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Jindal Poly Films Limited

An Enterprise of the B.C. Jindal Group

Corporate Presentation
November 2010

Private & Confidential

Disclaimer
This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by Jindal Poly Films Limited (the Company). This presentation has been prepared for information purposes only and is not an offer or invitation, directly or indirectly, to buy or sell any securities, nor shall part, or all, of this presentation form the basis at or be relied on in connection with, any contract or investment decision in relation to any securities. This presentation is not an offer document or a prospectus under the [Indian] Companies Act, 1956, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended and any other applicable law. This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding expansion plans and the benefits there from, fluctuations in our earnings, our ability to manage growth and implement strategies, intense competition in our business including those factors which may affect our cost advantage, costs of raw materials, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns, changes in technology, availability of financing, our ability to successfully complete and integrate our expansion plans, liabilities, political instability and general economic conditions affecting our industries. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom. Securities offered or sold outside of the United States are being offered or sold in compliance with the applicable laws of the jurisdiction where those offers and sales occur. There will be no public offer of the securities in the United States or in any other jurisdiction.By viewing this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Company. Except as otherwise noted, all of the information contained herein is indicative and is based on management information, current plans and estimates in the form as it has been disclosed in this presentation. Industry and market-related information is obtained or derived from industry publications and has not been verified by us. The information contained in this presentation, except as otherwise noted, is only current as of the date of the presentation, and is subject to change without notice. The Company may alter, modify or otherwise change in any manner the content of this presentation, without any obligation to notify any person of such revision or changes. Persons relying on the information in this presentation should do so at their own risk and the Company shall not be responsible for any kind of consequences or liability to any person arising out of, relying and acting upon any such information. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM ANY PART OF ANY OFFER, INVITATION OR RECOMMENDATION TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES IN THE UNITED STATES OR ELSEWHERE. Private & Confidential
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Agenda

1 2 3 4 5

Company Overview

Industry Overview

Business Highlights

Power Generation Foray

Future Growth Strategy

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B.C. Jindal Group Overview


Established in 1952, the B.C. Jindal Group is one of Indias leading corporate houses, diversified into several business areas The Group is engaged in the business of manufacturing BOPET films, BOPP films, metallised films, steel pipes, cold rolled steel strips, galvanized sheets and photographic products through various companies The Group has ventured into power generation business recently B.C. JINDAL GROUP

Jindal Poly Films Ltd.


Largest flexible films (BOPET and BOPP) producer in India* Distribution network across 40 countries Listed on NSE and BSE with FY-10 Net Sales of Rs. 1,591 Cr. (USD 358 ml)1 Market Cap2: Rs. 3,097 Cr (USD 696 ml)1

Jindal India Thermal Power Ltd.


Currently developing 1,800 MW thermal power project in Odisha. Fuel from captive coal mine / linkage

Jindal (India) Ltd.


Commenced operations in 1952 Manufactures CR Strips, GP/ GC Sheet, ERW/ HIFW black and galvanized steel tubes Net Sales of Rs.1,066 Cr in FY-10 (USD 240 ml)1

Jindal Photo Ltd.


Commenced operations in 1986 under an alliance with Fuji Photo Films, Japan Produces film roll, photo colour paper, x-ray films, etc Listed on NSE and BSE. FY 10 Net Sales Rs. 379 Cr (USD 85 ml)1

Rexor SA
Founded in 1954 Major player in flexible and luxury packaging and a leader in tear tapes and film wrap in Europe based out of France Acquired by B C Jindal Group in 2003 Revenues of Euro 17.6 ml (USD 24 ml)1 in FY10

(1) (Exchange Rate: 1 Euro = USD 1.39, 1 USD = Rs.44.50) (2) Market Cap as on [ ] Nov2010 (Source: BSE)

* Source: World BOPET film market trends 2010, PCI Films Consulting; World BOPP Film Market Trends 2008, PCI Films Consulting

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Jindal Poly Films An Integrated Packaging Films Company


