Reliance to bid for Australian PE producer Qenos

13-Apr-05

As part of the Reliance group's strategy to transform into a global player and further its global ambitions, RIL plans to bid for Qenos. Qenos is a 6 year old privately held Australian polyethylene manufacturing company, jointly promoted by Exxon of the US and Orica of Australia. Qenos is valued at approximately US$315-400 million. RIL will compete with private equity investors like Iron Bridge Capital. Qenos, controls 60% of the Australian domestic market and is Australia's largest polyethylene producer, has been put on the block after it reported losses of approx A$70 million in 2004. Qenos is the 16th biggest petrochemical company in the world and the second biggest in the South East Asian region. This takeover of Quenos (together with its technical support and distribution network) would be a vehicle to develop markets for other Reliance polymers and reduce Reliance's dependency on the Chinese market. Also the high Australian reserves of natural gas (the feedstock for the petrochemical products) seems like an added advantage.