presentation - analyst meet 25 july 2008

8/7/2019 Presentation - Analyst Meet 25 July 2008

http://slidepdf.com/reader/full/presentation-analyst-meet-25-july-2008 1/14



2

3

Contents

Introduction : KCI at a Glance

Financial Highlights

Growth Plans

Closing remarks

4

Introduction



3

5

KCI at a glance Incorporated in 1960

Over 40 years of experience in manufacturing Industrial Chemicals

Continuously Profit making since commencement of commercial productionin FY’1965

Uninterrupted Dividend since FY’1975

History

Global Investors recognizing the potential of the Company

Stock Split & Bonus issue of Equity Shares perceived well in the Capital Market. Equity Shareholdershave more than doubled in the past one year.

Shareholding

structure

National Stock Exchange of India Ltd.

Bombay Stock Exchange Ltd.Shares Listed at

9749 (as on 30th June, 2008)No. of Shareholders

57.1%

10.8%

7.2%

2.8%

8.5%

13.6% Promoters

International F inance Corporation

Banks, Fis, MFs & Insurance Cos.

FII, NRI, OBC

Corporate Bodies

Indian Public

6

KCI at a glance (contd….)• Chloro Chemicals at Renukoot, Dist. Sonebhadra,Uttar Pradesh

• Alco Chemicals at Ankleshwar, Dist. Bharuch, Gujarat

• Salt Works at Samakhali, Gandhidham, Gujarat

• Bio Compost Plant at Sengpur, Dist. Bharuch, Gujarat

• Wind Farm at Dhank, Dist. Rajkot, Gujarat

ManufacturingLocations

Over 40 years of industrial chemicals manufacturing experience with a wide productportfolio achieved by forward & backward integration

Operating

Segments & keyproducts

Pentaerythritol

Formaldehyde

Acetaldehyde

Hexamine

Industrial Alcohol

Acetic Acid

Ethyl Acetate

Chloro Chemicals

Caustic Soda

Liquid Chlorine

Hydrochloric Acid

Stable Bleaching Powder

Aluminium Chloride

Poly Aluminium Chloride

Chlorinated Paraffins

Alco Chemicals

With CaptivePower

With CaptivePower



4

7

KCI at a glance (contd…)

Extract from CRISIL GVC Rating Rationale :

“….The rating indicates that the company’s capability with regard to corporategovernance and value creation for all its stakeholders is high….”

• CRISIL GVC Level 3 rating for strong Corporate Governance Practices.Governance

• Unblemished track record of timely meeting its financial obligations

ever since the inception of the Company.Credit History

• ISO 9001 (Quality Standards)

• ISO 14001 (Environment Management)

• OHSAS 18001 (Occupational Health & Safety Assessment Series)

Certification

8

Key features

Fully integrated Chlor Alkali manufacturing complex at Renukoot

Backward integration by way of 2*25 MW Captive Power Plant atRenukoot and Salt Works in Gujarat

CPP located at almost pit head leading to low generation cost

Forward integrated chemical plants fo r value added ch lorinatedderivatives

Leadership in manufacture of Stable Bleaching Powder, AluminiumChloride, Poly Aluminium Chloride and amongst Top Five in Caustic

Soda

Chloro Chemicals

30,000 tpaPoly Aluminium Chloride

11,500 tpaChlorinated Paraffins

30,000 tpaStable Bleaching Powder

17,000 tpaAluminium Chloride

25,284 tpaHydrochloric Acid (Co-product)

103,560 tpa

128,000 tpa

Current Capacity

Liquid Chlorine (Co-product)

Caustic Soda

Key Products manufactured



5

9

Alco Chemicals

3,300 tpaEthyl Acetate

6,000 tpaAcetic Acid

22,500 KLIndustrial Alcohol

10,000 tpaAcetaldehyde

4,000 tpaHexamine

75,000 tpaFormaldehyde

6,000 tpa

CurrentCapacity

Pentaerythritol

Key Products Manufactured

Key features

Leadership in manufacture of Pentaerythritol, Formaldehyde & Hexamine

State of the art manufacturing facility

Ideally located near to raw material source as well as customer base

‘Waste to Wealth’ programme for treatment of distillery effluent : powergenerated from bio gas, recycling of water using pioneering concept of RO process in distillery and convert ing treated solid effluent into biocompost.

Self sufficient in power generated from bio-gas, natural gas & wind farm.