Indias largest manufacturer of flexible packaging films*. Product range includes thin and thick BOPET films, BOPP films, metallised films and specialty films Industry leader in its segments in India, with a total capacity of 307,000 TPA BOPET Films 35% market share BOPP Films 50% market share# Plant at Nasik, Maharashtra is the worlds largest single location plant for the manufacture of BOPET and BOPP films** Advanced machinery imported from Dornier, Bruckner, Applied Materials and Kampf, Germany Established distribution network - Export to more than 40 countries worldwide Strategically located manufacturing facility - Close to source of raw material and seaport
Source: BSE * Source: World BOPET film market trends 2010, PCI Films Consulting; **World BOPP Film Market Trends 2008, PCI Films Consulting in Sep, 2010 - Source: Access Management Services (P) Ltd #

Market Data & Stock Price Performance


BSE Code: NSE Symbol: Bloomberg: Reuters: Last Price: (Ex-Bonus 1:1) 52-Wk High/Low: Market Cap: Net Debt(1): EV: P/E: P/B(1):
Source: BSE (as on 04 Nov 2010)

500227 JINDALPOLY JDPF IN JPLY.BO Rs. 622.75 Rs. 700 / 146 Rs. 2,867 Cr (USD 644 ml) Rs.421 Cr (USD 95 ml) Rs. 3,288 Cr (USD 739 ml) 5.44x (Based on H1) 2.15x
(1) As on 30th Sep 2010

Shareholding Pattern (As on 30th Sep, 2010)

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Business Model

PTA Supplier Polyester Chips MEG Supplier BOPET FILM


Metallizing & Coating

Industrial Buyers

Presence of Jindal Poly Films

PPHP Supplier

BOPP FILM PPCP Supplier

Converters

FMCG Companies

Follows a B2B model, supplies base film to converters/ processors who in turn sell the value added product to the end customers (FMCG Companies) Jindal Poly Films is an integrated player of Poly Films; it manufactures poly chips after purchasing base raw material from outside. It also has metalizing and coating capabilities The films are also consumed in-house by Rexor for manufacture of high end luxury packaging products

Backward integrated production facilities


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Evolution into A Integrated Player


Another 8.7 meter thin PET film line was installed taking total capacity to 1,27,000 TPA

We believe, we became largest producer of BOPP in India by commissioning third BOPP line of 45,000 TPA, one of the largest in the world. Yarn production stopped Expansion of BoPET capacity by 25,000 TPA Manufacturing of BoPET films started Commenced manufacturing of Polyester Yarns 1993 1985 Backward Integration into manufacturing of polyester chips for captive use 2003 1996 Diversified into BoPP films, Acquisition of Rexor, France. Entered the metalised films segment 2006 2005 2004 Expansion of BoPP capacity by 32,000 TPA, second thin pet film line and second BOPP line commissioned Two BOPP film lines with a capacity of 90,000 TPA commissioned

2010 2009

Emerged as a leading player in plastic films in a relatively short period


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Flexible Packaging - Dominated by BOPET & BOPP


Flexible packaging involves the use of light weight, durable and flexible materials, such as plastic films, paper and aluminum foil to package and label products Applications include labels, wrappings for food, tobacco, fast moving consumer products and textiles The key reasons for the shift towards flexible packaging are: Improves shelf life of the products Helps differentiate products Enhances customer convenience Provides cost benefits Comparison of BOPET/ BOPP with other form of packaging material
Machinable BOPET BOPP TQPP PVC Polyethylene Aluminum foil Paper
Source: Company Strong Medium Weak

Barrier

Durable

Clarity

Flexible Plastic Applications*

Dominant share of BOPET, BOPP films led by superior properties


* Graphics above are representation of examples of end uses of flexible packaging films. These do not represent our direct or indirect customers

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BOPET Film: Global Scenario


Stable growth in BOPET demand*
(KTPA)

Demand drivers* Substitution of rigid packaging formats (e.g. bottles by stand-up and retort pouches) Additional packaging to preserve food products New thick film applications

3,000 2,500 2,000 1,500 1,000 500 0 2004 2005 2006 1,714 1,841 1,998

CAGR: 6.9%

2,166

2,320

2,393

2007

2008

2009

Increasing Contribution from Packaging, Electrical Applications*


15% Avg Growth 2009-2014 Electrical & Electronics

Emerging Application Areas

10%

Packaging & Metallising Other Industrial


LCD Television Screens Solar Photo Voltaic Cells

5%

0% Imaging & Graphics 0% 5% Avg Grow th 2004-2009 10% 15%


Luxury Packaging Touch Screen Mobile Screens

-5% -5%

The secular growth in BOPET demand driven by newer applications


* Source: World BOPET film market trends 2010, PCI Films Consulting

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BOPP Film: Global Scenario


Faster growth in BOPP demand*
(KTPA) 6,000 5,000 4,000 3,000 2,000 1,000 0 2003 2004 2005 2006 2007 2008 3,550 3,853 4,188
CAGR: 7.6%

