Kiri Industries Limited · NSE:KIRIINDUS
Kiri Industries — Investor Presentation (December 2018)
46 slides from Kiri Industries's investor presentation, Dec 27, 2018
Slide 1: Kiri Industries Limited – Investor Presentation Filing Letter
CD Kiri Industries Limited ~ {i:ft ~ Cdc. UY. •••• December 27, 2018 To, To, BSE Limited National Stock Exchange of India Limited l't Floor, Rotunda Building, Exchange Plaza, Bandra Kurla Complex, B.S. Marg, Fort, Mumbai - 400 001 Bandra (E), Mumbai - 400 051 Scrip Code: 532967 Scrip 10 - KIRIINOUS
Slide 2: Investor Presentation December 2018
Kiri Industries Limited (CIN:L24231GJ1998PLC034094) INVESTOR PRESENTATION | DECEMBER 2018
Slide 3: Executive Summary
2 Executive Summary PRODUCTS INDUSTRIES CATERED FINANCIAL HIGHLIGHTS* Dyes Intermediates For Dyes intermediates TOTAL REVENUE H-acid • Various INR 11,368 Mn Vinyl Sulphone manufacturers of Specialty Intermediates reactive dyes across 3 Year - CAGR the globe. 4.41% Dyes Reactive dyes OVERVIEW Acid Dy
Slide 4: Company Overview
<< AOS 2 COMPANY OVERVIEW
Slide 5: Company Overview
4 Company Overview • Based out of Gujarat since 1998, Kiri Industries Consolidated Revenue Break-up (INR Mn) Limited (KIL), has emerged as one of the largest manufacturers and exporters of a wide range of Dyes, Dyes Intermediates and Basic Chemicals from India. 4,517 3,681 4,722 4,117 • It is also c
Slide 6: Management Team
5 Management Team Pravin Kiri (Chairman) • He is a science graduate from Gujarat University and started his career in the year 1966 by associating himself with Jai Chemical Industry (Kharawala Group) as a partner and was responsible for all the technical matters of the group. • He has a wide interes
Slide 7: Key Milestones
6 Key Milestones Two-Star Export Achieved highest House Entered into a Commercial JV Agreement PAT since Obtained with Well Filed inception production Environmental Prospering minority of Singapore Court Incorporat Clearance for Ltd. for oppression backward Acquisition of DyStar delivered ion of Kir
Slide 8: Manufacturing Facilities
7 Manufacturing Facilities Unit I, Unit II & IV Unit V Location: Ahmedabad, India. Location: Vadodara, India. Products manufactured: Products manufactured: • S. O. Dyes • Sulphuric acid • Disperse Dyes • Oleum • Chloro-sulphonic acid along with 3.3 MW steam Capacity Installed: based power plant • Re
Slide 9: Manufacturing Process
8 Manufacturing Process Key Inputs Ice Napthalene Sulphur Sodium Nitrate Soda Ash Water Aniline Caustic Soda Chlorine Sulphur & Bulk Chloro Chemicals Para Nitro Sulphuric Oleum 65% Sodium Bi Thionyl Beta-Nepthol Sulphonic Acetanilide MPD Aniline Acid Oleum 23% Sulphate Chloride Division Acid Vinyl S
Slide 10: Geographical Presence
9 Geographical Presence AHMEDABAD THE NETHERLANDS VADODARA CZECH REPUBLIC UK BELGIUM SPAIN HUNGARY ITALY KOREA USA PORTUGAL TURKEY CHINA PAKISTAN TUNISIA SYRIA NEPAL IRAN TAIWAN BANGLADESH INDIA EGYPT HONG KONG THAILAND HONDURAS ECUADOR COTE D'IVOIRE SRI LANKA KENYA SINGAPORE INDONESIA DEMOCRATIC RE
Slide 11: Awards and Accolades
10 Awards and Accolades Award for Export performance of Award for Direct Export Platinum Award for Trishul Award for Chemexcil Gold Award - more than INR 6 Cr for Direct export of Self Manufactured Small Scale Sector - Small Scale Sector - 2006-07 of Self Manufactured Dye and Dye Dyes - 2000-01 2002
Slide 12: Key Strengths
11 Key Strengths • High entry barriers due to a stringent • The Company established a track record process of acquiring new permissions. of long-term relationship with key global • Heavy capital expenditure. names and the ability to pass on price • Strict implementation of environmental increases. a
Slide 13: Business Overview
BUSINESS OVERVIEW
Slide 14: Business and Product Mix
13 Business and Product Mix Revenue Break-up (FY14) Thionyl Chloro Chloride Basic Chemicals Reactive Sulphonic 1% Dyes Acid Oleum Dyes 65% & Acid Dyes 43% Intermediates 23% 56% Basic Dyes Chemicals 43% 3% Sulphuric Direct Acid Dyes Dyes Revenue Break-up (H1-FY19) Intermediates 54% Basic Chemicals 3%
Slide 15: Value Chain – Dye Stuff Manufacturing
14 Value Chain – Dye Stuff Manufacturing Aniline Naphthalene In-house Acids and Usage of Raw Materials for Dyes Intermediates such as VS H-Acid B-Napthol MPD, etc. effluents & by-products Gamma Acid, K-Acid MUA, etc. Result of Zero Waste Dyes Inputs Intermediates Manufacturing process Dyestuffs Black