10

KCI - USPs

USPs

Diversified

customer baseIntegrated

business with large

volumes

Independent

Board

Professional and

experienced

managementState-of-the-art

and modern

manufacturing facilities

Low cost producer

with economies

of scale

Recognised for its

quality products

Strategically

located



6

11

Board of Directors

Experience of 4 decades in international business operations.

In charge of the affairs of Chloro Chemicals Segment.

Mr. J. P. Sonthalia

Mg. Director (Designate) –Chloro Chemicals

5 decades of experienceIn charge of the affairs of the Alco Chemicals Segment.

Mr. T D BahetyWhole Time Director

Vice Chairman and Director (Strategy) of Murugappa Group of CompaniesMr. A Vellayan

Entrepreneur with diverse business interests including property development.Mr. B D Sureka

First Chairman of the Central Elect ricity Regulatory Commission

Director General of NCAER from 1990 – 1996.

Mr. S L Rao

More than 20 years of experience in Chemicals Industry

A member of the Governing Council of World Chlorine CouncilPresident of International Chamber of Commerce (ICC) India

Mr. R V Kanoria

Chairman &Managing Director

Retired Indian Foreign Service Officer

Served as High Commissioner to countries such as Pakistan, Cyprus and Australia

A leading advocate & has more than 40 years of experience

Expertise in Corporate Laws, M&A, Banking Restructuring etc.

More than two decades of experience in industrial enterprises

Retired Bank executive with more than 45 years of experienceEx-Chairman of AXIS Bank Ltd

Mr. G Parthasarthy

Mr. Ravinder Nath

Mr. H K Khaitan

Mr. Supriya Gupta

Core group of management with over 20-30 years of experience with the company & in the industry

12

Key Products User IndustryAluminium, Pulp & Paper, Soaps & Detergents, Power Plants,Steel Plants, Fertilizers, Petroleum Refining & Petrochemicals

Caustic Soda

Aluminium Chloride

Stable BleachingPowder

Formaldehyde Adhesives, Laminates, Resins & Polyurethanes

Chemicals, Agrochemicals, Pharmaceuticals

Pulp & Paper, Textiles, Water Treatment & sanitation

Pentaerythritol Alkyd Resins & Paint Industry

Hexamine Bakelite Powder, UF Resins, Explosives

Liquid ChlorinePulp & Paper, Textiles, Water Treatment, Chloromethanes,Chemicals, Sugar, Secondary Plasticizers

Diverse Product base catering to wide range of applications



7

13

Financial Highlights

14

Summarized Profitability StatementINR in millions

25.88%22.3819.5920.54PBIDT Margin ( %)

4.50%7.064.538.64NP Margin (%)

1.015.473.895.21Basic EPS (INR)

56.74305.01195.03263.56PAT

20.0990.2092.2739.20Tax

76.83395.21287.30302.76PBT

93.56317.68291.75203.69Depreciation

170.39712.89579.05506.45PBDT

93.24

(-)62.43

254.31

(+)2.90

263.73120.20Interest

Exceptional Item*

326.06964.30842.78626.65PBIDT

1260.034322.344301.223051.28Net Sales

June’082007-082006-072005-06

*Exchange Fluctuation gain/loss related to FCCBs ; Q1 NP Margin excl. this 9.46%



8

15

Summarized Balance Sheet

13.0810.0314.52Return on Net Worth (%)

INR in millions

41.4338.7436.17Book Value per Share (Rs.)

10.178.878.56Return on Capital Employed (%)

