Reliance Industries Ltd (RIL) represents the fastest-growing industrial house during the last three decades. Its founder, Dhirubhai Ambani (he continues to lead the company), started it all with a small textile mill in 1966. The company has grown at an exponential pace to become one of the largest industrial houses in the country in terms of assets, turnover and profits.

RIL is the leading player in petrochemicals and manmade fibres in India. RILs products are mainly petrochemical-based products, which include polymers, polyester, fibre intermediate and chemicals. A joint venture of RIL (30 per cent), Enron (30 per cent) and ONGC (40 per cent), was awarded the production-sharing contract for three oil fields with proven reserves - Panna, Mukta and Tapti. A company promoted by RIL, Reliance Petroleum, has set up a refinery with a capacity of 27 mtpa. Moreover, RIL operates 800mw of captive power facilities at its various units. RIL has three committed projects under implementation by independent power-producing companies at Patalganga (410mw), Jayamkondam (Tamilnadu) (500mw) and Jamnagar (500mw) with a total project cost of US$1.35 billion, funded by debt-equity in the ratio of 70:30. Restructuring with merger of group companies can have unpredictable impact on the companys prospects. The performance of new ventures like power and telecom will also impact its earnings.

NATIONAL ORGANIC CHEMICAL IND LTD

National Organic Chemical Ind Ltd (Nocil), a Mafatlal group company (it is the first company to set up a petrochemical complex in the country), is planning to restructure. The company has decided to restructure the business by splitting it into three new companies - Nocil Petrochemicals, Nocil Rubber and Nocil. Nocil operates a small 65,000-tpa naphtha-based cracker. It produces mainly HDPE, and also PVC, ethylene oxide and ethylene glycol. The company has minor interest in rubber, agrochemicals and trading businesses.

The company has two subsdiaries - Ensen Holdings and Urvija Investments - that are mainly active in investment activities. Nocils petrochemicals complex is located at Thane, while the rubber chemicals plant is located at Navi Mumbai and the plastic products plant in the MIDC area at Akola. The companys plant was set up in the early sixties and being depreciated, has lower fixed cost. Nocil has a capacity to produce 65,000 tpa of ethylene and 35,000 tpa of propylene, 17,000 tpa of benzene and 10,000 tpa of butadene. In addition to own production, the company sources about 20,000-22,000 tonnes of ethylene from IPCL through a direct pipeline. The company is likely to improve its profitability in the current year due to significant cost savings.

The Government of India has a 60-per cent stake in Indian Petrochemicals Ltd (IPCL), one of the leading integrated petrochemical players in India. The company manufactures petrochemical products (polymers, fibre and fibre intermediates and chemicals) using hydrocarbon feed stocks naphtha and natural gas. The government has undertaken the process to offload its 25 per cent stake in IPCL in favour of a strategic partner with management control.

IPCL has taken various steps to face competition like regular monitoring of the product mix as per the market requirements, innovative sales policy, creating new areas of application. The company has also established a strategic marketing group, which monitors market trends and formulates strategies based on market intelligence and surveillance. IPCL, although a public sector enterprise, is professionally managed. The management has absorbed technologies from several international collaborators and has demonstrated an ability to execute large complex petrochemical project.

The IPCL management does not have the complete autonomy to take decisions, which are partly controlled by the respective ministry and the government. In the last few years, there has been a considerable enhancement in the autonomy granted to the company. The company received the Excellent rating from the Government in the financial year 2000 for achieving the goals set out in the MoU with the Government of India.

IPCL has no plans to undertake any major new capital expenditure plan in the current year. It is also reviewing its investments in non-core businesses - GE Plastics and Indo Vaccines Corporation - and plans to increase its stake in strategically important areas. The company also plans to focus on operational consolidation in the current year.