Chememan Public Company Limited Analyst Meeting : Q3-2018 16 - - PowerPoint PPT Presentation

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Chememan Public Company Limited Analyst Meeting : Q3-2018 16 - - PowerPoint PPT Presentation

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Chememan Public Company Limited Analyst Meeting : Q3-2018 16 November 2018 Table of Contents Highlights Key 1. Key Highlights of Q3 2018 Performance Financial 2. Financial Performance Progress Update 3. Progress Update Chememan Analyst

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Chememan Public Company Limited

Analyst Meeting : Q3-2018

16 November 2018

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Chememan Analyst Presentation Q3-2018

Financial Performance Key Highlights Progress Update

2

Table of Contents

  • 1. Key Highlights of Q3 2018
  • 2. Financial Performance
  • 3. Progress Update
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Financial Performance Key Highlights Progress Update

Key Highlights of Q3-2018

Chememan Analyst Presentation Q3-2018

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Chememan Analyst Presentation Q3-2018 4

Key Highlights of Q3-2018

  • Refinance : Chememan was able to improve the existing financing

package through refinancing, which help to lower the financing cost by one-third. This transaction had one-time fee of approximately 10 million baht.

  • KK1 : In Q3 2018, KK1 quicklime kiln was temporary shut down as per

repair and maintenance schedule. The maintenance took 68 days to complete at the expenses of around 6 million baht.

Financial Performance Key Highlights Progress Update

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Financial Performance Key Highlights Progress Update

Chememan Analyst Presentation Q3-2018

Financial Performance of Q3-2018

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Chememan Analyst Presentation Q3-2018 6

Financial Highlights of Q3 2018

Financial Performance Key Highlights Progress Update

Unit : Million Baht Q3 2018 Q2 2018 Q3 2017 %QoQ %YoY Sales Revenue 588 647 513

  • 9.2%

+14.6% Cost of Sales (not include depreciation & amortization) (351) (389) (292)

  • 9.7%

+20.2% Transportation cost (106) (116) (94)

  • 8.7%

+12.1% Gross Profit (net transportation cost and depreciation & amortization) 131 143 127

  • 8.1%

+3.4%

Gross Profit Margin (net transportation cost and depreciation & amortization) (%)

27.2% 26.8% 30.3%

Other income

6 9 6

  • 31.9%

+4.0%

Selling expenses

(9) (8) (7) +9.5% +21.3%

Administrative expenses

(40) (42) (53)

  • 5.7%
  • 24.5%

Gain (Loss) on exchange rate

(5) 17 (2) N/A N/A

Share of loss from investment in joint ventures

(1) (1) (0)

  • 10.3%

N/A

EBITDA

83 117 71

  • 29.4%

+17.2%

Adjust : (a) Gain (Loss) on exchange rate

5 (17) 2 N/A N/A

Adjust : (b) Cost incurred by temporary shutdown of kiln for maintenance

6 1 N/A N/A

Normalized EBITDA

93 100 74

  • 6.2%

+26.9%

Normalized EBITDA Margin (%)

15.9% 15.4% 14.3%

Depreciation & Amortization

(47) (48) (40)

  • 0.5%

+18.2%

Depreciation & Amortization – Cost of sales (43) (44) (37)

  • 1.2%

+17.7%

Depreciation & Amortization – Administrative expenses (4) (4) (3)

+7.3% +24.9%

Finance costs

(20) (11) (16) +83.1% +27.3%

Adjust : (c) Loan prepayment fee

11 N/A N/A

Gain (Loss) on tax

4 (0) 3 N/A +46.1%

Normalized Net Profit

41 41 21 +1.6% +98.1%

Normalized Net Profit margin (%)

7.0% 6.3% 4.1%

(a) Gain (Loss) on exchange rate

(5) 17 (2) N/A N/A

(b) Cost incurred by temporary shutdown of kiln for maintenance

(6) (0) (1) N/A N/A

(c) Loan prepayment fee

(11) N/A N/A

Net profit

20 58 18

  • 66.3%

+10.7%

Net Profit Margin (%)

3.3% 9.0% 3.4%

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Chememan Analyst Presentation Q3-2018 7

Financial Highlights of 9M 2018

Financial Performance Key Highlights Progress Update

Unit : Million Baht

9M 2018 9M 2017 %YoY

Sales Revenue 1,831 1,620 +13.0% Cost of Sales (not include depreciation & amortization) (1,095) (899) +21.8% Transportation cost (314) (302) +4.2% Gross Profit (net transportation cost and depreciation & amortization) 422 420 +0.5%

