Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (November 2011)
56 slides from Coromandel International's investor presentation, Nov 21, 2011
Slide 1: Investors Presentation
Nov 21,2011 Investors Presentation 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: Contents
Contents Global Megatrends 4 Key Nutrient Demand Drivers 6 Indian Fertiliser Scenario 9 Company profile 24 Fertiliser Business 28 Specialty Nutrient Business 37 Crop Protection Business 42 Retail Business 46 Financial Performance 51 3
Slide 4: Global Megatrends
Global Megatrends • Global food demand to increase 1.5x by 2030 vs. 2000 Rising Food Demand • Changing dietary patterns especially in emerging countries • Limited Land Availability Limited Resources • Labour Shortage • Depletion in Soil Quality High Volatility in • Globally, prices of staple foods i
Slide 5: Global Megatrends
Global Megatrends Increase Value Chain • Coordination across the agriculture value chain to improve farm extension, market linkage and infrastructure will increase Coordination 5
Slide 6: Key Nutrient Demand Drivers
Key Key demand drivers suggest Nutrient Demand strong nutrient Drivers demand Global Fertiliser Demand ( Million Mt) • Global population growth 212 • Growing affluence leading to higher 168 protein usage 136 • Bio fuel production • Farm economics • Planted area • Application rates • High Commodity P
Slide 7: 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% Others AN/CAN NPK 70% 52% DAP/MAP 9% Others 5% “K” Market is 29 Million MT “N” Market is 100 Million MT Global Fertiliser Industry: "P" World Market Consumption is growing at 2.0 - 2.2%
Slide 8: International Raw Material Price Movement
International Raw Material Price Movement Ammonia DAP 680 630 660 600 640 570 620 540 600 510 580 480 560 450 Phos acid Urea 600 1100 1080 500 1060 1040 400 1020 300 1000 980 200 960 940 100 920 0 8
Slide 9: Indian Fertiliser Scenario
Indian Fertiliser Scenario 9
Slide 10: Agriculture Impacts economic growth and large proportion of population
Agriculture Impacts economic growth and large proportion of population • Nearly 600 million Indians depend directly on Agriculture (54%) • Agriculture contributed around 16.6% of GDP in 2010-11* and its share is declining 10
Slide 11: Indian Agriculture Production
Indian Agriculture Production Crops % Share World Rank Wheat 11.4 2nd Rice 21.6 2nd Total Pulses 23.3 1st Groundnut 10.4 3rd Rapeseed 16.3 3rd Vegetables 9.1 2nd Fruits 8.4 2nd Potatoes 7.6 3rd Onion (Dry) 9.7 2nd Sugarcane 20.2 2nd Tea 24.4 2nd Coffee 3.4 6th Jute 65.6 1st Cotton (Lint) 14.3 3rd To
Slide 12: Indian Crop Productivity
Indian Crop Productivity Crop Productivity (Mt/ha) World India China Sugarcane 74 67 69.8 Wheat 3 2.8 4.7 To enhance the crop Rice 4.2 2.3 6.59 productivity, Nutrient consumption in India has Corn 5 2.2 5 to go up with improved efficiency. Soybean 2.2 0.9 1.6 Rapeseed 1.9 1.1 1.9 Peanut 1.6 0.9 3.3
Slide 13: Food Grain Production
Food Grain Production India will need additional35-40 Million Ton of food grain and much more fruits and vegetables to feed its growing & affluent population 280 241 245 231 234 217 218 209 198 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12* 2020-21* Million MT 13
Slide 14: India consumption ~15% of global Nitrogen
India consumption ~ 15 % of global Nitrogen ‘000 tons ‘000 Tons 102263.3 96942.1 100788.8 98220.4 90409.9 92927.1 86059.3 87506.5 82069.6 82788.7 10910.6 14419.1 15090.1 15580 11308.6 11077.1 11714.9 12723.3 13774.1 10469.2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 India Consumption World Co
Slide 15: India consumption ~19% of global Phosphate
India consumption ~ 19 % of global Phosphate ‘000 tons 38791.7 38534.1 37475.3 37254.7 37645.4 33344.2 33733.5 34922.2 33917.3 32812.3 7274 5227.4 5537.3 5520.2 6506.2 4248 4381.4 4021.4 4117 4625.6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 India Consumption World Consumption 15
Slide 16: India consumption ~15% of global Potash
India consumption ~ 15 % of global Potash ‘000 tons 29072.4 27704.6 27210.2 26148.3 26067.8 23366.8 23953.2 22855.1 23397.5 22095.1 3312.6 3632.4 2413.3 2334.8 2636.6 1669.1 2060.9 1565.1 1597.6 1596.9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 India Consumption World Consumption 16
Slide 17: N P K Consumption Balance (Ratio) – An improving Trend
