DCM Shriram Consolidated Limited Presentation and discussions - - PowerPoint PPT Presentation

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DCM Shriram Consolidated Limited Presentation and discussions - - PowerPoint PPT Presentation

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DCM Shriram Consolidated Limited Presentation and discussions September, 2011 Promoters Sir Shriram (Founder) Murli Dhar Bharat Ram Charat Ram Bansi Dhar Shri Dhar Vinay/Vivek/Arun Siddharth/Deepak Over 120 years business history.

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SLIDE 1

DCM Shriram Consolidated Limited

Presentation and discussions

September, 2011

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SLIDE 2

Promoters

Murli Dhar

Sir Shriram (Founder)

  • DCM Shriram Consolidated Ltd.

Shri Dhar

Ajay Charat Ram Bharat Ram

Vinay/Vivek/Arun

  • Over 120 years business history.
  • Tradition of contribution to society -

Education, Cultural, Research.

  • Core Values - Trust, Ethics & Fairness.
  • Focus on long term value creation.
  • Several firsts to its credit.

Siddharth/Deepak

Vikram Ajit

Bansi Dhar

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SLIDE 3
  • Formed in 1990 consequent to restructuring of DCM Ltd
  • Two lines of business

– Agri/Rural – Chemicals and Polymers

  • Each Vertical includes some Commodity businesses and some Non Commodity businesses

(Service/knowledge driven)

  • Non Commodity businesses include – Bioseed (Hybrid Seeds), Farm Solutions, Hariyali (Rural Retail),

Fenesta (UPVC Windows & Door Systems) , Polytech

  • Revenue growth Last 20 Years 11x- CAGR-13%- FY 11 Turnover- USD 923 Mn.
  • Strengths-

– Deep understanding of Agri/Rural sector, multiple interfaces with rural Customers. – Ability to spot and incubate new business opportunities. – Multiple skills catering to broad range of sectors.

  • ~300 MW Power generating capacity
  • Strong brands representing Trust and Reliability.
  • Long term association with all Stakeholders.

Overview

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SLIDE 4

Agri/Rural Business

  • Inputs

– Urea

  • ~ 400,000 tonnes/year

– Farm Solutions

  • Bulk Fertilizers, Specialty

Fertilizers, Micro nutrients, Crop Care Chemicals, Seeds etc.

– Hybrid Seeds

  • India, Philippines, Vietnam,

Thailand and Indonesia

Working towards improving farmer profitability – supported by over 500 agronomists

  • Output

– Sugar

  • 500,000 tonnes/year

– Bagasse based Power

  • ~ 95 MW
  • Rural Business Centers

– Hariyali Kisaan Bazaar ( 264

Outlets)

  • Retailing of Products ( Agri and

Family goods)

  • Services ( Agronomy, financial)
  • Outputs ( Grain, Seeds, Milk)
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SLIDE 5
  • Trust, Reliability, Dignity – basic foundation of engagement with customers.
  • Partner with farmer – Solutions to increase his profits
  • Strong Research and applications development programme.
  • Last Mile delivery of relevant knowledge/ solutions ~ 500 agronomist and ~

1000 Agri- Extension professionals, backed by strong Central team.

  • Multiple interfaces directly with farmers-

– Sugar - Over 200,000 farmers – Farm Solutions - 300,000 farmers; over 100 SKVK‟s – Hybrid Seed - 500,000 farmers – Hariyali Kisaan Bazaar - ~4 Mn rural families in catchment area of ~2.2 Mn sq.feet.

Agri/Rural Business: Key Drivers

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SLIDE 6

Farm Solutions

  • Farm solutions business include sale of Bulk Fertilizers, Micro-nutrients,

Seeds, Crop Care Chemicals, Pesticides etc.

  • 18000 retail outlets in 17 states.
  • Process of introduction of new products is a continuous one.
  • Over 3 decades of direct relationship with the farming community.
  • “Shriram” brand signifies Trust, Reliability ,Quality and latest technology to

the farmer.

  • The products are backed by extensive service network which helps in

transferring latest technology to farmers to improve their productivity.