Gross Profit Margin (net transportation cost and depreciation & amortization) (%)

27.8% 31.8%

Other income

12 13

  • 7.7%

Selling expenses

(25) (21) +14.8%

Administrative expenses

(112) (153)

  • 26.6%

Gain (Loss) on exchange rate

1 (2) N/A

Share of loss from investment in joint ventures

(3) (0) N/A

EBITDA

295 257 +14.8%

Adjust : (a) Gain (Loss) on exchange rate

(1) 2 N/A

Adjust : (b) Cost incurred by temporary shutdown of kiln for maintenance

6 1 N/A

Normalized EBITDA (3)

300 260 +15.6%

Normalized EBITDA Margin (%)

16.4% 16.0%

Depreciation & Amortization

(137) (119) +15.5%

Depreciation & Amortization – Cost of sales

(127) (111) +14.6%

Depreciation & Amortization – Administrative expenses

(10) (8) +28.4%

Finance costs

(49) (46) +7.1%

Adjust : (c) Loan prepayment fee

11 N/A

Gain (Loss) on tax

7 (1) N/A

Normalized Net Profit

131 94 +40.1%

Normalized Net Profit margin (%)

7.2% 5.8%

(a) Gain (Loss) on exchange rate

1 (2) N/A

(b) Cost incurred by temporary shutdown of kiln for maintenance

(6) (1) N/A

(c) Loan prepayment fee

(11) N/A

Net profit

115 91 +26.6%

Net Profit Margin (%)

6.3% 5.6%

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Chememan Analyst Presentation Q3-2018

354 491 438 1,169 1,388 108 97 89 288 283 50 59 62 163 160

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 Limestones Hydrated Lime Quicklime

513 647 588 1,620 1,831

Unit : THB million

Progress Update Financial Performance Key Highlights

8

Financial Performance

Sales Quantities Sales Revenues

Unit : MT

105,724 153,551 134,949 353,140 440,763 25,591 24,243 22,588 67,129 72,515 124,252 146,939 147,813 444,089 385,661

Q3/2017 Q2/2018 Q3/2018 9M 2017 9M 2018 Limestones Hydrated Lime Quicklime

255,567 324,733 305,350 864,358 898,938

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Chememan Analyst Presentation Q3-2018

Progress Update Financial Performance Key Highlights

9

Financial Performance

Net Profit

Unit : THB million

Normalized Net Profit

Unit : THB million

EBITDA

Unit : THB million

Normalized EBITDA

Unit : THB million 71 117 83 257 295 13.7% 18.1% 14.1% 15.8% 16.1%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 50 100 150 200 250 300 350 400

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 EBITDA EBITDA Margin (%)

74 100 93 260 300 14.3% 15.4% 15.9% 16.0% 16.4%

13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 50 100 150 200 250 300 350 400

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 Normalized EBITDA Normalized EBITDA Margin (%)

18 58 20 91 115 3.4% 9.0% 3.3% 5.6% 6.3%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 20 40 60 80 100 120 140 160 180 200

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 Net Profit Net Profit margin (%)

21 41 41 94 131 4.1% 6.3% 7.0% 5.8% 7.2%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 20 40 60 80 100 120 140 160 180 200

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 Normalized Net Profit Normalized Net Profit margin (%)

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Chememan Analyst Presentation Q3-2018 10

Analysis by Product - Quicklime

Financial Performance Key Highlights Progress Update

Quicklime Unit Q3/2018 Q2/2018 Q3/2017 9M 2018 9M 2017 Sales Quantities MT 134,949 153,551 105,724 440,763 353,140 Domestic MT 48,474 58,656 55,320 186,810 189,907 Export MT 86,474 94,895 50,403 253,953 163,234 Price per unit BPT 3,243 3,199 3,350 3,149 3,311 Ex-fac price per unit BPT 2,464 2,436 2,543 2,440 2,552 Cost per unit BPT (2,190) (2,208) (2,220) (2,135) (2,128) Sales Revenue MB 438 491 354 1,388 1,169 Domestic MB 134 159 147 506 503 Export MB 303 332 207 882 666 Cost of Sales MB (295) (339) (235) (941) (752) QL cost MB (267) (305) (211) (859) (683) Transportation cost to AU MB (29) (34) (24) (82) (69) Transportation expense MB (76) (83) (61) (231) (199) Gross Profit (Net Transportaion) MB 66 69 58 216 219 % Gross Profit Margin (Net Transportation) % 18.2% 16.8% 19.8% 18.7% 22.5%