N P K Consumption Balance (Ratio) – An improving Trend 17
Slide 18: India's Fertilizer Outlook
India’s Fertilizer Outlook India’s NPK Demand (Million 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 3 4 5 6 7 8 9 0 1 2 Nutrient
Slide 19: India's Nutrient Consumption is low
India’s Nutrient Consumption is low Nutrient Consumption among the Kg/Ha Asian Countries 333 170 133 135 106 India Bangladesh Pakistan Srilanka China India’s Nutrient consumption (Kg/Ha) is lower than countries like China (333), Bangladesh (170) and Pakistan (135). 19
Slide 20: Fertilizer Subsidy Scenario
Fertilizer Subsidy Scenario New Nutrient based Subsidy Policy • Nutrient Based Subsidy (NBS) policy introduced in April’10 has been received well by all stakeholders- farmers/Industry/Govt. • Ensured timely availability of fertilizers through out the year supplemented by imports • Subsidy reimbursem
Slide 21: Indian Fertilizer Industry Overview
Indian Fertilizer Industry Overview Yield (Kg/Ha) 2000 30 Nutrient Consumption (Million MT) Fertilizer Use Efficiency : 25 1500 For the last 10 yrs., Crop yield growth 20 rate has been only 1.20% where as 1000 15 10 Nutrient consumption has grown by 500 3.6%. Fertilizer use efficiency is the 5 0 0 m
Slide 22: Subsidy Computation – Pre Vs. NBS
Subsidy Computation – Pre Vs. NBS DAP Price : $ per MT Pre NBS NBS Q1 Q2 DAP DAP Import Parity 569 500 612 677 Price - - Farm Gate Price Farm Gate Price* Variable 216 (29%) Fixed 203 (36%) 395 (48%) 334 (44%) Subsidy Amount Fixed Subsidy Amount Variable 366 (64%) 354 (71%) - 430 (56%) 430 (52%) Pre
Slide 23: Emerging Scenario
Emerging Scenario • India a Growing fertilizer market for the world • Subsidy system fast reforming • Market will align to global market & development • Growing role of Imports • Use of micronutrients will increase due to crop diversification and balanced Nutrition • Nutrient use efficiency will be
Slide 24: Company Profile
Nov 21, 2011 Company Profile 24
Slide 25: Snapshot of Coromandel
Snapshot of Coromandel Coromandel Share in • Coromandel International Limited, Murugappa Group established in 1961 is the flagship Turnover company of the 3.8 Billion USD 45% 55% Murugappa group, contributing 45% of Coromandel the group turnover and 51% of EBITDA Other group companies • Coromandel i
Slide 26: Business Structure
Business Structure Sales EBITDA Phosphatic DAP Fertilisers Complex Fertilisers /SSP/MOP 85% 70% G-Sulphur Specialty Water Soluble Fertilisers Nutrients & Coromandel Compost Organic Manure Technicals 15% 30% Crop Protection Formulations Agri Inputs Retail Agri Services 26
Slide 27: Strategic Direction
Strategic Direction Farm Inputs Business Dominance in Fertilisers Non Subsidy Businesses Sourcing Cost Marketing Leadership Strength • Specialty Nutrients/ Water Strategic Alliances in • Low cost • Wider reach and Soluble Sourcing – manufacturer of penetration Fertilisers/Micro • Long Term tie-up wi
Slide 28: Coromandel's Fertilisers Business
Coromandel’s Fertilisers Business 28
Slide 29: Coromandel Fertiliser Business Growth Story
Coromandel Fertiliser Business Growth Story 29
Slide 30: Global Strategic Alliances
Global Strategic Alliances 30
Slide 31: 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 32: 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 33: Cost Leadership
Cost Leadership Visak Production (Million Mt) Visak Plant Captive Phos Acid • Continuous de-bottle necking to increase production levels 1.05 • Value gap - imported Vs own acid 0.94 1.00 0.91 • Increased Gypsum generation • Use of various sources /grades of rocks 0.74 0.70 • New belt filter technolo
Slide 34: Marketing Network
Marketing Network West Bengal (WB) Factory Orissa (OR) Andhra Pradesh (A.P) Karnataka (KN) Maharashtra (MH) Madhya Pradesh (MP) Wholesaler & Chattisgarh / Distributor Tamil Nadu (TN) PDO Semi Wholesaler / Dealer Visak Retailer Kakinada / Sub Dealer Ennore Ranipet Farmer 34
Slide 35: Key Developments in 2011-12
Key Developments in 2011-12 C Train in Kakinada Adding a new granulation train to increase the production capacity by 8 lac mt Turn key order placed with Uhde India Pvt Ltd Project progressing on brisk pace Project is expected to be commissioned on schedule by Q2 2012-13 35
Slide 36: Key Developments in 2011-12 Contd..
