Polyplex (Thailand) Public Limited Company Presentation at the SET - - PowerPoint PPT Presentation

Polyplex (Thailand) Public Limited Company

Tuesday, 7th June 2011 Website : www.polyplexthailand.com Presentation at the SET Opportunity Day

• BOPET Film Industry
• Polyplex group
• Polyplex Competitive Strength

PTL : Financial Performance

Contents

• PTL : Financial Performance
• Current Industry Scenario & Outlook

2

Film business - Value Chain

PTA Supplier

P E T R E S I N

MEG Supplier

B A S E

Industrial Industrial Buyers Buyers

Polyplex’s area of operation

3

N F I L M S

Converters Converters FMCG FMCG Companies Companies

BOPET Thin Film Application

4

BOPET Thick Film Application

5

BOPET Film

• BOPET is mainly segmented into Thin & Thick Films

– Thin Film : 50 Micron & Under (75% of total BOPET) – Thick Film : Over 50 Micron (25% of total BOPET)

• The industry capacity is mainly divided based on above Thickness segments.
• Some lines are designed to produce intermediate range of Films from 12µ to

100µ

• Major End use of BOPET Film are
• Major End use of BOPET Film are

– Imaging & Graphics – Magnetic Tape – Packaging & Metalizing : Main Segment for POLYPLEX – Electronics / Electricals – Other Industrial

6

BOPET Film – Influencers on Price

COST DRIVEN FACTORS

CRUDE OIL PRICE IMPACT ON POLYESTER FILM (60%)

PTA MEG ENERGY COST (FUEL / POWER) LOGISTICS COST

MARKET DRIVEN FACTORS

7

CURRENCY VOLATILITY

COUNTRY EXPORT COMPETITIVENESS IMPORT INTENSITY CURRENCY WAR

TRADE AGREEMENTS AND BARRIERS

PROTECTIONISM, ANTI-DUMPING BILATERALISM & REGIONAL TRADE

DEMAND – SUPPLY BALANCE

BOPET Global Demand Supply

BOPET Thin Film "KMT" 2004 2009 2014 E BOPET Thick Film "KMT" 2004 2009 2014 E Capacity 1,388 2,171 3,166 Capacity 626 847 1,137 Production 1,235 1,806 2,781 Production 479 587 829 Capacity Utilisation % 89% 83% 88% Capacity Utilisation % 77% 69% 73% Demand 1,235 1,806 2,843 Demand 479 587 829 Imaging & Graphics 8 6 4 Imaging & Graphics 203 161 133 Magnetic Tape 94 22 7 Magnetic Tape

• Packaging & Metallising

730 1,232 1,998 Packaging & Metallising 4 17 32 Electrical / Electronics 59 90 187 Electrical / Electronics 142 248 443 Other Industrial 344 456 647 Other Industrial 131 161 221

• Largest End use :Flexible Packaging - which accounts for more than two-third of

total Thin Film used.

• Thin Film demand has witnessed a CAGR of about 8% Per Annum (2004-09) and

expected to grow at CAGR of 9.5% (2010-2014).

• Thick Film market has grown at a CAGR of about 4% per annum (2004-09) and is

expected to grow at CAGR of 7.2% (2010-2014).

• The above CUF is based on “Name Plate” Capacity. Achievable peak CUF is 85%-

90% for Thin Film and 70% - 75% for Thick Film against Name Plate Capacity.

8

Other Industrial 344 456 647 Other Industrial 131 161 221 *Source: Industry Sources

Packaging :Sustainable Growth

• Diversified application of BOPET has resulted in Sustainable Growth at better than

World GDP Growth rates.

• The growth in packaging segment proves it resilience to recessionary factors.