Slide 16: Benefits of Zero Waste
15 Benefits of Zero Waste • The Company’s focus on becoming a Operating Zero Waste company has ensured Efficiency Superior that Spent Acids are a source of Entry Return Ratios Barrier revenue (converted into commercially viable products) and not a source of expense (frees the hassles of management and
Slide 17: Dyestuff – An Overview
16 Dyestuff – An Overview Dyestuff are organic and inorganic substances which can absorb light as well as reflect some Total Revenue (INR Mn) & Gross light to show colour. The dyestuff is also a water soluble substance. Margins Criteria for a Suitable Dyestuff 3,809 3,808 3,749 • Economical / Compet
Slide 18: Dyestuff Manufacturing Process
17 Dyestuff Manufacturing Process Diazotization of Amine + HCl + Sodium Nitrite + Water + Ice Dissolving of Coupling Coupling of Component Diazo with Blending and (Coupling Coupling Clarification Standardization Spray Drying fine Packing Component + Components + standardization Water + Ice + NaHCO3
Slide 19: Reactive Dyes
18 Reactive Dyes • Reactive Dyes are the most versatile and popular class of Organic Dyes for importing colour on cellulosic fibres. • These are water soluble dyes which react to fibre, forming a direct chemical linkage with the application materials, which is not easily broken and offers good wash
Slide 20: Other Dyes
19 Other Dyes Acid Dyes • Acid dyes are the dyes which can be applied directly to the application materials from an aqueous solution (without mordant). • The Company has been working on developing Acid dyes since a decade. It has been manufacturing this range of dyes for a long time. • Colours Avail
Slide 21: Dyes Intermediates
20 Dyes Intermediates • Dyes intermediates are the main raw materials used for manufacturing dyestuffs. Total Revenue (INR Mn) & Gross • The manufacturing chains of dyes and dyes intermediates can be traced back to Margins petroleum-based products. 46% 38% 39% • Naphtha and natural gases are used fo
Slide 22: Dyes Intermediates – H-Acid
21 Dyes Intermediates – H-Acid H-Acid • H-acid is one of the leading dyes intermediates in the world, used in the manufacture of black dyes. • H-acid (8-amino- 1-hydroxynaphthalene-3,6-disulfonic acid), an important dye intermediate, is produced from Naphthalene by a combination of the unit processe
Slide 23: Dyes Intermediates – Vinyl Sulphone
22 Dyes Intermediates – Vinyl Sulphone Vinyl Sulphone • Vinyl Sulphone is an industrial chemical used as a key raw material for manufacturing reactive dyes, having application mainly in textiles. It is manufactured from aniline. • It has applications in manufacturing of Reactive dyes. • The Company
Slide 24: Basic Chemicals
23 Basic Chemicals • As part of strategic backward integration, the Company has set up Basic Chemical facility Total Revenue (INR Mn) & Gross to manufacture: Margins • Sulphuric Acid 35% 36% • Oleum 32% • Chloro Sulphonic Acid 25% • Thionyl Chloride 20% 157 260 256 206 • All these products are made
Slide 25: Future Outlook – Foray Into Disperse Dyes
24 Future Outlook – Foray Into Disperse Dyes Disperse dye: • Disperse dyes are synthetic organic dyes and is a kind of organic substance which is free of ionizing group. They are less soluble in water and are used for dyeing synthetic textile materials. Disperse dyes are mainly used for dyeing polye
Slide 26: DyStar
DYSTAR
Slide 27: About DyStar
26 About Dystar Total Revenue (USD Mn) 1,016 938 898 KIL acquired Dystar in 2010, along with Zhenjiang 822 871 859 Longsheng holding 37.57% presently • The DyStar Group is a leading dyestuff and chemical manufacturer and solution provider, offering a broad portfolio of colorants, specialty chemicals
Slide 28: History
27 History COLORATION SPECIALIST FOUNDATION JOINT VENTURE OF: ACQUISITION: Bayer AG and Emerald Hoechst AG Performance (Textile dyes, ACQUISITION: FOUNDATION: Materials SOLUTION Ind. Color Solutions ACQUISITION: Sustainable Specialities SUSTAINABILITY LEADER PROVIDER Mitsubishi) International Texani
Slide 29: Value Creation in DyStar
28 Value Creation in Dystar Successfully turning around the operations of DyStar • The turn-around plan was successfully executed by replacing high cost German manufacturing base with low cost manufacturing in India, China and Indonesia, etc. • KIL is entitled to profit shares of INR 826 Mn, INR 1,9