Key Developments in 2011-12 Contd.. SSP Plant at Bhatinda, Punjab Set up a greenfield 800 tonnes per day (TPD) Single Super Phospahte (SSP) plant including 400 TPD granulator plant in the state of Punjab 36 36
Slide 37: Specialty Nutrient Business
Specialty Nutrient Business 37
Slide 38: Speciality Nutrients Division (SND)
SPECIALITY NUTRIENTS DIVISION (SND) G-SULPHUR Micronutrients Organic Compost WSF GROMOR SULPHUR GROMOR SPRAY Boron Zinc GROMOR POWER Sulphozinc 38
Slide 39: Basics of Water Soluble Fertilisers
Basics of Water Soluble Fertilisers What is Water soluble fertilizers? How to use Water soluble fertilizers? •100% water soluble •Available in double and multi nutrient •Foliar application combinations with or without secondary •Fertigation (with Drip) elements or micronutrients. •Available in the P
Slide 40: Sulphur and WSF Business
Sulphur and WSF Business G Sulphur _ Water soluble ae murugappa, iN Market Share G-Sulphur @ Coromandel © Others @ Coromandel © Others First in India to manufacture and market Sulphur fertilizer under the brand name of “Gromor Sulphur”
Slide 41: Organic Manure Business
Organic Manure Business Advantage of Organic Manure Volumes (Lac Mt) • Improving the soil texture - contains N, P & K in micro quantities 2.5 • Builds up moisture holding capacity and 1.2 improves Quality & yield 0.8 0.2 Coromandel’s Strategy 2008-09 2009-10 2010-11 2011-12 • Coromandel pioneered th
Slide 42: Crop Protection Business
Crop Protection Business Coromandel
Slide 43: Crop Protection business
Crop Protection business • Wider range of Technicals 2011 • Increased Global presence and registration Sabero Acquisition 2010 -Open Offer process to • Strong distribution with own retail get underway shortly Acquired Pasura Bio outlets 2009 Tech – Jammu Unit II 2006 Expansion to Latin America Acqui
Slide 44: Initiatives
Initiatives Operational Initiatives 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 Strategic Initiatives • Acquired S
Slide 45: Recent Developments – Sabero Acquisition
Recent Developments – Sabero Acquisition Sabero is a Gujarat based Agro Chemical (Rs. Mio) 2008-09 2009-10 2010-11 Product manufacturer with strong export Turnover 3670 4300 4130 base EBITDA 520 860 480 Coromandel entered into a definitive agreement to acquire 42.22% promoter % of Revenue 2009-10 20
Slide 46: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail 46
Slide 47: 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 48: Retail Business Overview
Retail Business Overview • Over 500 Mana Gromor Centers in Andhra Pradesh - servicing close to 2 million farmers • Expanding to Karnataka and Maharashtra soon • Targeting 1000 centers Products & Service Offerings Veterinary Other Crop Fertilisers Seeds SND FMS Agri Protection Feed Services Providing
Slide 49: 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 providing servic
Slide 50: Farm Mechanization… action plan
Farm Mechanization… action plan o Covered over 5000 Acres in 1st year of launch o New services like laser leveling, harvesting and power spraying o Targeting 1 lac Acres by FY14. 50
Slide 51: Financial Performance
Financial Performance cuscecaiesnalill
Slide 52: Financial Performance
Financial Performance Turnover ( RS. Million) EBIDTA (Rs. Million) & EBIDTA % (Rs. mio) One time exceptional income from Foskor (%) EBITDA 96,678 13,200 EBITDA % 11,344 17.0 77,161 11,200 6,527 15.0 65,268 9,490 7,904 9,200 12.0 14.7 13.0 45,893 1,586 14.2 38,001 7,200 10.5 4,554 11.0 20,842 5,200 1
Slide 53: Income Statement
Income Statement 2007 2008 2009 2010 2011 H1 2011-12 Revenue (INR m) 20,842 38,001 96,678 65,268 77,161 45,886 EBITDA (INR m) 2,181 4,554 9,490 8,430 11,344 6,527 PBT (INR m) 1,464 3,334 8,082 7,084 9,884 6,192 PAT (INR m) 1,007 2,098 4,964 4,682 6,945 4,382 EPS (Rs.) 3.97 7.50 17.74 16.72 24.69 15.
Slide 54: Balance sheet
Balance sheet INR mn 2007 2008 2009 2010 2011 2012 (H1) Equity 5,124 7,944 11,271 14,350 19,041 23,440 Debt 5,490 10,429 17,199 19,178 14,712 20,704 Deferred Tax Liability 713 825 795 855 815 715 Sources of Funds 11,327 19,198 29,265 34,382 34,567 44,859 NFA 3,824 7,354 7,918 8,173 8,532 9,124 Inves
Slide 55: Key Developments in 2011-12 contd…
Key Developments in 2011-12 contd… Rewarding Coromandel ‘s Shareholders Bonus Debentures 1.Face Value -Rs.15/- 2.Quantum of Bonus Debentures issued - 1BonusDebenture for every share of Re.1/each 3.Tenor - 4 years - Redemption in the years 2 / 3 & 4 4.Coupon - 9% (Annual) 5.Cash outgo - Rs.495 cr (in
Slide 56: Thank You
iN he murugappa 56
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