global scenario - wordpress.com3 global sugar demand will increase to 198 mn tones in 2021 and 257...
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GLOBAL SCENARIO
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Global sugar demand will increase to 198 mn tones in 2021 and 257 mn tones by 2030 compared with 168 mn tones in 2014
Asia will remain the biggest consumer of sugar, increasing its share of total consumption from around 45% in 2014, to 50% in 2021
By 2030, it forecast that India and China will respectively constitute 17.60% and 14.70% of the total global consumption
Total consumption in Europe is expected to remain stable over next 20 years
Africa will begin to emerge as a major consumer, increasing its contribution in global consumption from 9% to 13% in 2030
45%
13%
19%
12% 9%
1%
Asia S. America Europe N.America Africa Oceania
Global Sugar Consumption 2012-13-165 mn Global Sugar Consumption 2020-21-198 mn
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World (Figures in million tonnes)
Sugar Year (SY)/ Marketing Year (MY) Aug-July (MY)
Major Sugar producing states Brazil, India, EU, China
2010-11 2013-14
Area under Sugarcane
Sugar Opening Stocks 26.15 43.16
Sugar Production 161.89 174.82
Sugar Imports 49.15 52.55
Total Supplies 237.19 270.53
Consumption 158.92 168.48
Exports 51.81 58.68
Total Demand 210.74 227.16
End Stocks 26.45 43.37
Supply Mismatch • Over last 20 years sugar production has risen by
44% to 176 mn tones • Global consumption expected to rise to 260 mn
tones by 2030 • Production gap to additional 84 mn tones
requires to be met over the next 15 years Concentrated Industry
• Industry is mature and increasing production is difficult given the demand on acreage
Brazil Key to fill Demand • World still dependent on Brazil, which currently
accounts for 45% of global exports, to meet the remaining 45 mn tones requirements
Weather – A key Determinant • World sugar production still heavily dependent
on weather and continued cyclical production patterns
Sugar Diversion to Ethanol • Oil prices is another external risk to contend
with as it makes sugarcane for fuel ethanol more lucrative
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INDIAN SCENARIO
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Around 664 sugar factories in India widely dispersed over UP, Maharashtra and other States
Ownership of sugar sector – 55% private sector and 45% in co-operative & Govt. Sector
Uttar Pradesh [in North] and Maharashtra [in West] produce 60% of sugar in India
Cultivation of cane largely monsoon depended
Sugar industry has potential to play a major role in development of rural India.
About 2.4% of cultivable land is under sugar cane
` 80,000 crore industry, cane payment of ` 69,000 crore
Located in rural heartland, directly contributes to rural economic development & employment
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Area under Sugarcane : 5.10 million hectares
Sugarcane Production : 345 million tones
Number of Sugar Mills : 664
Average Capacity of Sugar Mills : 3800 TCD
Production of Sugar : 24.2 million tones [2013-14]
Average per capita consumption : 21.2 kgs of sugar and 6 kgs of other sweeteners
Refinery : 4.50 million tones
Payment to farmers towards : ` 690 billion cane price
Provides direct employment : 0.60 million workers to around
Annual contribution to national : ` 2700 crores by way of excise duty exchequer
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(Million Tones) 2009 2010 2011 2012 2013 2014 [E]
Opening Stock 10.8 4.6 6.1 7.1 7.6 8.2
Production 14.5 18.9 24.4 26.3 25.1 24.3
Increase in Production
-45.1% 30.3% 29.1% 7.8% -4.6% -3.2%
Internal Consumption
22.9 21.3 20.8 22.4 23.0 24.0
