Deepak Fertilisers And Petrochemicals Corporation Ltd. · NSE:DEEPAKFERT
Deepak Fertilisers And Petrochemicals — Virtual Investor Meet hosted by IIFL Securities, 13 January 2022
39 slides from Deepak Fertilisers And Petrochemicals's conference presentation, Jan 13, 2022
Slide 1: Cover letter to stock exchanges
13th January, 2022 The Secretary Listing Department BSE Limited National Stock Exchange of India Ltd. Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Fort, Bandra - Kurla Complex, Bandra (E) Mumbai – 400 001 Mumbai – 400 051 BSE Code: 500645 NSE Code: DEEPAKFERT Dear Sir/ Madam, Sub: Copy o
Slide 2: Investor Presentation
(BSE: 500645; NSE: DEEPAKFERT) Investor Presentation 13th January 2022 MINING CHEMICALS INDUSTRIAL CHEMICALS CROP NUTRITION (BSE: 500645; NSE: DEEPAKFERT)
Slide 3: Investor Meet @ 13 January 2022
2 Investor Meet @ 13 January 2022 Time Slot Agenda Management 11.00 AM – 11.15 AM Opening Remarks Mr. Sailesh Chimanlal Mehta, Chairman & Managing Director 11.15 AM – 11.45 AM Mining Chemicals Business (TAN) Mr. Tarun Sinha, President – Technical Ammonium Nitrate 11.45 AM – 12.15 PM Industrial Chemi
Slide 4: Opening Remarks
3 Mr. Sailesh Chimanlal Mehta Chairman & Managing Director Opening Remarks
Slide 5: Mining Chemicals Business
4 Mr. Tarun Sinha President – Mining Chemicals • He is heading the Ammonium Nitrate (TAN) Business and is primarily responsible for P&L Management, including Strategy Development & Execution and managing Strategic Alliances for the TAN Business • Mr. Sinha has over 30 years of combined experience in
Slide 6: Mining Chemicals: Competitive Edge
5 Mining Chemicals: Competitive Edge Strategically Located Near Key Mining Operations and Customers, Providing Just-in-time Delivery and Response to Customer Needs Favourable Location Near Major Mining Hubs in Eastern & Central India India’s largest TAN complex producing AN Melt, HDAN and LDAN Main
Slide 7: Mining Chemicals: Industry Overview
6 Mining Chemicals: Industry Overview Government of India is Reforming the Mining Sector to Infrastructure: Strong Stable Growth in Infrastructure Spending India Infrastructure Industry Value (US$Bn) Boost Domestic Production • Mines and Minerals Development and Regulation (MMDR) Act Amended 135 147
Slide 8: Business Insights
7 Business Insights ➢ Entry barriers for new entrants ➢ Existing AN manufacturers’ entry into TAN solids and any plans for expansion by others ➢ Current demand supply and Import situation. Any threat of increased import on the upcoming project ➢ Our strategic initiatives in downstream sector and rec
Slide 9: Industrial Chemicals (IC) Business
8 Mr. Rajiv Rao President – Industrial Chemical • He is heading the Industrial Chemicals Business and is primarily responsible for the P&L Management including Strategic Development & Execution. • He has over 27 years of experience in Polyurethane and Specialty Chemicals Industry • Prior to joining
Slide 10: Industrial Chemicals: Competitive Edge
9 Industrial Chemicals: Competitive Edge Nitric Acid 70% DFPCL Market Share (%) • Largest producer of Nitric acid in India & SEA • NA imports viable only in short windows 45% 43% • Domestic NA demand mostly dependent on local capacities 27% • Indian demand to outstrip local capacity in near future.
