to unlock India’s sporting potential and; to create and operate major sports and entertainment assets in the country.

A press release from Reliance Industries Ltd. said the senior management teams of the two organizations led by their respective Chairmen Mukesh Ambani and Ted Forstmann had formulated clear ambitions and strategies for the new company. “The idea is to try to begin to make this country much more proficient in sports other than cricket,” Forstmann said in an interview in Mumbai. IMG Reliance Pvt. Ltd. will harness IMG’s international expertise gained in over 50 years in the business of sport, entertainment and celebrity management with RIL’s expertise in the domestic market, strategic planning and flawless execution.

Under the auspices of The Reliance Foundation, the corporate social responsibility initiative of Reliance Industries, state of the art sporting academies will be developed to provide world class coaching and training facilities for Indian sportsmen and sportswomen. The required infrastructure investment will be provided by The Reliance Foundation. IMG Academies, Florida the world’s leading sporting and educational institution which has many alumni who have pursued successful professional sporting careers on the world stage will provide management knowledge and coaching skills transfer to the management and coaching teams of the Academies in India which will be managed by the joint venture.

IMG Reliance Pvt. will use “special-purpose vehicles,” to build sporting infrastructure and will replicate IMG’s facilities in Bradenton, Florida, which have trained athletes, including tennis players Andre Agassi and National Basketball Association player Vince Carter.

“The market is gigantic,” said Forstmann, whose company helped set up the Indian Premier League for the Twenty20 format. “In a country with a middle class growing like India, sports entertainment and media are going to be things that the country is going to want more and more.” He further added that, “The performance of Indian athletes on the national and international stage will improve dramatically with the correct development strategies. The No. 1 sport in the world is soccer. It would be a great thing for this country to have a really competitive national team.”

Mukesh Ambani said development of sports and a sporting culture was a social imperative for India in the 21st century. “World class infrastructure, frugal engineering, technology and scientific coaching are an integral part of development of today’s sporting talent globally. IMG has an enviable track record of leveraging these aspects and identifying, training and developing champion talent across disciplines,” he said.

Mrs. Nita Ambani, Member on the Board, IMG Reliance Pvt. Ltd. added, “I am excited about the comprehensive relationship with IMG which will seek to unlock the potential of young India at a global platform. Reliance Foundation will invest in the infrastructure development of the globally renowned IMG Academies in India. We are committed to undertake grassroots development programme to make a fundamental difference to the lives of millions of youngsters in the country based beyond the big cities.”

In keeping with Fostermann’s belief – “Heroes get created,” IMG and Reliance will begin this year by sponsoring 20 Indian students to train in Florida. The venture aims to produce world-class athletes in golf, tennis, soccer, basketball, and Olympic sports to help India “go win some medals”!


Three times more Reliance Gas to NTPC

March 12, 2010

State-owned power utility NTPC Ltd has tripled the volume of natural gas it buys from Mukesh Ambani‘s Reliance Industries at the government-approved price of USD 4.2 per mmBtu, to 1.81 million standard cubic meters a day.

NTPC, which till last month was taking 0.61 mmscmd from RIL’s eastern offshore KG-D6 field, has begun drawing an additional 1.2 mmscmd of gas to boost power generation, sources in know said.

In October, the government had allocated an additional 3.85 mmscmd gas to NTPC. Since NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat that are connected with pipelines ferrying KG-D6 gas from the Andhra coast, a complex swap arrangement was worked out with state-owned gas utility GAIL India.

Under this arrangement, GAIL diverted gas from other sources to NTPC plants and supplied RIL gas to its existing customers.


Reliance Industries to power Konaseema

March 11, 2010

Arrangements have been made, at the instance of the AP Transco, to supply gas from Krishna-Godavari basin of the Reliance Industries to the 445-MW Konaseema power project in East Godavari district to enable it to start generation.

This followed an approval given by the AP Electricity Regulatory Commission (APERC) to the Transco’s proposal to purchase power from Konaseema.

