Feb., 10, 2003 // Reliance Industries, which already has a capacity of about 850,000 tons of polyester (PSF + POY), is still on an acquisition spree. In the last five years or so, Reliance has taken over three polyester staple fiber plants (India Polyfibres, Orissa Synthetics and JCT Fibres) and two fairly large POY units (Raymond Synthetics - 66,000 tons and DCL Polyesters - 30,000 tons). Now, it seems that Reliance has also finalized the purchase of the PSF and POY plants of J.K. Synthetics, and is moving to acquire a 30,000-ton PSF facility owned by Bongaigaon Refinery & Petrochemicals Ltd., a public-sector refinery in north-eastern India.

As of early December 2002, Reliance was reportedly also bidding for the polyester arm of Kohap of Korea, though it isn't clear whether it is going all out for it or is interested only if the acquisition is possible at an attractive price. Mitsubishi of Japan is also interested in KP Chemicals, which was hived off from Kohap some time ago under a broader restructuring plan of the troubled industrial house.

In the case of PSF, Indo Rama Synthetics is now the only major player other than Reliance. Indian Organic is a relatively small unit of 30,000 tons. In the case of POY, however, there are several players in the field. Besides Indo Rama Synthetics, there are firms such as Nova Petrochemicals, Mahendra Petrochemicals, Sanghi Polyester and Modern Petrofils. Profitability in the case of POY has been quite good in the last two years, and most of these mid-sized operations have earned good money. However, most of them buy PTA and MEG from Reliance, and follow the pricing policies of Reliance. For the time being, further consolidation in POY doesn't appear to be in the pipeline.

Overall demand for polyester is steady in India. No significant growth is expected to occur in the immediate term. Much would depend on India's ability to push exports of polyester and blended textile products. Polyester producers do not appear to be in a hurry to enter the global markets in a big way. They earned some good profits only in exports of textured yarn to Europe, but that has slowed down because of anti-dumping duties.

The process of consolidation has also started for nylon as well. India's output of NFY has been stagnant at around 40,000-50,000 tons a year, and the market is divided between half-a-dozen players. Recently, JCT has finalized a deal of taking over the nylon business of Baroda Rayon, which has been lying closed for some time because of financial problems. JCT's total nylon capacity would rise to over 12,000 tons with this deal.