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CORPORATE PRESENTATION
February, 2011
Disclaimer
2
Corporate Presentation (the “Presentation”) of Hindusthan National Glass & Industries Limited (HNG), as contained in this document, is
based on management estimates and is being provided to you (herein referred to as the “Recipient”) only for information purposes. The sole purpose of this Presentation is to provide preliminary information on the business activities of the Company, in order to assist the
recipient in understanding the Company. This Presentation does not purport to be all inclusive or necessarily include all information that
a prospective investor may desire in evaluating the Company. The Company expressly disclaims any and all liability for any errors and/or omissions, representations or warranties, expressed or implied, as contained in this document.
This Presentation contains certain forward looking statements, which are based on certain assumptions of future events over which the Company exercises no control. Hence this involves number of risks and uncertainties which could cause the actual results to differ
materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: Company’s ability to manage growth, competition, attracting and retaining skilled professionals, time and cost
overruns, regulatory approvals, market risks, domestic and international economic conditions, changes in laws governing the Company
including the tax regimes and exchange control regulations.
The Company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the Company. This Presentation may not be photocopied, reproduced or distributed to others at any time without prior consent of the
Company. Upon request, the Recipient will promptly return all material received from the Company without retaining any copies thereof.
In furnishing this Presentation, the Company does not take any obligation to provide the Recipient with access to any additional
information on the Company or its Subsidiaries. This Presentation should not be deemed an indication of the state of affairs of the Company nor shall it constitute an indication that there has been no change in the business or state of affairs of the Company since the
date of publication of this Presentation.
Any clarifications / queries, as well as any future communication, regarding the Company should be addressed to the Company. “This
presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, invitation, or a solicitation of any offer, to purchase or sell or subscribe, any shares of the Company and should not be considered or construed in any manner
whatsoever as a recommendation that any person should subscribe for or purchase any of the Company’s shares.”
Introduction of the Company
Industry Snapshot
Business Overview
Float Glass Business
Business Strategy and Expansion Plans
Financial Snapshot
3
Table of Contents
Introduction of the Company
Overview
5
Medium growthLow growthDecline High growth Not illustrated
HNG: Unique and only of its kind in high growth Indian market
Industry leader – market
share ~ 55%
Diversified customer base across all market
segments
Pan-India presence
Successful turn around of loss making acquisitions
Strong focus on value creation through
strategic initiatives
Robust start in high growth oriented Float
Glass business
Professionally run
organization with competent management
Growth in respective Economies
Vision
“To create a world-class glass
manufacturing plant that pursues
Quality, Cost Reduction, and
Productivity Improvement measures in
a truly holistic manner, leading to
Customers‟, Shareholders‟,
Employees‟ and Suppliers‟
Satisfaction; this integrated effort will
result in the Company becoming an
Industry Benchmark and a role model
for systems, processes and results”
6
Corporate history – Key events
1952
Company laid the foundation stone for its first plant at
Rishra
2002
Acquisition of
plants at
Rishikesh and
Puducherry from
Owens
2006
Merger with associate, Ace Glass Containers Ltd
2009
Rated as the best Indian company in the Glass &
Ceramics category by Dun & Bradstreet
7
2001
Expansion of capacity to 1,100 tonnes per day
2007
-Set up Float Glass plant in Halol
- Acquisition of the Neemrana unit of
Haryana Sheet Glass (capacity 125 tpd)
2005
Acquisition of the glass division of L&T at Nashik
2010
-Work on 7th plant at Naidupetta (650 TPD) started at full swing (operations to
commence by Mar-12)
-650 tpd of additional capacity announced in Nashik, production
expected by Nov, 2011
Corporate structure
Hindusthan National Glass & Industries Ltd
HNG Float Glass Ltd (HNGFL)
Quality Minerals LtdGlass Equipment
(India) Ltd.
100% 100%
Capital Goods & Spares
Supplier to Glass Industry
Net revenues: INR 366 m
Mineral Supplier to Glass
Industry
Net revenues: INR 29 m
Manufacturer of Float &
Processed Glass
Net revenues: INR 275 m
47.4%1
- Consolidated net revenues: INR 13,834 m
- Standalone net revenues: INR 13,599 m
8
Note: 1 HNGFL is proposed to be made a Subsidiary
2 All figures of revenues are of FY 20103 All Values are in INR million
Organization
9
Chandra Kumar Somany,
Chairman
Finance CommercialPurchaseMarketingManufacturing
HNG Board
Mukul Somany,
VC & MD
Sanjay Somany,
VC & MD
HR & Admin
Professionally managed organization with clear delegation of responsibilities and authority.
