I take this opportunity to thank everyone who worked with us to fulfil our responsibilities to generate sustainable value for our employees, customers and partners, and other stakeholders, provide a safe work environment and invest in the communities around us.
The global economy continued to expand during 2018, with the IMF estimating the global growth at 3.7% for the year. As a result, the global oil demand growth continued, at 1.3 mb/d for the year as per IEA estimates. China and India together continue to maintain dominance with their share being more than 50% of global oil demand growth.
New emerging concerns that include escalating trade restrictions, gradual shift towards protectionist policies and geopolitical strains pose as big risks. These have had a particular impact on the availability of heavy oil – our core feedstock. Oil demand itself remains robust, and the incremental supply is coming from US light shale oil. The above factors have substantially added to price volatility and is forcing organizations to reshape their strategy.
India is one of the fastest growing energy markets and the demand for oil and chemical products continues to expand riding on increasing vehicle ownership, growing urbanization and industrialization. Nayara Energy continued focus on its commitment to excel in this transformational year, marked by structural change in the ownership, revitalization of the governance framework and a new corporate identity. We reinforced our commitment to safety as well as towards our local communities.
Nayara Energy has a disciplined approach towards health, safety, environment and quality (HSEQ) across the business, infrastructure and people. The refinery’s turnaround marked by innovative thinking, efficient planning and sound execution, enabled the company to deliver safe and reliable operations and that too, ahead of the schedule. Apart from regular engineering, maintenance and inspection of all major processing units, we carried out unit revamps and tieins for future projects along with major catalyst replacement activities during the turnaround. The refinery throughput was stable with 18.90 MMT on the back of this planned turnaround.
The robust governance and risk management framework defines our strategic direction. The Board of Directors and Management team, encompassing wealth of diverse experience, oversee regular reporting and auditing practices. Various board committees and strong internal control mechanisms enable the company to ensure robust view of the company operations.
Above all, we successfully refinanced the entire long-term debt of USD 2 billion. Concurrently, our domestic credit rating from CARE was upgraded three notches from “A” to “AA” and we also achieved maiden international rating of “Ba2” from Moody’s, highest rating in Asia for a single-site refinery.
Nayara Energy’s retail business is the fastest growing private network in India with over 5100 retail outlets across the country as of March 31, 2019 and our retail expansion continues to be robust. Enhancing the supply infrastructure, we operationalized the first rail-fed depot in Wardha, Maharashtra, which marks an important step towards our commitment to creating world-class assets. The fundamental commitment of safety was well-integrated into the entire process from construction to commissioning. We are developing the local communities around Wardha depot alongside rather than an afterthought.
Our CSR and environment initiatives continue to play a pivotal role in improving quality of life and driving inclusive growth in the communities that we thrive in.
While working towards delivering a better tomorrow for future market sustenance and ambition for our asset development, Nayara Energy endeavours expansion into the petrochemical business, which is a stepping stone for growth for meeting the key needs of the nation.
In a structurally growing Indian market for petrochemicals, Nayara Energy has a unique opportunity to leverage on the existing integrated infrastructure of land, port, power and storage. The company is well positioned to harness this impending boom with its cost-competitive technology for propylene production, location close to the downstream plastic processing industry in Western India, and strong local channel partnerships.
New opportunities for growth will also come from the impending IMO 2020 regulation limiting sulphur content of bunker fuel to 0.5%, and India’s shift to Bharat Stage VI compliant fuel.
Our future is exciting and we are well equipped to build on the momentum and leverage on the opportunities to realise our potential.
On behalf of Board of Directors, I would like to extend my deep appreciation to the entire Nayara Energy family, Anand and his leadership team.