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Reliance says has not shut polyester units

Posted by Yogesh on Wednesday, 5 November, 2008

MUMBAI, Nov 5 (Reuters) – Reliance Industries Ltd, India’s largest private sector firm, on Wednesday denied a newspaper report that it had shut five polyester and petrochemical plants due to lower demand.

The Business Standard newspaper reported the company had closed five of its seven polyester and petrochemical units at Patalganga near the western city of Mumbai, amid falling demand for polyester products worldwide, citing unidentified sources.

The report said the company had shut plants for manufacturing polyester filament yarn, polyester staple fibre, paraxylene, purified terephthalic acid (PTA) and linear alkyl benzene (LAB).

It triggered concerns over the company’s earnings, and prompted selling in its shares, pushing them down 12.8 percent to 1,269.45 rupees ($26.7).

A Reliance spokesman declined to comment on the report when contacted by Reuters, but the firm later issued a statement to the stock exchange.

“The PTA and LAB facilities are currently operating at full capacity in Patalganga. Some of the polyester plants are shut for routine maintenance and enhancing product capabilities,” the firm said in the statement.

“The company expects to restart from this month. There are no plans currently to shift any plants from Patalganga to Nagothane.”

Last month, Reliance reported a 7.4 percent rise in quarterly profit to 41.22 billion rupees, but analysts said a global economic slowdown and falling crude oil prices would put pressure on its refining margins. Source Reuters

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