HNGIL Board of Directors
Chandra Kumar Somany
Sanjay Somany
Mukul Somany
Kishore Bhimani
Sujit Bhattacharya
Ratna Kumar Daga
Shree Kumar Bangur
Dipankar Chatterji
Indrajit Kumar Saha
Venkatasan Sridar
* Includes 16.76% held as Treasury Shares in the Company
Total 87.4 million shares of face value of (INR. 2.00) each.
Listed at: National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
Calcutta Stock Exchange (CSE)
Shareholding pattern
Particulars% Shareholding
(as on February, 2011)
Promoters 69.98
Public Shareholding
Insurance Companies 0.37
Bodies Corporate 2.67
Financial Institutional Investors 7.27
Individuals & Others* 19.69
Total 100.00
10
30.02
Overview
11
Sales CAGR: ~ 25%
PBITDA CAGR: ~ 39%Standalone operations
7,016
10,212
13,110
1,1752,147 2,359
3,163
13,599
16.8%
21.0%
23.3%
18.0%
-
5,000
10,000
15,000
20,000
25,000
30,000
FY2007 FY2008 FY2009 FY2010
0%
5%
10%
15%
20%
25%
Net Revenue (INR m) PBITDA (INR m) PBITDA margin
Successfully combated the
impact of recession and
increase in global crude prices
• Current capacity of 2,825 Tpd – producing over ~ 15m bottles per day ranging from 5 ml to 3200 ml
• Expanding to ~ 4,150 Tpd over the next 2 years
Marketing Office
Kolkata
Mumbai
Delhi
Hyderabad
Bengaluru
Chennai
Plant Locations
Naidupeta
Pan – India presence
12
• Manufacturing locations in all regions in
the Country
• Pan-India presence enables :
◊ Lowering overall landed cost to
customers and ensuring JIT
supplies.
◊ Comprehensive coverage of the
key customers across India
◊ Fleet of 100 Trucks
Upcoming Greenfield Mega
Project
Inorganic growth
13
Successful turnaround of loss making businesses – demonstrates strong
management capabilities
January 2002
◊ Acquired Owens Brockway India Ltd, a subsidiary of
Owens Illinois, USA.
◊ Capacity acquired: 700 Tpd (plants at Puducherry and
Rishikesh).
◊ Closed the 3rd plant of the Company at Pune, since
commercially not viable.
October 2005
◊ Acquired loss making unit of Larsen & Toubro
◊ Capacity acquired: 320 Tpd (at Nashik)
October 2007
– Acquired the assets Container Glass division of Haryana Sheet Glass.
– Capacity acquired: 180 Tpd (at Neemrana)
Ratings, Rankings & Accreditations
Business Standard Ranking (Out of 1000 top listed corporates, as of Feb ‟10)
◊ In terms of Revenue – 299th
◊ On Operating Profit Quantum – 265th
◊ On Net Profit Quantum – 253rd
Rating by CARE (Credit Analysis & Research Ltd.)
◊ Long Term credit rating of AA+ (implying high safety for timely servicing of debt obligations and carrying very low credit
risk).
◊ Short Term credit rating of PR1(+) (implying the lowest credit risk).
CRISIL EquityRating
◊ On „Fundamental‟ side 4/5 meaning „Superior Fundamentals‟
◊ On „Valuation‟ Side 3/5 meaning Align (+ - 10% from CMP)
Rated as the best Indian Company in the Glass & Ceramics category by Dun & Bradstreet in
year 2009
Accredited with ISO 9001:2008 certification, ensuring stringent quality standards and ISO 22000 for
food and safety
Rated at No.35, out of the best 500 companies by Inc.India(Comprehensive ranking of India‟s best
performing mid-sized companies) in their Sep-Oct, 2010 issue.
