Combine ExxonMobil with AT&T, then have the resulting partnership plan a Wal-Mart-type operation, and you'll get some idea of what Reliance Industries Ltd. means to India.
Mumbai, India-based Reliance is not only India's largest oil and gas producer, it's also the largest maker of polyethylene, polypropylene, PVC and PET on the subcontinent. The firm is a major cell-phone network provider and runs a financial services business as well.
And even though parts of the company are being spun off - as the ongoing public feud between brothers Mukesh and Anil Ambani plays itself out - Reliance remains India's largest private-sector company and one that in many ways seems tied into the national identity as India looks to modernize.
It's a familiar story
There's a lot in the Reliance story that will be familiar to North American perspectives, especially to fans of a good rags-to-riches story.
Founder Dhirubhai Ambani was born in Saurashtra, but moved to the Middle East nation of Yemen as a teenager, where he worked at a gas station. In 1958 - while in his mid-20s - he returned to India and started Reliance Commercial Corp., a commodity trading and export house, with an investment of about $400.
Ambani stepped into manufacturing in 1966 by opening a textile mill in Naroda. From there, it was a series of increasingly larger steps into backward-integration that led the firm into polyesters and raw materials, and from there into oil and gas.
Even Ambani's death at age 69 in 2002 launched another Western-style drama - a bitter sibling rivalry between his sons Mukesh and Anil. According to terms of the split, Mukesh will get the industrial businesses, which make up about 75 percent of the firm.
Big kid on the block
Basically, if you're making plastic parts in India, you're buying from Reliance. The firm has a 45 percent market share in polymers overall. It also ranks as the world's largest maker of polyester fiber and yarn with more than 2 billion pounds of annual capacity, including a newly opened, 200 million-pound plant.
Reliance has the financial numbers to back up its ambitions. It's the only Indian firm to rank among Fortune's Global 500, with sales of $16.7 billion in the fiscal year that ended March 31, 2004. In the first nine months of fiscal 2005, overall sales were up 18 percent to almost $14 billion. Profit also climbed 24 percent to almost $1.5 billion.
In that same nine-month period, plastics and other petrochemicals accounted for about 30 percent of gross sales - about $5.1 billion - a jump of more than 7 percent over the year-ago period. The unit also contributed almost 40 percent of pretax profit in those nine months.
Reliance is doubling its oil refining capacity. That effort will increase the amount of propylene monomer available to its plastics business, resulting in the April opening of a new 660 million-pound-capacity PP plant in Jamnagar.
The push will continue in 2008 when Reliance adds a whopping 2.2 billion pounds of PP capacity, raising its overall capacity to about 6.6 billion pounds.
``We're exploiting the integration of the system,'' Kamal Nanavaty, president of Reliance's cracker and polymers sector, said at Plastindia 2006, held Feb. 9-14 in New Delhi. ``We're now an integrated energy company.''
Reliance still sells about one-third of all the resin it makes into the export market, but that could be changing. Nanavaty said that in the last nine months of 2005, consumption of PP and polystyrene in India grew more than 10 percent, high and linear low density PE use was up more than 20 percent and PVC demand zoomed up more than 30 percent.
``The Indian packaging market is at the flashpoint of a retail revolution,'' he said. ``We'll see a tremendous amount of growth as the country opens up economically. We use 5 kilograms per capita now, but that number will be 20 by 2015.
``We're tripling consumption every 10 years. The country went from nowhere to having 100 million cell phone users. We're adding 5 million handsets every month.
``Because of the sheer size of the market,'' Nanavaty added, ``we tell converters that if they're growing at 7-8 percent, they have to double that. They have to think big.''
Sujit Banerji, president of Reliance's polymers business, shares his colleague's optimism.
``The Indian market has [9.3 billion total pounds] of plastic consumption today, and we hope to get to [27.5 billion] by 2011,'' he said. ``Polypropylene will be a big share of it. More than a half billion people in India have good spending power and purchasing power. It's an increasingly young population that's interested in fast-moving consumer goods, whether it's food or other products.
``Today, packaging is half of the market, but it will come down as the others grow,'' Banerji added. ``Processed food isn't a big sector now, but it's a huge market that will be opening up. There's still a heavy amount of material substitution to do.''
Banerji pointed out that in the last nine months of 2005, total Indian polymer demand grew 21 percent, outpacing even the 8 percent growth the overall Indian economy saw in full-year 2005.
But the splintered nature of Indian plastics processing still represents a challenge to Reliance and other material suppliers. Nanavaty estimates the market has about 15,000 companies, but the top 2,000 make up 70-75 percent of resin consumption.
Reliance sells directly to the top 1,000, then deals with the rest through a network of distributors, dealers and resellers across the country. Reliance also operates five technical service offices nationwide.
Yet even that hodgepodge of a customer base and a tighter energy market haven't done much to slow down Reliance.
``India has come to the stage where real production has detached itself from high natural gas prices,'' Nanavaty said. ``Even with 50 percent higher prices, consumption is up and we've been able to pass our costs through.''
The U.S. also is showing up on Reliance's radar screen. The firm recently opened a sales office in South Charleston, W.Va., and, according to Nanavaty, has received ``plenty of inquiries'' about the availability of its resin.
``The U.S. is structurally short on polyethylene but long on polypropylene, so that's got [U.S. processors] looking around,'' he said.
Retail: the next step
Most intriguing of all may be Reliance's planned venture into the world of retail. The company already operates 1,000 gasoline service stations across India, and now it plans to spend $750 million to launch a chain of retail supermarkets and specialty stores, the first of which will open midyear.
Reliance will benefit from an Indian government policy that limits outside firms from selling more than one branded product in a retail business. In other words, Nike can open a store selling Nike products, but Wal-Mart effectively is blocked for now.
According to a company estimate, only 1 percent of Indian retail is organized, with the rest coming from individual merchants in individual settings. As a result of the growing Indian middle class, more than 600 shopping malls are in the planning stages across India.
If Reliance is successful in its new venture, it's a good bet many of those malls will be anchored by Reliance megastores, providing yet another outlet for goods made with Reliance plastics that are processed from Reliance oil.