9

Segment wise Demand of BOPET Film

616 638 617 659 710 766 820 868 201 222 255 293 333 338 389 444 508 575 630 211 198 181 178 172 167 160 154 147 140 137 94 55 42 32 28 22 17 15 11 9 7 1500 2000 2500 3000 3500 4000

• BOPET (Thin + Thick) Film demand expected to grow @ CAGR of 9%
• Packaging is expected to grow @ CAGR of 10%

10

734 842 951 1046 1149 1249 1392 1545 1698 1863 2030 474 524 568 616 638 201 211 500 1000 1500 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E

Packaging Other Industrial Electrical Imaging Magnetic Tape

Structural Shift in Application of BOPET

2000 2500 3000 3500 4000

5% 14% 7% 1% 24% 17% 4%

• P-I-E

segment to continue to grow at robust rate

• Electrical

segment to witness highest growth rate of 13%.

• Growth in Electrical

11 500 1000 1500 2004 2009 2014 E Packaging Other Industrial Electrical Imaging Magnetic Tape

43% 28% 12% 12% 5% 52% 26% 55%

K MT

• Growth in Electrical

due to new applications.

• Packaging to follow

closely at 10%

• Imaging and Tapes

to experience “Negative” growth

Changing Consumer Habits, convenience is the key Consumer demand for fresh and healthy food, beverages driving need for intelligent as well as high barrier packing Emergence of strong Retail sector

Packaging: Growth Drivers

Emergence of strong Retail sector Securing product from counterfeiting Sustainability - Growing concern on carbon footprint, promotion of Green Technology

12

• BOPET Film Industry
• Polyplex group
• Polyplex Competitive Strength

PTL : Financial Performance

Contents

• PTL : Financial Performance
• Current Industry Scenario & Outlook

13

Polyplex Group – Global Presence

Turkey: Plant 3

India : Plant 1 & Plant 4

Thailand: Plant 2

USA : Plant 5 (Under Implementation)

14

Manufacturing Locations – India (PCL), Thailand (PTL),Turkey (PE) & USA (under implementation) Distribution Companies – USA (PA) & China (PTSL). Warehouses – 12 in USA, 3 in Mexico, 1 in Poland & 1 in Guangzhou, China

Factories Warehouses

Polyplex Group Structure

Polyplex (Asia) Pte. Ltd. SINGAPORE Polyplex Corporation Limited INDIA Private Investor Polyplex (America)

• Inc. USA

Polyplex (Thailand) Public Company Ltd. THAILAND Public/ Institutional Shareholders

9.88% 9.88% 16.5%% 34.5% 100% 100% 49% 80.24%

15

Polyplex (Singapore) Pte. Ltd. SINGAPORE Polyplex Trading (Shenzhen)

• Co. Ltd.

CHINA Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi TURKEY Outside Interest Investment Company Manufacturing Company Distribution Company

100% 100%

Polyplex Group: Serving Customers Worldwide

More than 1,200 Customers in 80 countries More than 1,200 Customers in 80 countries

• Customer solution oriented sales and technical

services teams (region specific ) & Global Innovation Centre PCL- SAARC, GCC and Africa PTL- SEA, Far East & Oceania PE - Europe & CIS countries

• Distribution subsidiaries in

PA - North and South America, Canada & Mexico PTSL-China

• Distributors & agents increase reach and service

small customers

• Customer centric customized delivery model:

– Container loads drop-shipped for cost- effectiveness – Local warehousing support for higher flexibility & security

16

Polyplex : Business Strategy

• We’re a fully integrated, global manufacturer of plastic films with Concentric

Diversification into BOPP & CPP

Turkey Turkey India India Thailand Thailand

• Our vision is to continuously grow, create value and establish global leadership in

the plastic film business

• We’re expanding to meet demand in new geographies and for new applications

like Extrusion lamination, Silicone Coated release films etc.

• Continually balance our Product & Market Portfolio to increase stability of our

Earnings.

• Judicious mix of On-shore, Off-shore and Near-shore strategy.

