Amongst the various achievements of the Indian corporate juggernaut, execution clearly stands off as the best. Within years, the company has built the largest refining capacity at any single location. It is also the largest producer of Polyester Fibre and Yarn and has ranks amongst the top in the world in many other operational aspects.
In the year 2008-09 saw the commercialisation of two initiatives. The new petroleum refinery at Jamnagar and the deep-sea oil and gas production system in the Bay of Bengal, were the two.
According to Mukesh Ambani, chairman Reliance Industries (RIL), ?A global transformation initiative to leverage Reliance?s financial and technical skills, open new vistas for our enterprise and for our energetic talent to create new value globally, as the world resets to a new fundamental economic reality.?
However, financial year 2008-09 was also a tough one for the company as oil prices slumped and so did gross refining margins. And while net revenues grew by 6.2%, over the previous year, to touch Rs 146,328 crore operating profit remained stagnant at Rs 25,374 crore and the net profit declined by 21% to touch Rs 15,309 crore. And since Reliance Petroleum was amalgamated with RIL, these numbers might not be exactly comparable. However, despite this the company had a highest ever dividend outflow of Rs 1,897 crore and maintained a return on capital employed of over 20%.
These actions include conserving and re-deploying capital to petroleum refining and oil and gas projects for early completion of projects. Prioritising expen- diture to operationally critical areas and controlling working capital, particularly on inventories and receivables.
And above all, concentrating on flawless execution and commissioning of the oil and gas and petroleum refining projects. ?Execution, as they say, is the test of intent.Reliance learnt this dictum from its very inception. Not only has Reliance become world-class over the years in project execution, but it has also been constantly raising the bar for itself,? says Ambani.
?We invested for growth when most major global companies were reducing capital expenditure,? he adds. In a difficult times, Reliance spent close to Rs 24,713 crore on capital expenditure. With a current cash balance of nearly Rs 19,421 crore, Reliance is among the financially strongest companies in emerging markets. Net debt is now at less than 21 months of cash flow.
In the quarter ended December 2009, the company has reported revenues worth Rs 58,848, up 92.7% over the same period of the previous year . For the same period, operating profit grew by 38.5% to touch Rs 8,351 crore and net profit by 15.8% at Rs 4,008 crore.
Reliance is the largest polyester producer in the world, with a manufacturing capacity of 2.5 million tonnes per annum. This has been strengthened with the commissioning of the 900,000 tonnes per year polypropylene plant at Jamnagar makes it the fourth largest polypropylene producer in the world. The gas production levels have crossed six billion cubic metres and the field is slated for plateau production by the second half of the year 2010. 200 days of gas production has been completed with 100% uptime. Oil production from the D26 field has 2.8 million barrels with daily peak production expected by the end of the year.
Today, the Reliance Retail initiative serves over five million loyal customers in 86 cities and 14 states. This is done through nearly 1,000 stores. And despite scaling down of plans the management is confident to deliver on the promise of developing an ecosystem capable of enhancing shareholder wealth and also prosperity for marginal farmers, small transporters and vendors.