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Chememan Analyst Presentation Q3-2018

147 159 134 503 506 207 332 303 666 882

19.8% 16.8% 18.2% 22.5% 18.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 200 400 600 800 1,000 1,200 1,400 1,600

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018

Domestic Export Gross Profit Margin (net transportation)

354 491 438 1,388

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Quicklime

Unit : THB million

55,320 58,656 48,474 189,907 186,810

50,403 94,895 86,474 163,234 253,953

Q3/2017 Q2/2018 Q3/2018 9M 2017 9M 2018

Export Domestic

  • 12% QoQ

+ 25% YoY

Unit : MT

105,724 153,551 440,763 353,140 134,949 1,169

Financial Performance Key Highlights Progress Update

Quicklime Sales Revenue Quicklime Sales Quantity

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Chememan Analyst Presentation Q3-2018 12

Analysis by Product – Hydrated Lime

Financial Performance Key Highlights Progress Update

Hydrated Lime Unit Q3/2018 Q2/2018 Q3/2017 9M 2018 9M 2017 Sales Quantities MT 22,588 24,243 25,591 72,515 67,129 Domestic MT 8,924 8,604 5,521 27,350 17,224 Export MT 13,665 15,639 20,070 45,165 49,904 Price per unit BPT 3,922 3,990 4,236 3,905 3,990 Ex-fac price per unit BPT 3,343 3,305 3,381 3,307 3,422 Cost per unit BPT (2,463) (2,549) (2,499) (2,502) (2,525) Sales Revenue MB 89 97 108 283 288 Domestic MB 28 27 18 86 55 Export MB 60 70 91 197 233 Cost of sales MB (56) (62) (64) (181) (170) HL cost MB (52) (58) (61) (170) (160) Transportation cost to WH in AU MB (4) (4) (3) (11) (9) Transportation expense MB (10) (13) (19) (32) (49) Gross Profit (Net Transportaion) MB 23 22 26 70 69 % Gross Profit Margin (Net Transportation) % 29.6% 26.2% 28.8% 27.7% 29.0%

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Chememan Analyst Presentation Q3-2018

5,521 8,604 8,924 17,224 27,350 20,070 15,639 13,665 49,904 45,165

Q3/2017 Q2/2018 Q3/2018 9M 2017 9M 2018 Export Domestic

  • 7% QoQ

+ 8% YoY

Unit : MT

25,591 24,243 72,515 22,588

Financial Performance Key Highlights Progress Update

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Hydrated Lime

Hydrated Lime Sales Quantity Hydrated Lime Sales Revenue

67,129

18 27 28 55 86 91 70 60 233 197

28.8% 26.2% 29.6% 29.0% 27.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 50 100 150 200 250 300 350 400 450

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 Domestic Export Gross Profit Margin (net transportation)

Unit : THB million

108 97 89 288 283

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Chememan Analyst Presentation Q3-2018 14

Analysis by Product – Limestones and Ground Limestone

Financial Performance Key Highlights Progress Update

Limestones Unit Q3/2018 Q2/2018 Q3/2017 9M 2018 9M 2017 Sales Quantities MT 147,813 146,939 124,252 385,661 444,089 Domestic MT 147,513 126,758 123,439 365,179 379,983 Export MT 300 20,181 813 20,481 64,106 Price per unit BPT 417 403 406 415 367 Ex-fac price per unit BPT 282 269 289 282 247 Cost per unit BPT (249) (215) (231) (243) (196) Sales Revenue MB 62 59 50 160 163 Domestic MB 60 50 49 149 140 Export MB 2 10 2 11 23 Cost of sales MB (37) (32) (29) (94) (87) LS cost MB (37) (32) (29) (94) (87) Transportation cost to WH in AU MB Transportation expense MB (20) (20) (15) (51) (53) Gross Profit (Net Transportaion) MB 5 8 7 15 23 % Gross Profit Margin (Net Transportation) % 11.8% 20.3% 20.3% 14.1% 20.6%

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Chememan Analyst Presentation Q3-2018

49 50 60 140 149 2 10 2 23 11

20.3% 20.3% 11.8% 20.6% 14.1%

  • 2.5%
2.5% 7.5% 12.5% 17.5% 22.5% 50 100 150 200 250 300

Q3 2017 Q2 2018 Q3 2018 9M 2017 9M 2018 Domestic Export Gross Profit Margin (net transportation)

50 59 62 163 160

Financial Performance Key Highlights Progress Update

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Limestones and Ground Limestone

Limestones and Ground Limestone Sales Quantity Limestones and Ground Limestone Sales Revenue

