Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (December 2010)
71 slides from Coromandel International's investor presentation, December 2010
Slide 1: Investors Presentation
Investors Presentation Coromandel International Limited 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements which may be identified by their use of words contains “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections
Slide 3: Agenda
Agenda Company CompanySnapshot Snapshot 44 Global GlobalFertiliser FertiliserIndustry IndustryOverview Overview 77 Indian IndianFertiliser FertiliserScenario Scenario&&New NewPolicy Policy 10 10 Coromandel’s Coromandel’sJourney Journey 20 20 Strategic StrategicDirection Direction––Farm FarmInputs In
Slide 4: Snapshot of Coromandel
Snapshot of Coromandel Coromandel Coromandel Share Sharein in • Coromandel International Limited, Murugappa MurugappaGroup Group established in 1961 is the flagship Turnover 47% company of the Murugappa group 53% contributing 47% of the group turnover Coromandel Other group companies and 46% of PBT
Slide 5: Business Structure
Business Structure DAP Phosphatic Phosphatic DAP Fertilisers Fertilisers Complex ComplexFertilisers Fertilisers/SSP/MOP /SSP/MOP G-Sulphur G-Sulphur Specialty Specialty Water Soluble Fertilisers Water Soluble Fertilisers Nutrients Nutrients&& Organic Manure Organic Manure Compost Compost Coromandel
Slide 6: Financial Performance
Financial Performance Sales Salesand andSubsidy Subsidy(Rs. (Rs.Million) Million) PBT PBT(Rs. (Rs.Million) Million) One time exceptional 72,197 income from Foskor Subsidy Sales 1,586 7,084 6,906 CAGR – 35,642 36.60% CAGR - 25,464 57.51% 15,890 3,334 6,347 6,981 6,496 1,154 1,464 22,111 24,481 29,626
Slide 7: Industry Overview
Industry Overview 7
Slide 8: World Fertiliser Map
World Fertiliser Map EU Fertiliser Market DAP/MAP NPK UAN Nitrates USA Fertiliser Market 6% 3% 18% Urea 18% 7% 7% Other 14% 20% DAP/MAP China Fertiliser Market NPK 12% 2% 5% 7% UAN DAP/MAP 43% 26% Ammonia NPK 26% Urea ABC 27% Other 59% Urea Other DAP/MAP India Fertiliser Market NPK 14% Urea AS AS/CA
Slide 9: World N,P,K Fertilizer Market
World N,P,K Fertilizer Market "K" World Market "N" World Market 1% Ammonia 4% 29% 13% Urea MOP/SOP 6% NPK UAN 11% AN/CAN Others NPK 70% 52% DAP/MAP 9% Others 5% “K” Market is 22 Million MT “N” Market is 100 Million MT Global Fertiliser Industry: "P" World Market Consumption is growing at 2.0 - 2.2%
Slide 10: Indian Fertiliser Scenario
Indian Fertiliser Scenario 10
Slide 11: India's Nutrient Consumption and Crop Productivity
India’s Nutrient Consumption and Crop Productivity Nutrient NutrientConsumption Consumptionamong amongthe the Asian Countries Asian Countries 333 India’s Nutrient consumption Kg/Ha (Kg/Ha) is lower than countries like China (333), Bangladesh 170 127 135 (170) and Pakistan (135). 106 India Bangladesh
Slide 12: India's Food Production and Nutrient Consumption
India’s Food Production and Nutrient Consumption •Food grain consumption crosses 250 million MT – challenge to produce more from the shrinking arable land •Increased demand of food grains to drive nutrient consumption - to go up from 25 million MT to 29 million MT •Increasing yield key for future su
Slide 13: India's Fertiliser Outlook
India’s Fertiliser Outlook India’s India’sNPK NPKDemand Demand(Million (MillionMt) Mt) 17.00 N (LHS) P2O5 (LHS) K2O (RHS) 2.80 15.00 2.60 2.40 13.00 2.20 11.00 2.00 9.00 1.80 1.60 7.00 1.40 5.00 1.20 3.00 1.00 20 20 20 20 20 20 20 20 20 20 02 03 04 05 06 07 08 09 10 11 -0 -0 -0 -0 -0 -0 -0 -1 -1 -1
Slide 14: Fertilisers – The emerging scenario in India
Fertilisers – The emerging scenario in India 2009-10 • Fertiliser consumption – India contributes 16% 16% of the Global consumption • India’s imports of fertilizers for 2009-10 pegged at 18 MMTs 84% India Rest Of World Fertilisers – The potential of Indian Market From To 2009-10 Million MT 2012-13 M
