Kiri Industries Limited · NSE:KIRIINDUS
Kiri Industries — Investor Presentation (July 2020)
48 slides from Kiri Industries's investor presentation, Jul 16, 2020
Slide 1: Intimation of Investor Presentation cover letter
CD Kiri Industries Limited ~{i:fto{ C'~..... July 16, 2020 To To BSE Limited The National Stock Exchange of India Ltd . 1st Floor, Rotunda Building Exchange Plaza, 5th Floor, Plot No. C/l, "G" B. S. Marg, Fort. Block, Bandra-K urla Comp lex Mumbai - 400001 Mumbai - 400 051 Scrip Code: 532967 Symbol:
Slide 2: Investor Presentation July 2020
Kiri Industries Limited (CIN:L24231GJ1998PLC034094) INVESTOR PRESENTATION | JULY 2020
Slide 3: Executive Summary
2 Executive Summary PRODUCTS INDUSTRIES CATERED FINANCIAL HIGHLIGHTS* Dyes Intermediates For Dyes intermediates OPERATIONAL REVENUE H-acid • Various INR 13,053 Mn Vinyl Sulphone manufacturers of Specialty Intermediates reactive dyes across 3 Year - CAGR Naphthalene and Aniline the globe. 2.96% based
Slide 4: Company Overview
<< AOS 2 COMPANY OVERVIEW
Slide 5: Company Overview
4 Company Overview • Established in 1998, Kiri Industries Limited (KIL), Consolidated Revenue Break-up (INR Mn) is based out of Gujarat and has emerged as one 6,625 of the largest manufacturers and exporters of a 6,499 4,629 wide range of Dyes, Dyes Intermediates and 3,681 4,879 Basic Chemicals from
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 Jay 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 Achieved Two-Star Entered into highest PAT Export House a JV since Commercial Agreement Filed inception Obtained with Well Incor- Environmental production minority Singapore Prospering Kiri poration Clearance for of oppression Court Ltd. for Industries of Kiri further backward Acqui
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 Canada CZECH REPUBLIC UK BELGIUM SPAIN HUNGARY ITALY UZBEKISTAN KOREA USA PORTUGAL GREECE TURKEY CHINA PAKISTAN LEBANON TUNISIA NEPAL ISRAEL BANGLADESH TAIWAN INDIA EGYPT UAE HONG KONG EL SALVADOR THAILAND HONDURAS PHILIPPINES MALAYSIA COLOM
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 Other Basic Chemicals Sulphonic Speciality 1% Acid Chemical Oleum Dyes Vinyl 43% 65% & Intermediates Sulphone 23% Dye 56% Basic Intermedia Chemicals tes 3% 52% Sulphuric H Acid Dyes Acid Revenue Break-up (FY20) 45% Basic Che
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 Blac
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 26% 26% • Economical / Competitive 22%
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: Disperse Dyes
19 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 polyester yarn or fabric. • For d
Slide 21: Other Dyes
20 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 22: Dyes Intermediates
21 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% 43% 47% • Naphtha and natural gases are used fo
Slide 23: Dyes Intermediates – H-Acid
22 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 24: Dyes Intermediates – Vinyl Sulphone
23 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 25: Basic Chemicals
24 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% 36% 37% • Oleum 32% • Chloro Sulphonic Acid 25% • Thionyl Chloride 20% • All these products are made in one i
Slide 26: Future Outlook
25 Future Outlook • Lockdown on account of COVID19 impacted the business operations of the Company as well as global economy; The Company expects to achieve Pre-covid operational capability by end of December 2020. • Looking to the further impact of COVID 19, the Company will plan its continuing cap
Slide 27: DyStar
DYSTAR
Slide 28: About DyStar
27 About DyStar Total Revenue (USD Mn) KIL acquired Dystar in 2010, along with Zhenjiang 1,129 1,016 1057 Longsheng holding 37.57% presently 938 898 822 871 • The DyStar Group is a leading dyestuff and chemical manufacturer and solution provider, offering a broad portfolio of colorants, specialty ch
Slide 29: History
