Académique Documents
Professionnel Documents
Culture Documents
By Manish Agarwal
Content
Brief History
Positioning in Indian Cement Industry Financial Performance
Cost drivers
Expansion Project Financing of expansion projects Conclusion
growth acquisitions
and
growth
through
of
2005 - ACIL restructured as a joint venture 2006 - Founder promoters sold part of their
2006
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Content
Brief History Positioning in Indian Cement Industry Financial Performance Cost drivers Expansion Project
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Positioning - ACL
North Central Region
Cement Capacity 7.0 Mio t
Eastern Region
Cement Capacity 3.0 Mio t
South-West Region
Cement Capacity 8.0 Mio t Cement Plant Grinding Station Terminal Port
Overseas: Cement receiving station at Galle (Sri lanka), which is not indicated in the map above
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Strategy
Strong presence in growing markets of North &
West
Largest exporter of cement Grinding close to market Premium brand Extensive & primarily exclusive distribution network
Over 6,600 dealers and 20,500 retailers Captive Infrastructure Port, Receiving Terminals and Power Plants (230 MW) Sea Transportation Seven vessels
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Export
Cement and clinker export volumes
[Mio t]
1.4 2.0 2.0 1.5
Comments
ACL exports
1.8
10
Gujarat provides around 80% of Indian cement exports. Exports markets are mainly in the Middle East but also in Sri Lanka (0.8 million t)
Export flows from Gujarat are expected to decline from 20082009, due to strong demand and better realization in the local market.
6
9.9
9.2 9.7 9.5
4
6.5
0
2002 2003 2004 2005 2006
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Surat Maratha
Panvel
Ahmadabad
Total
8.0
2.5
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Darlaghat
Rauri
Darlaghat Rauri
Ropar
Nalagarh
Roorkee
Bathinda
Dadri
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2009
Bhatapara
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Comments
ACL Market Share in %
10 10 10
10
11
42
41
distribution
12 12
11
10
36
37
36
36
36
2005
2006
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Sales development
54 52
39
27.0
37
36
27.0
30.0
31.0
32.0
[Mio t]
4.0
5.0 6.0 11.0 15 11.0 11.0 9.0
4.0
5.0 6.0 11.0 15 10.0 10.0 9.0
4.0
5.0 6.0 12.0 14 10.0 10.0 8.0
4.0
5.0 7.0 12.0 13 10.0 9.0 8.0
60
40
17
11.0
20
11.0 8.0
4.0
2002
2003
2004
2005
2006
Comments Top three players represent around 52% of the market share* Dominance of regional players in the southern market
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Sales development
55
17.0 7.0 8.0
9.0 11.0 5.0 2 13.0
39
18.0
40
17.0 7.0 8.0
9.0 11.0 6.0 2 13.0
41
17.0 7.0 8.0
8.0 11.0 6.0 3 13.0
53
16.0 9.0 8.0
10.0 10.0 5.0 1 13.0
80
7.0 8.0
60
9.0 11.0
40
6.0 2 12.0
20
15.0 11.0
15.0 12.0
16.0
16.0
16.0
4
5.0 5.8 6.3 6.6
13.0
14.0
13.0
0
2002 2003 2004 2005 2006
4.4
Comments Top three players now represent around 53% of the market* but still fragmented among 2nd and 3rd tier players Jaypee and Shree are relatively aggressive competitors Currently the region with the highest ACL presence 13
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Sales development
62
12.0 5.0
7.0 17.0
47
15.0 5.0
6.0
51
10.0 6.0
7.0 18.0
50
12.0 5.0
7.0 19.0
66
11.0 4.0
8.0 18.0
60
20.0 12.0 11.0 12.0 13 7.0 18.0 8.0 14.0 12 8.0 17.0 8.0
40
13 13 7.0 7.0
20
14.0 8.0
19.0 8.0
2 1.3 2002 1.4 2003 1.5 2004 1.8 2005 2.0 2006
2002
2003
2004
2005
2006
Comments Most consolidated compared to all India Top three players represent around 66% of the market*
ACL
ACC
Grasim
Century
Birla Corp
Lafarge
Others
Orissa
UltraTech
* In 2005 and 2006, Top 3 are: ACL+ACC; Grasim + Ultratech, Lafarge. Their market share could reach close to 80% with the likely integration of Century into Grasim/Ultratech
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Content
Brief History Positioning in Indian Cement Industry Financial Performance Cost drivers Expansion Project
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2002-03 9 14
2003-04 13 17
2004-05 17 22
37 36
2006* 47 43
9 12
50 40
30 20 30 30
31
10 0
14
17
20
26
34
34
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Full Year Rs. In crores Sales Volume Sales EBITDA EBITDA margin 2006 16.3 4847.86 1880.68 38.8% 2006 12.2
Nine Months 2007 12.5 4198.13 1669.76 39.75% % (+/-) 2.46 19.31 26.33
1340.07
1,099.53
967.61
13.63
* IGAAP. Figures for FY 2006 have been restated to make it comparable, on account of change in accounting year and merger of ACEL 17 ** Excluding extraordinary income
4/19/2012
Content
Brief History Positioning in Indian Cement Industry Financial Performance Cost drivers Expansion Project
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Cost drivers
Power
Fuel (coal)
Clinker content
Composite cement
Transport
Grinding facility close to end user, production close to raw materials Terminal logistics
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Energy
Consumption per unit of Production
90 89 88 87 86 85 84 83 82 81 80
2001-02 2002-03 Electricity (Kw h/T of Cmt) 2003-04 2004-05 2006 720 715 710 705 700 745 740 735 730 725
Measures
Shift from liquid to solid fuel to reduce cost of captive energy cost by approx. Rs.2 per unit. Reduction dependence on grid power, with the construction of additional power plants aggregating to 178 MWs Captive power ensures continuous and consistent supply of
90 80 70 60 50
2050 1550
76 80 72 66 72
power
2002-03
2003-04
2004-05
2006
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Content
Brief History Positioning in Indian Cement Industry Financial Performance Cost drivers Expansion Project
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Expansion projects
Location Rauri Dadri Nalagarh Roorkee* Rabriyawas Surat Ahmedabad Bhatapara Farraka* Total Cluster North North North North North SW SW East East
Grinding Grinding Clinkering Grinding Grinding Clinkering
2007
2008
Clinkering Grinding
2009
2010
2011
Grinding
0.6
Capital outlay (in USD million) Clinker Grinding Captive power plant
* Already commissioned
Greenfield
Brownfield
Content
Brief History Positioning in Indian Cement Industry Financial Performance Cost drivers Expansion Project
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Financial position
Million USD Net Cash from Operating Activities Debt:Equity Debt:EBITDA 1.10 3.83 1.09 3.42 0.63** 2.61 0.52 1.41 0.25 0.38 2001-02 28 2002-03 68 2003-04 144 2004-05 180 2006* 453
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Content
Brief History Positioning in Indian Cement Industry Financial Performance Cost drivers Expansion Project
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Conclusions
Solid market position built up within short period of time through organic growth and acquisitions
Pin-pointed positioning tied to substantial captive infrastructure to serve markets including sea transportation, capability to export
High use of alternative raw materials in production of composite cements Substantial greenfield and brownfield expansions plans to grow within the attractive markets and an internal financing capability to fund expansion projects
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Disclaimer
Cautionary statement regarding forward-looking statements
This presentation may contain certain forward-looking statements relating to the future business, development and economic performance. Such statements may be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation. Ambuja assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise.
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