14
Industry Snapshot
16
Global packaging industry
As per World Packaging Organization, the global packaging industry at present is estimated to be
US$ 500 bn in revenues, with ten year historical growth at ~ 3.1% CAGR
Projected to grow at ~ 3.6% CAGR in the next five years mainly driven by growth in emerging
markets (Asia Pacific region)
Source: Owens-Illinois, Inc. - Investor presentation, March 2010
6.3%
3.4%
0.7% 0.5%
3.1%
7.0%
3.2%
0.4% 0.2%
3.6%
Asia Pacific Latin America Europe North America Global
10-year historical growth (1999-2009E) Forecasted growth (2008-2013E)
17
Indian macroeconomic overview
846
11621029
683548
439
18%20%
26%28%
32%
23%
0
250
500
750
1000
1250
19
61
19
71
19
81
19
91
20
01
20
10
0%
5%
10%
15%
20%
25%
30%
35%
Total Population (m) % Urban
9.0%
7.4%7.5%
9.4%9.9%
6.7%
0.0%
2.5%
5.0%
7.5%
10.0%F
Y 2
00
5
FY
20
06
FY
20
07
FY
20
08
FY
20
09
FY
20
10
GDP growth rate
India is the seventh largest Country by geographical area and the second-most
populous Country in the world. According to IMF estimates, India‟s GDP is expected to
grow by 8.5% in the current year.
89.0
63.9
50.3
27.5
27.5
19.5
10.2
5.9
4.8
1.4
1.2
South Korea
France
Spain
UK
USA
Mexico
Japan
China
Brazil
India
Indonesia
(kg)
18
Indian Glass Packaging Industry
World glass container per capita
consumption
At US$ 14 bn, Indian packaging industry has been growing at
~ 15% over the last few years
◊ Expected to accelerate further with increasing
urbanization, growing middle class and expansion of
modern retail
Indian glass container market stood at US$ 1 bn plus in FY10
with a growth of ~ 12%
Entry barrier owing to capital intensive nature
◊ Top 3 players are HNG, Piramal Glass and AGI
Glaspac
Low per capita glass container consumption of 1.4 kg in India
as compared to 27.5 kg. in US and 10.2 kg. in Japan
Strong economic drivers for end-user segments (liquor and
beer, pharmaceuticals, food, cosmetics, etc.)
19
Liquor
49 56 57
190
214236
0
50
100
150
200
250
2007-08 2008-09 2009-10
Ca
se
s in
millio
ns
HNG Supply Liquor Industry Volumes
Size of Indian IMFL market is estimated to be ~ US$
4.5 bn with total sales volumes of 236m cases
Industry projected to grow at 10-12% p.a. over next few
years
Growth Drivers:
Low per capita consumption in India of 1.8 litres as
against 8.7 litres in Europe and 8.5 litres in USA
Increasing disposable incomes
Youth & Middle-Aged population expected to increase
from ~ 48% of population (2001) to 54% in 2011
~ 485m people in the drinking age and another 100m
likely to be added overnext 5 years
Cultural change – acceptance of social drinking and
growing drinking habits in women
Increasing deregulationby state governments
Increasing awareness of health &
hygiene issues leading to greater
usage of new glass bottles.
20
Beer
19 20 21
157174
191
0
50
100
150
200
250
2007-08 2008-09 2009-10
Ca
se
s in
millio
ns
HNG Supply Industry Volumes
Size of industry in terms of volumes: 191 m cases
Industry projected to grow at 12-15% p.a. over next few
years
Growth Drivers:
Low per capita consumption in India of 1.3 litres,
compared to global average of 24 litres
Increase in disposable income
Increasing exposure to beer, mainly due to increase in
number of outlets
Rising popularity of beer among urbanworking women
Branding efforts of beer producing companies is also
adding growth of new glass bottles in the segment
Given the growth of beer industry
in India, there is large potential for
the new glass bottles.
66,040
100,625
FY2007 FY2010
21
Food
Figures in MT – HNG Glass
bottles
CAGR: ~15%
As per Government of India‟s Vision 2025, the food processing
industry is expected to more than double in size from the current
US$ 70 bn to ~ US$ 150 bn in 2025
Growth Drivers:
Increase in disposable income
Changing lifestylesof urban and rural middle class
Increasing health consciousness with shift from traditional
unpackagedformats to packaged,branded goods
Increasing working womenpopulation
Increase in penetration of glass containers – currently 10-12% of
all food and beverages are packed in glass containers in India as
compared to 40-50% in developedmarkets
22
Soft Drinks
19,731
51,852
FY2007 FY2010
Figures in MT – HNG Glass
bottles
CAGR: ~ 38%
The Indian soft drinks market is estimated to be ~ US$ 1.8 bn
with carbonated drinks contributing US$ 1.5 bn and juices US$
0.3 bn
Overall industry growing at ~ 8% p.a. with fruit drinks/ juices
categorygrowing at ~ 25% p.a.
Growth Drivers:
India‟s consumption amongst one of the lowest in the world
at 5 bottles (equivalent to 8 oz) p.a.