17

Polyplex Group: Existing Capacities

51000 42000 58000

PET FILM (151,000 TPA)

INDIA THAILAND TURKEY

35000 10000 16300 15200 11000

MET FILM (42,500 TPA)

INDIA THAILAND TURKEY

Polyplex :Product Portfolio PET Film 151 KTPA,CPP 10KTPA, BOPP 35 KTPA

151000

PET FILM (TPA) BOPP (TPA) CPP (TPA)

77600 57000 57600

PET RESIN 192,200 TPA

INDIA THAILAND TURKEY 160 150

SILICONE COATING (Mn Sqm)-India EXTRUSION COATING (Mn Sqm)-Thailand

INDIA THAILAND TURKEY

Offline Coater 310 Mn SQM

18

Polyplex Group capacities: 2012

19

• The above capacities include Silicone Coated Film and Thick PET film under

implementation in Thailand & Thin PET film line expansion ( Including metalized film line) under implementation in US

Polyplex: Continuous Growth…

From 20 KMT capacity in 2002, we have become a TOP 5 Manufacturer of Thin BOPET Film with capacity of 151 KMT and adding further 63.4KMT (Thin +Thick PET) by H1 of FY 2013-2014. In addition, existing BOPP capacity of 35 KMT and CPP Capacity of 10 KMT

20

Thailand

Apr/ Nov 2003 Sep 2004 Feb 2005 July 2005 April 2008 PET Film – Line 1 & 2 Chip Plant –Batch /Continuous Metallizer-1 Extrusion Coated Film

Turkey

PET Film – Line 1 Metallizer - 1 Chip Plant December 2005 March 2006 December 2006

Polyplex Thailand : Journey So Far

21

May 2008 Metallizer -2 Metallizer -2 PET Film - Line 2 May 2008 May 2008 March 2010 Cast Polypropylene Film Expected- Q3 2011-12 Silicone Coating line Expected H1 FY 2013-14 PET Thick Film line + PET Chips

USA

PET Film – Line 1 Expected in H2 FY 2012 - 13

SILCONE COATING LINE – THAILAND

• Investment size – USD 25 million, including working capital.
• Target markets – Europe, US and Asia
• Applications – Used as a release liner for Label liners, graphic

arts, medical liners and Shingle Tapes

• Capacity – Dependant on the product mix being run on the line

Projects Under Implementation

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• Capacity – Dependant on the product mix being run on the line

and can vary significantly across different product types – 200 million sq.mts to 600 million sq.mts

• Financial closure achieved.
• Delivery of main machinery received and commissioning under

progress

• Expected to be operational in Q3 of FY 2011-12.

THIN PET FILM LINE – US

• Project initially planned for Turkey, relocated to the US
• Capital Investment size – USD 75 million
• Capacity –
• Thin PET film line – 31,000 MT pa
• High speed Metallized Film line – 8,600 MT pa

Projects Under Implementation

• High speed Metallized Film line – 8,600 MT pa
• Financing Pattern:
• Investment to be made by PTL and/or its 100% held subsidiaries in a new

company to be incorporated in the US

• Debt Borrowing – Approx. 50 Million USD
• Balance to be funded out of internal accruals
• Expected to be commercially operational in 15-18 months from financial closure

23

Thin PET film line –US - Investment Rationale

• Market share of Polyplex in the American continent has increased significantly post

acquisition of the Trading Company in the US, in January 2006.

• With existing US PET thin film manufacturers shifting their focus from packaging

applications to high end industrial and electrical applications and no new capacities coming in the US, there is a scope for Polyplex to further increase its market share in the US

• On shore location in the US would be more competitive from a long term point of view

as compared to an off-shore supplier due to the following reasons:

Projects Under Implementation

24

as compared to an off-shore supplier due to the following reasons:

• Proximity to key markets leads to reduced cycle time, faster deliveries and is clearly

a source of differentiation in the eyes of the customer. Also this will help the company to reduce its logistics, delivery costs including lower working capital.

• Both the key raw materials i.e. PTA and MEG are surplus in North America and

possibilities of co-location also exist to further improve the economics.

• Risk of Trade remedial measures like AD/CVD duties can also be significantly

reduced / eliminated.

