Descon Oxychem Limited · PSX:DOL
Descon Oxychem — Investor Presentation (December 2020)
36 slides from Descon Oxychem's investor presentation, December 2020
Slide 1: Descon Oxychem Limited Investor Presentation
DESCON OXYCHEM LIMITED Investor Presentation December 2020 Imran Qureshi – CEO M. Saqib Abbas - CFO Imran.Qureshi@descon.com Saqib.Abbas@descon.com +92 322 7707198 +92 322 4491716
Slide 2: Table of Content
TABLE OF CONTENT Introduction Corporate overview Business overview Production Overview Growth drivers Financial overview
Slide 3: Group profile
Group profile • Annual revenue over half a billion USD. • Descon has been in business for over 4 decades. 3
Slide 4: Core values
Core values DESCON Values bind us together SAFETY alk We believe HSE is of utmost importance em = and we attach the highest value to the safety of our employees and stakeholders. ‘é @ ‘ LEADERSHIP We believe leaders inspire others to learn i@ and achieve more. On ACCOUNTABILITY AND OWNERSHIP EY We b
Slide 5: Company video
Company video PARTNERS IN. PROGRESS | DESCON
Slide 6: Vision
Company profile Vision Winning together with our customers, our ambition is to enhance local and regional footprint while delivering sustainable value to all stakeholders. Ambition 2023 About Descon Oxychem Today Incorporated 2004 We are a leading company in the Pakistan Hydrogen Peroxide market Sta
Slide 7: Goals and culture
Goals and culture A Framework for our Future OUR GOALS Profitable Sales Manufacturing Engaged Growth Excellence Employees OUR PRIORITIES ▪ Customer Delight ▪ Openness & Honesty ▪ Lowest cost producer ▪ Corporate Governance ▪ Energy for change ▪ Innovation ▪ Diversity & Inclusiveness ▪ Performance Cu
Slide 8: Corporate Overview
Corporate Overview
Slide 9: Board of directors
Board of directors Taimur Dawood, Chairman Faisal Dawood, Director ▪ MD of Gray Mackenzie Engineering Services BV, the Netherlands ▪ Vice-Chair of Descon Engineering ▪ >15 years of work experience in product marketing, project finance, strategy ▪ Served in management roles in the engineering and che
Slide 10: Management team
Management team Imran Qureshi, Chief Executive Officer M Saqib Abbas, Chief Financial Officer ▪ 20 years experience in the chemicals industry ▪ ICAP Member with rich experience in financial planning, business ▪ Worked as MD of J&P Coats Pakistan, as Business Manager Performance partnering, stakehold
Slide 11: Key Partners
Key Partners External Internal Credit Rating Auditors Auditors Agency Key Financing Share Registrar Partner 11
Slide 12: Milestones
Milestones 2004 2009 2011 2017 ▪ Incorporated as ▪ Got listed on KSE ▪ ISO 9001 ▪ Highest Production achieved Private Company ▪ Start of Commercial certification - SGS of 34,697 MT under Companies Production ▪ First PAT of PKR 180 ▪ ISO 18001, ISO 14001 Ordinance 1984 Million Certification by - SGS
Slide 13: Shareholder Structure
Shareholder Structure Major Shareholders (as of Dec-20) No. of Shares % DEL CHEMICALS (PRIVATE) LIMITED (CDC) 60,358,918 34.485 DESCON ENGINEERING LIMITED 56,711,084 32.401 EVLI EMERGING FRONTIER FUND (CDC) 11,515,320 6.579 DESCON CORPORATION (PVT.) LIMITED 10,051,697 5.743 LOCAL / JOINT STOCK COMPA
Slide 14: Business Overview
Slide 15: Business strategy
Business strategy Manufacturing ➢ HSE – move towards system - based organization. ➢ Become lowest cost producer Sales & Marketing ➢ Process improvements to meet quality requirements of food-grade & export market ➢ Retention & realignment of critical customer base ➢ Reduce reliance on textile segment
Slide 16: Geographic footprint
Geographic footprint PAKISTAN Ali Chemicals Saigal & Co M.M Trading Companyg Ibrahim & Co ashif Chemicals MAS & Dyes Chemicals G6 Enterprise kda & Tex-Chem Trading Company 16
Slide 17: Value chain
Value chain Suppliers Customers 17
Slide 18: Capacity expansion
Capacity expansion Capacity expansion of 8400 MT p.a. (25%) to maintain leadership position Project cost of PKR 1.3 billion Design production has been achieved in Jan 21. Plant to achieve further efficiencies in energy and chemical indices 18
Slide 19: Risk Management
