Balrampur Chini Mills Ltd · NSE:BALRAMCHIN
Balrampur Chini Mills — Investor Presentation (March 2007)
52 slides from Balrampur Chini Mills's investor presentation, Mar 21, 2007
Slide 1: Balrampur Chini Mills Limited
BALRAMPUR CHINI MILLS LIMITED 21 March 2007 1
Slide 2: Contents
CONTENTS • Indian Sugar Industry Overview • Indian Sugar Industry: Key Policies and Regulations • BCML: At a Glance and History • BCML: Units • BCML: Business Model and Future Plans • BCML: Management and Organization Structure • BCML: Financials • BCML: Risks and Concerns • Appendix 2
Slide 3: Indian Sugar Industry Overview
INDIAN SUGAR INDUSTRY OVERVIEW 3
Slide 4: Indian Sugar Industry: Size & Overview
Indian Sugar Industry: Size & Overview • Size : Rs. 360 Bn annually [ US$ 8 Billion ] • Contributes Rs.30 Bn Crores to exchequer [ US$ 600 Million ] • Comprises 7.5 per cent of India’s rural population • Number of farmers 5 Million • Rs.230 Bn payment to cane farmers every year [ US$ 5 Billion appro
Slide 5: Indian Sugar Industry – An overview
Indian Sugar Industry – An overview • Indian sugar industry is fragmented. There are 450 sugar mills in India • 50% of sugar production under co-operative mode • Average crushing capacity is about 3500 TCD • Uttar Pradesh [North] and Maharashtra [West] produce 60% of sugar in India • Cultivation of
Slide 6: Synopsis of Indian Sugar Industry
Synopsis of Indian Sugar Industry 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Cane Acerage ('000 Hectares) 4,316.0 4,412.0 4,520.0 4,023.0 3,661.0 4,245.0 Cane Production (Lac tonnes) 2,960.0 2,972.0 2,874.0 2,373.0 2,371.0 2,784.0 Yeild of cane per hectare (tonnes) 68.6 67.4 63.6 59.0 64.8 65.6
Slide 7: Production, Consumption & Closing Stock
Production, Consumption & Closing Stock [ In Million tonnes] 2002-03 2003-04 2004-05 2005-06 2006-07[P] 2007-08[P] Opening Stock as on 1st Oct. 11.32 11.66 8.44 4.63 4.23 8.23 Production during Season 20.14 13.99 12.69 19.20 25.00 26.00 Imports [Raw Sugar] 0.04 0.30 2.00 - - - Total Availability 31.
Slide 8: State-wise Production - Four Seasons
State-wise Production - Four Seasons F ig u r e s in L a c T o n s E s t im a t e d S E A S O N Zone P r o d u c t io n P r o d u c t io n 2 0 0 4 -0 5 2 0 0 3 -0 4 2 0 0 2 -0 3 2 0 0 6 -0 7 2 0 0 5 -0 6 E a st U P 2 7 .0 0 2 0 .9 3 1 6 .0 2 1 3 .9 9 1 9 .8 0 W est U P 2 4 .0 0 1 9 .1 3 1 8 .3 5 1 7
Slide 9: Indian Sugar Industry: Key Policies and Regulations
INDIAN SUGAR INDUSTRY: KEY POLICIES AND REGULATIONS 9
Slide 10: UP Sugar Industry Promotion Policy 2004
UP Sugar Industry Promotion Policy 2004 FIXED CONCESSIONS • Capital Subsidy @ 10% of capital investment • Remission in Stamp Duty & Registration Charges on land purchase VARIABLE CONCESSIONS DEPENDING ON PRODUCTION • Cane Transportation Expenses – reimbursement • Cane Society Commission – reimbursem
Slide 11: Ethanol - Government encouraging mixing of alco-fuel with petrol
Ethanol - Government encouraging mixing of alco-fuel with petrol • 5% Ethanol blending with petrol has been made mandatory effective 1st Oct 2003 in nine sugar producing States. Level of blending likely to be increased to 10% . Govt. also exploring admixture with diesel. This is expected to save sub
Slide 12: Co-generation attractive