• An additional location will also significantly diversify the overall business risk.

THICK PET FILM LINE – THAILAND

• New Project approved by the board on 14th February 2011
• Investment size – USD 75 million, including working capital.
• Capacity – Integrated line with Backward integration into PET resin
• Thick PET film line – 28,800 MT pa
• Polyester Resin plant – 28,000 MT pa

Projects Under Implementation

• Polyester Resin plant – 28,000 MT pa
• Financing Pattern:
• Debt Borrowing to the extent of 65-75% of project cost – Approx. 50 Million USD
• Balance to be funded out of internal accruals
• Main machinery ordered and down payment made on 15th February 2011.
• Expected to be commercially operational in 18-24 months from financial closure

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PET Thick film line - Investment Rationale

• Thick film offers a relatively higher margin and more stable business, thereby mitigating

the risk of volatility in earnings

• Competition is limited and with high cost producers in USA, Europe, Japan, Korea etc

and not with Asian manufacturers (as in packaging applications)

• Diversification of risk from packaging dominated to industrial segments
• Opportunity to the company to meet the in house requirement of Thick PET film for

Projects Under Implementation

• Opportunity to the company to meet the in house requirement of Thick PET film for

Extrusion Coated film line and the Silicone Coating film line under implementation

• Leveraging existing sales and distribution network
• Rich experience in Thin PET films coupled with learning in traditional Thick film markets

can be leveraged for entry into Optical segment which has huge potential

• Duty advantage for exports from Thailand
• FTAs of ASEAN with Korea, Japan and China will enable Polyplex to meet demand in

these markets

• Trade defense measures (Anti Dumping duty) imposed by Korea on imports from

China

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• BOPET Film Industry
• Polyplex group
• Polyplex Competitive Strength

PTL : Financial Performance

Contents

• PTL : Financial Performance
• Current Industry Scenario & Outlook

27

• State-of-the-art machineries at all locations
• Backward Integration enables:

– Consistent quality – Development of new and specialty application products – Assured supplies

• Forward integration and Concentric diversification enables us to

Polyplex : Competitive Strengths

28

• Forward integration and Concentric diversification enables us to
• ffer more value to customers.
• Customer engagement initiatives
• Benefits of Global presence
• Focus on Operational Excellence – Better efficiencies, lower
• perating costs etc.

• BOPET Film Industry
• Polyplex group
• Polyplex Competitive Strength
• PTL : Financial Performance

Contents

• PTL : Financial Performance
• Current Industry Scenario & Outlook

29

Financial performance :FY 2010-11

• FY

2009-10 FY 2010-11 YoY %

• Production (PF+MF)-MT

107,913

112,150 4%

• Total Revenues

7,300 11320 55%

• 30

Financial Figures in Mn THB Production Qty includes only BOPET Film (PF+MF).

• EBITDA

1,527 4371 186%

• Profit before Tax

1,056 3921 271%

• Profit after Tax (excl.minority int)

1,039 3883 274%

Financial Performance – Historical Data

10% 15% 20% 25% 30% 35% 40% 3,000 4,500 6,000 7,500 9,000 10,500 12,000 rofit as a % of Sales Million Baht

Historic Sales revenue & Net profits (Consolidated)

31 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Sales Revenue 3,300 4,719 6,399 6,860 7,125 11,183 Net Profits 561 342 814 1,042 1,039 3,883 NP margin 17.00% 7.24% 12.71% 15.19% 14.59% 34.72% 0% 5% 10%

• 1,500

3,000 Net Pro Financial Year Sales Revenue Net Profits NP margin

Financial Performance – Return on Assets

15% 20% 25% 30% 35% 40% 5,500 7,000 8,500 10,000 11,500 13,000 turn on Assets (%) Total Assets in million baht