Increase in disposable income
Increasing penetration in rural India
Introduction of healthier fruit based substitutes / juices and
energy drinks to tap newer market aspirations
95,009
83,460
FY2007 FY2010
23
Pharmaceuticals
Figures in MT – HNG Glass
bottles India's Pharmaceutical Industry is the 3rd largest in the world in
volume terms and 14th in value terms
The Indian domestic market is currently ~ US$ 12.3 bn and is
growing at CAGR of 12-15% as against a global average of 4-7%
◊ Projected to grow to US$ 20 bn by 2015
Growth Drivers:
Increase in disposable income
Increased health awareness
Expansion of healthcare facilities in the rural and far-flung areas
to further boost demand
Increasing penetration of customized insurance plans would drive
affordability of healthcare services
Glass Bottle market has
experienced a de-growth of
5% CAGR due to penetration of
PET Bottles
Business Overview
25
Summary
Largest Glass Container manufacturer in India (~ 55% volumes) with about six decades of
experience. Present capacity of 2,825 tpd with proposed expansion to ~ 5975 tpd by FY14.
Robust financial position
◊ During the period of FY07 to FY10, standalone sales grew at a CAGR of 25% while
PBITDAgrew at a CAGR of 39%
◊ Enjoys economies of scale owing to size and has best in class PBITDAmargins
Strong manufacturing platform spread across India through six manufacturing units, with
additional Greenfield project being executedat Naidupeta, A.P and Nashik.
Markets container products to several top clients including United Spirits, SAB Miller, HUL,
Nestle, Glaxo, Heinz, etc.
Highly experienced and competent management team
Compliancewith Health, Environment and Safety regulations in India
Group is committed to CSR
Competitive benchmarking
26
Player Market
Cap (INR)
Capacity
(tpd)
Sales
(consolidated) FY10-INR
Other comments
HNG 22.70 bn 2,825 13.8 bn
• Produces glass bottles to liquor, beer,
pharmaceuticals, food and carbonated drinksindustries
Piramal
Glass8.46 bn 1,115 11.0 bn
• Produces glass bottles for cosmetics, pharma,
food and beverages for both domestic andinternational markets
• Key segment: Cosmetics& Pharma
Vitrum Glass NA 130 NA • Produces amberglass containers for pharma
Haldyn Glass 0.74 bn 320 1.34 bn• Produces glass bottles for liquor, cosmetics,
pharma, food and beverage
Hindusthan
Sanitaryware8.65bn 950 8.06* bn
• Glass Division named “AGI Glaspac”
• Produces glass bottles for liquor, pharma, foodand beverage
• *Total revenues of the company ( includes revenues from sanitary-ware business)
North
45%
South
20%
West
13%
East
22%
Liquor
53%
Beer
15%
Food
11%
Pharma
10%
Others1
11%
27
End user segment Geography
Volume Mix (9m FY11)
1 Others includes soft drinks
Customers – Some names
28
Liquor
Beer
Pharmaceuticals
Food
Carbonated drinks
(Soft drinks)
HNG’s Share of Top 10 Customers
29
0
10
20
30
40
50
60
70
80
90
100
United Spirits Limited
United Breweries
Limited
Pernod Ricard India
SAB Miller India
Allied Blenders & Distillers
Coca Cola India
Pepsico India
Bajaj Corp Limited
Shiva Distilleries
John Distilleries
Limited
60
65
55
60
80
40
70
95
80
50
HNG's Share in the Total Requirement of Top 10 Customers in 2009-10 (%)
Manufacturing Facilities
30
Plant details: Rishra (West Bengal)
Description
Year of start of
operation1952 (Area: 38.3 acres)
Installed capacity 805 tpd
Production in FY10 207,748 MT
Furnaces 3 (13 manufacturing lines)
Other comments
• On-site bottle printing facility
• Amber, flint and green glass manufacturer
Rishra
31
Plant details: Bahadurgarh (Haryana)
Description
Year of start of
operation1964 (Area: 57.9 acres)
Installed capacity 655 tpd
Production in FY10 180,831 MT
Furnaces 3 (15 manufacturing lines)
Other comments
• On-site bottle printing facility
with four decorating lines• Amber and flint glass
manufacturer
• Foundry and mould workshop• Energy feed through captive
power generating facilities
Bahadurgarh
Manufacturing Facilities (contd.)
