EkaLore has previously highlighted Reliance Industries Limited (RIL) (in various connect enterprises) with regard to Alien Invasions (communications, retail). In these releases we highlight the Jamnagar Refinery and implications of recent global energy market challenges.
Even before Covid-19 the Jamnagar refinery was subject to global energy pricing and revenues tied to higher value outputs like chemicals.
The currently high profit margins from Jamnagar are providing RIL with new profits and cash-flow. RIL has opportunities to enter more global markets (like the failed Boots acquisition with Apollo Global Management). Having a huge cash-inflow during a highly inflationary period also positions Reliance for stronger cash-flows for joint ventures and being brought the most desirable deals.
The Jamnagar facility accrues increasing value for Reliance by:
1) Enabling agility to react to global conditions (conflict, supply interruptions, demand conditions) ensuring and delivering cash flows.
2) Leveraging asset valuation during inflationary periods (barrier for competitive entry) and improving asset returns (inflated flows).
3) Leading market position to supply Indian domestic demands for higher-value products (other than fuels) for potential near-term market growth rates above 20%.
4) Key employer to attract, retain, and accelerate talent for complex operational, administrative, financial, and global presence.
5) Recognition as a key global industrial facility attracting and enabling growth with partners, technology exploitation, and risk-reduced shared ventures.
Our next post covers Reliance’s opportunity to leverage the availability of Russian oil
Read this and other posts at www.ekalore.com/India-Business or www.ekalore.com/alien-invaders
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