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Indian Polyester 2016
Vipin Kumar
PET GLOBAL OVERVIEW
www.indoramaventures.com
Our vision: To be a world-class chemical company making great products for society
3 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
PET is now in its 75th Year
and Still Revolutionizing The Drinks World
Superior benefits to brandowners
• Encourages novel package design and enhances
brand differentiation, Shelf impact
• Reduces transportation and distribution cost
Superior benefits to consumers
• PET is a shatterproof, safe package option for both
home and away-from-home applications
• PET is easy to store, carry, clean up and re-seal
Sustainable packaging choice
• Competitive product against other packaging
materials
• Product & pack size innovation help PET
outperform competing packaging
• PET is the most widely recycled plastic globally
• PET has lower carbon footprint vs. competing
materials
PET is a transparent, lightweight, strong, safe, and recyclable packaging material, making it suitable for a wide array of products
0
100
200
300
400
500
2000 2003 2006 2009 2012 2015
Aluminium PET Glass
Paper Others
15-yr CAGR
+7.0%Surpassing glass as
the largest packaging
substrate
Global Beverage Containers Demand (Bn units)Compelling product attributes driving PET’s success
Source: IVL Analysis, Euromonitor
4 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
PET: Most Affordable Packaging Material
0
500
1,000
1,500
2,000
2,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PET Aluminum
Most cost effective alternative
PET vs Aluminum Price Comparison (2001-2010)
Equivalent Prices (US$ / T)
1. Asia PET Prices 2. London Metals Exchange Aluminum Price x 0.71Note: Prices are per equalized unit for the product consumedSource: SBA CCI, London Metals Exchange, IVL Analysis
1 2
28%10-year Average
Aluminum / PET price premium
5 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
PET: Sustainable Packaging ChoiceNumerous life-cycle studies give environmental edge to PET over competing materials
11
16
27
0
5
10
15
20
25
30
(Million BTU)
302
767
4,457
0
1,000
2,000
3,000
4,000
5,000
PET Aluminum Glass
1,125
2,766
4,848
0
1,000
2,000
3,000
4,000
5,000
PET Aluminum Glass
Weight (lbs) CO2 equivalents (lbs)
Note: Product pictures for illustrative purpose onlySource: Franklin Associates, IVL Analysis
Lowest energy
consumption
Lowest waste
generation
Lowest CO2
emissions
PET packaging is more energy efficient and has lower
carbon footprint vs. aluminum and glass
6 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Growing PET Application
28.8% 28% 10.9%
15.5% 10.1%
6.6%
CSD
10.6 bn. Additional Consumption
Water
71.2 bn. Additional Consumption
PET Packaging Consumption
Total unit volume
CAGR% 2013-2018
Source: Euromonitor (2014), Husky, IVL Analysis
Global Consumption of PET
package growth at steady
pace.
JSDT
37.4 bn. Additional
Consumption
Global Packaging Demand in
Carbonates
21%
43%
36%
Glass PET Bottle Others
20%
18.3%
21%
19.2%
12.9% 8.5%
PET Demand Share by Region
Source : PET Planet (No.6, 2016)
Source : pci WoodMackenzie
Source: Euromonitor (2014)
7 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Population Growth• Increase in population and changing
demographics lead to greater demand
for necessities such as food and
beverages
Urbanization, Middle Class• Growing middle class and urbanization
in emerging markets
Higher Income Levels • Wealth increase and upside
purchasing power in emerging markets
Infrastructure Development• The prevalence of supermarkets and
convenience stores allows for ready
access to packaged food and
beverages as well as impulse
purchase spending
Attractive Industry Dynamics and TrendsCompelling Product Attributes Driving PET Success
Health Awareness• Quality of tap water is suspect and
health awareness driving bottled water
consumption
Product Innovations• Continued improvements in design,
process, technology create new
product applications
Brand Differentiation• Brand owners increasingly use
packaging as a source of
differentiation
Lifestyle Changes• Demand for more convenient and
aesthetic packaging
• Consumers are increasingly
encouraged to shift towards more on-
the-go consumption
Source: IVL Analysis
8 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Food & Beverages
Differentiated PET Portfolio
Inventing the Future Everyday
End Markets End Use Applications
Solar panels
Wind turbines
LED
Pharma
Blood tubes
Face shields
Bio-based PET resins
Recycled PET bottles
Recycled PET trays
Beer, milk, wine applications
Oxygen barrier resins
Multi-serve resins
Antimony Free Catalyst: Al, Ge, Ti
Bio & Recycle
Medical
Industrial &
Electronics
Personal & Home
Care
Note: Examples only and not exhaustive
Shampoo containers
Body care
Cosmetics
9 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
2016