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SLIDE 7

Farm Solutions – Extension programs

Soil Testing Compost Manufacturing Zero Tillage Farmer Productivity Management

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SLIDE 8

Bioseed

  • Complete seed company- Research, Production, Processing, Extension activity and marketing.
  • Focus on Tropical and Sub-Tropical climates
  • Operations in India, Vietnam and Philippines, and testing/test marketing in Thailand,

Indonesia and China.

  • Own Breeding programme in various crops.
  • Field Crops-Cotton, Corn, Rice, Millet, Sorghum, Sunflower
  • Vegetable Crops- Tomato, Okra, Gourds, Melon, Cabbage, Cauliflower etc.
  • Large investments made in Research, People and Seed processing infrastructure.
  • Over 60 scientists.
  • Spending ~ 10% of revenues on Research in last few years.
  • Investing in Bio-Technology.
  • Strong product pipeline to support future growth
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SLIDE 9

Bioseed – Field Research Stations

Hyderabad, (India) Philippines Vietnam

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SLIDE 10

Sugar- Manufacturing facilities

DSCL Sugar plant - Ajbapur

Location - Central U.P.

  • Current operation – 4 mills
  • Creating an inter-factory grid with

large command area

  • Over 200,000 farmers, extensive cane

development program

  • Sugar capacity : 33,000 TCD
  • Ajbapur : 10,500 TCD
  • Rupapur : 6,500 TCD
  • Hariawan : 8,000 TCD
  • Loni : 8,000 TCD
  • Power Co-gen : 94.5 MW

(51.5 MW for export)

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SLIDE 11
  • Improving farmers‟ prosperity - creating

„Trusted farmer relationships‟

  • One-stop shop for meeting farming and family

needs of the rural population

  • Product offerings:

– Retailing

  • Agri-Inputs
  • FMCG/Consumer Durables
  • Lifestyle
  • Fuel
  • Milk

– Services

  • Agronomy
  • Financial
  • Warehousing

– Output Procurement & Trading – Seed Processing

  • 264 outlets
  • Geographical presence in 8 states

(North , South, West India)

Hariyali Kisaan Bazaar-Rural Business Centres

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SLIDE 12

Chemicals & Polymers

  • Chemicals
  • Chlor – Alkali
  • Carbide
  • SBP
  • Polymers
  • PVC Resin
  • Power
  • Cement

– Waste utilization

  • u PVC windows ( Fenesta)
  • Design, extrusion, fabrication and installation
  • PVC Compounds

Total Power Generation

  • f 300 MW

(~ 50 MW dedicated for sale)

(275,000 tonne/year) (112,000 tonne/year) (13,200 tonne/year) (70,000 tonne/year) (400,000 tonne/year)

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SLIDE 13

Commodity Businesses

  • Be amongst lowest cost producers- latest technology, strong operations, integration and

scale.

  • Manage volatility through multiple revenue streams with swing capability.
  • Securing energy supplies through Lignite mines/Coal, Hydel Power.
  • Long term associations with customers, dealers, suppliers.
  • Strong Safety, Health and Environment(SHE) management.
  • Focus on creating a trained and skilled cadre of employees

Non- Commodity Businesses

  • Fenesta- Customer excitement through excellence in design and execution
  • Polytech- Developing required solutions and deliver it consistently.

Chemicals and Polymers: Key Drivers

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SLIDE 14

Manufacturing facilities – Kota

  • Highly integrated operations
  • Key product capacities:

– Chlor- Alkali: 1,13,750 TPA – SBP: 13,200 TPA – PVC Resin: 70,000 TPA – Calcium carbide: 1,12,000 TPA – Compounding: 29,700 TPA

  • Own railway siding-Handling 1 mn tonnes of annual traffic

– Urea: 3,79,000 TPA – Cement: 4,00,000 TPA – Fenesta windows: extrusion plant – Captive power – 133 MW

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SLIDE 15

Value chain – Chlor-Vinyl at Kota Complex

Cement Power Sale PVC Comp. PVC Plant Carbide Plant C/Soda Flakes SBP Chlorine Liq. Caustic Soda Plant

Power Plant

Coal

Lime Carbon Material

Acetylene Gas

Salt

Vinyl 30% HCL Acid Chlor- Alkali Cl2 Gas Lime Sludge

Integrated facilities with multiple revenue streams enable swing capabilities & cost efficiencies

  • Power
  • PVC Resins & Compounds
  • Calcium Carbide
  • Cement
  • UPVC Doors & Windows
  • Caustic Soda
  • Chlorine
  • SBP

Finished Products

Power

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SLIDE 16

Manufacturing facilities – Bharuch

Chlor-Alkali –1,46,850 TPA Power – 55 MW (Coal Based)

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SLIDE 17

Fenesta

  • UPVC based windows and door systems
  • End to end service- Design, extrusion,

fabrication and installation

  • State of the art extrusion facility at Kota,

and fabrication shops in 4 regions.

