INDO RAMA SYNTHETICS (INDIA) LTD TWO DECADES OF POLYESTER - - PowerPoint PPT Presentation

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TWO DECADES OF POLYESTER MANUFACTURING EXCELLENCE

INDO RAMA SYNTHETICS (INDIA) LTD

Investor & Analyst Meet – May 4, 2011

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An abiding faith in “Self” A dogged determination to “Excel” A resolve to hold one’s own against all odds A passion to seek greater and newer challenges, consistently A vision to be first and the “best among the best”

We are

Our Motto Our Motto

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The Indian Textile Sector The Indian Textile Sector

• The Indian textile industry is one of the leading textile industries in the world
• Contributes about 14 per cent to industrial production, 4 per cent to the country’s

GDP ; 17 per cent to the country’s export earnings.” (ref Min of Textiles Annual Report 2010)

• Provides direct employment to over 35 million people - the second largest

provider of employment after agriculture

Source - http:/ / www.importerbase.com

4 Source : Saurer Fiber Survey Report

Fiber Fiber Consumption overview Consumption overview

Globally, consumption is significantly tilted towards manmade fibers, whereas India will catch up the trend soon. World Natural Fiber = 26.3 MMT (37%) Manmade Fiber = 47.1 MMT (63%) India Natural Fiber = 4.7 MMT (61%) Manmade Fiber = 3.1 MMT (39%)

Per capita consumption (Kgs)

Region Cotton Polyester 2005 2010 % 2005 2010 % World 4.0 3.7 (7.5) 3.7 5.1 38 China 7.0 8 14 10.0 18 80 India 3.3 3.9 18 1.8 2.5 38

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The Indian Polyester Segment The Indian Polyester Segment

• Growing at a CAGR of more than 10% for the past two years – capable of

exceeding this growth going forward

• Several drivers for this growth
• Rising demand driven by higher GDP
• Easily Available raw material
• Spiraling cotton prices
• Very high operating rates in the downstream industry
• Progress in Non-woven & Technical Textile applications; opportunities non

textile applications

• More of Nuclear Families

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Finished goods overview

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Source : PCI Demand Supply Report 2010/11 for Global and Indo Rama Internal Reports for domestic

Global Scenario

million tons million tons

Domestic Scenario

Polyester Outlook (PFY + PSF ) Polyester Outlook (PFY + PSF )

10 20 30 40 50 60 70

2008 2009 2010 2011 2012 2013 2014 2015

66% 68% 70% 72% 74% 76% 78% 80% 82% 84% Capacity Production Operating rate

2011-2015 Projected Figure

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Source : PCI Demand Supply Report 2010/11 for global and Indo Rama Internal reports for domestic

Global Scenario

million tons million tons

Domestic Scenario

Polyester Outlook (PSF) Polyester Outlook (PSF)

5 10 15 20 25 2008 2009 2010 2011 2012 2013 2014 2015 0% 20% 40% 60% 80% 100% 120%

Capacity Production Operating rate

2 0 1 1- 2 0 1 5 Project ed Figure

9 Source : PCI Demand Supply Report 2010/11 for Global and Indo Rama Internal report for domestic.

Global Scenario

million tons million tons

Domestic Scenario

Polyester Outlook (PFY) Polyester Outlook (PFY)

5 10 15 20 25 30 35 40 45 2008 2009 2010 2011 2012 2013 2014 2015 65% 75% 85% 95% Capacity Production Operating rate

2 0 1 1- 2 0 1 5 Project ed Figure

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Numerous R&D initiatives have enabled innovation and identification of non apparel usages for polyester. These include:

Non Apparel Segment

Expanding non apparel opportunities can only expand demand for polyester

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Substitute Fiber

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Global Domestic

million tons million tons % age % age

Cotton Scenario Cotton Scenario

Cotton prices are very high due to stock to use percentage coming down.

(Cotton Year Aug – July) (Cotton Year Oct – Sep)

13 Source : Cotton Prices from Cotlook Website

Cotlook Cotlook A Index vs. World Stock / Use Ratio A Index vs. World Stock / Use Ratio

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Apr-10 July-10 Oct 10 Jan 11 Mar 11 Cotton 194.0 203.0 279.0 395.0 502.0 PSF 135.0 125.0 144.0 195.0 225.0 POY 141.0 131.0 148.0 177.0 206.0

Source : Business Plan Reports for PSF and POY and Cotton Prices from Cotlook Website Cents / Kgs

Historical International Prices - Cotton / PSF / POY

Gap between Cotton Price and Polyester Widened

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Raw material overview

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Global Scenario Domestic Scenario