Co-generation attractive • Electricity Bill 2003 passed encouraging for power sector • Sugar industry can generate 4000 MW surplus power by using bagasse a by product • 100% captive power requirement currently generated from bagasse-fired boilers • 10% of incremental power in the country to come fro
Slide 13: Power from Bagasse
Power from Bagasse • All sugar factories are equipped to generate power to meet their captive requirement of steam and power • Surplus bagasse available after meeting requirement for captive power generation is about 10% of cane crushed • Surplus bagasse can be sold to paper manufacturers or alterna
Slide 14: BCML – History at a Glance
BCML —- HISTORY AT A GLANCE 14
Slide 15: Key Milestones
Key Milestones • 1975 – Incorporated as BCML and commenced operations at Balrampur unit • 1990 – Acquired Babhnan Sugar Mill Limited • 1995 – Diversified into distillery operations at Balrampur • 1998 – Acquired Tulsipur Sugar Company Limited • 2003 – Ventured into bagasse based power generation wit
Slide 16: BCML Data Sheet [Summary]
BCML Data Sheet [Summary] FINANCIAL As on 31.12.2006 LISTING AT BSE, NSE & CSE REVENUE [TURNOVER] Rs. 3527.2 Million NSE SYMBOL BALRAMCHIN PAT Rs. 191.8 Million BSE SYMBOL 500038 EQUITY CAPITAL Rs. 248.2 Million CSE SYMBOL 12012 REUTER CODE NSE - BACH.NS & BSE - BACK.BO CAPACITIES As on 31.12.2006 L
Slide 17: Factory Locations
Factory Locations . Tulsipur . Balrampur . Mankapur . Babhnan . Haidergarh . Akbarpur . Rauzagaon . Kumbhi . Gularia 10. Maizapur WOON AU &FWHN 17
Slide 18: BCML – At a glance
BCML – At a glance SUGAR COGEN POWER COGEN POWER BIO UNITS CAPACITY DISTILLERY [MW] INSTALLED [MW] SALEABLE COMPOST [TCD] [KLPD] CAPACITY CAPACITY [TONS] BALRAMPUR 12000 160 24.55 22.25 30000 TULSIPUR 7000 - - - - BABHNAN 9000 60 - - 18000 HAIDERGARH 5000 - 23.25 17.95 - RAUZAGAON*** 7500 - 25.00 16
Slide 19: Capacity Expansions in the History of BCML
Capacity Expansions in the History of BCML Sugar (TCD) Distillery (KLPD) Power (MW) Bio-compost (MT) 90 80 70 60 50 40 30 20 10 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 19
Slide 20: BCML – Business Model and Future Plans
BCML – BUSINESS MODEL AND FUTURE PLANS 20
Slide 21: Business Model – Sugar is an Energy Crop
Business Model – Sugar is an Energy Crop • Better inter plant synergies and utilisation of by products resulting in substantial value addition and greater hedge against sugar cycle • Ground water available at 75 ft and hence area naturally suited for sugar cane crop • No threat of competition from a
Slide 22: Business Model – Processing of By Products and Further Expansion
Business Model – Processing of Buy Products and Further Expansion • Company commissioned a sugar plant having 7000 TCD and 18 MW cogeneration facility at Akbarpur with a capex of Rs. 234 Cr.in Nov. 2005 • Byproducts consumed inhouse leads to substantial value addition • Commissioned a sugar plant of
Slide 23: Business Model – A conservative financing model
Business Model – A conservative financing model • From Nov’06 Sugar crushing capacities will touch 55500 TCD, Distillery capacity 320 KLPD and Cogeneration saleable power 85.20 MW • From November’07 sugar crushing capacities will touch 74,500 TCD, Distillery capacity 320 KLPD and Cogeneration saleab