521.92460.47404.06Deferred Tax

3534.603808.452719.32Loan Funds

2051.001777.421648.26Reserves & Surplus

281.50167.34167.34Share Capital

Created out of -

6389.026213.684938.98Capital Employed

453.201406.57412.95Net Current Assets

56.8256.8256.82Investments

5879.004750.294469.21Net Block

2007-082006-072005-06

16

Business Segment wise Sales

62% 64% 66% 66%

38% 36% 34% 34%

0%

20%

40%

60%

80%

100%

2005-06 2006-07 2007-08 June'08

Chloro Chemicals Alco Chemicals



9

17

Product wise Sales

Caustic Soda

35%

SBP4%

CP

6%PAC

2%Aluminium Chloride

12%

Pow er

5%

Pentaery thritol

14%

Ethyl Acetate

3%

Acetic Acid

3%

Acetaldehy de

2%

Others

3%

Hex amine

4%

Formaldehyde

7%

Caustic Soda accounts for majority of the Sales Revenue followed by

Pentaerythritol & Aluminium Chloride

18

Operating Cost Breakup

44.7% 46.8%38.5% 42.4%

14.3%15.6%

15.7%16.3%

4.4%4.2%

4.2%4.0%

5.3%4.7%

5.4%3.7%

7.7% 6.6%

7.3%6.7%

6.3% 6.1%6.9% 6.7%

0%

15%

30%

45%

60%

75%

90%

2005-06 2006-07 2007-08 June'08

Material Cost Power & Fuel Stores

Other Mfg. Exps. Employees Cost Selling & Admn. Cost



11

21

EPS & Book Value

5.21

3.89

5.47

36.17

38.7441.43

0

1

2

3

4

5

6

7

8

2005-06 2006-07 2007-08

0

5

10

15

20

25

30

35

40

45

EPS Book Value

Previous Year's figures have been adjusted for Sub-division and Bonus issue ofEquity Shares made during the year

22

Growth Plans



12

23

KCI – Growth Story

KCI starts theCaustic

Chlorine Plant

at Renukootwith a capacityof 16,500 tpa

BleachingPowder

Plantcapacity

expandedto 15,000

tpa

19651965 19721972 1983198319801980

CommissionedStable

Bleaching

Powder Plant

(5,000 tpa) andstarted

producing own

salt from Salt

Works

Commissioned

Ankleshwarworks to

manufacturePentaerythritol

(1,200 tpa) &other chemicals

19881988 19921992 19971997 20042004 20062006

CommissionedFormaldehyde &

Acetaldehyde Plant

with 16,500 & 6,000tpa capacitiesrespectively

CommissionedAluminium

Chloride Plant witha capacity of 6,875

tpa, expandedPenta & Hexamine

capacities to 5,000& 4,000 tpa

respectively

Further expansion

of Formaldehyde &Aluminium Chloride

Plants to 75,000 tpa& 16,000 tpa

respectively

25 MW coal

based CPP

startedcommercial

generation in Dec

2005, Agreement

signed withUPPCL for sale of

surplus power

upto 13 MW

39,600 tpacaustic Soda

Plant

commissioned

in Apr 2006

Commissioned

Hexamine Plantwith a capacityof 1,500 tpa at

Ankleshwar

Works

19771977

BleachingPowder

Plantcapacity

expandedto 10,000

tpa

19981998

Commissioned a

25 MW CPP atRenukoot Works,Commissioned

Acetic Acid &

Ethyl AcetatePlant with

capacities of 6,000

tpa & 3,300 tpa

respectively

20072007

39,600 tpa

caustic SodaPlant and 15,000tpa Bleaching

Powder Plantcommissioned

in March 2008

20082008

11.500 tpaChlorinated

Paraffins plant

commissioned in

July 2008

24

Business strategy

KCI aims to become one of the largest, fully integrated, low cost manufacturer ofpremium quality Industrial Chemicals in the country

Maintain a strong, team-oriented and customer focused culture

Focus on quality, execution and timely delivery of products

Increasing production capacities and extending capabilities

Continually enhance market leadership by expanding coveragedomestically and overseas

Reducing manufacturing costs with continuing focus on quality

The growth strategy at KCI encompasses both organic and inorganic means based on acareful study of markets and contemporary business environment. The underlying ethos

of this strategy is sustainability and transparency.



13

25

Growth Plans

To set up a Greenfield fully integrated AlcoChemicals Complex in stages at JawaharlalNehru Pharma City, Visakhapatnam

Land admeasuring 29.7 acres acquired

First Stage implementation include setting upof:

Formaldehyde Plant with an installed capacity of 100,000 tpa

Hexamine Plant with an installed capacity of 5,000tpa

Estimated Capital Outlay (excl. Land Cost) Rs. 51crores

Strategically located near to Vizag and Gangavaram Ports for handlingimport of key raw materials and finished goods export

26

Estimated Financial Growth

38%Cash Profit

45%PBIDT

30%Net Sales

FY’2009



14

27

To reiterate…

Manufactures more than 15 industrial chemicals & is Market Leader in three of them

Well positioned to capitalize on growing demand

Expertise in industrial chemical manufacturing with established relationship withcustomers

Broad based Board backed by experienced management team adhering to establishedcorporate governance procedures and practices

Recognized operational excellence by adopting the latest e nvironmental f riendly

technology

One of the largest Caustic Soda manufacturer in the Eastern India

Over 40 year old Company with consistent dividend paying track record backed bystrong f inancial performance and fundamentals

Self sufficient in Power Requirement, extra revenue by sale of surplus power

28

Q&A

presentation - analyst meet 25 july 2008

Documents