ICIS PET VALUE CHAIN

Amsterdam -13Mar2018

Nishith Patel SBU Head- PET Business

2

Contents

f Recent trends and outlook for production and

consumption – India PET

What will the Indian downstream PET industry look like

in future?

Governmental impact on plastics in India – Plastic bag

concerns vs. PET recycling initiatives

3

Birth Of PET – The Wonder Molecule

Nathaniel Wyeth – DuPont Researcher.

In 1967 – he pondered whether Soda could be stored in

Plastic Bottles…..tried polypropylene and other

plastics….failed.

….finally…..

15th May 1973 Wyeth patented process to produce bottles

from Polyethylene Terephthalate (PET).

Born in 1973– PET created paradigm shift in life of bottles.

Plastics – Commercialized 1930 onwards.

(1911 – 1990)

f

4

PET – The Packaging Driver

0

50

100

150

200

250

300

350

400

Paper Flexible Packaging PET Aluminium Glass

18 Year CAGR (1999 -2017)Global Packaging

(Units Billions)

PET @7.5%

Paper @3.9%

Flexible Packaging @6.3%

Glass @1.5%Aluminum @2.2%

PET Surpassed Glass

as the largest packaging substrate

in year 2008

Source : Packaging Strategies

Aluminum=Glass

in year 2012

5

15.831.6

31.1

41.6

0

20

40

60

80

2010 2020F

PET Other Packaging Material

73.2

43%

Shift in Global Packaging Demand

46.9

67%

33%

Mn MT

57%

Global Beverage Packaging Demand

All 7.2 10.2

PET 2.4 4.4

Per Capita

CAGR

3.5%

6.5%

10 Years Growth

Mn. MT CAGR

26.3 4.5%

10.5 2.9%

15.8 7.5%

Source : Packaging Strategies

PET – Fast Growing Packaging Solution

Per Capita

All

Others

PET

6

PET Per Capita Consumption

RIL Committed to PET Industry

• Current India PET

Demand: 850KTA

• India PET annual

Demand would be:

~ 4MMT @ World per capita

~ 5MMT @ China per capita0.62

3.07 3.103.69

4.625.04

5.68

7.69

9.8510.00

0

2

4

6

8

10

12

India World Brazil China Russia Mexico Turkey France USA Italy

Per Capita PET Consumption (kg)

Reliance - Committed to Growth of Indian PET Demand

7

India - Growth Drivers

Market

GrowthRising GDP

Increasing

Disposable

Income

Rising

UrbanisationRetail Culture

Changing

Life Style

Favorable

Demographics

India – fundamentally strong drivers

8

India - Urbanisation Rate & Growth

856 1040 1210 1410

26 28 31 38

Total Population (mn)

Urbanisation Rate (%)

Mckinsey Report – Oct 2014

1.42 X

9

YEAR 2015

USD550 Billion

VALUE

USD2100 Billion

India- Retail Growth Multiplier

4 X

in 10 Years

YEAR 2025

CII-WAZIR – MAY’15

TOTAL

ORGANISED USD40 Billion USD315 Billion7 X

in 10 Years

10

18

33

34

12

4

Middle Class - Growth

40

45

12

2

1

14%

Deprived

Aspirers

Globals2010 2025

Source:

Mckinsey/NCAER

%%

Strivers

Seekers

46%

Deprived < 90K ; Aspirers < 200K ; Seekers < 500K ; Strivers < 1000K

India Middle Class Population will be more than total population of USA by 2025.

11

Retail Culture

Strengthening Consumer Base

Youth Population

Disposable Income

People on move

Rural Markets: ‘Last mile reach’

Retail Outlets and Packaging

Pack clarity

Shelf visibility

Innovative Solutions

Emerging Scenario

Depth and Width of Choices

Exposure to International brands

Increased RTD and RTE products

Organised

Retail Share

2005

2010

2015

2020

4%

5%

21%

25%

Retail Growth to

spur Packaging Industry

Source: Deloitte, FICCI, ASA

12

India– Beverages

6% 10% 9% 12%CAGR%

Euromonitor

Per Capita Consumption

13

India – End Use Consumption Growth

• Food Processing and Beverage Industry contributes 8.4% of Manufacturing output.

• The industry will grow from USD40bn to USD180bn by 2022

• Local Branding & Convenient Packaging will drive Rural Market penetration.

• Barrier PET application is in nascent stage for Beer segment.

(Billion Litres)2008 2013CAGR

('08-'13)2018

CAGR

('13-'18)

Soft Drinks 4 12 22% 23 12%

Bottled Water 3 8 25% 17 16%

Juice 0 1 24% 2 16%

Alcoholic Drinks 2 4 11% 5 6%

Beer 1 2 12% 3 7%

Source : Euro Monitor

14

PET….. the most preferred packaging material

Convenience

of PETGood Barrier

Properties

Light weight /

Unbreakabale

Transparent

Shelf Appeal Food GradeRecyclable

Ecofriendly

More Bottles per

Truck, less CO2

Emission

Reduced Packaging Cost

Less Noise Pollutions on filling lines

15

+ 10%

+ 18%

+ 6%

+ 4%

0%

0%

+ 21%

+ 12%

+ 34%

+ 21%

MATERIAL

Other pack PET Additional growth 13-17 (Packaging Type)