Source : PCI Demand Supply 2010/11

million tons million tons % age % age

PTA Outlook PTA Outlook

2011-2015 Projected Figure

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Global Scenario Domestic Scenario

Source : PCI Demand Supply Report 2010/11

MEG Outlook MEG Outlook

million tons million tons % age % age

2 0 1 2- 2 0 1 5 Project ed Figure

40 240 440 640 840 1040 1240 1440 1640 Q 2 5 Q 3 5 Q 4 5 Q 1 6 Q 2 6 Q 3 6 Q 4 6 Q 1 7 Q 2 7 Q 3 7 Q 4 7 Q 1 8 Q 2 8 Q 3 8 Q 4 8 Q 1 9 Q 2 9 Q 3 9 Q 4 9 Q 1 1 Q 2 1 Q 3 1 Q 4 1 ' J a n 1 1 ' F e b 1 1 ' M a r 1 1

U S D p e r M T

40 50 60 70 80 90 100 110 120 130

U S D p e r B a rre l

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* Oil prices are in USD/Barrel. All other prices are in USD/MT CFR

Correlation between crude and PTA / MEG not significant

Crude vs. Raw Crude vs. Raw Material Material

Source: IRSL Internal reports

Crude MEG PTA

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Who We Are Who We Are

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Financial Results Financial Results

for the Quarter / Year ended M arch 31, 2011 for the Quarter / Year ended M arch 31, 2011

EBIDTA (` 417.51 Cr)

223.54 417.51

100 200 300 400 500 FY10 FY11 EBIDTA

PAT (` 139.41 Cr)

7.13 139.41

50 100 150 FY10 FY11 PAT

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HIGHLIGHTS HIGHLIGHTS Financial Year 2010 Financial Year 2010-

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(April, 2010 (April, 2010 – – March, 2011) March, 2011)

13 % 13 % 86.77 % 86.77 %

Revenues (` 3,000.14 Cr)

2,659.41 3,000.14

2,400.00 2,500.00 2,600.00 2,700.00 2,800.00 2,900.00 3,000.00 3,100.00 FY10 FY11 Revenues

` . Cr. ` . Cr. ` . Cr.

1855.26 % 1855.26 %

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FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS

FY 2011 FY 2011

` . in crore

PARTICULARS 2010-11 2009-10 % Change Gross Turnover 3,000.14 2,659.41 12.81 Expenses: Raw materials cost 2,154.87 1,929.35 11.69 Employees cost 63.58 56.71 12.11 Total Expenditure 2,581.16 2,482.18 3.99 PARTICULARS 2010-11 2009-10 % Change EBIDTA 417.51 223.54 86.77 Interest 59.27 66.77 (11.23) Depreciation 149.90 149.15 0.50 Profit Before Tax 208.34 7.62 2634.12 Profit After Tax 139.41 7.13 1855.26

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Annual Financial Ratios Annual Financial Ratios

Particulars F.Y. 2010-11 F.Y. 2009-2010 Debt/Equity Ratio 0.93 1.66 Interest Coverage Ratio 7.04 3.35 Debt Service Coverage Ratio 1.59 1.56 Current Ratio 1.00 0.84 Fixed Asset Coverage Ratio 2.47 1.94 Return on Capital Employed 29.48% 19.22%

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• Fig. in ` . Cr.

Finance Cost Reduction Finance Cost Reduction

` . Cr

(Including Working capital Interest & Term Loan)

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Major Value Addition / Cost Cutting Measures

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DTY Capacity Expansion DTY Capacity Expansion

Expansion of value added product capacity by the addition of 22 new high capacity Draw Texturized Yarn (DTY) machines.

• With 8 new high capacity DTY machines already commissioned, the capacity

has increased to 64,800 TPA from 43,000 TPA in February, 2011 Further enhancement of plant capacity by adding 14 new DTY machines which will be commissioned from August, 2011 to January, 2012

• Post commissioning : Capacity: - 98,000 TPA
• Total Cost of Project : ` 32 crore
• Payback period for the project: 2 years

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Operational enhancement Operational enhancement

Existing dowtherm Heating System based on Furnace Oil (FO) to be replaced by a coal based plant which will be commissioned by July, 2011.

• Under this project four coal based heaters will be commissioned
• Total Cost for this project would be ` 73 Crore
• Expected payback period : 1.5 Years

To set up a Steam turbine generator with a capacity of 11 MW, utilizing the available Steam capacity for captive use, reducing dependency on Furnace Oil based DG set.

• Steam Turbine Generator to be commissioned by November 2011
• Total Cost for this project: ` 36 Crore
• Expected payback period : 2 Years

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