Aarti Industries Ltd · NSE:AARTIIND
Aarti Industries — Investor Presentation (March 2023)
40 slides from Aarti Industries's investor presentation, Mar 29, 2023
Slide 1: Exchange cover letter for Analyst Presentation
March 29, 2023 To, Listing/Complianpce Department To, BSE LTD. Listing/Compliance Department Phiroze Jeejeebhoy Towers, National Stock Exchange of Dalal Street, India Limited Mumbai – 400 001. “Exchange Plaza”, Plot No. C/1, G Block Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051. BSE CODE –52420
Slide 2: Analyst Presentation March 2023
Analyst Presentation March 2023
Slide 3: Disclaimer
Disclaimer AARTI INDUSTRIES LIMITED may, from time to time, make written and oral forward looking statements, in addition to statements contained in the company's filings with BSE Limited [BSE] and National Stock Exchange of India Limited [NSE], and our reports to shareholders. The company does not u
Slide 4: Vision, Mission and Values
Vision, Mission and Values OUR PURPOSE OUR VALUES Right Chemistry for a Brighter Tomorrow Excellence OUR VISION To emerge as a Global Integrity partner of choice for Care leading consumers of specialty chemicals and intermediates OUR MISSION Delighted stakeholders 3
Slide 5: About Aarti Industries Limited
About Aarti Industries Limited Overview Financial Trends ▪ Established by first generation technocrats in 1984 ▪ Specialized in Benzene-based derivatives ▪ Integrated operations and high cost optimization 17% 15% ₹5,036 Cr. ▪ Key value chains include Nitro Chloro Benzenes, Di-Chlorobenzenes, 5-Year R
Slide 6: Aarti Industries' Locations
Aarti Industries’ Locations Global Locations & Export Share AIL has manufacturing facilities in India Manufacturing Units Location AIL’s Locations in Gujarat and Maharashtra Vapi, Gujarat Zone 1 Tarapur, Maharashtra India Zone 2 Jhagadia, Gujarat Bhachau Bhachau, Gujarat Zone 3 Gujarat Dahej, Gujara
Slide 7: Board of Directors (Executive and Non Executive)
Board of Directors (Executive and Non Executive) Technocrats Mr. Rajendra V. Gogri Mr. Rashesh C. Gogri Mr. Shri Parimal Parimal H. Desai Desai Chairman & MD Vice Chairman & MD ED Director Founder Marketing Mr. Renil R. Gogri Mr. Manoj M. Chheda ED ED Administration Non-executive Director (NED) Mr.
Slide 8: Board of Directors: Independent Directors
Board of Directors: Independent Directors Banking Academia / Technical Mr. K.V.S Prof. Ganapati D. Shyamsundar Mr. P. A. Sethi Yadav Independent Director Independent Director Independent Director Versatile Industry Experience Versatile Industry Experience Mr. Vinay G. Nayak Mr. Lalit S. Naik Indepen
Slide 9: Our Journey
Our Journey
Slide 10: Journey
Journey •Upgraded hydrogenation unit from batch to ● Operationalized Phase 1 continuous Unit at Dahej SEZ for •Custom Synthesis agrochemical ● Demerger of Set up a large scale •Commissioned ethylation •Commissioned the intermediates & Pharmaceutical division at Vapi received hydrogenation & facility
Slide 11: 1.0: Global Partner of Choice (1984 - 2013)
1.0 : Global Partner of Choice (1984 - 2013) Financial Highlights FY1992 FY2013 Focus Areas Highlights Sales (In Rs. Cr.) 25 2274 ● Cost Efficiency, Economies of Scale ● Ranked globally amongst Business ● Export competitiveness ○ top 3 in DCB Exports (%) 37% 52% ● Integrated Value Chain ○ top 4 in NCB
Slide 12: 2.0: Growth with Sustainability for Sustainable Growth (2013 - 2018)
2.0: Growth with Sustainability for Sustainable Growth (2013 - 2018) Financial Highlights FY2013 FY2018 Focus Areas Highlights Sales (In Rs. Cr.) 2274 3806 ● Embarking on the transformation ● Bagged a 10 yr and 20 yr long term Business Journey supply contract Exports (%) 52% 49% ● Focus on Sustainab
Slide 13: 3.0: Growth focussed, Future Ready (2018 - 2023)
3.0: Growth focussed, Future Ready (2018 - 2023) Macro Drivers Creating the Foundation ● China + 1 ● Increasing Business A. Sustainability as the Key Differentiator Opportunities B. Mature and Future Ready Org. Structure and Talent Pool ● Increasing Sustainability C. Innovation and R&D requirements
Slide 14: A. Sustainability Is At The Core Of What We Do (1/2)