Slide 15: Fertiliser Subsidy Scenario
Fertiliser Subsidy Scenario New NewNutrient Nutrientbased basedSubsidy SubsidyPolicy Policy • Govt has notified Nutrient Based Subsidy (NBS) policy effective from April1,2010. The Salient features of NBS policy are: • Subsidy is fixed based on the import parity price adjusted for MRP. “P” based on D
Slide 16: NBS - Win-Win Proposition for all Stakeholders
NBS -“Win-Win” Proposition for all Stakeholders • Certainity in Subsidy amount • Reduction in Subsidy outgo Govt of India NBS Industry Farmers Company NBS will help companies with • Access to new products • Strong Brand image and technologies • Intensive Extension activities 16
Slide 17: Subsidy rates for 2011-12
Subsidy rates for 2011-12 Subsidy in Rs. per 50 kg bag of fertilisers 2011-12 2010-11 % Change DAP 648 813 -20.3% 20:20:0:13 412 507 -18.7% 10:26:26 643 776 -17.2% 12:32:16 617 756 -18.4% 14:35:14 646 794 -18.6% Reduction in subsidy outgo– improves Govt fiscal deficit – reduces delays in cash sett
Slide 18: Output prices have grown more than input prices
Output prices have grown more than input prices 18
Slide 19: NBS policy – Advantage Coromandel
NBS policy – Advantage Coromandel • Strong Brands in the highly irrigated and Agricultural dominated Southern states – Consistent agriculture • Very good infrastructure with port facility/captive jetty • Flexibility to produce wide range of complexes: low P to high P; Crop & soil specific grades; •
Slide 20: Coromandel's Journey
Coromandel’s Journey 20
Slide 21: Key Milestones in Coromandel's Journey
Key Milestones in Coromandel’s Journey • In the last 48 years Coromandel has evolved as a strong Agri player serving the Indian farmers by supplying quality Agri inputs and providing timely advice • 2nd largest player in Phosphatics segment • Strong operational focus & higher efficiencies • Grown 5
Slide 22: State of The Art Manufacturing Facilities
State of The Art Manufacturing Facilities • Plants are strategically located in highly • High capacity utilisation levels & irrigated southern Indian states and in continuous modernisation of facilities heart of fertilizer consumption market – • Backward integration into low freight cost manufacturi
Slide 23: Strategic Direction – Farm Inputs Business
Strategic Direction Farm Farm Inputs Inputs Business Business Dominance Dominance in in Fertilisers Fertilisers Non Non Subsidy Subsidy Businesses Businesses Sourcing Sourcing Cost Cost Marketing Marketing Leadership Leadership Strength Strength • Specialty Nutrients/ Water Strategic Alliances in •
Slide 24: Strategic Alliances for Key raw materials
Strategic Alliances for Key raw materials Rock Phosphate MOP 0.9 Million MT Potash- Israel , Togo Canada Algeria 0.50 Million Mt Ammonia and Sulphur 0.61 Million Mt Ammonia, 0.30 Million Mt Sulphur- Mitsui, Japan WSF and MAP JV with SQM, TIFERT Strategic Urea Chile JV - Stake in 0.25 Million Mt Arab
Slide 25: Tie ups for Phosphoric Acid
Tie ups for Phosphoric Acid Million MT Captive Production 0.23 Supply contracts with FOSKOR, ICL , GCT and Sterlite 0.60 New JV TIFERT 0.20 Spot Buying 0.20 Total 1.23 Acid tie up of 1.2 million Mt can cater to 4 million Mt Production of fertilisers Coromandel has successfully concluded Business Ass
Slide 26: Cost Leadership
Cost Leadership Visak Production (Million Mt) Visak VisakPlant Plant Captive Phos Acid • Continuous de-bottle necking to increase production levels 1.00 1.05 0.94 • Value gap - imported Vs own acid • Increased Gypsum generation 0.70 0.74 • Use of various sources /grades of rocks • New belt filter te
Slide 27: Marketing Network
Marketing Network West Bengal (WB) Factory Factory Orissa (OR) Andhra Pradesh (A.P) Karnataka (KN) Maharashtra (MH) Madhya Pradesh (MP) & Chattisgarh Wholesaler Wholesaler //Distributor Distributor Tamil Nadu (TN) PDO PDO Semi Semi Wholesaler / Wholesaler / Dealer Dealer Visak Retailer Kakinada Reta