28 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 30: Value Creation in DyStar
29 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 1,976
Slide 31: Value Creation in DyStar (Continuation)
30 Value Creation in DyStar Continuation…… • DyStar has initiated a new suit against the Company and Mr. Manish Kiri for alleged violation of SSSA with respect to competition by the Company with DyStar through solicitation of customers of DyStar in Bangladesh, Pakistan, Iran and Brazil. The Company
Slide 32: Industry Overview
INDUSTRY OVERVIEW
Slide 33: The Colourant Industry
32 The Colourant Industry • Global colorants market is forecast to witness a CAGR of around 9% during 2020 – 2025. The market is driven by rising inclination of consumers towards innovative and appealing shades of packaged products and items. Moreover, increasing need for dyestuff in numerous end-us
Slide 34: Dyestuff Industry
33 Dyestuff Industry Dyestuff Industry: The global dye market is expected to witness a growth of USD 8.75 billion by 2023 with a CAGR of 8.13%. The dyes and dyestuff industries play a major role in the growth of the chemical industry. Dyes intermediates are products that are transformed to finished
Slide 35: Indian Dyes Intermediates Industry
34 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 36: Industry Overview
35 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 37: India's Competitive Advantage
36 India’s Competitive Advantage China Factors: • In China, apart from the ETP hurdle, there is: (1) Reduction in refund of VAT from 17% to about 13% on DI (2) Cancellation in power subsidy (a major cost, 6-9% of revenue) (3) Non refund of VAT on DS export out of China causing imposition of export d
Slide 38: Strategic Overview
STRATEGIC OVERVIEW
Slide 39: The Way Forward
38 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 40: Financial Overview
FINANCIAL OVERVIEW
Slide 41: Standalone Income Statement
40 Standalone Income Statement PARTICULARS (INR Mn) FY17** FY18 FY19 FY20 Revenue from Operations 10,335 9,013 10,619 9,690 Total Expenses 9,059 7,712 9,055 8,729 EBITDA 1,276 1,301 1,564 961 EBITDA Margin 12.35% 14.43% 14.73% 9.92% Other Income 20 33 28 41 Depreciation 222 250 285 366 Finance Cost
Slide 42: Standalone Balance Sheet
41 Standalone Balance sheet PARTICULARS (INR Mn) FY19 FY20 PARTICULARS (INR Mn) FY19 FY20 Equity 6,307 6,730 Non Current Assets 6,922 7,665 Equity Share Capital 313 336 a) Property, Plant and Equipment 4,290 4,635 Other Equity 5,994 6,394 b) Other Intangible assets 1 - c) Capital Work In Progress 37
Slide 43: Consolidated Income Statement
42 Consolidated Income Statement PARTICULARS (INR Mn) FY17** FY18 FY19 FY20 Revenue from Operations 11,983 11,352 13,938 13,054 Total Expenses 10,393 9,542 11,628 11,193 EBITDA 1,590 1,810 2,310 1,861 EBITDA Margin (%) 13.27% 15.94% 16.57% 14.26% Other Income 24 16 27 53 Depreciation 291 341 376 444
Slide 44: Consolidated Balance Sheet
43 Consolidated Balance sheet PARTICULARS (INR Mn) FY19 FY20 PARTICULARS (INR Mn) FY19 FY20 Equity 15,673 19,334 Non Current Assets 15,673 18,919 Equity Share Capital 313 336 a) Property, Plant and Equipment 4,769 5,062 Other Equity 15,360 18,998 b) Other Intangible assets 70 56 c) Capital Work In P
Slide 45: Consolidated Financial Highlights
44 Consolidated Financial Highlights Operational Revenue (INR Mn) EBITDA (INR Mn) & PAT(INR Mn) & PAT 13,938 EBITDA Margins (%) Margins(%) 13,054 11,983 11,352 11,119 15.94% 16.57% 13.27% 14.26% 11.14% 11.16%11.31% 9.14% 8.86% 2.50% 1,239 1,590 1,810 2,310 1,861 257 1,095 1,267 1,576 1,157 FY16 FY17
Slide 46: Capital Markets
45 Capital Markets Share Price Data as on 30th June 2020 15% -5% -25% -45% -65% Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Kiri Industries SENSEX Price Data (30th June, 2020) INR Shareholding Pattern as on 30th June, 2020 Face Value 10.0 Public 32% Market Pri
Slide 47: Disclaimer
46 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 48: Thank You
THANK YOU