Indian Chemical Outlook

Indian Chemical Outlook Presentation by Kamal Nanavaty President Strategy Development Reliance Industries Limited World Petrochemical Conference 2016 Houston, 16 th March 2016

India emerging as Global Growth Epicentre Indian Chemical Industry Mega Trends fueling growth Investment opportunities in India Brief on Reliance Industries Ltd.

India A Force to Reckon 17% of global population World s fastest growing economy Largest two-wheeler manufacturer globally 5th largest passenger vehicle market in world >1 Billion mobile subscribers 4 th Largest consumer of Energy globally 4 th Largest oil refining capacity globally 2nd largest textile manufacturing capacity globally World s 2 nd largest producer of food next to China Largest producer of Milk globally 3

Indian economy going forward US$ 2 Trillion to US$ 5 Trillion GDP Growth projections (%) 7.7 8.2 7.3 6.9 6.36.5 2015 2020f 2025f 2.5 2.02.4 1.5 1.6 2.0 India China USA EU Source: - IMF and Knoema.com 4

Triggers fueling growth in Indian economy Fast Growing Economy Youngest Population Infrastructure Investment Urban Population Growth Thriving Organized Retail 100 Smart Cities Make in India Program 100 smart cities Govt. has planned US$150bn highway & shipping sectors by 2020 35% India expected Urban population by 2020 (up from 32% in 2014) Global Mobile Subscribers to touch 5.5Bn by 2020 Railways to Invest $140 Bn By 2020 Mobile Growth Rural Consumption to go up 65 million new houses by 2022 'India to be world's 3 rd largest aviation market by 2020 5

India emerging as Global Growth Epicentre Indian Chemical Industry Mega Trends fueling growth Investment opportunities in India Brief on Reliance Industries Ltd.

Chemical industry holds a significant position in the economy Govt. allows 100% FDI in chemical sector 9% of total exports & 8% of total imports 2.11% of National GDP Indian Chemical Industry 2015 In 2025, Chemical Industry to reach US$403bn 3rd largest in Asia preceded by China Japan Sector covering >70,000 commercial Prdts Source: FICCI, TechSci Research Notes: Figures mentioned above are from Dept. of Chemicals and Petrochemicals 7

Growth in Indian Chemical Industry would lead to higher global positioning 2015 Global Chemical Industry US$ 3.26 Trillion Indian Chemical Industry US$ 144 Billion 2025 (E) Global Chemical Industry US$ 5.4 Trillion Indian Chemical Industry US$ 403 Billion Contribution to global chemical industry would increase 2015 2025 (E) 7.50% Strong growth outlook for the Indian chemicals industry (USD billion) 301 403 144 92.50% Global India Source: FICCI, TechSci Research, IBEF E Estimate, 2020 and 2025 are estimates 2015 2020 2025 8

Olefins to grow at steady rates Capacity Ethylene Consumption 7127 6980 Propylene Capacity Consumption 4255 4020 5166 4690 3907 3816 2014-15 Actuals 2016-17 Projection 2014-15 Actuals 2016-17 Projection Capacity 435 Butadiene Consumption 550 456 172 Source: 2014-15:Industry Statistics 2016-17: Company Statistics 2014-15 Actuals 2016-17 Projection 9

Polymer consumption to more than double Capacity 9237 9922 Polymers Consumption 13700 18279 Capacity 783 719 Surfactants Consumption 838 778 Capacity Synthetic Fibres 6455 Consumption 4317 4893 2834 Source: 2014-15:Industry Statistics 2021-22: Sub-group report on Petrochemicals for the 12th Five Year Plan 10

Aromatics Aromatics 8442 Capacity Consumption 1083 7042 470 4782 4015 Benzene Capacity Consumption 2110 954 Toulene Capacity Consumption 800 440 270 270 Capacity Orthoxylene Consumption 420 420 479 Capacity Paraxylene 5642 Consumption 4809 286 3009 2819 Source: 2014-15:Industry Statistics 2021-22: Sub-group report on Petrochemicals for the 12th Five Year Plan, Note: Aromatics total includes Bz, Toluene, OX and PX 11

Fibre Intermediates to continue rapid growth ACN Capacity Consumption 154 166 MEG Capacity Consumption 1855 1950 2182 Fibre Intermediates 1200 Capacity Consumption 9586 40 40 5170 6724 7774 PTA 7476 Capacity Consumption 4715 3930 5319 Source: 2014-15:Industry Statistics 2021-22: Sub-group report on Petrochemicals for the 12th Five Year Plan, Note: Fibre Intermediates total includes ACN, MEG, PTA 12

Elastomers consumption projected to pick up Elastomers Capacity Consumption 220 513 454 354 586 SBR Capacity Consumption 277 290 312 PBR Capacity Consumption 195 114 124 224 Capacity 41 NBR Consumption 40 50 20 Source: 2014-15:Industry Statistics 2021-22: Sub-group report on Petrochemicals for the 12th Five Year Plan, Note: Elastomers total includes SBR, PBR and NBR 13

Existing deficits in key chemicals in India indicative of the opportunity India Deficit ('000 Tonnes) in FY 15 PETROCHEMICAL DERIVATIVE CHEMICALS: OPPORTUNITY YET TO BE TAPPED Availability of feedstock, basic building block, excess Naphtha and Benzene makes it imperative to start manufacture niche chemicals in India SOURCE: Chemicals and Petrochemicals Statistics at a Glance 2015, DCPC 14

India imports certain key petrochemical intermediates; It s an opportunity waiting to be tapped PETROCHEMICAL INTERMEDIATES: OPPORTUNITY YET TO BE TAPPED Import of major petrochemical intermediates (KT) in FY 15 Production Imports 705 718 611 465 285 318 0 42 183 160 122 126 48 16 0 0 Styrene Phenol Acetic Acid Propylene Glycol Polycarbonate Butyl Acrylate EDC VCM SOURCE: Chemicals and Petrochemicals Statistics at a Glance 2015, DCPC 15

Multinationals operating in India SOURCE: Industry 16

Major players in Indian Chemical Industry Robust Demand for Chemicals Strong govt. support towards R&D Low cost manufacturing Construction Chemicals Booming Policy Support Increasing investments by Foreign Cos 100% FDI allowed Bright Future for Speciality Chemicals Setting up of PCPIRs SOURCE: CPMA 17

Executive Summary India emerging as Global Growth Epicentre Indian Chemical Industry Mega Trends fueling growth Investment opportunities in India Brief on Reliance Industries Ltd.

