Indo Rama Synthetics (India) Limited · NSE:INDORAMA
Indo Rama Synthetics (India) — Investor Presentation (October 2004)
30 slides from Indo Rama Synthetics (India)'s investor presentation, Oct 21, 2004
Slide 1: Indo Rama Synthetics (I) Ltd. Analyst Meet
Indo Rama Synthetics (I) Ltd. Analyst Meet Mumbai 21 Oct., 2004
Slide 2: The Meet Highlights
The Meet Highlights 1. Polyester Growth Potential • Opportunities for Polyester in India • Demand drivers • Edge over other Fibres • Conclusion & outlook 2. Plan to Capitalize on the Opportunity • Expansion project • Participation in Global PET business 3. Indo Rama Performance • Financial Performan
Slide 3: Factors to Stimulate Polyester Growth in India
Factors to Stimulate Polyester Growth in India Polyester Competitively Produced Edge over Polyester Favourable Competing Growth Demand Fibres Potential Drivers Versatile Product Characteristics 3 3
Slide 4: Polyester Industry Growth in India – The Enablers
Polyester Industry Growth in India – The Enablers Polyester Polymer Operating Rates • Adequate availability of Raw Materials (i.e. PTA & MEG) Long Term View – Polyester Industry* • Existence of world scale & world-class production facilities Source: PCI * Including PET chips 4 4
Slide 5: Polyester Capacities Shifting from Taiwan / Korea
Polyester Capacities Shifting from Taiwan / Korea Source : PCI 5 5
Slide 6: Polyester Capacities Shifting to China / India
Polyester Capacities Shifting to China / India Source : PCI 6 6
Slide 7: Demand Drivers for Polyester
Demand Drivers for Polyester 100% 3% – Increase in per capita 4% 80% consumption due GDP 43% growth & urbanisation 60% 16% 93% 40% 20% 41% – Value added & innovative 0% new product development World India – Home textiles Industrial Applications Home Textiles – Geo textiles Apprael – Auto textiles, e
Slide 8: Edge Over Competing Fibres
Edge Over Competing Fibres 3,000 2,947 2,942 2,902 2,888 2,926 2,811 2,703 Cotton Cotton&& 2,500 polyester polyester constitute constitute 2,000 more morethanthan 1,511 1,614 1,433 90% 90%ofoftotal total 1,500 1,343 1,352 Polyester 1,220 Cotton fibre fibre 1,087 consumption consumption 1,000 in inth
Slide 9: Summing up on Triggers from Growth
Summing up on Triggers from Growth • Polyester growth to escalate & remain high • “Best in Class” Indian polyester players will prosper post Jan, 2005 • Operating rates in polyester industry in healthy shape • Non-apparel use - Major market to exploit 9 9
Slide 10: Factors Limiting the Growth
Factors Limiting the Growth • Unfavorable duty structure for polyester compared to competitive fibres Duty Earlier Current Reduction Yarn & Fibre - Cotton Yarn 9.20% 4.08% 5.12% - Blended Yarn 13.80% 8.16% 5.64% - PSF 18.40% 16.32% 2.08% - POY/PFY/FDY 28.60% 25.50% 3.10% Fabric - 100% Cotton 10.00%
Slide 11: Enablers of Growth for IRSL
Enablers of Growth for IRSL RM supplies • Globally PTA & MEG is in short supply to IRSL well covered Will result in reduced production of polyester Opportunity for margin improvement in future • Expansion plan on target to meet the demand opportunities post Jan, 2005 IRSL continues to be bullish on
Slide 12: Indo Rama's Plans to Capitalize on the Textile Opportunity
Indo Rama’s Plans to Capitalize on the Textile Opportunity
Slide 13: Polyester Capacity Expansion – Existing V/s Planned
Polyester Capacity Expansion – Existing V/s Planned 600 600 35 15 500 260 400 300 300 (in '000 tpd) 300 15 20 15 0 120 140 200 100 290 150 140 0 Existing Cap. Expansion Cap. Total Cap. PSF POY FDY CHIPS Total capacity after expansion will be 600,000 tpa 13 13
Slide 14: Moving with Time on Technology
Moving with Time on Technology Parameter Present Plant New Project Technology - CP Dupont Zimmer /Chemtex Technology - PSF Toyobo Zimmer Technology – POY Barmag Barmag Polymer plant 3 nos 2 nos Individual plant cap. (180 – 240 tpd) (400 tpd) PSF plant 5 lines 2 lines Line capacity 70 – 90 tpd line 1
Slide 15: Strengthening the Backbone….
Strengthening the Backbone…. Parameter Present Projected Type of Plant DG plant Cogeneration with steam turbine Capacity 51 MW 2 x 15 MW Cost of Power Rs. 2.75 / Kwh Rs. 1.70 / Kwh Generation Operating cost to come down on energy… 15 15
Slide 16: Manpower Productivity to Frog leap….
