july 6, 2007
DESCRIPTION
Welcome. July 6, 2007. Lalbhai Group. The Arvind Mills Ltd. Indian Institute of Management, Ahmedabad. Atul Ltd. A moment of historic significance. An aerial view of Atul site. JVs. Customers World-wide. Sales. Rs cr. 895. 814. 681. 566. Profit from operations. Rs cr. 62. 62. - PowerPoint PPT PresentationTRANSCRIPT
July 6, 2007
Welcome
Lalbhai Group
Commenced manufacturing activities in 1908
Textiles, Chemicals, Engineering, Finance
Group sales US$800 million
Health, Education, Culture
The Arvind Mills Ltd
Indian Institute of Management, Ahmedabad
Atul Ltd
Founded in 1947 by Kasturbhai Lalbhai
Manufacturing and marketing of chemicals
Create wealth, generate employment, be self reliant
A moment of historic significance
An aerial view of Atul site
Manufacturing sites 2
Land 1300 acres
Effluent treatment plant 30000 cubic metres׀day
Secured solid waste disposal facility 50000 MT
Captive power plant 40 MW
Water storage (2 weirs) 2 million cubic metres
1150 houses
2 schools
Medical centre
Recreational facilities
JVs
Partner Duration Area
American Cyanamid 1947-2000 Agro׀Pharma
American Home Products
2000… Pharma
ICI 1955-1995 Dyestuffs
Ciba 1960-1999Polymers׀Pharma Intermediates
Customers World-wide
200
400
600
800
1000
03-04 04-05 05-06 06-07
Sales Rs cr
566
895
814
681
0
20
40
60
80
03-04 04-05 05-06 06-07
Profitfrom operations
PBDT* PBT*
Rs cr
33
62
7
3443
Excluding VRS
15
31
62
05-06 06-07 Growth over PY % of Budget
A A B
Net Sales 814 895 915 10% 98%
Contribution 240 234 265 (3)% 88%
Contribution % 29 26 29
PBIDT 91 90 109 (1)% 83%
PBDT 62 62 76 0% 82%
PBT 33 31 43 (6)% 72%
Financial Highlights 06-07Rs cr
Profit Reconciliation: CY vs PY
Operating PBT 2005-06 33
Reduction in profit due to:
Higher sales to production ratio over PY
Higher repairs & maintenance
Increase in raw material prices (net), etc
Higher depreciation
Total reduction
(11)
(4)
(30)
(2)
(47)
Increase in profit due to:
Dollar appreciation
(Rs1.01|$ on $106 m exports)
Contribution on incremental sales
Lower employee cost
Exchange difference on FCL
Total increase
11
24
4
6
45
Operating PBT 2006-07 31
Rs cr
Cash Flow from OperationsRs cr
06-07 05-06 Inc|(Dec)
Operating profit before capital changes 80 87 (6)
Inventories 37 (38) 75
Debtors (37) (14) (22)
Other receivables (7) (12) 4
Creditors & other payables 23 18 5
Cash generation from operations 96 40 56
Tax payments (17) (2) (15)
VRS payments (5) (21) 16
Net cash flow from activities 74 17 57
Cash Flow from Operations (continued)Rs cr
06-07 05-06 Inc|(Dec)
Net cash flow from operations 74 17 57
Uses:
Capex (46) (54) 8
Proceeds (repayments)
from borrowings
22 (14) 36
Interest payments (28) (29) 1
Dividend payments (10) (7) (3)
Dividend receipts 5 4 1
Other inflows 7 83 (76)
Net increase in cash|equivalents 24 0 24
06-07 05-06 Inc|(Dec)
Secured Loans 319 308 11
Unsecured Loans 49 41 8
Total 368 349 19
Position of Borrowings 2006-07Rs cr
Note: One loan of US$5.5 m availed end of March has been parked partly as short term FDR amounting to Rs16 cr carrying 11.25% p.a. interest rate.