Slide 24: Future Plans
Future Plans • BCML is setting up two green field integrated sugar complexes in Kumbhi & Gularia in Central U.P. with cane crushing capacity of 8000 tcd each. These two units will have 51 MW cogen facility. Capital outlay of these green field integrated sugar complexes would be close to Rs. 700 Cr •
Slide 25: BCML – Management and Organisation Structure
BCML – MANAGEMENT AND ORGANISATION STRUCTURE 25
Slide 26: Farmer Relationship, Technology & Infrastructure, Quality & Production, Human Resources
Balrampur – Farmer Relationship, Technology & Infrastructure, Quality & Production, Human Resources • Enjoys extremely good relationship with farmers in its command area • Company instals latest technology and machinery to achieve the highest operational result • Latest machines, technology and infr
Slide 27: BCML - Recognitions
BCML - Recognitions • Balrampur Chini among India’s 24 Gems in Forbes List of rising Asian firms - 2005 • In Forbes list of 100 best smaller-size enterprises in both Asia Pacific and Europe, the number of Indian companies is next only to UK's. And India is ahead of industrial powers such as Japan, G
Slide 28: BCML - Recognitions
BCML - Recognitions • Balrampur Chini selected as the top Indian company in the Sugar sector for prestigious Dun & Bradstreet – American Express Corporate Awards 2006 • Balrampur Chini selected as one of the 200 ‘Best Under a Billion” companies listed in Forbes Asia, October 30, 2006 Issue. Selectio
Slide 29: Organizational set up
Organizational set up BALRAMPUR CHINI MILLS LTD BOARD OF DIRECTORS MANAGING DIRECTOR JT. MANAGING DIRECTOR EXECUTIVE PRESIDENT WHOLE TIME DIRECTOR CHIEF GENERAL MANAGER [UNITWISE] DIRECTOR CUM CFO WHOLE TIME DIRECTOR COMPANY SECRETARY GM-COMMERCIAL GM-PRODUCTION CHIEF EXECUTIVE [OPERATIONS] SR. GM-
Slide 30: Profile of Directors
Profile of Directors • SRI . KAMAL NAYAN SARAOGI, Chairman, 61, is a graduate in • SRI. SUDHIR JALAN, Director, 60, is a commerce graduate and an commerce. He promoted the company in 1975. He brings with him 39 MBA from IIM, Kolkata. He is the past president of FICCI (the years of experience in the
Slide 31: Profile of Directors
Profile of Directors • SRI. M.M. MUKHERJEE, Director, 61, a university rank holder in • SRI. KEDAR NATH RANASARIA, Whole-time Director, 71, Political Science from Calcutta University, he also holds an Associate having more than 42 years experience in sugar industry. He is M.A. in diploma from Insura
Slide 32: BCML - Financials
BCML - FINANCIALS 32
Slide 33: Segment-wise contribution in turnover
Segment-wise contribution in turnover Qtr 1 : FY 2006-07 September'06* March March Rs. In Rs. In % Rs. In % Rs. In % Products Million % Million 2006 Million 2005 Million 2004 Sugar 2990.6 84.4 17,542.6 88.2 6,564.5 80.4 5,136.2 76.1 Alcohol 202.0 5.7 1,341.5 6.7 1,101.8 13.5 1,193.4 17.7 Power 348.4
Slide 34: Segment-wise contribution to PBIT
Segment-wise contribution to PBIT Q1: FY 2006-07 Sept 06* March March Rs. In % Rs. In % Rs. In % Rs. In % Products Million 2006 Million 2006 Million 2005 Million 2004 Sugar 88.4 24.47 3,025.7 75.76 1,305.6 67.93 709.5 66.68 Alcohol 72.6 20.09 385.3 9.65 346.1 18.01 144.8 13.61 Power 197.7 54.73 585.