The entire system of the project, including the switch-yard and the transmission lines which would evacuate the generated power and wheel into the State grid, has been readied.

The Konaseema project has three units, two with 140 MW capacity each and one with 280 MW. For the present, only the two units with smaller capacities will go on stream.

The APERC also conceded Transco’s request to extend the time-limit up to March 31 to submit its tariff proposals for 2010-11 fiscal. Meanwhile, the distribution companies have been asked to ensure night supply (6 pm to 6 am) to all households in the State in the light of students preparing for various examinations; for seven hours to farm pumpsets to save the standing rabi crops; and provide supply to industries on all days except Sundays and the days observed as “power holidays”.

They have been instructed not supply power to industries from 6 pm to 10 pm every day.

The Transco supplied 228 million units from all its sources when the unrestricted demand in the state, indeed, reached a whopping level of 270 mu.


RIL to tap US markets, leases 1.2 mn barrel storage in Bahamas

March 8, 2010

Reliance Industries (RIL) has leased about 1.2 million barrels of clean storage at the Borco terminal in Bahamas as it seeks to increase its presence in the United States, trade sources said.

RIL, which operates the world’s biggest refining complex, aims to directly sell fuel in the US, the world’s biggest oil consumer, and had earlier leased 800,000 barrels of clean storage from American refiner Hess Corp in the New York harbour.

Two sources said today the firm leased about 1.2 million barrels storage with Borco, while a third source put the figure at 1 million barrels.

They said the Borco deal was done in the second half of 2009.

“RIL began supplying gasoline to the Bahamas storage from October. By the end of January it had supplied about 515,000 tonnes of gasoline to the Bahamas,” a source said.

RIL last year began shipments to the US, after it started its 580,000 barrels per day refinery, located next to its old 660,000 bpd refinery at Jamnagar in Western India.

RIL has, over the past few years, embarked on a robust marketing campaign to sell its refined products in Europe, Latin America, East Africa and the US.

Last year, RIL commissioned its clean storage facility at Ashkelon terminal in Israel to tap Mediterranean and European markets.


Reliance Trends to open 100 stores by 2012

March 4, 2010

Reliance Trends, the apparel arm of Reliance Retail Group, that offers quality and fashionable clothing at low prices, is chalking out major expansion plans. Reliance Trends is all set to expand its current base of 18 stores across the country to over 100 by 2012 across 90 cities. Mr. Akhilesh Prasad, Senior Vice President and Head, National Operations, Reliance Trends, mentioned that major thrust area for this growth will be the southern market, especially Tamil Nadu. Recently, Reliance Retail launched its first Reliance trends shop in Chennai at Mylapore.

As the apparel retail subsidiary of Reliance Retail, Reliance Trends commenced operations in the year 2008 with a unique target: to offer the common man quality and fashionable clothing at remarkably low prices. The mega structure store has been established keeping the needs of common man in mind. Backed by the largest corporate entity in India, Reliance Industries, this strong enterprise stayed unaffected even during the times of economic slowdown. In fact, Reliance Trends was conferred the prestigious title of the Asia Retail Congress recently.

Realising the growing prosperity of smaller towns and cities in India, Reliance Trends is now laying emphasis on A and B class towns. Of the new stores, 60 per cent will be in smaller cities and towns as they have the advantage of lower ren¬tals and lesser property pri¬ces. At present, it has 18 st¬ores in 13 cities, including Nashik, Ghaziabad, Jalandhar and Vishakapatnam.

Reliance Trends is planning to add 1.5 million sq ft retail space to assist its expansion plans. A considerable number of stores sized 15,000 to 25,000 sq ft will come up in the land bank available with Reliance Retail, the rest on leased and rented spaces. “As per standards, an investment of Rs 1,500 to 2,000 is required for each sq ft of retail space,” said Mr. Akhil¬esh Prasad.