CY PY Inc|(Dec)
Gross block 715 688 27
Gross BlockRs cr
Division Project Amount
AG Indoxacarb 40 TPA 6.50
AR p-Cresol 10,000 to 12,000 TPA 2.00
AR p-Anisic acid 150 TPA recovery 1.70
CO Benzathrone Toluene extraction 1.20
CO Vat Green 1 120 TPA 1.10
COR Wyeth assets 8.00
OthersOthers 6.506.50
TotalTotal 27.0027.00
AG
3rd largest producer of 2,4D in the world
Increasing domestic distribution network
Increasing input prices
Reducing formulation margins
Shrinking demand in Indian market
Strategic actions planned | under implementation
Increase brand business
Reduce variable cost of production
Introduce value added products
Enter high price markets
Salient features
AR
Salient features
Global leader in 3 major products
Increasing input prices
Margins under pressure for commodity business
Strategic actions planned | under implementation
Increase capacity of existing value added products
Enter high price markets
Introduce more value added products
BI
Volatile selling prices
Margins under pressure being commodity business
Strategic actions planned | under implementation
Introduce value added down stream products of
Increase capacity of Resorcinol
Achieve cost reduction through improved technology
Salient features
CO Salient features
Established player in VAT dyes
Increasing input prices
Increasing domestic consumption
Strategic actions planned | under implementation
Acquire synergistic vat finishing capacity
Reorganise marketing setup
Introduce new value added products
Increase sourcing activity
Introduce high performance pigments
PI
Global leader in one major product
High contribution margin
Strategic actions planned | under implementation
Increase capacity of 2 major products
Introduce new phosgene based products
Introduce several other intermediates pharma inters and APIs
Salient features
PO
Increasing input prices
Margins under pressure for commodity business
Strategic actions planned | under implementation
Reorganise marketing set-up
Expand capacity of BLR
Introduce brands
Salient features
Capex
Div|
UnitBrief description
Project Cost
PBT
2007-08
PBT
Full Cap
Payback Period
(Years)
ARPAAL capacity increase from 1000 to 2000 tpa
3 1 2 2
BIResorcinol capacity increase from 1300 to 2000 tpa
14 7 2
BINew ACPD system with multiframe cell cover for CE improvement from 92% to 96%
3 1 1 2
BIRefurbishment of existing Mercury plant
3To run the existing Mercury plant till
2010
PI PTSI manufacture in PHIN 4 1 5 2
Various jobs (Div|Unit) 13 2 7 2
Grand Total 40 5 22 3
Rs cr
Major Initiatives(Consideration|Implementation)
Div Initiative C|I Sales
AG Catalytic chlorination|Chlorophenol C 50
2,4 D capacity enhancement C 30
AR PAA expansion I 54
PAAL expansion I 6
Multipurpose plant C 36
Sulfonics C 22
BI Resorcinol expansion (3000 MT) C 34
Resorcinol derivatives I 3
CO New products I 25
Textile auxiliaries I 7
PI PTSI C 14
New PHIN products C 6
PO Epoxy expansion I 96
Total 383
Rs cr
AG Brands, Introduction of new products
AR F&F chemicals, Antioxidants
BI Resorcinol downstream, SO2׀SO3׀Cl2 downstream
CO Specialty dyes & organic high performance pigments
FL Essential oils
PI Phosgene based intermediates, other pharma inters and APIs
PO Consumer marketing of resins
Direction, value added products
Value Added Products
AG
Clodinafop Imidacloprid Indoxacarb Metsulphuron methyl Sulphosulphuron Triazoles
AR
p-Anisic aldehyde p-Anisyl alcohol
BI
Resorcinol
CO
Vat Red 10
PI
1,1’-Carbonyl diimidazole 1-Chloroethyl chloroformate 1-Chloro-2-methylpropyl chloroformate DDS 4-Nitrophenyl chloroformate Vilsmeier reagentPO
DDM
(Launched)
Value Added Products
AG
Fipronil Imazethapyr Mecoprop-p Quizalop-p
AR
p-Anisyl acetone p-Anisyl phenylacetate p-Anisyl propanol p–Cresyl acetate
BI
1,3-CHD 4-Chlororesorcinol 4-n-Hexylresorcinol R F resins RDME
CO
Auxiliaries High performance pigments
PI
Azepine 1-CECC 1-CECF 1-CEIC HEGC Lauryl chloroformate 4-MPCF PTSI L–Valine
PO Small consumer packs
(Pipeline)
Brands AG
Brands PO
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