Growth Y-O-Y 4.6% -7.0% -2.3% 7.7% 2.7% 4.3%
Exports 0.2 0.2 2.6 3.4 1.5 2.0
Imports 2.4 4.1 - - - -
Closing Stock 4.6 6.1 7.1 7.6 8.2 7.5
Months of Consumption
2.3 3.3 4.0 4.0 4.2 3.8
RECENT DEVELOPMENTS IN
INDIAN SUGAR INDUSTRY
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Partial decontrol of the industry wherein abolition of long standing levy quota and removal of sugar release mechanism
CCEA clears ` 6,600 crores loans for sugar industry
SAP for the current season, in state of UP, kept same at ` 280/qtl
UP Govt. announced relaxation in Society Commission and Purchase Tax & Entry Tax
Further, Govt. has also agreed to market-linked prices of Ethanol through tender process
Advantage to Millers:
• No loss on account of levy sugar burden
• Freedom to sell sugar without any quantitative and time restriction
• Can plan storage capacity
• Sell sugar on a forward basis
Advantage to Farmers:
• Better cash flow for millers would ensure prompt sugarcane payment
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OMC’s had invited 1st bid of tender for 1.40 billion liter and 2nd bid for 1.33 billion liter of Ethanol
Out of the 1st bid OMC’s have ordered to supply 0.40 billion against which 0.30 billion has already been delivered
Out of the 2nd bid OMC’s have ordered to supply 0.25 billion against which 0.04 billion has already been delivered
Current price range stands at ` 34-35 per liter
Ethanol Blending Programme: • Save substantial Forex • Eco-friendly product: answer of
time • Will lower emission of green
house gases • To increase demand for alcohol
and thereby molasses
This is also expected to firm up the prices of Rectified Spirit (RS) and Extra Neutral Alcohol (ENA) going forward which will boost the prospects of the industry
Value of fuel Ethanol ` 1600 crores – likely to go up to ` 3000 crore [1500 million litres]
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Revenue Sharing Model
• Maharashtra along with Karnataka is deliberating two revenue-sharing models: the first with a 75:25 ratio (suggested by the Rangarajan Committee) where only sugar is considered, and the second with a 70:30 ratio where sugar, molasses and bagasse are also included. This revenue sharing is consistent with international practices.
• Taking Maharashtra’s average sugarcane price of ` 230 per quintal in 2012-13 under the proposed configuration, an upfront 75 per cent payment would have to be made to farmers (` 173 per quintal) and the remainder following the determination of mill profitability.
Revision in Tariff of Cogen
• Rate of supply of power under provisions of CNCE Regulations are due to increase. This increase will be effective from 1st April 2014
Expected increase in price of Ethanol
• We expect the Ethanol prices to increase to align with the current market prices
All these measures / policy changes put together once effective will be a huge boost for the industry
We, at Balrampur, are well placed ahead of peers to take advantage of the same based on our fully integrated model
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BCML Business Model
Large Capacities Sugarcane crushing capacity at 79,000 TCD, Distillery and Co-generation operations of 320 KLPD and 148.20 MW (Saleable) respectively
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SUGAR COGEN POWER COGEN POWER ORGANIC
CAPACITY DISTILLERY [MW] INSTALLED [MW] SALEABLE MANURE
[TCD] [KLPD] CAPACITY CAPACITY [TONS]
BALRAMPUR 12000 160 43.55 22.25 30000
BABHNAN 10000 60 14.50 3.00 18000
TULSIPUR 7000 - 9.50 - -
HAIDERGARH 5000 - 23.25 20.95 -
AKBARPUR 7500 - 18.00 11.00 -
MANKAPUR 8000 100 37.00 25.00 10000
RAUZAGAON 8000 - 30.75 23.00* -
KUMBHI 8000 - 32.70 23.00 -
GULARIA 8000 - 31.30 20.00
MAIZAPUR 3000 - 6.00 - -