Unit : THB million

123,439 126,758 147,513 379,983 365,179 813 20,181 300 64,106 20,481

Q3/2017 Q2/2018 Q3/2018 9M 2017 9M 2018 Export Domestic

+ 1% QoQ

  • 13% YoY

Unit : MT

124,252 146,939 385,661 444,089 147,813

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Chememan Analyst Presentation Q3-2018

RY

Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

KK PB

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Production Capacity

Financial Performance Key Highlights Progress Update

73% 23% 35% 65% 27% 77%

146,375 MT 135,156 MT 169,826 MT

Hydrated Lime Production Quicklime Production

*

* Remarks : - Only 1 quicklime kiln at PB was operated in Q3 2018.

  • KK1 quicklime kiln was temporary shut down for maintenance as per scheduled maintenance plan in Q3 2018.

64% 36% 52% 48%

141,252 MT 115,684 MT 21,118 MT 20,663 MT 19,973 MT 20,821 MT 21,669 MT

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17 Chememan Analyst Presentation Q3-2018

917 1,070 1,223 2,215 2,176 952 1,298 1,556 864 956 353 414 438 365 407

2015 2016 2017 Q2 2018 Q3 2018

Equities Interest Bearing Debt Others

549 650 739 778 759 1,674 2,132 2,478 2,665 2,780

2015 2016 2017 Q2 2018 Q3 2018

Current Asset Non-current asset Progress Update

Balance Sheet

Financial Performance Key Highlights

Asset (THB million) Liabilities & Equity (THB million)

2,223 2,223 2,783 2,783 3,217 3,217 3,443 3,443 3,539 3,539

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Chememan Analyst Presentation Q3-2018 18

Sources & Uses of Fund - Q3-2018

Financial Performance Key Highlights Progress Update

Unit : THB million

Source of Fund Use of Fund

CF from Operation 307 Acquisiton of PPE 369 Long-term loan received 659 Increased in W/C 15 Net proceeds from IPO 897 Interest paid 46 Interest income & others 2 Income tax paid Investment in JV 79 Long-term loan repayment 1,214 Debt repayment 54 Dividend paid 48 Fee & Exchange translation 7 Cash increased 35 SOURCE OF FUND 1,866 USE OF FUND 1,866 Beginning Cash 46 Ending Cash 80

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Chememan Analyst Presentation Q3-2018 19

Ratios

Financial Performance Key Highlights Progress Update

1.51x 0.55x 0.63x 1.20x 0.39x 0.44x Q3 2017 Q2 2018 Q3 2018 Debt to Equity Ratio Interest-bearing debt to Equity Ratio

Current ratio (x times)

1.28x 1.43x 1.20x

Q3 2017 Q2 2018 Q3 2018

Debt to Equity ratio (x times)

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Chememan Analyst Presentation Q3-2018

31.00 32.00 33.00 34.00 35.00 36.00 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 1 USD Quarterly Average Rate

20

Exchange Rate – THB / USD

Financial Performance Key Highlights Progress Update

31.00 31.50 32.00 32.50 33.00 33.50 34.00 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

Q1-2018 31.71 Q2-2018 32.12 Q3-2018 33.15

USD 2018 USD 2017

Average Rate 9M 2018 : 32.37

Q1-2017 35.28 Q2-2017 34.45 Q3-2017 33.54 Q4-2017 33.11

Average Rate 9M 2017 : 34.42

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Chememan Analyst Presentation Q3-2018 21

Exchange Rate – THB / AUD

Financial Performance Key Highlights Progress Update

23.50 24.00 24.50 25.00 25.50 26.00 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

Q1-2018 25.19 Q2-2018 24.54 Q3-2018 24.52

AUD 2018 AUD 2017

Average rate 9M 2018 : 24.66

24.50 25.00 25.50 26.00 26.50 27.00 27.50 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

1 AUD Quarterly Average Rate

Q4-2017 25.70 Q1-2017 27.02 Q2-2017 26.12 Q3-2017 26.73

Average rate 9M 2017 : 26.63

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Financial Performance Key Highlights Progress Update

Chememan Analyst Presentation Q3-2018

Progress Update

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23 Chememan Analyst Presentation Q3-2018

Financial Performance Key Highlights Progress Update

Project Location Ownership Estimated CAPEX Installed Capacity (MT/year) Commercial Operation Date To increase production capacity : Thailand Quicklime kiln (KK6) Kangkoi, Saraburi 100% 221.0 MB 109,500 Completed Crushing plant at Tubkwang quarry Kangkoi, Saraburi 100% 131.0 MB 3,102,500 Completed Quicklime grinder machine Kangkoi, Saraburi 100% 17.0 MB 120,000 Completed New Quicklime kiln (KK4) Kangkoi, Saraburi 100% 235.0 MB 73,000 Q4 2018