A. Sustainability Is At The Core Of What We Do (1/2) AIL received the gold award in the 2022 EcoVadis ● 11 sites are Zero Liquid Discharge (ZLD) CSR assessment, placing us in the top 3% of ● Total water recycled ~45% of the total water withdrawal in FY 22 evaluated companies globally ENVIRONMENT ● M
Slide 15: A. Safety Practices (2/2)
A. Safety Practices (2/2) Systems ▪ AMS ‘15’ elements on HSE ▪ Digital Platform for HSE (AIMS) & Compliance ▪ Process Safety labs & dedicated scientists to design Inherent safe processes ▪ Six tiers Governance system for HSE - Board of Directors to Contract workers ▪ Every month is Safety month - Th
Slide 16: B. Mature and Future Ready Org Structure and Talent Pool
B. Mature and Future Ready Org Structure and Talent Pool Highly Qualified and Experienced CXOs with an average 30+ years of experience from leading global industries steering the company for a sustainable growth Developing AIL Culture ❏ Continual Employee engagement Initiatives like Gallup Survey ❏ U
Slide 17: C. Innovation and R&D
C. Innovation and R&D<Link> 2 19 7 40+ 18,000 sq. ft. Planned product State-of-the-art R&D centres PhDs introductions, more than 50% Covered by an ultra-modern and 220+ scientists Patents filed synthesis laboratory at Maharashtra & Gujarat products will be launched first time in India Fully Digitise
Slide 18: D. Expansion and Supply Security
D. Expansion and Supply Security Business Expansion Supply Security 1st Long Term Contract - Value Chain Expansion ● 10-year supply contract to source a key herbicide intermediate Historic partnership with ● Total contract value of $620 million Deepak Fertilisers (DFPCL) ● Value chain and Isomer han
Slide 19: E. Restoration and Debottlenecking of Assets
E. Restoration and Debottlenecking of Assets Asset Revamp Capacity Upgradation ● Assets 2+ decades old required replacement/revamp Major Capacity Increases with Asset revamp/ upgradation ● Additional opportunities were available to meet ● NCB Capacity increase from 75000 TPA to 108000 increased dema
Slide 20: Aarti Advantages- Multi dimensional
Aarti Advantages- Multi dimensional Global Player and Well Diversified Strong Focus on R&D & Process Across Multiple Dimensions Innovation ● 100+ Multi-product ● State of the art R&D facilities ● 60+ Countries ● Investment for the future ● 400+ Global Customer processes ● 700+ Domestic Customer Stron
Slide 21: Benzene Value Chain
20 Benzene Value Chain A B C D E F PNCB PNA PCA 35 DCA PFNB • Integrated operations across NCB MCB product chain of Benzene Chain ONCB ONA OCA 24 DNCB OFNB and Toluene • Co-products /Isomer ODCB 34 DCNB OCPNA 34 DCA 33 DCBH OFA balancing DCB PDCB 23 DCNB 23 DCA RED B 24 DFNB • Optimizing product mix
Slide 22: Toluene and Sulphuric Acid Product Chains with Integrated Operations
21 Toluene and Sulphuric Acid Product Chains with Integrated Operations Toluene Value Chain Sulphuric Acid Chain Nitration Hydrogenation Others Sulphuric Acid NEOT OLEUM 23% & 65% ONT OT MEA SULPHUR 1000 OC SO2 Lean SO2 Gas SO3 99% Steam DEMA Di Methyl Sulphate Toluene PNT PT MNPT Co Gen Power Plant
Slide 23: Well Diversified across Customer Profile & Product End Usage
Well Diversified across Customer Profile & Product End Usage Key End-Use Industries Served Agrochemicals Pharmaceutical Dyes/ Pigments Additives Polymer Home & Personal Care Other industries include personal care ingredients, nutra-functional ingredients, water, etc. …with a well diversified product po
Slide 24: Well Diversified across various regions
Well Diversified across various regions Export Share – North Export Share – America Europe 26% 27% Export Share – Japan 7% Export Share – China 11% ~25% of Domestic sales is value added and further exported Export Share – ROW 29% 23
Slide 25: Capex Breakup: FY19- H1FY23
Capex Breakup: FY19- H1FY23 Chemical Business (Amt in Capitalisation Total (Capitalization Crs) Mar 2018 Sept 2022 (FY19-H1FY23) CWIP (Sep 22) + CWIP - H1FY23) Gross Block 2,065 5,528 3,463 1,392 4855 All nos in INR Crs 24
Slide 26: Chemical EBITDA
