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Refining & Petrochemical in trouble-II: Why Mukesh Ambani needs to diversify?
Apr 05: Was Mukesh Ambani's ambitious foray into the telecommunication sector a far sighted attempt to cut potential risks in the refinery and petrochemical sector?
8The answer may well be "yes".
8A supply glut in the petrochemical sector is looming ahead even as large American, Chinese and Middle Eastern players with new technologies and cheaper feedstock get into the fray.
8The preeminence of the refining and petrochemical sector could be under serious threat in the coming years due to a variety of reasons.
8Ambani perhaps thought breaking through the Indian telecom market -- in which existing players looked over leveraged and vulnerable -- will be easier than challenging deep pocketed global peers in the refining and chemical business.
8Even as he consolidates his telecom investments, from which profits will take years to build up, Ambani may have to look to pour more investments into similar vulnerabilities in other segments of the economy to make up for the potential risk in his main business.
8Ambani has a unique advantage that his Chinese, Amercian and Saudi Arabian peers do not have. He has India as his captive market.
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