PET Demand
in India
1.6K
2015 GDP Per Capita ($) Current PET Per Capita
Consumption
0.8
Kg
Current Soft Drink
Per capita consumption
13
litres
Modern Trade stores per
million consumers
6
Source: World Bank 2015 GDP per capita, Industry Data, IVL Analysis, Euromonitor, Nielsen
8K
2015 GDP Per Capita ($) Current PET Per Capita
Consumption
3.4
Kg
Current Soft Drink
Per capita consumption
62
litres
Modern Trade stores per
million consumers
162
India = “NEXT China” A very promising market for long-term growth
CAGR 2016-2026 = 17%
CAGR 2016-2026 = 17%
2016
PET Demand
in China965 1,129 1,320 1,544 1,805 2,111
2,469 2,888
3,377 3,950
4,619
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
10 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
India – A Country with Huge Growth PotentialStructural Changes Underpin Strong Long-Term Demand Growth
2013 Beverage Packaging Mix (Per Cent)
Application
Share
Significant Penetration Upside
Still Drinks
Source : Industry Data, IVL Analysis
17% 38% 15% 23% 7%
PET Share of Beverage Market 30% Only
“Lifestyle Parity”
India Beverage Industry
CAGR
In Litres mn 2013 2018 2013-2018
Soft drinks 11,755 22,937 14%
Bottled water 8,197 16,957 16%
CSD 2,352 3,465 8%
Juice (Fruit/vegetable) 1,132 2,413 16%
Source : The Economic Times (2016)
Source : PET Planet (No.5, 2016)
11 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
India – A High-Priority Market Coke and Pepsi to Invest > $10 billion by 2020
“PepsiCo will invest $5.2 billion with its
partners in India by 2020 as it increases
manufacturing capacity and adds new
products…India is a country with huge
potential and it remains an attractive, high-
priority market for PepsiCo”
Indra Nooyi, CEO PepsiCo, Nov 2013
“Coca Cola and its bottling partners will
invest $5 billion in India by 2020 as it
looks to raise its presence in one of the
fastest growing markets in the
world…India, a country of 1.2 billion,
remains one of the last big frontiers for
Coca Cola”
Muhtar Kent, CEO Coca-Cola, July 2012
Ambitious Targets Confirm Long Term Potential
Note: IVL Research, The Economic Times (2016)
“We have already created some 45,000
jobs and continue to see huge potential in
the Indian economy”
Jeff Bezos, CEO Amazon, June 2016
"India continues to be among P&G's fastest
growing developing markets globally, and is
a key priority for the company”
A.G. Lafley, CEO P&G, June 2013
Referring to the launch of Coke 250 ml
PET bottle in India,
"The pack radically extends the shelf life of
small PET... So, this is a way of really
being able to extend the reach way further
into the rural areas“
James Quincey, COO Coca-Cola,
June 2016
12 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Source : IVL Analysis, IHS Global Trade Atlas (2016)
India PET Operating Rates Returning to Normal
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
500
1000
1500
2000
2500
2012 2013 2014 2015 2016 2017 2018 2019 2020
Capacity Production Demand Operating Rate
13 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Supply Chain Supports the Socio-Economic Needs
Improving
Processes and
Technology to
reduce Energy
consumption
Recycling-The
way to go
Zero emissions
and waste
Conservation of
resources through
light-weighting
Renewable
Materials
BIO-MEG/ BIO-PX
SUSTAINABILITY
Renewable
Energy
Stakeholder
Engagement
14 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Recyclability Creates Competitive Attractiveness
Countries Have Proven It Can Be Done
Source: PCI, NAPCOR, IVL Analysis
31%
PET Bottle Collection Rates in Selected Geographies - 2014
US
58%
EU
85%
China
79%
Japan
75%
Mexico
31%
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PCR Approval
Industry
Collaboration
Create
Infrastructure
Volatility
Focused Business
Commitment
“LOOKING AHEAD”
Carbon Footprint
Modern Trade
Awareness
Sustainability
16 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Key Essential Elements for Business
EBITDA MarginTop line growth
Competitive cost
Growing value addition
Effective capacity utilization Resilient products
SCM for reduced
cost of delivery
Favorable Trends and Demographics
Operational Excellence
Co
re E
PS
Core EBITDA
Co
st
of d
eb
t
Cash FlowNet debt/Equity
Net debt/EBITDA
Div
iden
d p
ayo
ut
Cyclical products
Advantaged Raw Materials
Sustainability
17 ©Indorama Ventures PCL Our vision: To be a world-class chemical company making great products for society.
Indorama’s Differentiation
EBITDA MarginTop line growth
Competitive cost
Growing value addition
Effective capacity utilization Resilient products
SCM for reduced
cost of delivery
Favorable Trends and Demographics
Operational Excellence
Co
re E
PS
Core EBITDA
Co
st
of d
eb
t
Cash FlowNet debt/Equity
Net debt/EBITDA
Div
iden
d p
ayo
ut
Cyclical products
Advantaged Raw Materials
Sustainability
Innovation
TechnologyR&D
Integration
Global
Scale
People
HVA