Demand Drivers* Growth in the sales of packaged & convenience food Substitution of other forms of packaging films and materials Investment in new converting and packaging equipment by purchasers of BOPP film Environmental friendliness Cost effectiveness Market by Type*
Non-Food Packing
White/Opaque/M att 13% Metalised 12%

4,906

5,117

4,532

Food packaging to witness highest growth*


14%
Avg Growth 2003-2008

12% 10% 8% 6% 4% 2% 0% 4% 5% 5% 6% 6% 7% Avg Grow th 2008-2013 Industrial Food Packaging

Transparent 75%

Growth of branded food retailing to sustain growth in demand for BOPP


* Source: World BOPP Film Market Trends 2008, PCI Films Consulting

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BOPET & BOPP Pricing Trends


BOPET (Thin) and BOPP Price Trends
230 210 190 170 150 130 110 90 70 50 Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

BOPET

BOPP

Prices per KG BOPET (Thin) BOPP

Apr-09 to AprMar-10 Mar86 91

Apr-10 Apr94 89

Oct-10 Oct210 87

% change (Apr-Oct 2010) (Apr+ 123% - 2%

Thin BOPET prices have more than doubled since Apr 2010
Source: Company

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Key Investment Highlights


Largest Manufacturer in India for BOPET & BOPP films* Large Capacities Providing One Stop Stop Solution and Economies of Scale

Strong Industry Growth Outlook

Advanced Manufacturing Facility

Strong Financial Performance with Robust Balance Sheet

Low Cost Producer

Global Presence

* Source: World BOPET film market trends 2010, PCI Films Consulting; World BOPP Film Market Trends 2008, PCI Films Consulting

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1 Market Leader in Flexible Packaging Films


Worlds Largest Single Location Facility*
Plant Capacity (TPA)#

Largest capacity in India


BOPET (TPA) BOPP (TPA)

180,000
180,000

127,000
127,000 40,000 116,200 60,000 Jindal Poly* Cosmo Uflex 35,000 51,000 Polyplex 55,000 SRF 41,000 Garw are 27,000 Ester

Source: FY10 Company Annual Reports

45,000

To be one of the largest BOPET companies globally


4,500
355 330 268 262 240 222
Capacity in 2014 (000 TPA)

BOPET
Source: Company

BOPP

Metallised films

Coating Plant

Toray Plastics Zheijang Euro Asia

Jindal Poly*

DuPont Teijin

Jisngsu Suqian

Mitsubishi

Source: World BOPET film market trends 2010, PCI Films Consulting * As per Companys board sanction capacity to increase to 217 KTPA by 2013

Jindal Poly to be among top five largest BOPET film manufacturers in the world by 20141
#

as on 30th Sep 2010, above capacity has been worked on 12 Mic packaging grade production * Source: World BOPET film market trends 2010, PCI Films Consulting; World BOPP Film Market Trends 2008, PCI Films Consulting

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2 Wide Product Portfolio Catering to Diverse Application Markets


One-Stop-Shop

Consumer Products

Food packaging

Adhesive tapes

Magnetic media, imaging

Specialty Products

Security Threads in Currency Notes

Tear Tapes

Luxury Packaging

Emerging Applications

Solar Photo Voltaic Cells

One of the few players globally to be able to offer a range of thin and thick BOPET film and BOPP film products
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3 Advanced manufacturing Facilities


Advanced technology from global suppliers

Implementing Advanced Technology Wider high speed lines reduce energy 8.7 metre width BOPET lines costs Lower wastage due to wider lines Over 8 metre width BOPP lines Backward integration into poly chips reduces dependence on third parties Flame treated 5 layer films as well as provides cost advantage

Focus on technology and cost control


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4 Global Presence
Well established relationship with distributors in over 40 countries Marketing Network Around the Globe