Slide 35: Cane Crushing, Production, Recovery
Cane Crushing , Production, Recovery Details of the cane crushing, production and recovery year to year in respect of existing Units are presented below : Years Cane Crushing [ Million Tons ] Production [ Million Tons] Recovery % of cane crushed SS FY SS FY SS FY 2001-02 4.10 3.06 0.41 0.30 10.00 9.
Slide 36: Sugar Efficiency
Sugar Efficiency • Balrampur achieves highest operational efficiency in production • The sugar recovery is the highest in east U.P Percentage 2002-03 2003-04 2004-05 2005-06 [SS] [SS] [SS] [SS] BALRAMPUR 9.85 10.07 10.30 10.24 BABHNAN 10.04 10.28 10.53 10.32 TULSIPUR 9.40 9.72 9.55 9.92 HAIDERGARH -
Slide 37: Financials
Financials Qtr 1 Rs. Million Fin. Year FY ENDED ON 31ST MARCH 2006-07 2002 2003 2004 2005 Sept 2006* Gross Sales 3,527.2 5,489.5 6,675.8 8,022.9 9,302.6 19,897.7 Total income [incl.stock adjustment] 4,412.0 5,048.6 5,757.4 8,150.5 8,539.2 16,240.0 Raw Materials 3,285.3 3,273.0 3,950.4 5,494.5 4,741.
Slide 38: Financial Performance Ratios
Financial Performance Ratios *Sept Financial Year Ended 31st March 2002 2003 2004 2005 2006 PBIDT / TOTAL TURNOVER [ % ] 17.00 10.82 16.13 23.68 23.44 INTEREST / TOTAL TURNOVER [ % ] 3.08 2.03 2.47 2.04 1.73 INTEREST COVER [ X ] 5.52 5.35 6.55 11.66 13.59 PBDT / TOTAL TURNOVER [ % ] 13.92 8.79 13.66
Slide 39: Balance Sheet Ratios
Balance Sheet Ratios *Sept Financial year ended on 31st March 2002 2003 2004 2005 2006 DEBT EQUITY RATIO [ % ] 0.31 0.57 0.78 0.41 0.39 INVENTORY TURNOVER [DAYS] 178 151 178 167 25 CURRENT RATIO [ % ] 1.08 1.27 1.51 1.49 1.10 QUICK RATIO 0.20 0.31 0.31 0.38 0.79 ASSET TURNOVER RATIO 0.84 0.88 0.78 0
Slide 40: Per Share Data [Rs.]
Per Share Data [Rs.] ***Sept 2002 2003 2004 **2005 2006 EARNINGS [DILUTED] 2.46 1.54 3.16 6.16 12.19 CASH EARNINGS 3.50 2.65 4.73 7.99 15.00 DIVIDEND 0.85 0.55 1.00 1.60 3.50 BOOK VALUE *115.00 124.00 145.00 21.15 36.31 DIVIDEND PAYOUT [%] 34.06 39.89 35.39 33.85 33.96 NET INDEBTEDNESS PER SHARE 3.6
Slide 41: Financial Results
Financial Results [Rs. Million, unless otherwise specified] Reviewed Audited Reviewed Audited Audited Revised Revised Sl. Particulars 15 months Quarter Quarter 18 months year Quarter Quarter No. ended ended ended ended ended ended ended 30-Jun-06 30-Sep-06 30-Sep-05 30-Sep-06 31-Mar-05 31-Dec-06 31-
Slide 42: BCML: Risks and Concerns
BCML: Risks and Concerns 42
Slide 43: Risk & Concern – BCML's Response
Risk & Concern – BCML’s Response • CYCLICALITY OF SUGAR INDUSTRY • FINANCIAL RISK Response : Derisking Business Module Sugar Industry being cyclical, adequate – BCML switched to integrated business funds may not be available for model. Commissioned two distillery working capital or long term needs [
Slide 44: Appendix
APPENDIX 44