  • Pan India Sales and Service presence
  • 120 dealers in ~51 cities along with

marketing offices in 12 cities.

  • Catering to Institutional & Retail segment
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SLIDE 18

Fenesta

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SLIDE 19

Summing up

  • Swing capabilities
  • Operating synergies
  • Cross-flow of resources
  • Leveraging deep rural

knowledge

Integrated operations

  • Strong brand
  • Trusted & long term customer

relationships

  • Extensive distribution network

Market positioning

  • Cost competitiveness
  • Robust agri portfolio
  • Business risk hedge

Operating advantages

  • Scale up/ Consolidate the new

businesses.

  • Stabilize the expanded capacities.
  • Secure sources of energy and key

raw materials

Plans Organization & processes

  • Enabling SBU structure
  • Best in class IT infrastructure
  • Sound Corporate Governance
  • Conservative accounting

practices

  • Robust EBIDTA margins
  • LT Debt to equity < 1x
  • All Capital Expenditure programs

completed – will improve internal generations

Financials

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SLIDE 20

FINANCIALS

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SLIDE 21

Business mix – FY2011 (Consolidated)

Gross Revenue (Rs 4,328 crores) PBIT (Rs 215 crores)*

Q1FY12 FY 2010-11

Fertilizer 10% Farm Solutions 16% Bioseed 13% Sugar 16% Hariyali Kisaan Bazaar 16% Chloro-Vinyl 19% Cement 3% Others 7% Fertilizer 11% Farm Solutions 21% Bioseed 7% Sugar 14% Hariyali Kisaan Bazaar 18% Chloro-Vinyl 19% Cement 3% Others 7%

Gross Revenue (Rs 1,309 crores)

Fertilizer 14% Farm Solutions 19% Bioseed 17% Chloro-Vinyl 42% Cement 8% Fertilizer 9% Farm Solutions 12% Bioseed 36% Chloro-Vinyl 37% Cement 6%

PBIT (Rs 107 crores)*

Particulars Amt Rs. Cr PBIT 214.86 Less: PBIT of Hariyali 83.11 Less: PBIT of Sugar 7.12 Less: PBIT of Others 11.75 Less: Unallocated Expenditure 78.55 PBIT Reported 34.33 Particulars Amt Rs. Cr PBIT 106.99 Less: PBIT of Hariyali 19.18 Less: PBIT of Sugar 8.07 Less: PBIT of Others 4.2 Less: Unallocated Expenditure 22.08 PBIT Reported 53.46

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SLIDE 22

Revenue

360 405 437 502 608 590 621 712 673 935 1056 1183 1379 1559 1980 2540 2940 2775 3534 3547 4152

400 800 1200 1600 2000 2400 2800 3200 3600 4000 4400 199119921993199419951996199719981999200020012002200320042005200620072008200920102011 (Rs Crore)

  • Revenue growth 11x over 20 years at a CAGR of 13%
  • Accelerated growth momentum over last few years
  • Reduction in FY 08 is on account of decline in trading of Bulk Fertilizer
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SLIDE 23

EBITDA

23 26 42 48 63 79 92 101 112 130 151 142 185 202 235 295 240 218 400 368 194

50 100 150 200 250 300 350 400 450 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Rs Crore)

  • EBITDA growth over 20 years at a CAGR of 11.3%
  • Big drop in Sugar prices led to reduction in EBITDA in FY07, FY08 & FY11.
  • Big drop in Chloro-Vinyl in FY11
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SLIDE 24

Networth

  • Networth growth 48x in 20 years
  • Networth doubled in FY 08, consequent to land sale.

Deferred tax adjustment

27 31 41 75 120 208 254 269 276 295 325 227 273 333 443 526 554 1149 1269 1330 1306 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(Rs Crore)

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SLIDE 25

Thank you

Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. DCM Shriram Consolidated Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.