Risk Management The objective of the ERM is to ensure that: ❖ Significant risks are identified, measured, analyzed and monitored; ❖ Sufficient, timely and accurate information is reported to the ERMC and Board Audit Committee; and ❖ Responses to identified risks are appropriately formulated and impl
Slide 20: Works Overview
Works Overview 20
Slide 21: Production volumes
Production volumes Production Trend (MT) 20,000 16,848 17,067 15,045 12,749 10,000 0 DEC 17 DEC 18 DEC 19 DEC 20 21
Slide 22: Production process
Production process Oxygen Working solution with dissolved Hydrogen peroxide Oxidation Hydrogenated Working solution Demineralized Filtration water Hydrogen Hydrogen Extraction Peroxide Degassing Recycle catalyst Separated Filtration Water Pd Catalyst Water Separation Hydrogenation and drying Hydroge
Slide 23: Health and safety (HS)
Health and safety (HS) Health and safety philosophy HS Way Forward 2022 Culture, Leadership & 1 Governance 1 DOL HSE Culture step transformation Enhance line HS Risk Recognition & responsibility & Philosophy 2 ownership 2 Mitigation Introduce sustainability Manage Continuous 3 targets for business 3
Slide 24: Health and safety (HS)
Health and safety (HS) Field visits GL sessions HS development process Series of sessions were Site visits were conducted to identify the gaps in field, conducted individually with all whereas interaction at shop floor GLs to identify potential areas level was ensured for an improvement 1 2 3 4 5 Sy
Slide 25: ESG & Sustainability
ESG & Sustainability Policies and Practices Certifications ISO 9001 OHSAS 18001 ISO 14001 25
Slide 26: UN Sustainable Development Goals
UN Sustainable Development Goals Good Health & Well-Being Affordable & Clean Energy • Zero TRIR without LTI • Renewable energy mix: 10% by 2023 • Implement HSE roadmap by 2022 • Reduce NG index: 3% by 2023 • Training manhours/employee: 4 per • Reduce power index: 5% by 2023 month • ISO 45001 Certifi
Slide 27: Growth
GROWTH LSS Kc
Slide 28: Competitive landscape and market share
Competitive landscape and market share Market share: Pakistan Unique Competitive Advantages ▪ Plant Technology, Chematur (DOL) vs Chinese (SPL) ▪ Capacity utilization is @ 117% (DOL) vs 82% (SPL) ▪ Cost of production is 25% less then SPL. Imports ▪ DOL is increasing production capacity by 25% 50% 32
Slide 29: Product applications
Product applications Current Applications Potential Applications Mining Textile Cosmetics Livestock An oxidant, recovery agent or Environmentally-friendly oxygen source chemical used as bleaching agent Water Poultry treatment Food and beverages Disinfection (antimicrobial agent) 29
Slide 30: Business outlook
Business outlook - Keep striving towards being the Lowest cost producer (energy conservation and efficiency projects). - Keep the plant running at an Optimum level without any unplanned breakdowns. - Achievement of optimum sales mix post expansion. - Retention of critical Human Resources. - Developm
Slide 31: Financial Overview
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Slide 32: Dividend policy, history and capital raising
Dividend policy, history and capital raising 2008 2011 2013 2021 CAPITAL RAISES Capital – PKR 1 Billion Inter-co Loan – Inter-co Loan – Syndicate Loan – Foundation (2008) Syndicate Loan -1.4 Billion PKR 409 M PKR 710 M PKR 1.1Billion DIVIDEND HISTORY Dividend Policy Statement Bonus Company’s fundame
Slide 33: Financial highlights
Financial highlights Revenues (PKR m) 1,600 1,400 1,200 1,000 800 600 400 200 953 1,340 1,371 1,326 - DEC 17 DEC 18 DEC 19 DEC 20 Revenues Linear (Revenues) 33
Slide 34: Financial highlights
Financial highlights Gross Profit (PKR m) 600 41% 45% 40% 500 35% 400 26% 26% 30% 25% 300 19% 20% 200 15% 10% 100 5% 245 548 362 252 - 0% DEC 17 DEC 18 DEC 19 DEC 20 Gross profit GP margin Net profit (PKR m) 1,000 35% 900 30% 800 24% 700 25% 600 20% 500 400 11% 15% 10% 300 8% 10% 200 5% 100 316 143
Slide 35: Financial highlights
Financial highlights Retained Earnings (PRK m) 300 200 100 182 136 - (643) (607) (403) (344) (236) (100) (200) (300) (400) (500) (600) (700) (800) 2015 2016 2017 2018 2019 2020 DEC 20 RE Linear (RE) 35
Slide 36: Thank You Q&A
THANK YOU Q&A
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