Manpower Productivity to Frog leap…. No. of MT / Heads Head 1800 1685 400 1600 380 1400 355 360 1246 340 1200 320 1000 300 800 280 600 240 260 400 240 200 220 0 200 Existing Total (After expansion) Number MT/Head …. Improvement of >50% post expansion 16 16
Slide 17: Time Schedule for Project Start-up
Time Schedule for Project Start-up Product Time Line PSF Dec’05 / Jan’06 POY Feb’06 / Mar’06 17 17
Slide 18: Project Funding
Project Funding Amount (Mn. Rs.) IKB & DEG 4530 Indian Banks 1110 Internal Accruals 2960 Total – Polyester 8600 Project 18 18
Slide 19: Benefits from Expansion…..
Benefits from Expansion….. • Operating cost of the new plant lower compared to existing plant – Operating cost of existing plant will also come down • Commercial Production by early 2006 synchronized with the completion of IOC’s PTA plant at Panipat of 530,000 MTs. • Annual Sales from the new projec
Slide 20: IRSL Goes Global in PET Business
IRSL Goes Global in PET Business • IRSL invested to Starpet (USA) – 24% stake • Indopet (Thailand) acquires Starpet • Indopet also setting-up new project in Lithuania (EU state) with capacity of 210,000 tpa to manufacture bottle grade PET resin – Indopet to emerge as one of the largest global PET pr
Slide 21: Performance Update
Indo Rama Synthetics (I) Ltd Performance Update
Slide 22: Financial Highlights – 1H FY05
Financial Highlights – 1 H FY05 Rs. Crore 1H 1H Variance % Change 2004-05 2003-04 Gross Sales 1167.36 1148.30 19.06 2% Sales (Net of Excise & inter- 879.66 885.15 (5.49) (1%) divisional sales) Other Income 6.20 9.92 (3.72) (38%) Consumption of RM, 599.62 642.03 42.41 7% etc. Staff Cost 16.34 17.14 0
Slide 23: Financial Highlights – 1H FY05
Financial Highlights – 1 H FY05 Rs. Crore 1H 1H Variance % Change 2004-05 2003-04 Non-operating Inc/ (Exp) (22.95) 22.71 (45.66) (201%) EBDITA 130.97 156.52 (25.55) (16%) Interest Cost 21.82 28.83 7.01 24% EBDT 109.15 127.69 (18.54) (15%) Depreciation 49.52 49.16 (0.36) (1%) Profit Before Tax 59.63
Slide 24: Financial Highlights – Qtr 2
Financial Highlights – Qtr 2 Rs. Crore Q1 Q2 Q2 Variance % 2004-05 Change 2004-05 2003-04 Q2 vs Q2 Gross Sales 558.20 609.16 672.99 (63.83) (9%) Sales (Net of Excise & 416.64 463.02 516.77 (53.75) (10%) inter-divisional sales) Other Income 3.37 2.83 4.05 (1.22) (30%) Consumption of RM, 278.54 321.08
Slide 25: Financial Highlights – Qtr 2
Financial Highlights – Qtr 2 Rs. Crore Q1 Q2 Q2 Variance % 2004-05 Change 2004-05 2003-04 Q2 vs Q2 Non-operating Inc/ (29.95) 7.00 8.07 (1.07) (13%) (Exp) EBDITA 47.81 83.16 110.54 (27.38) (25%) Interest Cost 11.98 9.84 11.43 1.59 14% EBDT 35.83 73.32 99.11 (25.79) (26%) Depreciation 24.49 25.03 24.
Slide 26: Analysis of Sales Mix
Analysis of Sales Mix H1 : 2004-05 H1 : 2003-04 13% 14% 7% PSF 6% POY 4% 47% 4% 44% Chips FDY DTY 29% 32% Rs. 1167.36 Cr. Rs. 11,48.30 Cr. PSF & POY constitute >75% of total sales 26 26
Slide 27: Growth in Operating EBIDTA
Growth in Operating EBIDTA 18% 17% 16% 15% 14% 1H FY04 1H FY05 Procurement & Operating efficiencies resulting in improvement of margins 27 27
Slide 28: Prudent Financial Management
Prudent Financial Management 200 28.83 188.0 30 175 28 150 26 Rs. Cr. Rs Cr. 125 114.4 24 100 75 22 21.82 50 20 1H FY 04 1H FY 05 Loan Repayment Interest Cost 28 28
Slide 29: Rewarding the Shareholders – Interim Dividend
Rewarding the Shareholders Interim Dividend 10% 29 29
Slide 30: House Open for Questions
House Open for Questions 30 30
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