About 20% export revenues. Registered an export of Rs 319 Cr (USD 72 ml) in FY10

Presence across multiple markets helps increase volumes as well profitability by taking advantage of the low cost manufacturing base
Rexor SA
Access to high-end portfolio of products Captive consumer of JPFLs base films R&D support Market intelligence Pan European distribution

No anti-dumping and one of the lowest anti-subsidy duties among all other Indian exporters for export to USA and European Union

Global presence and low duty structure provides competitive advantage


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5 Doubling Capacity over Next Two Years


Proposed Capacity Expansion (000 TPA)

66 30 66 312 60

With expansion in thick BOPET films capacities, entering into high end thick films used in solar photovoltaic cells

Expansion into high value added products such as metallized & coated films

180

We believe BOPP expansion to cater to rapidly growing domestic and export demand, speciality films and capacitor grade film
217

127

Existing

FY12

FY13 BOPET

At the end of FY13 BOPP

Source: Company

Capacity expansion and focus on value added specialty films to be the future growth drivers
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6 Strong Financial Performance


Sales (Rs. Crores)
1,591

Profitability (Rs. Crores)


CAGR
339
18%

364

CAGR

1,421 1,259 1,020 831

271 208
30%

% of sales1
267 364 364 353 319
20%

168 128 46 65 133 126


46%

2006

2007

2008 Net Sales

2009

2010 Export Sales

2006

2007

2008 EBITDA

2009

2010 PAT

Balance Sheet (Rs. Crores)


0.49 0.45 0.38 0.3 913 0.19 729 275 2006 787 479 237 2007 171 2008 Net Worth 2009 Total Debt 2010 Debt / Equity Ratio 476 973 1,069

(1) Export sales as % of total sales for FY2010

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Financial Performance Quarterly P&L (Trailing 4 Quarters)


Amount in Rs. Cr PARTICULARS Net Sales Other Operating Income Other Income TOTAL INCOME TOTAL EXPENDITURE (Increase) / Decrease in stock in trade Consumption of Raw Materials Employee Cost Power & Fuel Other expenditure EBITDA Depreciation Interest Exceptional Items PROFIT BEFORE TAX Provision for Tax NET PROFIT CASH PROFIT 332 4 50 33 285 22 8 -14 269 89 180 206 6 333 4 48 30 146 22 7 11 106 23 84 107 -6 278 5 45 30 97 22 7 -12 79 30 50 82 3 248 5 40 20 81 20 7 -11 65 30 35 62 Sep 10 687 17 704 June 10 556 11 567 March 10 436 12 448 Dec 09 387 9 396

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Financial Performance P&L (Annual)


Amount in Rs. Cr PROFIT & LOSS STATEMENT Net Sales Other Income Increase / (Decrease) in stock in trade TOTAL INCOME Out of above export sales EXPENDITURE Consumption of Raw Materials Manufacturing Expenses Excise duty on Increase/(Decrease) in stock Employee Cost Selling & Distribution Expenses Other Expenses EBITDA Depreciation Interest Exceptional Items PROFIT BEFORE TAX Provision for Tax NET PROFIT CASH PROFIT 1,030 209 1 17 15 19 364 80 28 (46) 302 93 208 318 860 163 (1) 16 25 44 339 69 20 62 188 62 126 203 803 148 (1) 14 32 10 271 63 14 194 61 133 202 671 125 (1) 12 36 11 168 61 18 90 26 65 138 554 116 1 11 38 9 128 59 16 53 7 46 108 2009-10 20091,591 46 19 1,656 319 2008-09 20081,421 22 4 1,446 353 2007-08 20071,259 20 (3) 1,276 364 2006-07 20061,020 12 (9) 1,023 364 2005-06 2005831 17 10 859 267

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Financial Performance B/S (Annual)


Amount in Rs. Cr BALANCE SHEET SOURCES OF FUNDS: Shareholders Funds Equity Share Capital Reserves & Surplus Deferred Tax Liability Loans Funds Secured Loans Unsecured Loans TOTAL APPLICATION OF FUNDS: Net Fixed Assets Gross Block (Incl. CWIP) Accumulated Depreciation Investments Net Current Assets TOTAL 1,282 1,870 588 176 254 1,712 1,154 1,664 510 189 246 1,589 928 1,369 441 101 185 1,214 901 1,285 384 93 153 1,148 852 1,177 324 166 96 1,114 1,069 23 1,046 167 476 425 50 1,712 973 26 947 138 479 441 37 1,589 913 28 885 130 171 171 0 1,214 787 28 759 123 237 237 0 1,148 729 28 701 111 275 274 1 1,114 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 31-Mar-06

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Foray Into Power Generation


Current Structure Proposed Structure

Jindal Poly Films Ltd.

