Professional Documents
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Corporate Presentation
November 2010
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
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
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
Business Model
Industrial Buyers
PPHP 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
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
Barrier
Durable
Clarity
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
10%
5%
-5% -5%
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
Transparent 75%
10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
BOPET
BOPP
Apr-10 Apr94 89
Oct-10 Oct210 87
Thin BOPET prices have more than doubled since Apr 2010
Source: Company
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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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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
45,000
BOPET
Source: Company
BOPP
Metallised films
Coating Plant
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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Consumer Products
Food packaging
Adhesive tapes
Specialty Products
Tear Tapes
Luxury Packaging
Emerging Applications
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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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
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
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
Source: Company
Capacity expansion and focus on value added specialty films to be the future growth drivers
Private & Confidential
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364
CAGR
271 208
30%
% of sales1
267 364 364 353 319
20%
2006
2007
2009
2006
2007
2008 EBITDA
2009
2010 PAT
18
19
20
21
46.20%
73.73%
45.03%
8.77%
Others
26.27%
33%
81.55%
33%
86.46%
18.45%
Others
13.54%
Others
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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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
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
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
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
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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Land
Environmental Clearance
Water Allocation
Financial Closure
BTG Package
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
Private & Confidential
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Growth Strategy
Emphasis on efficient working capital cycle through sales on cash payment basis and low inventory levels
Diversify into high end BOPET thick films used in solar photovoltaic cells
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Thank You