Corporate India's 'Reliance Group'

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Reliance Charts Global Vision, Sets Up Teams In 10 Countries

 

"No constraints" mandate for opportunities, acquisitions

 

Our Bureau

 

Mumbai, Aug 2: The Reliance group has drawn up a mega global vision

which will see it scouting aggressively for value propositions

overseas, in a bid to translate them into ventures to increase

shareholder value.

 

Reliance Chairman Mukesh Ambani: Mapping Road Ahead

Establishments have been set up in 10 countries, including China, for

the purpose. The teams have been given "no constraints" mandate, and

have been told to scout for opportunities in those countries,

including local acquisitions across businesses. The global vision is

expected to fructify in a couple of years.

 

In a freewheeling interview with FE, the newly-appointed Reliance

group chairman Mukesh Ambani said the global plan was a key component

of Reliance's future growth, as the company was committed to growing

bottomline at between 20-25 per cent. Reliance, he said, had been

achieving this growth level — between 22 and 25 per cent every year —

and that is also what shareholders have come to expect. However, in

India, the growth rates in plastics and polymers ranged between 3 and

8 per cent, and if the company had to maintain its own targeted

growth rate, looking overseas was a logical extension.

 

"We have a large contingent in China, for instance. The global market

will offer value-generating opportunities. Work on the global plan is

on. We need to examine the options and figure out where value can be

generated in the world market," Mr Ambani said.

 

On the "no constraints" element, Mr Ambani said the teams had been

told they were free to look at whatever business opportunities came

their way, whether it was re-exporting, buying out companies in those

countries or setting up businesses there. "The teams are not going to

be restricted when they scout for opportunities," he said. Having

drawn up a detailed gameplan for the services sector domestically,

Reliance is now clearly setting its sights on the global arena.

 

One-third of Reliance group's total business portfolio by 2005 will

comprise services, and the rest will be oil and gas and

petrochemicals. Hence, the cyclical element would remain to an

extent, and the global gameplan would serve to balance that out and

mitigate risks.

 

Already Reliance is the largest exporter from India. The group's

exports grew a whopping 400 per cent over the previous fiscal during

2001-02. Reliance's total exports stand at around Rs 11,200 crore,

with Reliance Industries exporting its products to 100 countries and

Reliance Petroleum to 30 countries.