CAGR 13-17 CAGR 13-17Total in Mn UNITS

0% 20% 40% 60% 80% 100%

Beer + 10% 0%431 1,643 6

+ 18% + 21%JNSDIT* 89 1,675 383 5 905

+ 6% + 12%CSD

Liquid

Dairy+ 4% + 34%59 1,632 128 2,564 96 = Can

= Carton

0% + 21%Water= Glass

= Other+ 6% + 19%

Total: 4,242 Mn units= PET

* : Juices, Nectars, Still Drinks, Isotonics & Teas – includes flavoured & functional waters** : Total sales not available – only Retail

Source : Euromonitor 2013 – Top 54 countries databaseEuromonitor Forecast 2011-2015, March 2013

431

294 1,138 1,613

9,049

India – End Use Wise Packaging Growth

16

*Misc 3.6%

PET Resin Demand

850KTACSD/Fruit

Drinks

Persona

l Care

Liquor

PharmaceuticalsWide mouth Jar

Edible oil

Homecare

Dairy

Agro-

Chemicals

Bottled

Water

Packaging

*

India – PET Segments

Reliance

R&D Capability

R&D Centre – Patalganga

4 University Collaboration

17 Patents Granted

17 Publications in

Scientific Journals

Growing Diversified End-Usages along with Customers

17

PET – Segment-wise Volume

KTA FY'15 FY'16 FY'17 FY'18 FY'19 CAGR

CSD 170 190 230 255 285 14%

Alcoholic Beverages 95 100 125 155 170 17%

Non- Alcoholic Beverages 180 205 240 270 290 13%

Food & Oil 75 80 95 103 125 14%

FMCG/ Health Care 115 130 153 188 230 19%

Others /APET Sheets 5 5 7 9 15 14%

Total 640 710 850 978 1115 15%

Emerging Trend : Edible Oil, Milk, Pharmaceuticals

18

Dairy – Emerging Segment of Future

Package types – Options:

Rigid : PET, HDPE, PP

Flexible : Pouch, Semi-rigid : Tetra Pak

Indian Milk Production : 140 Mn MT

Value Added Product : 35%

Flavored Milk < 1%

PET Potential :Pack sizes 0.2, 1 litre

Currently used for fresh & flavored milk

Growing interest in different milk variant

Replacement for Carton & Glass

Barrier Properties, Light weighting & Branding

19

Downstream growth : Emerging Segments

India is the largest milk producing country in world : 127 MMT/ annum.

Only 37% is only processed milk.

Growing middle class, Health consciousness, Lifestyle changes demands more fresh

and pasteurized milk in convenient packaging mode

Remarkable growth in Baked Food, Confectioneries specifically Chocolates

and pastries

2008 2013 2018CAGR

( 2013-'18)

Dairy Products

MMT

10.2 14.5 18.5 5%

Bakery Products 3.3 4.2 5.4 5%

Confectionary 0.2 0.4 0.7 10%

Source : Euro Monitor

20

Edible Oil – High Potential Segment

Package types – Options:

Rigid : PET, HDPE, Tin plate.

Flexible : Pouch, Semi-rigid : Tetra Pak

Indian EO : 201 Lac MT (14-15)

Production : 85 LTPA & Import 116 LTPA

Packed Oil : 140 Lac MT, Loose : 61 Lac MT

PET Potential :Pack sizes

0.10, 0.25, 0.50, 1.0, 2.0 & 5.0 litre

Growing interest in 2 litre & 5 litre packs

15 litre Pack development : Conversion from Tin

Loose to packaged oil conversion

Tin

Containers

78.3%

HDPE

Containers

14.5%

PET Bottles

7.0%Tetrapack

0.2%

21

Source : APIC 2016/2017 , Country Paper India

1001610704

1232313353

1456016000

14000

12000

10000

8000

6000

4000

2000

0

Plastic Consumption: India kT

17-18 P

PVC

13-14 14-15

LDPE LLDPE

PS PET

15-16

HDPE

EVA

16-17P

PP

Total

Total plastic consumption projected

in India for 2017 is 14.5 Million ton

Plastic Waste in India : 5.6 MTA

Plastic Waste Recycled : 3.6 MTA

Uncollected and littered: 2.0 MTA

…….High Recycling in India supported

by Informal sector

Indian Plastics Consumption & Recycling

22

India-Plastic Recycling

Plastic Recycling creates Employment in India

23

PET Recycled Product

Apparels QuiltsInterlining

Wadding

Carpet

NFG BottlesFilm

HosieryUpholstery

PET Bottles

Toys Straps Comforter

…..Recycled fiber go into many applications

PET Recycled Products

PET Recycling is commercially attractive & value oriented business in India

24

Reliance: Responsible Recycling

RIL recycles

~2 bn bottles p.a.

Sorting

Grinding PET Flakes Spinning

Fibre-fill Largest selling pillow

Brand in India

Collection Sleep products

Reliance has created value chain from PET Bottles to Recron Pillows

25

ThankYou

Contact Details

Nishith Patel , SBU Head – PET Business, Reliance Industries Ltd.

Email : nishith.patel@ril.com & Phone : +91-9867639969

World-Cup Jersey from PET-Recycled-Fibre