Slide 28: Market Leadership
Market Leadership Production ProductionCapacity Capacity Market Marketshare sharein in2009-10 2009-10 Volume Company AP TN KN OR MH Plant (Million Product MT) •28:28:0 Coromandel 62 14 16 36 10 •14:35:14 Visak 1.30 IFFCO 7 16 15 18 19 •20:20:00 •10:26:26 ZUARI 3 13 27 0 19 •12:32:16 PPL 8 0 0.1 40 1
Slide 29: Specialty Nutrient Business
Specialty Nutrient Business 29
Slide 30: Specialty Nutrients Division
SPECIALITY NUTRIENTS DIVISION SND G-SULPHUR Micronutrients Organic Compost WSF GROMOR GROMOR SULPHUR SULPHUR GROMOR Boron GROMOR SPRAY SPRAY Boron Zinc Zinc GROMOR GROMOR POWER POWER Sulphozinc Sulphozinc 30
Slide 31: Basics of Water Soluble Fertilisers
Basics of Water Soluble Fertilisers What How Howto touse useWater Watersoluble Whatis isWater Watersoluble solublefertilizers? fertilizers? soluble fertilizers? fertilizers? •100% water soluble •Available in double and multi nutrient •Foliar application combinations with or without secondary •Fertig
Slide 32: SND Industry Trend
SND Industry Trend Global GlobalTrend Trend Global GlobalWSF WSFConsumption Consumption(Mio (MioMt) Mt) 3.5 Europe • Global WSF Business – 5.6 Million MT 3 America • Global giants like Yara, SQM, Haifa, 2.5 2 ICL increasing their capacity and 1.5 spread across the globe Middle East 1 • New capacitie
Slide 33: Specialty Nutrients Business Case
Specialty Nutrients Business Case Coromandel’s Coromandel’sStrategy Strategy--Increase Increasethe theshare shareof ofNon NonSubsidy Subsidybusiness business G-Sulphur G-SulphurMarket Market Coromandel’s Coromandel’sStrength Strength • Current market Size – 30,000 Mt • Separate focussed SBU • Projec
Slide 34: Organic Manure Business Case
Organic Manure Business Case Organic OrganicManure ManureMarket Market Coromandel’s Coromandel’sStrategy Strategy Global Scenario •First Mover Advantage • Globally very large market – US, Europe •Introducing variants and China nearly 50-60% of the total fertiliser used in the form of compost Indian
Slide 35: Crop Protection Business
Crop Protection Business 35
Slide 36: Crop Protection - Industry Scenario
Crop Protection - Industry Scenario Global GlobalScenario Scenario Indian IndianScenario Scenario • The total global agrochemical market • Indian Crop Protection Market is Valued at 55 Billion INR was USD 38 Billion in 2009. • Paddy continued its dominance in crop • Global markets are projected to g
Slide 37: Coromandel Products & Markets - Crop Protection
Coromandel Products & Markets -Crop Protection • Coromandel is one of the top 15 companies in Pesticides .“Coromandel pesticides product range includes Belgium – Insecticides : 27 Spain Korea Germany – Others : 8 Iran Vietnam Turkey Pan India presence Thiland Bangladesh • Introduced new technicals –
Slide 38: Initiatives
Initiatives Operational OperationalInitiatives Initiatives Jammu Jammu • Expansion of technical plant capacity at Ankleshwar • Export to more countries & increase the reach • Focusing on high margin super specialities • Leveraging on retail network in AP & Accelerated growth plan in all states Strat
Slide 39: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail 39
Slide 40: Retail Business - Rationale
Retail Business - Rationale Viable Alternative • Develop Distribution Channel for Coromandel • Reduce Dependency on Distributors • Capture opportunities in Rural Areas Opportunities in Rural Areas • Providing Lifestyle Products at nearest Location • Supply Products and Solutions to improve earning c
Slide 41: Strategy Behind MGCs
Strategy Behind MGCs Create a strong base for other businesses Leveraging Building Blocking Strategy Strategy Strategy Leverage on the relationship and goodwill created Create entry barriers with the farmers “To make the farmer family earn more with our inputs Base and services and spend the additio