Slide 11: Nitric Acid (CNA & DNA): Industry Overview
10 Nitric Acid (CNA & DNA): Industry Overview CNA demand-supply , KTPA DNA demand , KTPA 800 607 500 600 432 432 400 250 303 382 415 300 400 330 200 200 100 0 0 2021-22 E 2025-26-f 2021-22 E 2025-26-f Capacity Production Demand Demand CNA application break-up DNA application break-up 12% 6% 4% 1% 4%
Slide 12: IPA: Industry Overview
11 IPA: Industry Overview Market Overview Application ▪ Pharmaceutical industry is the leading application of IPA in India • DFPCL is the leading manufacturer of IPA in India with an installed capacity • Will contribute 72% of the total consumption in 2021-22, a trend which is likely to continue of
Slide 13: Business Insights
12 Business Insights ➢ Contractual arrangement of Nitric Acid business and impact of recent Ammonia price hike ➢ Impact of China + 1 factor on Nitric Acid demand ➢ View on Demand - Supply Equation over next 3-5 years for Nitric Acid ➢ Prospects of IPA business and sustainability of margins ➢ Probabl
Slide 14: Crop Nutrition Business
13 Mr. Mahesh Girdhar President – Crop Nutrition Business • Mr. Mahesh Girdhar joined the Company in 2017 as President – Crop Nutrition and is responsible for operations of the Crop Nutrition Business • Mr. Girdhar has over two decades of professional experience in business operation, strategy and m
Slide 15: Crop Nutrition Business: Competitive Edge
14 Crop Nutrition Business: Competitive Edge ▪ Ammonium Nitro Phosphate (ANP) ▪ Only producer of ANP Prilled product with 3.25 Lakh MT capacity ▪ 30 year accepted brand due to unique featured such as Nitrate nitrogen, low PH and high soluble Phosphorous ▪ NPK Smartek ▪ State of art latest Encro tech
Slide 16: Crop Nutrition Business: Competitive Edge
15 Crop Nutrition Business: Competitive Edge Successful Ramp-up of Smartek- Demonstrated ability to develop & scale up Value based solution Smartek Sales Volumes (KT) • 25,000+ demos of SMARTEK undertaken across geographies for establishing proof 438 of concept • ~ 2.53 Million farmers experience Sm
Slide 17: Crop Nutrition Business: Competitive Edge
16 Crop Nutrition Business: Competitive Edge Moving to next level of Innovation - First Company in India to Launch Crop Specific Balance Nutrition Product with Enhance Efficiency Technology
Slide 18: Crop Nutrition Business: Competitive Edge
17 Crop Nutrition Business: Competitive Edge We have already moved our portfolio from Commodity to Crop Specific ,Stage specific Enhance Efficiency Fertiliser with higher value Proposition for consumers & value chain Pre 2018 Today Manufactured NP/NPK Bulk Enhance Efficiency Fertilizers NP 24.24.00
Slide 19: Crop Nutrition Business: Industry Overview
18 Crop Nutrition Business: Industry Overview ➢ India is the 2nd largest fertilizer market in the world with nutrient consumption of 27MMT, but per hector arable land nutrition consumption 171 Kg/hect. It is very low Compare to China which consumes 70 MMT nutrient yearly. ➢ Current ratio of nitrogen
Slide 20: Business Insights
19 Business Insights ➢ Differentiation journey, achievements so far and way forward ➢ Next growth prospects (including debottlenecking, plan for increase in capacity utilization etc.) ➢ Anecdotal evidence of MCBR experienced by farmers ➢ Impact of raw material prices on CNB margins - short term vs l
Slide 21: Digital Transformation – Future Ready
20 Mr. Shyam Narayan Sharma – President – Strategy & Transformation • Mr. Sharma is heading the Strategic Planning, Business Transformation, IT Enablement and Operations Management. • He has over 28 years of experience in the B2B / B2C Industry in areas of Commercial – Sales & Marketing, Technical S
Slide 22: Top Digital Transformation Initiatives
21 Top 5 Digital Transformation Initiatives 1. SAP S4 HANA Functional Enhancement: Post successful rollout, aiming for best of SAP Control & Optimization (SAP Leading Practices), BPR/SOPs Review/addition and Automation to drive efficiency and best usage. Functional Enablement(s) Rolled out: (a) EBIT
Slide 23: Business Linked - Digital Transformation
22 Business Linked - Digital Transformation (Few Examples & More) 1. Crop Nutrition Business (CNB): Data Analytics Platform – Building Datamart; Centralized Digital Marketing Platform for enhancing reach, CRM for Saarthie Farmers, e-commerce channel, Crop Advisory etc. 2. Mining Chemicals (TAN): FIF
Slide 24: Expansion Projects: Ammonia and TAN
23 Mr. Arun Vijayakumar President – Projects • Mr. Arun Vijayakumar is President – Projects and is primarily responsible for setting up the greenfield expansion / diversification projects across India • He has ~26 years of extensive experience in managing integrated and large scale multi-phased comp
