Tata Chemicals Limited · NSE:TATACHEM
Tata Chemicals — Shareholder Meeting (July 2005)
29 slides from Tata Chemicals's shareholder meeting presentation, Jul 21, 2005
Slide 1: AGM FY2004-05
TATA CHEMICALS LIMITED AGM FY2004-05 July 21 2005
Slide 2: Your Company
Your Company Infrastructural • Widened presence in Growth constraints both business segments Increasing imports Domestic International • Expanded sales volumes, enhanced marketshare The The transition threat - A four-pronged Manufacturing First global of the approach and footprint 1990s Sales & Mktg
Slide 3: International presence
International presence Sourcing phosphoric acid and ammonia Exporting salt Exporting soda ash 3
Slide 4: IMACID
IMACID Phosphoric acid plant Sulphuric acid plant Storage tanks 4
Slide 5: Pan India presence
Pan India presence Marketing presence: 864,000 MT Urea Chemicals: across the country 445,000 MT Ammonia Fertiliser: Punjab, Haryana, Chandigarh, Delhi Bihar, Bengal, Uttaranchal Babrala Mithapur Kolkotta Haldia 870,000 MT Soda ash 500,000 MT Vacuum salt Mumbai Mumbai 670,000 MT DAP/ Complex fertilis
Slide 6: Tata Chemicals
Tata Chemicals •Market leader in soda ash and edible salt •Food Additives •Soda Ash •8.8% •21.2% •Urea •Most efficient •25.5% manufacturer of urea •Employs over 3,600 Others 8.7% •Cement people •STPP •3.9% •2.5% •NPK •DAP •Market cap (as on •7.7% •21.7% Mar 31, 05): Rs 33 bn Sales break up 6
Slide 7: FY 2004-05 performance perspective
FY 2004-05 performance perspective Net Income PAT Tata Salt Rs. 3,008 Cr Rs. 341 Cr . 453 Cr. Sales – Doubled in 2yrs Doubled in 456,312 Tn 3 yrs PBT Rs. 453 Cr Cement Prod. . . Doubled in 465,832 Tn 3 yrs Reduction in Soda Ash Exports First Overseas interest costs by -2 151,459 Tn Issue: FCCB of 50
Slide 8: Strengthening position in a challenging environment
Strengthening position in a challenging environment CHEMICALS • Expanding global presence • Cost reduction countering high input costs • Variants across categories, creating a value conscious market FERTILISERS • Constantly lowering energy consumption levels • IMACID tie securitises raw material • N
Slide 9: Business segments
ee TATA | Business segments SSS TATA CHEMICALS LIMITED
Slide 10: Chemicals Segment
ee Chemicals Segment TATA Chemic@ls olyphosphate (STPP) at TATA CHEMICALS LIMITED 10
Slide 11: Soda ash
TATA CHEMICALS LIMITED ee TATA
Slide 12: Soda Ash – Segmental Overview
Soda Ash – Segmental Overview Global • Demand: ~38 mn tonnes, China single largest consumer ~10 mn • Synthetic soda ash contributes around 70% of production • Overall segment growing at ~4% pa, glass segment biggest driver • Prices up ~30% over last year, though Chinese prices softening marginally I
Slide 13: Performance perspective
Performance perspective Project Manthan drives overall savings of over Rs 195 crore over 4 years Operations Identification of new fuel mixes improves operations Expanded presence in South East Asian markets; exports cross 150,000 tonnes in FY2005 Sales and marketing Product customisation: sodium bic
Slide 14: Overview: other key chemicals
Overview: other key chemicals TCL largest player in India, Marketshare: 67% STPP 65% sales through processing agreement with HLL Sales restricted to Gujarat region, Marketshare: ~5% Cement Stable price environment Sodium bicarbonate Dominant player, Marketshare over 50% Branding initiatives undertak
Slide 15: Inorganic Chemicals: Food additives
Inorganic Chemicals Food additives 15
Slide 16: Scope of Food Additive Business
