Reliance Industries to expand petrochemical production in India
MUMBAI, India — Reliance Industries Ltd. will spend $8 billion to boost capacity and $4 billion on a plant to make a combustible gas for powering its refineries and petrochemical factories in western India, Bloomberg reported.
Reliance wants to use its record $13.5 billion cash to reverse a 29% slump in its stock in the past year after a slowdown in China’s economy and Europe’s debt crisis cut fuel demand, the article stated.
The company estimates India’s economic growth will spur a 54% increase in chemicals in the next five years.
“The spending plan brings a lot of clarity on the use of their cash,” said Niraj Mansingka, a Mumbai-based analyst at Edelweiss Capital Ltd.. “The strategy of building capacity in chemical and refining to meet Indian demand offsets the fall in gas production.”