32
Plant details: Rishikesh (Uttarakhand)
Description
Year of acquisition 2002 (Area: 14.3 acres)
Installed capacity 425 tpd
Production in FY10 116,054 MT
Furnaces
2 (1 furnace used for Green glass
manufacture; 6 manufacturing lines )
Other comments
• On-site printing facility with
three decorating lines• Green, flint and Georgia green
Rishikesh
Manufacturing Facilities (contd.)
33
Plant details: Puducherry (Union territory)
Description
Year of acquisition 2002 (Area: 46.5 acres)
Installed capacity 370 tpd
Production in FY10 114,745 MT
Furnace 1 (4 manufacturing lines)
Other comments
• On-site printing facility with three decoration lines
• Sand beneficiation plant, foundry and mould workshop
Puducherry
Manufacturing Facilities (contd.)
34
Plant details: Nashik (Maharashtra)
Description
Year of acquisition 2005 (Area: 70.3 acres)
Installed capacity 390 tpd
Production in FY10 109,127 MT
Furnace 1 (4 manufacturing lines)
Other comments
• On-site bottle printing facility
with three decorating lines• Flint glass
Nashik
Manufacturing Facilities (contd.)
35
Plant details: Neemrana (Rajasthan)
Description
Year of acquisition 2007 (Area: 12.3 acres)
Installed capacity 180 tpd
Production in FY10 56,795 MT
Furnace 1 (3 manufacturing lines)
Other comments• Manufactures flint and amber
glass
Neemrana
Manufacturing Facilities (contd.)
36
Batch-houses from Zippe (Germany)
Furnaces from Sorg and Horn (Germany).
Furnace control System from STG( Germany ) , Sorg ( Germany ) and Horn ( Germany).
Distributor and Forehearths from Emhart (USA) , BHF ( the UK) .
Supervisory Control and Data Acquisition systems from Siemens ( Germany).
IS machine electronic control system from Bottero (Italy) and Futronics (Germany).
Parallel mold brackets machines AIS(Emhart –Switzerland ) and E- MOC (Bottero -Italy) .
Plunger mechanism and Process Control equipment from Quantum –TFA ( USA ) , Emhart -PPC( Switzerland) and
HEYE ( Germany) .
NNPB Development Technology from HEYE ( Germany) .
Hot –End Cullet Return System from Zippe ( Germany ) and Carmet ( Italy) .
Annealing & Decorating lehrs from Pennekamp ( Germany ) and Carmet ( Italy) .
Surface treatment equipment from Graphoidal ( the UK) , Pennekamp ( Germany) , Arkema (The Netherlands )
and IMACA (The Netherlands ).
Hot –End ware handling equipment from Heye International (Germany), Pennekamp ( Germany) and Sheppee
(the UK).
Bottle printing equipment from Strutz (USA) and Rosario (The Netherlands).
Bottle inspection machines from SGCC–MSC (France), Heye International (Germany) and IRIS (France).
State-of-the-art Technology from Global Majors in place to further boost operational efficiencies
and product quality which includes:
Technological Strengths
Supply chain
37
Procurement
Sourcing and Service contracts with various global parties
Strong procurement and supply chain systems in place with diversified supplier base to de-risk operations
Key raw materials include: silica, limestone, dolomite, feldspar, soda ash and cullet
Marketing and Distribution
Presence of multiple manufacturing locations across the country presents a strategic advantage over its peers yielding higher Net Sales Realization (NSR) due to lower freight cost to the customers
Flexibility to offer JIT supplies due to lower lead
Strategic acquisitions helped increase the geographic footprint and customer penetration
Six marketing offices spread across India
In-house fleet of over 100 trucks to de-risk supply side logistics
Over 90% customers are B2B
Environment, Health and Safety
38
Compliance with all EHS (Environment, Health and Safety) related legislations
Emission standards maintained within norms
Focus on zero discharge and recirculation of water
CDM projects are registered. More are in the pipeline
Qualified safety professionals at each plant
Periodical risk assessments and safety audits
Corporate Social Responsibility
39
The group remains committed to CSR and some of the programs embarked upon are:
Provision of street lighting and maintenance of a children‟s park in the colony (Tulsi Vihar) adjacent
to the plant at Rishikesh
Sunetra Eye Clinic
◊ The Group started an eye check-up centre for underprivileged citizens in collaboration with
Calcutta Eye Research Foundation
School operated at Bahadurgarh (Bal Bharti) that caters to the education requirements of most of
the children in the vicinity. 1,700 students registered under CBSE curriculum
Donated Rs ~1.2 million to few social organizations and Handicapped University, Chitrakoot.
