RIL spins polyester yarn in Malaysia
Reliance Industries is set to acquire the assets of Malaysian polyester manufacturer Hualon Corporation for Rs 2,000 crore. Influencing can be fairly simple
By Piyush Pandey & Nevin John, TNN |
MUMBAI : Reliance Industries is set to acquire the assets of Malaysian polyester manufacturer Hualon Corporation for Rs 2,000 crore. “It will be about $400-500-million investment. We are in the process of investing that kind of money in acquiring Hualon, which includes its working capital,” RIL senior vice-president Anil Rajvansi was quoted as saying in a Malaysian website.
Mr Rajvansi also talked about the “great synergy” between the two companies and said Reliance Industries was poised to capitalise on Hualon’s capabilities as a leading polyester producer in Malaysia.
The money will be used for restructuring operations and for meeting working capital requirements. RIL is also aggressively scouting for more acquisitions in the polyester space, sources familiar with development said.
RIL presently enjoys over 68% of the total polyester capacities.
“For becoming the world’s largest polyester maker, RIL is planning more acquisitions in the polyester space. What ever RIL does, it does it in a big way to ensure that it remains a market leader in that space. RIL plans to grow in polyester space inorganically ,” a source close to the company told ET.
RIL has a few companies on its radar and the talks have started, the source added.
RIL is keen to re-energise Hualon’s operations, which was sent into receivership in November 2006, over management problems. It has been under pressure from the global downturn in polyester margins and underwent debt restructuring. RIL aims to augment the production of the integrated textile company.
Hualon has fibre, yarn and resin manufacturing capacity of half a million tonne a year. Being one of Malaysia’s largest exporters, it has downstream textile manufacturing capabilities in Nilai and Malacca. Hualon sources raw materials from the local market and then manufactures and exports to the markets in US, Europe, Bangladesh, China, Egypt, Hong Kong, India, Iran, Korea, Syria, turkey and Vietnam.
Hualon has annual turnover of $800 million and has over 6,000 employees. Its assets include over 20 plants. While adding the capacity of Hualon, RIL’s polyester output will jump 25% to 2.5 million tonne a year, giving it a 7% share in the global fibre and yarn market.
Signs deal for E&P blocks in Colombia
The blocks are located in the Pacific Ocean, west of Colombia in water depths reaching up to 1,500 meters. Each block size is approximately 4,000 sq km. “RIL has carried out comprehensive geological studies before selecting these blocks,” it said. The contracts provide a six-year exploration period consisting of four phases of 18 months each, with exit right at the end of each phase.
Also Read:
RIL to spend over $12 bn to develop three gas basins
Mr Rajvansi also talked about the “great synergy” between the two companies and said Reliance Industries was poised to capitalise on Hualon’s capabilities as a leading polyester producer in Malaysia.
The money will be used for restructuring operations and for meeting working capital requirements. RIL is also aggressively scouting for more acquisitions in the polyester space, sources familiar with development said.
RIL presently enjoys over 68% of the total polyester capacities.
“For becoming the world’s largest polyester maker, RIL is planning more acquisitions in the polyester space. What ever RIL does, it does it in a big way to ensure that it remains a market leader in that space. RIL plans to grow in polyester space inorganically ,” a source close to the company told ET.
RIL has a few companies on its radar and the talks have started, the source added.
ADVERTISEMENT
Reliance international business president Atul Chandra recently said at an investment summit that the company was on the prowl for world-scale acquisitions of up to $15 billion as soon as next year. “We would be looking at major acquisitions, there is no question, because our growth cannot come only through organic expansion. We are always looking at opportunities where we find hidden value,” he said. RIL is keen to re-energise Hualon’s operations, which was sent into receivership in November 2006, over management problems. It has been under pressure from the global downturn in polyester margins and underwent debt restructuring. RIL aims to augment the production of the integrated textile company.
Hualon has fibre, yarn and resin manufacturing capacity of half a million tonne a year. Being one of Malaysia’s largest exporters, it has downstream textile manufacturing capabilities in Nilai and Malacca. Hualon sources raw materials from the local market and then manufactures and exports to the markets in US, Europe, Bangladesh, China, Egypt, Hong Kong, India, Iran, Korea, Syria, turkey and Vietnam.
Hualon has annual turnover of $800 million and has over 6,000 employees. Its assets include over 20 plants. While adding the capacity of Hualon, RIL’s polyester output will jump 25% to 2.5 million tonne a year, giving it a 7% share in the global fibre and yarn market.
ADVERTISEMENT
RIL had announced the acquisition of polyester assets of Hualon in last September . This was Reliance’s second acquisition since it bought Trevira in 2004. Reliance’s acquisition came at a discount to valuations given to petchem companies. As far as revenues are concerned , it is expected to add about $1 billion to RIL’s top line when fully operational and will add 25% to the existing polyester capacity. Signs deal for E&P blocks in Colombia
ADVERTISEMENT
Reliance Industries has signed contracts for two oil and gas blocks in Colombia where it plans to spend $50 million over the next six years, reports PTI from New Delhi. RIL, which had in 2005 signed a Technical Evaluation Agreement with Agencia Nacional de Hydrocarburos (ANH) of Colombia for two offshore blocks, on Monday signed production sharing contracts for Borojo North and Borojo South blocks, a company press release said here. The blocks are located in the Pacific Ocean, west of Colombia in water depths reaching up to 1,500 meters. Each block size is approximately 4,000 sq km. “RIL has carried out comprehensive geological studies before selecting these blocks,” it said. The contracts provide a six-year exploration period consisting of four phases of 18 months each, with exit right at the end of each phase.
Also Read:
RIL to spend over $12 bn to develop three gas basins
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