Slide 30: Industry Overview
INDUSTRY OVERVIEW
Slide 31: The Colourant Industry
30 The Colourant Industry • Global colourants market is estimated to reach ~USD 38.4 Bn by the end of 2021, a growth of ~5% CAGR during 2016-21, on the back of strong growth in high-value Colourants Industry products. (~USD 4.1 Bn) • From the current market size of ~USD 4.1 Bn (2016), the Indian col
Slide 32: Indian Dyestuff Industry
31 Indian Dyestuff Industry Dyestuff Industry: India – DS Industry size (USD Bn) • Dyestuff (DS) accounts for ~25% (USD 1.03 Bn) of the total colourants industry in India. • It is expected to maintain a higher double digit growth and reach ~USD 2.45 Bn by the 2.45 end of 2021 on the back of: (1) Str
Slide 33: Indian Dyes Intermediates Industry
32 Indian Dyes Intermediates Industry Dyes Intermediates Industry: DI market in India (USD Bn) • In terms of value, DI accounts for 47% (~USD 1.9 Bn) of the total colourant industry in 3.6 India and posted a CAGR of 16.8% from 2009 to 2016. • Over 70% of the DI industry in India is organised due to
Slide 34: Industry Overview
33 Industry Overview Indian Colourant Industry Global Colourant Industry Indian Colourant Industry Share Globally 8.4 38.4 30.1 21.90% 4.1 23.8 13.50% 2 8.40% 2011 2016 2021 2011 2016 2021 2011 2016 2021 RoE and RoCE India's Colourant Domestic-Export Mix India – Reactive DS Reactive DS (production t
Slide 35: India's Competitive Advantage
34 India’s Competitive Advantage China Factors: Average of top 7 Chinese DS Players • In China, apart from the ETP hurdle, there is: (1) Reduction in refund of VAT from 17% to about 13% on DI Asset T.O. (x) OPM (RHS) ROCE (RHS) (2) Cancellation in power subsidy (a major cost, 6-9% of revenue) 0.83 (
Slide 36: Strategic Overview
STRATEGIC OVERVIEW
Slide 37: The Way Forward
36 The Way Forward Focus on Focus on Focus on setting up establishing Focus on Free expanding the Set up Inorganic and Focus on manufacturing joint ventures with Cash Flow existing manufacturing organic growth strengthening facility of leading MNCs for Generation and Disperse dyes facilities of thro
Slide 38: Financial Overview
FINANCIAL OVERVIEW
Slide 39: Standalone Income Statement
38 Standalone Income Statement PARTICULARS (INR Mn) FY14 FY15 FY16 FY17* FY18* H1-FY19* Total Income** 5,839 7,826 8,967 10,355 9,046 5,241 Total Expenses 5,219 7,116 8,064 9,059 7,712 4,325 EBITDA 620 710 903 1,296 1,334 916 EBITDA Margin 10.62% 9.07% 10.07% 12.52% 14.75% 17.48% Depreciation 335 20
Slide 40: Standalone Balance Sheet (IND-AS)
39 Standalone Balance sheet (IND-As) PARTICULARS (INR Mn) FY17 FY18 H1-FY19 PARTICULARS (INR Mn) FY17 FY18 H1-FY19 Equity 3,941 5,109 5,868 Non-Current Assets 5,289 5,424 5,778 Equity Share Capital 278 302 313 a) Property, Plant and Equipment 3,048 3,485 3,419 Other Equity 3,663 4,807 5,555 b) Other
Slide 41: Consolidated Income Statement
40 Consolidated Income Statement PARTICULARS (INR Mn) FY14 FY15 FY16 FY17* FY18* H1-FY19* Total Income** 6,921 9,328 10,427 12,007 11,368 7,072 Total Expenses 6,186 8,313 9,173 10,393 9,542 5,659 EBITDA 735 1,015 1,254 1,614 1,826 1,413 EBITDA Margin 10.62% 10.88% 12.03% 13.44% 16.06% 19.98% Depreci
Slide 42: Consolidated Balance Sheet (IND-AS)
41 Consolidated Balance sheet (IND-As) PARTICULARS (INR Mn) FY17 FY18 H1-FY19 PARTICULARS (INR Mn) FY17 FY18 H1-FY19 Equity 10,324 14,047 16,018 Non-Current Assets 11,615 14,156 15,391 Equity Share Capital 278 302 313 a) Property, Plant and Equipment 3,668 4,033 3,934 Other Equity 10,046 13,745 15,7
Slide 43: Consolidated Financial Highlights
42 Consolidated Financial Highlights Total Revenue (INR Mn) EBITDA (INR Mn) & EBITDA Margins (%) PAT (INR Mn) & PAT Margins (%)* 1,826 3,580 12,007 1,614 11,368 1,254 2,656 31.49% 16.06% 1,957 13.44% 22.12% 10,427 12.03% 18.77% FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 RoE and RoCE Net Debt : Equ
Slide 44: Capital Markets
43 Capital Markets Share Price Data as on 30th September, 2018 100% Kiri industries Ltd. Sensex 50% 0% Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Price Data (30th September, 2018) INR Shareholding Pattern as on 30th Sept, 2018 Face Value 10.00 Market Price 50
Slide 45: Disclaimer
44 Disclaimer Kiri Industries Limited Disclaimer: The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that a
Slide 46: Thank You
THANK YOU
Kiri Industries — Investor Presentation (December 2018) on 6ix