aiae profile sept 2009 ir
TRANSCRIPT
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Sept 2009
Company Presentation
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1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3.
Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
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Industry: Mill Internals
High Chromium wear resistant parts for grinding & crushing
equipment
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Industry: Mill Internals (contd)
Grinding Media Liners Diaphragm
Rollers & Table liners Blow bars / Hammers Dipping Tubes
Cement & Mining as key end-user industries
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Process Critical Input for Grinding
Non availability
Product failure
Grinding Operations can
come to a halt
Leadsto
Leadsto
Optimal design for
given application
Consistent end product quality
Increased production volume
Reduce process costs
A small component of grinding cost, but essential for continuous production
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Industry Size & Scope
Global market for Mill Internals for mining and cement sectors estimatedat 3 mn MT (Rs 125 bn) and growing at 4-5% per annum
Mill internals are consumables in grinding mills
Their design and properties (abrasion, corrosion, impact resistance) are critical to
grinding process efficiency
Demand driven by new projects and replacement for wear parts
Industry moving from cost of parts to total cost of ownership, drivinginnovation in product development and total solutions
Move from forged grinding media to high chrome cast media
Total solutions include design of parts, metallurgy to meet the specific requirement
of the material being ground varies from plant to plant
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Industry size
India 25 KTIndia 25 KT Mining Sector Demand at
2.4 mn MT
Cement Sector Demand at
300,000 MT
Estimated
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1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
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Company Overview
AIA Engineering Limited (AIAE ) promoted by Mr Bhadresh Shah, a firstgeneration entrepreneur, began operations in 1978
A niche manufacturer of impact / abrasion / corrosion resistant high chromecastings with rated capacity of 165,000 MT per annum
Products include grinding media , liners, diaphragms etc for cement, mining &utility industries, with focus on application and end to end solutions
Strong focus on metallurgy, process technology for product development andprocess improvement to facilitate total solutions to customers
Basic know how through collaboration (1991 to 2000 ) with M/s Magotteaux, Belgium
Collaboration with Southwestern Corp, UK for process improvements (vertical mills)
Global marketing presence, through 100% owned subsidiaries / branches in USA,UK , ME , Australia and Philippines
Supply contracts with global cement majors like Lafarge of France, Cemex of Mexico andHolcim of Switzerland & commercial relationships with OEMs like F L Smidth of Denmark
Domestic customers include leading cement manufacturers, mining companies, major thermalpower plants and OEMs
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1978 - 1985
Initial years
1985 - 1991
Develop
highchrome
application
s
1991 - 2001
Foreign
JointVenture
2001
onwards
Indepen-
dent
global footprint
Milestones
2005
IPO
2008
100K Mtplantfully
commi-
ssioned
2009
$ 200million
revenuemark
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AIA Engineering A Total Solution Provider
Metallurgy Design
Application
M D
A
M D
A
MM DD
AA
Application : Working Conditions
Design of Part
Physical & Metallurgical Properties
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Marketing
International marketing presence under Vega brand Wholly owned subsidiaries and offices covering USA , UK, Middle East, Australia
Technical team in key offices servicing customer requirements
Established relationships with cement majors / technology suppliers
Holcim (Switzerland), Lafarge (France), Cemex (Mexico), FL Smidth
Now focusing on opportunities available in global mining & utility sectors
Domestic business spread across cement and utility/mining sectors ACC Limited, Gujarat Ambuja Cement Ltd., Ultra-tech Ltd., Grasim Industries Ltd., etc-
in cement segment
Kudremukh Iron Ore Company Ltd., Hy-grade Pellets, Hindustan Zinc, Bharat
Aluminium Company-in mining segment Major thermal power plants and OEMs in the utility segment
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Global Footprint in 75 countries
Countries where AIA/Vega products are sold
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Total Solutions Approach = Long Term Client Relationships
http://images.google.com/imgres?imgurl=http://www.domain-b.com/companies/companies_a/acc/logo.jpg&imgrefurl=http://www.domain-b.com/companies/companies_a/acc/20030702_shares.html&h=50&w=85&sz=3&tbnid=UvHopeXkwJAJ:&tbnh=42&tbnw=72&hl=en&start=10&prev=/images%3Fq%3DAssociated%2BCement%2BCompanies%2BLtd%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DNhttp://www.flsmidth.com/flsmidth/english/default.htmhttp://www.cemex.com/index.asphttp://www.lafarge.com/cgi-bin/lafcom/jsp/home.do?rubric=home&BV_SessionID=@@@@1660260066.1127976394@@@@&BV_EngineID=ccccaddfhekkmekcfngcfkmdhgfdggg.0http://www.holcim.com/CORP/EN/b/null/jsp/templates/home.html -
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Organisation Structure
AIAE
Welcast Steels
Limited (WSL)
Vega,
ME
Vega,
UK
Vega,
USA
Manufacturing subsidiaries Marketing subsidiaries
Backgro
un
d
Production
&
Sales
WSL is a
listed entity.