Scopeof Food Additive Business Portfolio Food Additives Business Edible Salt Cooking Soda Kitchen Table Top Exports Kitchen Vac. Evap. salt Table Top salt Crystal salt Flavored salt Popular solar salt Indian branded salt segment growing at ~4% 16
Slide 17: Edible salt: embedded competitive advantages in operations
Edible salt • Embedded competitive advantages in operations 21% 27% 40% 10% 73% 4% 5% 20% Loose unbranded Iodised Branded Tata Salt Annapurna Captain Cook Aashirwad Nirma Others Largest salt brand in the country High brand equity and premium perception Dominant position Proximity to inexpensive raw
Slide 18: Fertiliser Segment
ee Fertiliser Segment TATA Fertilis<« s Products TATA CHEMICALS LIMITED
Slide 19: The three main ingredients… N P K
The three main ingredients… P N K al to Vita Centr tion loca dev l for trans f e ro o ripe lopme ot thate s tial for n n ts y n en Ess h and see ing o t, pho p lants fru f h i n t grow ment in it, n d and wit or hig h lop can u and f crops deve ants. Yield and quality be trients ng pl es in s stored
Slide 20: Tata Chemicals' fertiliser business
Tata Chemicals’ fertiliser business • Presence in high consumption north and east regions PJB • Ground water availability in core Haryana command areas UP Bihar WB • First fertiliser Company to receive British Sword of Honour • Crop specific fertilisers manufactured at improve realisation, create va
Slide 21: Energy efficiency perspective
Energy efficiency perspective Continuously better than sector and improving 5 .8 Estimated sector Gcal/Tonne ~5.4 5 .7 3 5 .7 5 .6 5 .5 5 5 .5 3 5 .5 3 5 .5 5 .4 5 .3 7 5 .3 2 5 .3 5 .2 8 5 .2 3 5 .2 5 .1 5 .0 4 .9 F Y '9 8 F Y ' 9 9 F Y '0 0 F Y '0 1 F Y '0 2 F Y ' 0 3 F Y '0 4 F Y '0 5 Most energy
Slide 22: Indian industry - Policy constraints
Indian industry - Policy constraints • Urea - Approval for debottlenecking of Babrala facility still awaited - No clarity in run up to Stage 3 of New Pricing Policy • Intent for decontrol not translating into action • Phosphatic - Delays in settlement of raw material prices creating adverse environm
Slide 23: Financials
ee TATA TATA CHEMICALS LIMITED 23
Slide 24: Improved operations
Improved operations Rs Crores 2001-02 2002-03 2003-04 2004-05 Income 1,358 1,535 2,544 3,008 PBT from 133 187 265 353 Operations Profit after 127 197 221 341 Tax Income growth – PBT from Ops – PAT growth – CAGR @ 30% CAGR @ 39% CAGR @ 39% Improvement in Quality of Earnings 24
Slide 25: Distribution of earnings – FY2005
Distribution of earnings – FY2005 Retention Other 6% Others Income Dividend 4% 4% Soda Ash 4% 18% Financial STPP 5% 4% Taxes 8% Cement 4% Vacuum Overheads Salt 5% 8% Materials Distribution 60% 9% Urea Complex 25% Fertilizers Employee 33% 3% Rupee earned Rupee deployed 25
Slide 26: Shareholder returns
Shareholder returns 138.5 20 140 15.8 120 15 102.7 100 Rs. per share 10.9 10.3 Rs 10 80 7.0 54.9 6.5 5.5 5.5 60 5.0 5 40 40.4 0 20 FY '02 FY '03 FY '04 FY '05 EPS Dividend Average Market Price Consistent and healthy dividend payout 26
Slide 27: Recognition across businesses and functions
Recognition across businesses and functions 27
Slide 28: Growth Aspirations
Growth Aspirations Inorganic opportunities •Soda Ash: natural/ synthetic •Urea: locations of cheaper gas Innovation center Chemicals •Platform for new business •Modernisation, debottlenecking Urea •Capex: Rs 320 crore • Debottlenecking Babrala facility •Soda Ash: Cap. expansion to 1 Mn. tn. • Capaci
Slide 29: Thank you
Thank you TATA CHEMICALS LIMITED ee TATA 29