Growth in Total assets and Return on Assets

32 2006-07 20007-08 2008-09 2009-10 2010-11 Total Assets 5,838 8,299 8,881 8,867 11,933 Return on assets % 5.98% 11.51% 12.13% 11.71% 37.34% 0% 5% 10% 1,000 2,500 4,000 Retu Financial Year Total Assets Return on assets %

Financial Performance – Growth in Shareholder Equity

6 7 8 9 10 11 4,000 5,000 6,000 7,000 8,000 9,000 10,000

Value per share areholder Equity

Growth in Shareholder Equity and Book value per share

33

2004-05 2005-06 2006-07 20007-08 2008-09 2009-10 2010-11

• Sh. Equity

3,267 3,483 3,522 4,329 4,596 5,012 8,363 Book Value 4.08 4.35 4.40 5.41 5.75 6.27 10.45 3 4 5 1,000 2,000 3,000 4,000

Book V Shar

Financial Year

• Sh. Equity

Book Value

Historic Dividend Payout

34

Capacity Utilization Rate- Thailand

42,000 42,000 42,000 42,000 42,000 88% 95% 90% 97% 101% 71% 91% 67% 74% 79% 60% 80% 100% 120% 18,000 24,000 30,000 36,000 42,000 48,000

Capacity Utilization rate- Thailand 35

5,000 5,000 10,250 11,000 11,000 0% 20% 40%

• 6,000

12,000 18,000

Financial Year

Plain Film Metallized Film Plain Film Metallized Film

Capacity Utilization Rate- Turkey

29,000 29,000 54,375 58,000 58,000 81% 92% 74% 89% 91% 50% 83% 57% 72% 76% 50% 60% 70% 80% 90% 100% 30,000 36,000 42,000 48,000 54,000 60,000

Capacity Utilization rate- Turkey 36

5,000 5,000 10,250 11,000 11,000 50% 0% 10% 20% 30% 40%

• 6,000

12,000 18,000 24,000

Financial Year

Plain Film Metallized Film Plain Film Metallized Film

Sales Mix – Region Wise

37

Note: Above region wise break up is based on Film Sales Value for FY 2010 - 11 at Polyplex (Thailand) Consolidated level

• Significant presence in all leading markets
• The company’s sales reach in premium markets of Europe & North America validate company’s

strategy to set up manufacturing facility in Turkey and acquire the distribution company in the US - Judicious mix of On-shore, Off-shore and Near-shore strategy

• Well balanced region wise mix – no dependency on any single region

Sales Mix – Increasing Value Added Products

38

* Value added films include Chemically Coated films, Metallized Film (PET + CPP) and Thermal Laminated film which have higher value addition as compared with normal plain film.

Note: Above data is for PTL (standalone) based on Sales quantity

• BOPET Film Industry
• Polyplex group
• Polyplex Competitive Strength
• PTL : Financial Performance

Contents

• PTL : Financial Performance
• Industry Outlook

39

Industry Outlook

• The expected global growth in flexible packaging for the year

2011 is estimated at about 9-10%.

• Polyplex's estimate of Global Demand supply situation of Thin

Film Segment till 2013 is as follows:

40 Calendar Year

Industry Outlook

• Consumer preference for smaller and one time use packs are expected to

increase which will bring in more demand for packaging material.

• Changing life style of consumers to result in increase in demand for “ready

to eat” foods

• New applications like PV, Touch-screen panels etc will continue to drive the

growth of Thick PET film.

• Exceptionally high margins of 2010 are likely to result in capacity additions

by existing as well as new players, specially in China and India.

41

by existing as well as new players, specially in China and India.

• Hence, the shortage situation in 2010 is expected to be better balanced in

2011.

• Raw Material price fluctuation as well as currency volatility would continue

to remain a challenge

The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation

• r

warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be

42

Disclaimer

presentation has been prepared on the basis of a number of assumptions which may prove to be

• incorrect. This presentation should not be relied upon as a recommendation or forecast by Polyplex

(Thailand) Public Co., Ltd. Nothing in this release should be construed as either an offer to sell or a solicitation to buy or sell shares in any jurisdiction.