Slide 42: MGC Retail Model
MGC Retail Model The centre is located at Mandal HQ. (One Mandal for 20-25 villages) Each centre covers 30-40 villages having 5,000 farm families in a radius of 20 km Model envisages repetitive interaction between the centre and the farmer Primary focus is on technology transfer and providin
Slide 43: Rural Retail - Verticals
Rural Retail - Verticals Agri Products - Fertilisers •Products-SSP/DAP/NPKs/Urea •Micronutrients/Municipal Compost •Water Soluble/MOP •Soil Testing & Recommendation Lifestyle Products •Durables, footwear, apparels, non durables Agri Products - Pesticides •Diagnosis and Solution •Spraying •Entire Ran
Slide 44: Financial Performance
Financial Performance 44
Slide 45: Financial Performance
Financial Performance Turnover Turnover((RS. RS.Million) Million) EBIDTA EBIDTA(Rs. (Rs.Million) Million)&&EBIDTA EBIDTA% % (Rs. mio) One time exceptional income from Foskor (%) 96,678 1,586 11,200 19.0 EBITDA 17.5 9,200 EBITDA % 8,430 17.0 65,268 7,624 15.0 7,200 7,904 43,676 38,001 12.0 13.0 5,200
Slide 46: Income Statement
Income Statement 2006 2007 2008 2009 2010 H 1 2011 Revenue (INR m) 18,747 20,842 38,001 96,678 65,268 43,676 EBITDA (INR m) 1,765 2,181 4,554 9,490 8,430 7,624 PBT (INR m) 1,154 1,464 3,334 8,082 7,084 6,906 PAT (INR m) 835 1,007 2,098 4,964 4,682 4,716 EPS (Rs.) 6.57 7.93 14.99 35.48 33.43 33.57 De
Slide 47: Balance sheet
Balance sheet INR mn 2006 2007 2008 2009 2010 H1 2011 Equity 4,380 5,124 7,944 11,271 14,350 19,101 Debt 4,263 5,490 10,429 17,199 19,178 15,557 Deferred Tax Liability 752 713 825 795 855 815 Sources of Funds 9,394 11,327 19,198 29,265 34,382 35,473 NFA 3,637 3,824 7,354 7,918 8,173 8,132 Investment
Slide 48: Annexures
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Slide 49: Annexures
Annexures Nutrient Based Subsidy Policy State of the Art Plants Fertiliser Technology Center Rural Girl Child Education Assistance Programme Coromandel’s Firsts External Recognition... 49
Slide 50: Nutrient Based Subsidy Policy
Nutrient Based Subsidy Policy 50
Slide 51: Indian Fertiliser Industry Overview
Indian Fertiliser Industry Overview Yield (Kg/Ha) 2000 30 Nutrient Consumption (Million MT) 25 Fertiliser Use Efficiency : 1500 20 For the last 10 yrs, Crop yield growth 1000 15 rate has been only 1.20% where as 10 Nutrient consumption has grown by 500 5 3.6%. Fertiliser use efficiency is the 0 0 ma
Slide 52: Nutrient Based Subsidy Policy - Rationale
Nutrient Based Subsidy Policy - Rationale Indian IndianAgriculture Agriculture Fiscal FiscalConsolidation Consolidation •Right Nutrient balance for •NBS policy will help Govt of optimum farm productivity India to contain Fertiliser •Encourage usage of other Micro subsidy Bill nutrients •Fertiliser S
Slide 53: Main features of the NBS
Main features of the NBS • Primary Nutrients viz. Nitrogen ‘N’, Phosphate ‘P’ and Potash ‘K’ and Nutrient ‘S’ will be eligible for NBS. • Any variant of the fertilisers mentioned above with secondary and micro- nutrient (except Sulphur ‘S’) as provided for under Fertilisers Control Order (FCO) are a
Slide 54: Main features of the NBS
Main features of the NBS • Import of all fertilisers covered by NBS including 13 grade of complex fertiliser is placed under open General License (OGL) • Urea will not be covered under NBS and Import of Urea will continue to be channalised during the first phase. • Fertiliser Companies have flexibil
Slide 55: Products under NBS
Products under NBS • Di Ammonium Phosphate (DAP, 18-46.0) • Muriate of Potash (MOP) • Mono Ammonium Phosphate (MAP, 11-S2-0). • Triple Super Phosphate (TSP, 0-46-0) • 13 grades of Complex fertilisers. • Ammonium Sulphate (AS – (caprolactum grade by GSFC and FACT) and • Single Super Phosphate (SSP).