CHEMICAL EBITDA ● Pandemic Impact (COVID 19), majorly in FY21 ● Nitric Acid Shortage across various periods. ● Cancellation of Long term contract resulting into one time cash inflow but loss of annual EBITDA. ■ Facility operating at lower utilisation levels. EBITDA for the period FY18-FY22 are EBITDA
Slide 27: Key Projects - Existing Product Chains at AIL Zone 1,2,3
26 Key Projects - Existing Product Chains at AIL Zone 1,2,3 To be Completed from H2 FY23 - FY25 Unit for 3rd Long Term Contract at Jhagadia (Commercialised in Q3 FY23) Approx Key Project Details Project Value NCB Capacity Expansion at Vapi Specialty Chemicals Blocks at various locations (in Crs) NT
Slide 28: Outlook of EBITDA to Gross Block
Outlook of EBITDA to Gross Block EBITDA to grow at about 25% March 25 CAGR from FY 23 to FY 25 Details March 18 March 22 Estimated A. Key Capacities commercialising in recent times and volumes to ramp up over next two Chemical Gross Block (Excluding Zone 4) 2065 5036 7600 years B. Operating Leverage
Slide 29: The Future 4.0- Golden Decade
The Future 4.0- Golden Decade
Slide 30: 2023 and beyond: Golden Decade for Chemicals in India
2023 and beyond: Golden Decade for Chemicals in India ● Supply Chain Independent of China Global Factors ● Europe + 1 Share in Chemicals Market ~ 19% CAGR (%) FY’18-FY‘25 ~ 2% Share in Chemicals Market ~ 41% CAGR (%) FY’18-FY‘25 ~ 6% ● PLI for Manufacturing for various end-use Domestic Boost sectors
Slide 31: The India Advantage: Global Manufacturing Hub
The India Advantage: Global Manufacturing Hub Cost Competitiveness Large local market India China Germany ● Large middle class ● Rising per capita income ● Rising urbanization General labour Cost (USD/hr, 2020) Rule of Law ● IP protection ● Contract Enforcement Construction Costs (USD/sq.m) Large Ta
Slide 32: Zone 4 Jhagadia Key Highlights
31 Zone 4 Introducing Chlorotoluenes Value Chain: Key Highlights (Range of products) ● Zone 4 at Jhagadia is spread across ~ 95 acres. ● EC obtained and project works underway. ● Adding new chemistries and 40+ value added products Setting up Newer range of ● EBITDA margin ~ 25% - 30% Multipurpose Va
Slide 33: Future Growth Opportunities
32 Future Growth Opportunities Partnership with Global Companies • Collaborate with world’s leading chemical companies • Build on existing partnerships and build new ones • Contract Manufacturing/ CDMO Opportunities New Product Development • Explore new value Chains • Add new chemistry: e.g. Photoch
Slide 34: Outlook
33 Outlook ◆ Macro Concerns on demand continuing from FY23 is expected to FY24 progressively improve in FY24. ◆ Ramp-up of capacities and higher operating leverages shall lead to FY25 EBITDA of about Rs.1700 crs (~25% CAGR over FY23). ◆ Zone 4 to start gradually going onstream. ◆ EBITDA to grow by ~
Slide 35: AIL is equipped with the necessary levers to be a leading participant
“AIL is equipped with the necessary levers to be a leading participant in the Golden Decade of Indian Chemical Industry”
Slide 36: Awards & Accolades
35 Awards & Accolades Chemtech Foundation Award Hurun Industry Achievement Award 2019 CHEMTECH Foundation accorded Aarti Industries with the ‘Outstanding Hurun Report Global has presented Mr. Rajendra Gogri with the Hurun Most Respected Achievement for Innovation’ award for the Entrepreneur of the Y
Slide 37: Awards & Accolades
36 Awards & Accolades GARV Award 2022 ‘Best Performance on Fire Change Management ESG Prevention, Protection, Fire & Leader of the Year (ESG Emergency Rescue Services Summit & Awards 2021) across Gujarat’ by Government of Gujarat, Fire and Rescue Department Envirocare Green Awards Economic Times Fut
Slide 38: Certifications
37 Certifications The certifications listed above may be applicable to only some manufacturing units of Aarti Industries
Slide 39: CSR spend during FY22
AIL has been involved in various CSR activities focused on health and education Water Conservation Research & Development for social INR 1261.81 lakhs and uplift Amount Spent on CSR during FY22 Environment Cluster and Rural Education & Eradication of Development Covid-19 INR 301.36 Skill INR 408.13
Slide 40: Thank You !
Thank You ! Contact: +91 22 67976666 Email: investorrelations@aarti-industries.com
Aarti Industries — Investor Presentation (March 2023) on 6ix