Slide 45: Per Capita Consumption of Sugar in top ten sugar producing countries
Per Capita Consumption of Sugar in top ten sugar producing countries 60 54 52 50 46 39 40 35 29 30 23 1 9 .4 21 20 9 10 0 BRAZIL EU INDIA CHINA USA MEXICO AUSTRALIA THAILAND SADC PAKISTAN SOURCE: F.O. Licht’s International Sugar & Sweetener Report and CrisInfac Indian consumption increasing at a CAG
Slide 46: World Production & Supply
World Production & Supply CENTRIFUGAL SUGAR [ '000 MT ] RAW VALUE Beginning Total Domestic Ending Stock use Country Stocks Production Imports Supply Exports Consumption Stocks Ratio WORLD TOTAL 2002/2003 36,820 148,516 41,557 226,893 47,440 138,947 40,506 29.2 2003/2004 40,506 142,362 42,110 224,978
Slide 47: Key Producing Countries
Key Producing Countries In '000 Tonnes [Raw Value] 2002-03 2003-04 2004-05 2005-06 2006-07 Brazil 23,810 26,400 28,175 26,850 30,850 European Union [EU] 26,451 24,961 27,181 27,778 22,989 India 22,140 15,150 14,170 21,070 25,100 China 11,380 10,734 9,826 9,446 11,150 Mexico 5,229 5,330 6,149 5,604 5
Slide 48: World Raw Sugar Prices
World Raw Sugar Prices Year Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. 1st Q. 2nd Q. 3rd Q. 4th Q. Calendar CENTS PER POUND 2001 10.63 10.26 9.64 9.27 9.96 9.80 9.48 8.77 8.60 7.15 7.80 8.02 10.18 9.68 8.95 7.66 9.12 2002 7.96 6.81 7.27 7.12 7.33 7.07 8.02 7.86 8.54 8.84 8.87 8.81 7.
Slide 49: World refined Sugar prices
World refined Sugar prices Year Jan. Feb. Mar. Apr. May Jun Jul Aug Sep Oct. Nov Dec 1st Q 2nd Q 3rd Q 4th Q Calendar Cents per pound 2001 11.27 10.65 10.26 10.61 11.71 12.68 12.60 12.08 10.66 10.19 11.27 11.52 10.73 11.67 11.78 10.99 11.29 2002 11.88 10.80 10.81 10.09 10.28 10.02 10.23 10.33 9.68 9
Slide 50: Prices – Sugar & Sugar Cane ex Factory
Prices – Sugar & Sugar Cane ex Factory 1 0 Q n tl = O n e T o n SUGA R S U G A R C A N E [ L in k e d to 8 .5 % ] [ R s . P e r Q n tl ] [ R s . P e r Q n tl ] SUGA R Y EA R FREE SA LE LEVY SM P SAP 2 0 0 6 -0 7 [ E ] 1 ,4 5 0 .0 0 1 ,3 8 4 .0 0 8 0 .2 5 * 1 2 5 .0 0 2 0 0 5 -0 6 1 ,7 2 2 .0 0 1 ,3
Slide 51: Economics of locally produced sugar vs. Landed Cost of Imported Sugar
Economics of locally produced sugar vs. Landed Cost of Imported Sugar BASE PRICE [ US$ FOB] *345.00 FREIGHT 60.00 C&F PRICE 405.00 IMPORT DUTY - COST WITH DUTY 405.00 PORT, INCIDENTALS & OTHERS 35.00 LANDED COST [US$] 440.00 Rs. / US$ 44.00 LANDED COST [Rs.] 19,360.00 PLUS IMPORTER'S MARGIN 5% OF CO
Slide 52: Thank You
Thank You No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from BALRAMPUR CHINI MILLS Limited, FMC Fortuna, 2nd floor, 234/3A, A.J.C. Bose Road, Kolkata – 700 020, India. Certain part of this presentation describing estimates
Balrampur Chini Mills — Investor Presentation (March 2007) on 6ix