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. Ajay Vikram Ajit • Tradition of contribution to society - Education, Cultural, Research. • DCM Shriram Consolidated Ltd. • Core Values - Trust, Ethics & Fairness. • Focus on long term value creation. • Several firsts to its credit.
Overview • 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.
Agri/Rural Business • Output • Inputs – Sugar – Urea 500,000 tonnes/year • • ~ 400,000 tonnes/year – Bagasse based Power ~ 95 MW Working towards • improving farmer profitability – supported by over • Rural Business Centers – Farm Solutions 500 agronomists – Hariyali Kisaan Bazaar ( 264 • Bulk Fertilizers, Specialty Fertilizers, Micro nutrients, Crop Outlets) Care Chemicals, Seeds etc. • Retailing of Products ( Agri and Family goods) • Services ( Agronomy, financial) – Hybrid Seeds • Outputs ( Grain, Seeds, Milk) • India, Philippines, Vietnam, Thailand and Indonesia
Agri/Rural Business: Key Drivers 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.
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.
Farm Solutions – Extension programs Soil Testing Compost Manufacturing Zero Tillage Farmer Productivity Management
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
Bioseed – Field Research Stations Hyderabad, Philippines (India) Vietnam
Sugar- Manufacturing facilities 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) DSCL Sugar plant - Ajbapur
Hariyali Kisaan Bazaar-Rural Business Centres • 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)
Chemicals & Polymers • Chemicals • Chlor – Alkali (275,000 tonne/year) (112,000 tonne/year) • Carbide (13,200 tonne/year) • SBP Total • Polymers Power (70,000 tonne/year) • PVC Resin Generation • Power of 300 MW • Cement (~ 50 MW (400,000 tonne/year) – Waste utilization dedicated for sale) • u PVC windows ( Fenesta) • Design, extrusion, fabrication and installation • PVC Compounds
Chemicals and Polymers: Key Drivers 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.
Manufacturing facilities – Kota • Highly integrated operations • Key product capacities: – Urea: 3,79,000 TPA – Chlor- Alkali: 1,13,750 TPA – Cement: 4,00,000 TPA – SBP: 13,200 TPA – Fenesta windows: extrusion plant – PVC Resin: 70,000 TPA – Captive power – 133 MW – Calcium carbide: 1,12,000 TPA – Compounding: 29,700 TPA • Own railway siding-Handling 1 mn tonnes of annual traffic
Value chain – Chlor-Vinyl at Kota Complex Coal Power Plant Vinyl Power Chlor- Alkali Carbon Salt Lime Material Power Sale Carbide Plant Caustic Soda Plant Acetylene Gas 30% HCL Acid Cl 2 Gas PVC Plant Chlorine Liq. PVC Comp . SBP C/Soda Flakes Lime Sludge Cement • PVC Resins & Compounds • Caustic Soda • Calcium Carbide • Chlorine Finished • Power • Cement • SBP Products • UPVC Doors & Windows Integrated facilities with multiple revenue streams enable swing capabilities & cost efficiencies
Manufacturing facilities – Bharuch Chlor-Alkali – 1,46,850 TPA Power – 55 MW (Coal Based)
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
Fenesta
Summing up Integrated operations Operating advantages • Swing capabilities • Cost competitiveness • Operating synergies • Robust agri portfolio • Cross-flow of resources • Business risk hedge • Leveraging deep rural knowledge Financials • Robust EBIDTA margins Market positioning • LT Debt to equity < 1x • All Capital Expenditure programs • Strong brand completed – will improve internal • Trusted & long term customer generations relationships • Extensive distribution network Plans Organization & processes • Enabling SBU structure • Scale up/ Consolidate the new businesses. • Best in class IT infrastructure • Stabilize the expanded capacities. • Sound Corporate Governance • Secure sources of energy and key • Conservative accounting raw materials practices
FINANCIALS
Business mix – FY2011 (Consolidated) FY 2010-11 Gross Revenue (Rs 4,328 crores) PBIT (Rs 215 crores)* Cement Cement 3% 8% Others Fertilizer 7% 11% Fertilizer 14% Particulars Amt Rs. Cr PBIT 214.86 Chloro-Vinyl Farm Solutions 19% Less: PBIT of Hariyali 83.11 21% Farm Solutions Less: PBIT of Sugar 7.12 19% Chloro-Vinyl Less: PBIT of Others 11.75 Hariyali Kisaan 42% Bazaar Less: Unallocated Expenditure 78.55 18% PBIT Reported 34.33 Sugar Bioseed Bioseed 14% 7% 17% Q1FY12 Gross Revenue (Rs 1,309 crores) PBIT (Rs 107 crores)* Cement Cement 6% 3% Others Fertilizer Fertilizer 7% 10% 9% Farm Particulars Amt Rs. Cr Solutions PBIT 106.99 12% Chloro-Vinyl Farm Solutions Less: PBIT of Hariyali 19.18 19% 16% Chloro-Vinyl Less: PBIT of Sugar 8.07 37% Less: PBIT of Others 4.2 Bioseed Hariyali Kisaan Less: Unallocated Expenditure 22.08 13% Bazaar Bioseed PBIT Reported 53.46 16% 36% Sugar 16%
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