Olefin and Polyolefin Markets in India Amit Chaturvedi

Olefin and Polyolefin Markets in India Amit Chaturvedi Senior Vice President & Head of Cracker Reliance Industries Ltd

Forward Looking Statements This presentation contains forward-looking statements which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise.

Presentation Plan Reliance Role of Petrochemicals India s Economic Transformation Petrochemical Industry Outlook Conclusion

Reliance Overview India s Largest Private Sector Enterprise World # 107 by Revenue as per Fortune Global 500 (July 2013) Market Capitalization of 41 Bn $ (as on 28 Feb 14) Pre-eminent Position in India s Economy Exports to over 100 countries representing 64% of total turnover 14% of Exports (FY 12) and 4% of the total Market Capitalization in India 8.6% Weightage in the BSE Sensex Large contribution in the country s economy

World scale Capacities Largest refining capacity at any single location Largest producer of Polyester Fibre and Yarn 5 th largest producer of Paraxylene (PX) currently, will be 2 nd Largest by 2016 5 th largest producer of Polypropylene (PP) 8 th largest producer of Mono Ethylene Glycol (MEG) currently, will be 5 th Largest by 2016 9 th largest producer of Purified Terephthalic Acid (PTA) currently, will be 5 th Largest by 2016 The growth continues.

FY 12-13 Financial Highlights Turnover of 68.4 billion $ EBIDTA of 7.1 billion $ Net Profit of 3.9 billion $ Total Exports of 44.1 billion $ EBIDTA growing at CAGR of 12.3% over last 10 years

Petrochemicals an enabling industry Petrochemicals in Food/ Agriculture Petrochemicals in Clothing Petrochemicals in Building/Construction PVC Roofs PVC Flooring Wall Coverings PVC Windows PVC Doors PVC Cot Petrochemicals in Consumer Durables Petrochemicals in Automobiles Petrochemicals in Healthcare Petrochemicals key role in modern day living

Today s India Transforming India

India Economy Growth 7,000 6,000 5,000 Billion $ GDP,on PPP basis (Billion $) Per Capita GDP, on PPP basis ($) Forecast $ 5,750 7,000 6,000 5,000 4,000 4,506 4,000 3,000 2,241 3,000 2,000 2,042 2,000 1,000 1,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 Source: IMF India s GDP growing from 4.2% of world in 2004 to 5.9 % in 2015

Accelerated Urbanization Increasing urban share in population 2011 : 31% 2021 : 35% 2030 : 40% Number of cities with population >1 million to rise from 53 in 2011 to 75+ in 2021 Investment Required in Urban Infrastructure (excl Housing) 2012-30 ($ billion) Miscellaneous Waste Management Traffic Infrastructure Capacity Building Storm Water Drains Sewerage Water Supply Renewal & Redevelopment Urban Transport Urban Roads 68.4 10.1 20.4 21.2 39.8 50.6 66.9 85.2 93.6 Total Investments >$ 860 bn 360.2 0 100 200 300 400

Purchasing power continues to rise Source: NCAER, Reliance Research 50% of India s population is < 25 years of age and 65% is < 35 years old

Food security and water management India to become the most populous country by 2025 Population growth higher demand for food and water Limited increase of arable land and usable water possible Higher productivity of water and land vital Plastics applications can raise production of agri produce India adopting globally followed practices for productivity enhancement Future investments in agriculture expected to rise significantly Translates to additional consumption of petrochemicals

A day in the life of India: 2012 vs 2016 Average Daily Sales of Consumer Products in India 2012 Cars 6000 TVs 36400 ACs 10100 Refrigerators 22100 Washing Machines 10600 2-wheelers 36800 2016 10900 55100 15900 31500 14700 76100 India s growth is expected to accelerate in the coming years - Providing further fillip to petrochemicals consumption

India s Demand Drivers - Summary Economic Advantage 3rd largest economy globally (PPP) with potential for high growth rate Demographic Advantage Emergence of Middle class - rising household income Growing consumer market Large workforce - Highly skilled & Educated Urbanization 31% - 2010 to 35% -2020 (Population living in city) Growth of real estate sector and construction activity Modernization of Agriculture Plasticulture, Micro Irrigation, etc. India as auto manufacturing hub Booming retail sector Low levels of per capita consumption of polyolefins (6.1 Kg against global average of 20 kg) Indicative of India s potential for sustained high growth in coming years

Indian PE Demand Growth 7,000 6,000 5,000 4,000 Qty, KT Op. Rate 100% 90% 80% 70% 60% 50% 3,000 2,000 1,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Production Domestic Demand Capacity Operating Rate Capacity additions in line with the domestic demand growth 40% 30% 20% 10% 0%

Indian PP Demand Growth 7,000 6,000 5,000 4,000 Qty, KT Op. Rate 100% 90% 80% 70% 60% 50% 3,000 2,000 1,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Production Domestic Demand Capacity Operating Rate India continues to be long in PP 40% 30% 20% 10% 0%

12 th Plan projections for petrochemicals All Fig in KTs Consumption Actual Estimated CARG Group 2011-12 2016-17 11/12-16/17 Building Blocks 8105 12746 9.5% Comm Plastics 8555 14001 10.4% Syn Rubbers 462 721 9.3% Surfactants 648 868 6.0% Solvents and Int 1726 2563 8.2% Fibre Intermediates 9034 16911 13.4% Syn Fibres 3405 5364 9.5% Total 31934 53173 10.7% Capacity Actual Estimated CARG 2011-12 2016-17 11/12-16/17 8460 12533 8.2% 8975 12671 7.1% 124 764 43.9% 733 784 1.3% 2129 3304 9.2% 8977 17664 14.5% 4527 7390 10.3% 33925 55110 10.2% Overall consumption likely to grow by ~20 MMT

Upcoming Petrochemical Projects Company ONGC Petro Additions Locations Ethylene Production (KTA Propylene Production (KTA) Dahej, Gujarat 1100 340 MRPL Mangalore, Karnataka 440 BCPL Lapetkata, Assam 220 60 GAIL PATA, Uttar Pradesh 450 HMEL Bhatinda 440 BPCL Kochi 500 Reliance Gujarat 1400 150 Total 3170 1930 Huge investments in petrochemicals sector planned for next few years

But Some Challenges.. Notwithstanding growing demand, ensuring competitiveness is a MUST Historically Middle East was growth center thanks to low feedstock and Energy costs Less Ethane for new projects North America today is new epicenter of growth Low energy and feedstock costs However no domestic demand for polymers High energy costs on account of soaring LNG prices New coal-based manufacturing capacities can redefine the industry Environmental issues will have to be addressed suitably Industry will have to keep improving itself continuously

1 7 13 19 25 29 31 38 43 48 55 60 66 72 76 80 85 90 96 100 104 107 112 115 119 123 126 129 133 135 139 142 145 148 151 Cash Cost ($/MT) Ethylene Cash Cost Curve 1800 1600 1400 Asian/European Gas/Mixed Feed Crackers Asian and European Naphtha Crackers Small European and JKT Crackers 1200 1000 800 Middle East Gas Crackers and US Gas crackers 600 400 200 0 Cumulative Capacity (MMTPA) Feedstock and Energy costs driving competitiveness

Conclusion Economic transformation of India continues accompanied by income growth Coupled with population growth, demand for resources expected to increase manifold Increase in consumption translates to higher demand for petrochemicals Industry in India is responding to rising demand with additional investments creating growth opportunities Unprecedented opportunities in petrochemicals

Thank You