Slide 56: Subsidy Computation – Pre Vs. Post NBS
Subsidy Computation – Pre Vs. Post NBS Pre NBS NBS DAP DAP Commodity - IPP Price – 500 $ per Mt Price – 500 $ per Mt Price Farm Gate Price Farm Gate Price Fixed 203 $ per Mt Variable 203 $ per Mt Subsidy Amount Subsidy Amount Variable Fixed 297 $ Per Mt 297 $ Per Mt Minus Pre PreNBS NBS NBS NBS • Pr
Slide 57: Subsidy Calculation under NBS – 2010-2011
Subsidy Calculation under NBS – 2010-2011 Particulars Urea (N) DAP (P) MOP (K) Sulphur IPP (U.S $/MT) 310 500 370 190 Total delivered cost @ Rs.46/$ 15,994 25,618 19,147 8,920 Less: MRP (Rs. Mt) 5,310 9,350 4,445 Subsidy (Rs. Mt) (A) 10,684 16,268 14,692 1,784 (20%) Nutrient Content (B) 46% N 18%N a
Slide 58: Subsidy Calculation under NBS – 2011-2012
Subsidy Calculation under NBS – 2011-2012 Particulars Urea (N) DAP (P) MOP (K) Sulphur IPP (U.S $/MT) 280 450 350 125 Total delivered cost @ Rs.46.06/$ 14,561 22,928 17,902 5,870 Less: MRP (Rs. Mt) 5,310 9,950 5,055 4,695 Subsidy (Rs. Mt) (A) 9,251 12,978 12,847 1,175 Nutrient Content (B) 46% N 18%N
Slide 59: State of the Art Plants
State of the Art Plants 59
Slide 60: State of the Art Plants
State of the Art Plants Kakinada ● 700 acres of land ● Located 2.7 kms from Kakinada, an AP sea port ● Flexible Production Facility Capable of producing upto 1.5 mtpa ● Adequate land for further major capacity expansion in future ● Adequate Power (co-owned), water and other infrastructure facilities
Slide 61: State of the Art Plants
State of the Art Plants ENNORE ● Certified for ISO 14001 for Environment ● Ammonia submarine pipeline for unloading ammonia – first of its kind in Asia ● Captive phos acid/sulphuric plants ● Captive power plants/ water desalination plant Ranipet ● First in Asia to install a fertilizer plant ● SSP un
Slide 62: Fertiliser Technology Center
Fertiliser Technology Center 62
Slide 63: Fertiliser Technology Center
Fertiliser Technology Center FTC FTC--Phosphoric Phosphoricacid acid &&complex pilot plant complex pilot plant 1. Phos Acid pilot plant 2. Granulation Pilot plant to study •New product formulations •Optimizing the granulometry (granule size, strength) •Efficacy of new defoamers, anti-caking agents,
Slide 64: Rural Girl Child Education Assistance Programme
Rural Girl Child Education Assistance Programme 64
Slide 65: Rural Girl Child Education Assistance Programme
Rural Girl Child Education Assistance Programme Objectives: • To empower Rural Women • To encourage the Rural Girl Child for higher education Programme launched in 2005 Landmarks: 1320 Schools 2640 Students Rs. 5.9 million worth of Scholarships Going An Extra Mile…………… 65
Slide 66: Coromandel's Firsts
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Slide 67: Coromandel's Firsts
Coromandel’s Firsts • First fertiliser factory in India (1906) – Ranipet Plant • First Integrated Complex fertiliser plant in private sector (1963) – Ennore Plant • First in India (1967) to commercially manufacturer UAP 28:28:0, a high-analysis complex fertiliser with highest nitrogen-phosphate cont
Slide 68: External Recognition
External Recognition 68
Slide 69: External Recognition
External Recognition... • D&B – Rolta Corporate Award • DMA-Erehwon National Award for Innovation in HR • CNBC Award for the Most Engaged Workforce • FAI Best Production Performance Award for the Phosphoric Acid Plant at Vizag, for the 10th time. • FAI Best Production Performance Award for Complex (
Slide 70: External Recognition
External Recognition... • International Award for The VOICE magazine from IAVA, New York. • National Energy Conservation Award (Commendation Certificate) for efforts in Energy Conservation from Ministry of Power, New Delhi, for Kakinada Plant. • Ranked among the Top 20 Best Employers to work for by
Slide 71: Thank You
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