A day in the life of India: 2010 vs 2015 vs 2020 Average Daily Sales in India: 2010, 2015 & 2020 5200 14000 80000 84000 44000 42000 3000 33000 30000 21000 39000 66000 36000 10000 21000 6200 10000 28000 India s growth story to continue in the foreseeable future 19

Make in India India attracted investments of US$ 221Bn during Make in India week, Mumbai Feb 16 Boost share of manufacturing in GDP Higher growth, higher exports and job creation 21

With a market of more than 1Bn consumers with increasing purchasing power, local manufacturing is a compelling idea USA China Japan France Key Commitments by countries under Make in India Program Bilateral trade of US$100b expected from bilateral investment treaty US$42b over the next two to three years Plans to invest over US$20b in India s infrastructure over the next five years US$35b in Indian infrastructure US$4.5b in Delhi Mumbai Industrial Corridor France to Invest $10bn in 5 years Commitment >US$2.2Bn for 3 smart cities US companies like Boeing, Bombardier, Cummins, 3M, Foxconn,GE, General Motors, MV Agusta, Stanadyne, and Trina already part of Make in India S. Korea Plans to invest US$10b in India for infrastructure-related projects UAE Propose to invest US$75 Bn in India Source: News, Industry reports 22

There has never been a better time to invest in India ST AMONGST THE WORLD S FASTEST GROWING ECONOMIES Source IMF ST AMONG 100 COUNTRIES ON THE GROWTH, INNOVATION AND LEADERSHIP INDEX Source Frost & Sullivan ST AMONG THE WORLD S MOST ATTRACTIVE INVESTMENT DESTINATIONS Source E&Y ST AMONG THE WORLD S FASTEST GROWING ECONOMIES IN BOTH 2016 & 2017 Source WESP Report 16,United Nations ST CHOICE FOR TECH MNCs TO SETUP R&D CENTRES OUTSIDE THEIR HOME COUNTRIES Source ZINNOV MAGT CONSULTING ST AMONG THE TOPMOST GREENFIELD FDI DESTINATIONS, JAN-JUN 15 Source FINANCIAL TIMES FDI MARKETS ST AMONG 110 INVESTMENT DESITINATIONS POLLED GLOBALLY Source FOREIGN POLICY MAGAZINE BASELINE PROFITABILITY INDEX 2015 23

25 thrust sectors identified to push manufacturing activity in the country Defence Automobile Railways Textiles Chemicals 3 rd largest armed force in the world 40% of budget spent on capital acquisitions 60% demand met by imports Preference to Buy (Indian) and Buy and Make (Indian) over Buy (Global) FDI Limit raised US$ 120 Bn will be spent in next few years 7% of India s GDP, 45% of manufacturing GDP 3 rd largest automotive market by 2016 7 th largest producer in the world 23.36 mn vehicles Domestic and foreign, Co. s lined up with investments >$10 bn Volvo, BMW, Honda, GM, Ford, FIAT part of Make in India Investment of US$142Bn in 5 years US$ 1.6Bn projects cleared by govt. US$ 125Bn for rail infrastructure Double investment US$ 17.4 Bn for FY17 Metro s in 50 cities: Plan Bombardier, Alstom, Thales, Hyundai Rotem & ABB involved in expansion of Metro projects 2 nd largest textile manufacturing capacity globally Currently ~US$108 bn industry and expected to reach US$ 141 Bn by 2021 59% market share in textiles and garments Potential to grow 5X next 10 years 3 rd largest producer in Asia 12 th largest in world in volume terms India accounts for ~16% of the world production of dyestuff and dye intermediates Chemical Industry expected to reach a size of US$ 403 bn by 2025 Source: News, Industry reports 24

Brief about Reliance Industries Ltd. Jio Exploration & Production Refining & Marketing Retail Petrochemicals Across Products, Fully Integrated Crackers / Polymers (PE, PP, PVC) Polyesters (PFY, PSF, PET, FDY) Fiber Intermediates (PX, PTA, MEG) Elastomers / Chemicals (SBR, PBR, Butadiene, Benzene) 26

Reliance is committed to Petrochemicals Establishing largest supply chain of ethane in the world One of its kind state of the art shipping technology Building the world s largest cracker facility Build the world's largest gasification plant Investments across the petrochemicals sectors J3: ROGC, LLDPE, LDPE, MEG, PX SBR, PBR, Butyl Rubber PTA PET Ethane Tank at Dahej Paraxylene Heaters About US$16bn of fresh investments across petrochemicals and refining 27

To Sum Up GDP growth will be maintained at 7% + in near term Stable majority Govt in place after two decade Policies conducive to Industrial growth. Make in India and Digital India Growing middle class and large consumer base India becoming a favourite investment destination for Multinationals Favourable FDI environment Industrial peace in most part of India Better times for Chemical Industry 28

Thank you! To a bright and sustainable journey 29