KHALILABAD 2500 - 4.50 - -
TOTAL 79000 320 251.05 148.20 58000
* During season saleable cogeneration capacity is 16 MW
UNITS
Shareholding Pattern
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Board of Directors
AS on 31st March , 2014
Promoters 40.84
Financial Institutions 5.85
Foreign Institutional Investor
17.47
Private Corporate 8.66
Non-resident Indians 0.50
Public 26.68
Total 100.00
Chairman Emeritus : SRI . KAMAL NAYAN SARAOGI, Chairman Emeritus, Board of Directors : SRI. NARESH CHANDRA [ Retd. IAS], Chairman SRI . VIVEK SARAOGI, Managing Director, SMT. MEENAKSHI SARAOGI, Joint Managing Director
Shri R.K.CHOUHDURY, Independent Director
SRI. R. N. Das (Retd. IAS) , Independent Director
SRI R VASUDEVAN (Retd. IAS), Independent Director
SRI DINESH K. MITTAL (Retd. IAS), Independent Director
SRI KRISHNAVA DUTT, Independent Director
SRI KISHOR SHAH, Director-cum-Chief Financial Officer
DR. ARVIND KRISHNA, Whole-time Director
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Level I
Business Unit Level
Level II
Technological Level
Level III
Operational Level
Fully integrated company Second largest sugar crushing capacity
Located in India’s second highest sugarcane producing state
Superior utilization of fixed assets Latest technology and machinery and infrastructure
High operational efficiency
Diversified customer mix Access to power during off-season through dual-fuel power generation facility
Access to market with high sugar demand and relatively higher sugar realization
Excellent relationship with farmers Ability to refine sugar during off-season due to refining capacity and off-season power
Elaborate sugarcane collection network
Statement of Profit & Loss
(` million) Q4 FY14 Q4 FY13 % Y-o-Y Growth FY14 FY13
% Y-o-Y Growth
Net Operating Revenue
6,999.8 7,447.4 -6.01% 26,649.4 32,748.4 -18.62%
EBITDA 2,383.3 1,236.6 92.73% 2,140.2 4,198.9 -49.03%
EBITDA Margin (%) 34.05% 16.60% - 8.03% 12.82% -
Depreciation 270.0 261.8 3.13% 1,094.5 1,082.6 1.10%
Interest 228.6 266.5 -14.22% 1,178.4 1,438.7 -18.09%
Profit Before Tax 1,969.8 967.3 103.64% 126.7 2,105.6 -93.98%
Profit After Tax 1,899.0 709.8 167.54% 36.4 1,620.3 -97.75%
Profit After Tax Margin (%)
27.13% 9.53% - 0.14% 4.95% -
Diluted EPS (`) 7.75 2.90 - 0.15 6.63 -
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(` million) Sugar Cogen Distillery Others Total
Q4 FY 2014 6,339.9 1,573.4 713.5 24.4 8,654.2
Q4 FY 2013 6,760.5 1,343.6 803.6 11.2 8,918.9
% Shift -6.31% 17.10% -11.21% 117.86% -3.07%
FY 2014 23,599.4 3,294.5 2,518.1 59.4 29,471.4
FY 2013 30,031.5 3,024.7 2,061.6 50.6 35,168.4
% Shift -21.42% 8.92% 22.14% 17.39% -16.20%
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(` million) Sugar Cogen Distillery Others Total
Q4 FY 2014 1,106.0 765.8 375.3 2.4 2,249.5
Q4 FY 2013 110.2 774.6 456.2 4.8 1,345.6
% Shift 903.63% -1.11% -17.73% -50.00% 67.17%
FY 2014 (1,084.9) 1,519.6 1,162.2 6.9 1,603.8
FY 2013 1,266.1 1,584.4 968.3 12.2 3,795.0
% Shift - -1.86% 20.02% -43.44% -57.74%
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Long Term Debt of ` 667.09 crores as on 31st March 2014
Debt / Equity ratio stands at 0.55
Market capitalization of ` 1065.21 crores as on 31st March 2014
No visible high capex expansion
For more information on the Company, please log on to www.chini.com.
For further information contact: Mr Kishor Shah / Mr Pramod Patwari Registered Office: Balrampur Chini Mills Limited FMC Fortuna, 2nd Floor. 234/3A, A. J. C. Bose Road. Kolkata – 700020 Corporate Identification Number: L15421WB1975PLC030118 Telephone Number: +91 33 2287 4749 Fax Number: +91 33 2289 2633 Email ID: kishor.shah@bcml.in pramod.patwari@bcml.in
THANK YOU
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