Slide 25: Expansion Projects Under Execution
24 Expansion Projects Under Execution Greenfield Ammonia Project - EPC Greenfield TAN Project - EPCM • Taloja - Capacity of 510KTPA • TSSEZL, Gopalpur - Capacity • Total Captive Consumption 377 KTPA • Integration with existing Greenfield Ammonia – Taloja Greenfield TAN – Gopalpur • Strategically loc
Slide 26: Ammonia Project Status / TAN Project Status
25 Ammonia Project Status TAN Project Status Zero Date : 31-Mar’21 Zero Date (Start of Construction) : 01-Dec’21 Mechanical Completion : 30-Mar’23 Expected commissioning : Q2 FY 2025 Product Out : 16-May’23 Licensor : KBR - USA Licensor : CASALE - Australia EPC Contractor : Toyo – India EPCM Contrac
Slide 27: Site Images
26 Site Images Main Control Room and Substation extremely critical for project. RCC work completed. Major Masonry & finishing work completed. Area Ahead of schedule 95% foundation and civil work in ISBL area casted. The critical equipment Reformer Erection started. Main Pipe rack erection 90% Comple
Slide 28: Site Images (Compressor, Cooling Tower Areas)
▪ RAW WATER & FIRE WATER TANK 27 ▪COMPRESSOR AREA ▪ COOLING TOWER AREA
Slide 29: Corporate and Financial Overview
28 Corporate and Financial Overview
Slide 30: Business Overview
29 Business Overview ✓ One of the trusted chemical and fertiliser manufacturers in India ✓ Diversified ammonia downstream player; 40+ years industry experience ✓ Participating in the country’s growth story through serving critical sectors of the economy such as agriculture, pharmaceuticals, mining,
Slide 31: About DFPCL
30 About DFPCL A multi-product Indian conglomerate and has plants located in four states, namely Maharashtra (Taloja), Gujarat (Dahej), Andhra Pradesh (Srikakulam) and Haryana (Panipat) • Concentrated Nitric Acid Industrial Chemicals Production Flow Chart • Diluted Nitric Acid • Iso Propyl Alcohol •
Slide 32: Corporate Structure
31 Corporate Structure Deepak Fertilisers and Petrochemicals Corp. Value Industrial Added Real Ltd Chemicals Estate (IC) (VARE) 100% Smartchem Technologies Ltd * Crop Technical Nutrition Ammonium Business Nitrate (CNB) (TAN) 65.00% Diversified Businesses 92.57% Performance Chemiserve Ltd. Platinum B
Slide 33: Strategic Geographic Footprint
32 Strategic Geographic Footprint Dahej, Gujrat Panipat, Haryana ▪ Major customers of nitro aromatics and nitrocellulose are located in Gujarat ▪ Oil-seed growing belts of North and Central Taloja, Maharashtra India ▪ Significant geographic advantage over imported Bentonite Sulphur East Coast ▪ Clos
Slide 34: Performance Analysis
33 Performance Analysis Improvement in business performance with emphasis on enhancing profitability Operating Revenue (Rs. Cr) Chemical Segment Revenue (Rs. Cr) and Margin (%) 23.6% 15.1% 17.0% 6,742 4,685 5,808 3,695 * FY2019 FY2020 FY2021 H1 FY22 2,745 3,157 1,893 Operating EBITDA (Rs. Cr) and Ma
Slide 35: Capital Structure
34 Capital Structure Current balance sheet and strong cash flow generation to support planned capex (Rs. CR) Mar-21 Sep-21 1,310 1,248 ST Debt 110 78 LT Debt 2,187 1,984 991 Current Maturities 217 224 Total Debt 2,514 2,286 648 578 527 536 Cash & Cash Equivalent 170 234 484 Other Bank Balances 69 10
Slide 36: Update on Upcoming Projects
35 Update on Upcoming Projects Clearly defined investment program; strong track record of peak utilization demonstrated at Dahej plant Ammonia • Total planned Investment: Rs 4,350 cr • Balance investment: Rs. 2,553 cr • Cost incurred to date: Rs. 1,797 cr • Expected commissioning: Q1 FY24 • Debt inc
Slide 37: Recent updates on Shareholding
36 Recent updates on Shareholding Inclusion of DFPCL in MSCI India Domestic Small Cap Index in Nov 2021 DFPCL 150 % S&P BSE MidCap S&P BSE Sensex Top Institutional Shareholding REBASED TO DFPCL'S SHARE 550 475 Institutional Investors % Holding 400 SMALLCAP WORLD FUND, INC 3.76 PRICE 325 250 GOVERNME
Slide 38: Key Messages
37 Key Messages • Market leadership in all key product segments and strong demand outlook to further support business growth and profitability • Transformation from Commodity to Specialty and Product to Solutions continues • Growth in sales volumes supported by improving utilization levels, capacity
Slide 39: Safe Harbour
Safe Harbour: This presentation contains statements that contain “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating Deepak Fertilisers and Petrochemicals Corporation limited’s (DFPCL) futur