Reliance, in a statement today, stated that 65% of its capital expenditure investments will start returning cash flows in FY18. Reliance said it expects capital expenditure in FY18 to be Rs 15,000-18,000 crore, apart from investments that may be required in Jio. Total capital expenditure in Jio stood at Rs1.79 lakh crore at end of Q4FY17.
The company further added that they do not see any capital expenditure in their hydrocarbon business in FY18. Earlier on 20 April, reliance had announced the successful commissioning of the second and final phase of its Paraxylene (PX) unit at its Jamnagar complex, which will double the company’s PX processing capacity adding that the company would become the world’s second largest producer of PX with about 11% of global production with the commissioning of this project.
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RIL had also said that its various facilities, including Para-Xylene, Cracker and downstream projects (MEG, Linear Low-density and Low-density Polyethylene) as well as Gasification which is linked to RIL’s DTA refinery, have now been installed, mechanically complete and are in various stages of pre-commissioning and commissioning. “These projects will add significant value to Reliance’s Refining & Petrochemical business and enable Jamnagar complex to achieve energy self-sufficiency. The benefits of integration at the Jamnagar complex will set a new paradigm of scale and value addition in the Refining and Petrochemicals industry,” read the RIL statement.
Jal Irani, Senior VP at Edelweiss Capital Services, had also recently stated that Reliance Industries is expected to benefit immensely in the near future as the company’s projects under commissioning will significantly add to its free cash flows.
“There is $40 billion worth of projects in commissioning phase, which doubles their (RIL’s) productive assets,” Irani said. He further added, “We forecast RIL’s free cash flows to rocket from next year as the quarterly Capital Expenditure trend is plummeting.”