Progress Update – Capacity Expansion

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24 Chememan Analyst Presentation Q3-2018

Financial Performance Key Highlights Progress Update

Project Location Ownership Estimated CAPEX Installed Capacity (MT/year) Commercial Operation Date To reduce cost of production : Thailand Big silo Kangkoi, Saraburi 100% 116.0 MB 4 Big Silos capacity 12,000 MT Q4 2018 – Q2 2019 Warehouse Kangkoi. Saraburi 100% 14.3 MB Capacity 4,000 MT Completed

Progress Update – Reduce Production Cost

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25 Chememan Analyst Presentation Q3-2018

Financial Performance Key Highlights Progress Update

Project Location Owner ship Estimated CAPEX Installed Capacity (MT/year) Commercial Operation Date To expand the business : India EASTERNBULK LIME PRODUCTS PRIVATE LIMITED Joint venture established Quicklime manufacturing and distributing company Tuticorin, Tamil Nadu 50% 215.0 THBm (without borrowing due to religious limitation of alliance) 47,450 of Quicklime Q1 2019 73,000 of Ground Limestone

Progress Update – Business in India

SIRIMAN CHEMICALS INDIA PRIVATE LIMITED Joint venture established lime manufacturing and distributing company Visakhapatnam, Andhra Pradesh 50% 87.5 THBm 109,500 of Quicklime Q3 2019 87,600 of Hydrated Lime

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26 Chememan Analyst Presentation Q3-2018

BIG SILOS – IN PROGRESS

  • Location Kangkoi Saraburi
  • Storage Capacity 12,000 MT
  • Construction in progress end of

September 2018 = 60%

  • Expectation to operate in

beginning of year 2019

Financial Performance Key Highlights Progress Update

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27 Chememan Analyst Presentation Q3-2018

Financial Performance Key Highlights Progress Update

KK4 KILN – IN PROGRESS

  • Location at Kangkoi Saraburi
  • Installed capacity 73,000 TPY
  • Board approved and start

foundation on April 04,2018

  • Construction in progress
  • Blower house completed

90%

  • Kiln erection 75%
  • Quicklime grinding

erection 20%

  • Expectation to commissioning

in end of year 2018

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28 Chememan Analyst Presentation Q3-2018

EASTERNBULK LIME PRODUCTS PRIVATE LIMITED – IN PROGRESS

Status on Equipment / Refractory

  • All the equipment supplied by Maerz and other

suppliers at site.

  • All the major equipment from coal grinding plant

supplier at site.

  • All the MCC panels are under transit or have reached

the site.

  • All instruments will be reaching site by 25th Nov 2018

Civil Update

  • KFS silo foundation works are being done. Will be

ready by end of November 2018

  • Coal Grinding plant civils are almost done. Structure

work will start from 10th November 2018

  • PEB structure of QL handling under installation will

be completed by 15th November 2018.

  • Roads and drains work started.

Financial Performance Key Highlights Progress Update

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29 Chememan Analyst Presentation Q3-2018

EASTERNBULK LIME PRODUCTS PRIVATE LIMITED – IN PROGRESS

Mechanical Update

  • Kiln installation and alignment is completed.
  • Procurement of Kiln piping and housing is

completed.

  • Installation of QL Silo started and will be

completed by 20th November 2018.

  • Coal grinding plant installation will start from

15th November 2018.

Financial Performance Key Highlights Progress Update

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30 Chememan Analyst Presentation Q3-2018

SIRIMAN CHEMICALS INDIA PRIVATE LIMITED

Blower House Kiln Foundation

Status on Permits

  • We have also received the pollution control board

permission for the new land. Civil and Mechanical Progress

  • Civil works started on 5th September 2018
  • Received all the civil and mechanical drawings from

Maerz

  • Order placed on CPW for coal grinding plant.
  • Order placed on Golden Engineering for Kiln

fabrication.

  • Discussions started with other supplies like blowers,

refractory etc to place the orders.

Financial Performance Key Highlights Progress Update

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Remarkable Together

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32 Chememan Analyst Presentation Q3-2018

Disclaimer

Some statements made in this material are forward-looking statements with the relevant assumptions, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “intend”, “estimate”, “continue” “plan” or other similar words. The statements are based on our management’s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.