AIAE holds 72
% of its equity
100%
subsidiary
Vega, ME
owns 100% of
Vega UK
Vega, UK
owns 100% of
Vega USA
ManufacturesGrinding
Media Sells directly
to AIAE and to
its customers
Direct Sales toMiddle East,
South EastAsia and
South America
Direct Sales to
North America
and part ofCentral
America
Direct Sales to
European
Region,Russia, Africa,
Turkey and
other erstwhile
CIS Countries
165,000 MT manufacturing capacity
Domestic & international sales operations
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AIA/Vega Global Presence
Offices being opened in 2009
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1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
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Consolidated Financials ( In INR )
** Annualised
Rs.in Millions
PARTICULARS FY 05 FY 06 FY 07 FY08 FY09
Sales 2937 4070 5230 6912 10233
EBIDTA 469 919 1407 1955 2717
EBIDTA / Sales (%) 16% 23% 27% 28% 27%
Interest 28 53 24 17 21
Depreciation 33 71 82 136 203
Tax 136 252 346 460 750
NP after minority interest 269 524 943 1333 1736
PAT / Sales (%) 9% 13% 18% 19% 17%
Capital Employed 1483 3316 5184 6379 8324
Networth 875 2741 4918 6100 7726
ROCE (%) (EBIDTA-DEP/CE) 29% 26% 26% 29% 30%
RONW(%) (PAT/NW) 25% 19% 19% 22% 22%
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Consolidated Financials ( In USD )
** Annualised
USD inMillions
PARTICULARS FY 05 FY 06 FY 07 FY08 FY09
Sales 67 91 120 173 201
EBIDTA 11 21 32 49 53
EBIDTA / Sales (%) 16% 23% 27% 28% 27%
Interest 1 1 1 0 0
Depreciation 1 2 2 3 4
Tax 3 6 8 11 15
NP after minority interest 6 12 22 33 34
PAT / Sales (%) 9% 13% 18% 19% 17%
Capital Employed 34 74 119 159 164
Networth 20 62 113 152 152
ROCE (%) 29% 26% 26% 29% 30%
RONW(%) 25% 19% 19% 22% 22%
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1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
G th St t
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Growth Strategy
Expand focus on global
mining & utility segments
Capitalize further onpredominant position in
Cement in India & global
markets
Increased R&D focus tofurther strengthen total
solutions capabilities
Focus on strategic
relationship / commercial
partnerships with
international partners to
gain access to newermarkets
Exploring backward
integration opportunities
for sourcing of certain keyinputs and setting up
a power plant
P d C it & Pl
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Proposed Capacity & Plans
0
50,000
100,000
150,000
200,000
250,000
Existing Jun-07 Q408 Mar-09
115,000
Capacity in tons
Implementation
Further expansion of
manufacturing
capacity (by de-
bottling to 200,000)
65,000115,000
165,000
FY 2010-2011
200,000
Dec - 2005 June - 2007 April - 2008
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Thank You