The year 2018-19 was pivotal as it marks the first full year as Nayara Energy, embodying "the face of new era" and reaffirming our raison d'être. The new brand identity manifests not just in our people, processes and practices but in the possibilities and opportunities to realize the potential, the market presents.
The global oil market is experiencing renewed uncertainty and volatility due to complex geopolitical and macroeconomic factors. The world’s demand for energy is growing, owing to rising incomes and increasing population, especially in fast-growing developing economies. While there’s increased focus on renewables, we believe oil and gas will continue to remain essential components of the energy mix for many more years to come.
As one of the fastest growing economies in the world, India’s energy demand is rising. IEA estimates that India is expected to witness fastest growth in oil and gas demand in the world, largely driven by industrialization and urbanization. To boost energy security in India, Government of India is undertaking several forward-looking policy initiatives across the value chain to enhance oil and gas production, develop infrastructure and improve efficiencies within the downstream sector.
After a strong start, Nayara Energy continues its journey to optimize existing asset portfolio and strengthen the same for the future. The transformation efforts undertaken during the year, reported robust results including turnaround, which was critical for business sustainability and reliability. We are proud of this growth phase of our refinery. The Marketing business, too consolidated its market position. The retail business continued with steady performance, driven by efficiency gains from our operations, digitization and automation programs and working capital monitoring. In our continued journey towards achieving financial excellence and optimizing our capital structure, we have undertaken many innovative initiatives. These are positively reaffirmed by high domestic and international credit ratings by CARE Ratings and Moody’s respectively.
At the heart of our values is our commitment to safe work environment and making an impact in the communities in which we operate. Moving forward, we will continue to bolster our efforts towards strong safety performance and integrity of our operations.
Delivering operational efficiencies has been at the core of our refinery operations. We continued our pursuit of excellence and delivered a throughput of 18.90 MMT on the back of efficacious turnaround in November-December, 2018.
The success of turnaround can be gauged by the improvement in reliability, efficiency, and capacity. The turnaround has significantly enhanced our capability to take higher TAN and high sulphur crude. We are capable of producing more Euro IV/V compliant gasoil and gasoline. We can successfully start MS and HSD BSVI supplies to meet obligations of higher quality auto-fuel grade supplies to our retail outlets in notified NCR and adjoining areas.
India has a large and growing market for petrol and diesel. With burgeoning urbanization, this is only expected to increase. Echoing the market sentiment is the expansion of our retail network. We are the fastest growing private sector network with over 5100 retail outlets and we continue building efficient, integrated and automated, future-ready network of fuel stations.
We are also proud of our new beginnings - our first inland rail-fed depot, which is strategically located at Wardha, Maharashtra. This modern 16,000 kl depot caters to the requirements of customers as well as business partners in and around the Vidarbha region.
On the B2B front, we have broken new ground with institutional sales to the Andhra State Transport Corporation. We are looking to add new customers in other sectors too, as we continue to sell our products in priority markets through the right channels.
The Petrochemical sector has a vital role to play in India’s economic growth and development. Diversifying our energy basket with our foray into petrochemicals is our commitment to become a part of this development story. We proudly unveiled $850 million expansion plan into the petrochemical business and will mark the start of new growth phase in our refining business.
Additionally, our current and future investments will significantly contribute towards the development of Devbhumi Dwarka district as a petrochemical hub in India.
Guided by our fundamental priority and bedrock of success is Health, Safety and Environment (HSE) of our people, assets and communities. We strive to create and maintain a safe operating culture and testament of this is ISO 45001:2018 certification, that makes us the first ever petroleum refinery in India to receive this for conforming with Occupational Health & Safety Management System.
Turnaround 2018 further cemented our safety commitment. Not only did we complete the same ahead of the schedule, but we even did it with no major incident.
At Nayara Energy, we strive to optimize the overall cost of financing and strengthen the balance sheet. In our continued journey towards achieving financial excellence and optimizing our capital structure, we added many reputed Indian and International banks to our portfolio. We also launched our maiden issue in the domestic capital market and raised long-term prepayments from global counterparties. These initiatives put together have provided us with an opportunity to align our liability profile, resulting in a strong, efficient and agile capital structure.
The launch of our new corporate identity, Nayara Energy means so much more than just a brand name. It’s about our EXCEL values, our collective and individual actions we undertake every day and the behaviors we embody, and our culture – who we are and how we operate.
During the year, we engaged with Spencer Stuart and undertook a culture survey. What we heard was the incredible strengths we have of being both result-oriented as well as caring. While building our next chapter of growth, we are committed to driving the evolution of our business and creating a culture of learning and developing the best leaders today, for tomorrow.
For our culture to be meaningful, we have anchored and aligned ourselves to the commitment of trust and integrity. We have zero tolerance towards any form of harassment or discrimination and are committed to providing a safe and empowering work environment.
Through our social investments, we are creating opportunities for people to access healthcare and education to build sustainable communities. We also endeavor to make 11000 hectares of land water neutral by 2026 in Devbhumi Dwarka district and continue to make a positive and enduring impact on the communities in which we operate.
Though the pace of change in the industry remains relentless, the global economy continues to grow and brings to fold increasing demand for energy. I am confident that with our renewed sense of purpose, strategy and operational capacity, we are uniquely positioned to deliver value and growth.
I want to thank our Chairman, Board of Directors, the leadership team and all Nayara Energy employees for their continued trust, confidence and support.