Jindal Poly Films Ltd.

46.20%

73.73%

Jindal Photo Ltd.

45.03%

Jindal India Powertech Ltd. (JIPL)

8.77%

Others

Jindal Photo Ltd.

26.27%

Jindal India Powertech Ltd. (JIPL)

33%

81.55%

33%

86.46%

Mandakini Coal Co.Ltd


(290.52 Mn MT)

Coal Off-take Agreement

Jindal India Thermal Power Ltd. (JITPL)

18.45%

Others

Mandakini Coal Co.Ltd


(290.52 Mn MT)

Coal Off-take Agreement

Jindal India Thermal Power Ltd. (JITPL)

13.54%

Others

(Our share of 96.84 MT)

(Our share of 96.84 MT)

Source: Company

Jindal Poly has plans to make further investment of approximately Rs. 456 Cr (USD 102 ml) in JIPL at par. Consequently Jindal Poly Films Ltd. will have 63.75% effective control of JITPL.
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Angul 1,800 MW Pit-head Coal Based Thermal Power Project


Project Highlights
The project would run partly on captive coal mine and partly on linkage coal

Fuel security

Captive mine allotted with reserves of 96.84 MT Linkage in place for 2.66 MTPA from Mahanadi Coalfields Ltd. Fully explored mine with 56 boreholes over 6.5 sq km

Superior economics of captive coal mine

Estimated calorific value of coal: 4,278 kCal/ kg Stripping Ratio: 1:2.01(certified by CMPDI) Located 4 kms from the project site to result in huge savings in transportation cost

Pre development activities completed

Financial closure achieved for all the 3 Units Land, water, environment, fuel, off-take, BTG & other equipment and evacuation facilities in place Access road and boundary wall completed; site leveling & grading of WTP area, water pond, internal roads and drainage system under construction

Construction in full swing

Awarded the contract for BTG package in June 2009 BTG foundation work in progress BTG drum already dispatched Packages awarded for Coal Handling system, Ash Handling System, Chimney, Electrical, Civil Works, Cooling Tower, Transmission Line

Control over fuel transportation

5 km long overhead conveyor to be used for captive coal 35 kms down railway siding to be used for linkage coal

Secure and low cost fuel to provide competitive advantage; Significant progress on ground
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Angul Snapshot of Implementation Status


Parameters Unit I Unit II Unit III Remarks Land acquisition for ash dyke, overhead conveyor, merry-go-round and green belt pending Mining plan approved for captive mine Fuel* Linkage received

Land

Environmental Clearance

TOR received, EIA studies completed for Unit III

Water Allocation

Received water allocation for 48 cusecs and permission for drawl

Financial Closure

Debt tied up for all three units

BTG Package

Unit I & II - NTP issued in Jun 2009

Unit I - PPA with TPTCL for 500 MW Power Off-take Unit II & III - LOI from TPTCL for 400 MW each
Completed Significantly Completed Partially Completed Work Started Yet to begin

*Mining plan approval for captive mine is in place for 7.5 MTPA (Company share of 2.5 MTPA). Accelerated mining plan for 15 MTPA (Company share of 5 MTPA) may be submitted to the Ministry of Coal, GoI in due course. Subject to the accelerated mining plan being approved, the captive coal mine is expected to meet the annual coal requirements for 1,200MW generation for a period of approximately 19 years. Linkage coal is expected to meet the requirement for 600 MW.

Expected COD for Unit I, II and III are Mar 2012, Sep 2012 and Sep 2013 respectively
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Growth Strategy

Expansion into value added products

Maintain cost competitiveness

Emphasis on efficient working capital cycle through sales on cash payment basis and low inventory levels

Investment in power generation opportunity

Diversify into high end BOPET thick films used in solar photovoltaic cells

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Thank You

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