Training programs conducted for underprivileged girls.
Regularly conducts free medical camps
Undertaken plantation of trees in large numbers
Maintenance of park “Maharana Pratap Square” in Kolkata
Float Glass Business
Summary
41
Strategic move by Company to venture into higher margin Float Glass industry with associate HNG
Float Glass (c.47% shareholding)
◊ Proposed to be made a subsidiary
Indian Float Glass industry has been growing at c.18% CAGR over the last three years
◊ Growth drivers
◊ Low per capita consumption of Float Glass in India of 1.0 kg as compared to 12 kg in
China and 10.4 kg in USA
◊ Growth in real estate and automobile sector in India
Greenfield expansion in the float glass business by setting up a plant at Halol, Gujarat
◊ Manufactures glass to meet the needs of Construction and Autosectors
◊ Existing facility is an integrated glass plant having capacity to manufacture toughened,
insulated glasses for architectural and automotive application.
◊ Largest domestic players – well positioned to capitalize on the high growth potential
◊ Capacity: 600 tpd set up at a capex of INR 6 bn
◊ Commenced production in Feb ‟10. Companymarketed 16,147 tonnes in FY 2010
◊ Fully positioned to break-even in the first full year of operations – expected to generate
small profit in FY 2011
Market overview
42
Nascent industry in India with a per capita consumption of 1.0 kg as against China (12 kg), ASEAN
(8.4 – 11 kg), Europe (12.5 kg) and USA (10.4 kg)
◊ India has eight float glass lines comparedwith 196 in China
India‟s total installed capacity for float glass is estimated to be c.4,700 tpd
In FY10, imports were estimated at 0.1 m MT, largely from China and Indonesia.
◊ To support indigenous manufacture, the Government imposed an anti-dumping duty of
US$ 130 per ton on imports from China & Indonesia.
Growth drivers
◊ Growth in real estate driven by
◊ Growth in the services sector - telecom, financial services, IT & ITeS etc
◊ Boom in retail marketing through shopping malls
◊ Increasing demand for affordable housing and high rate of urbanization
◊ Growth in automobile sector mainly driven by growth in passenger car segment
Overview of HNG Float Glass Ltd
43
Overview
◊ Commenced production in a record time of 21 months
◊ Plant achieved global productionefficiency benchmarks within a short span of 5 months
◊ Competitors include Saint Gobain, Asahi, Gujarat Guardian, Gold Plus, Sejal, etc.
Certifications - Materials manufactured as per European standards EN 572-2 and ASTM C1036 -06
(U.S. standards). Certification for integrated management system confirming to ISO 9001 &14000,
OHSAS 18000
Procurement of raw material
◊ Diversified supplier base for each raw material to reduce any business risks on account of non-
supply
◊ c.18% of raw material is sourced within 100-150 km and 20% of the production is sold within
500 km
Product has been well received in the market and the Company has been increasing presence with
a distribution network of 758 agents spread across India
Competitive benchmarking
44
Player Installed
capacity (tpd)
Dealer network in diff geographical regions in India
North East West South Total
HNGFL 600 161 44 320 223 758
Saint Gobain 1400 212 75 210 279 759
Asahi 1200 112 40 90 177 419
Gujarat Guardian 550 93 30 160 171 454
Gold Plus 460 68 10 48 20 146
Sejal 550 54 11 80 81 226
Business Strategy and Expansion Plans
Key Success Factors
46
HNG’s Status Size and Strength of the Balance Sheet:
◊ Provides flexibility and power to negotiate withsuppliers and customers
◊ Enables the Company to build capacity and
pursue expansion plans
Cost management and optimal utilization of
resources (manufacturing assets)
◊ Ability to manage costs and suitably placed topass increases (if any) to the customer
◊ Ability to sweat the assets to the maximumextent for delivering better operational results
Strong technological capabilities
◊ Ability to innovate and provide customers withoptimized product, ensuring sustainable
competitive advantage in the market
Well diversified spread across verticals and
segments
◊ Presence across entire primary end userindustries and customer segments
◊ Market share of ~ 55%
◊ Low debt/equity of 0.35x
◊ Strong credit rating of AA+ (Long term)
◊ Diversified supplier base
◊ Strong focus on margin improvement
◊ Backward integration to reduce costs
◊ Optimum utilization of furnace capacities
◊ Introduction of NNPB technology
◊ Technology tie up with global majors including JV with OMCO, Belgium
◊ Presence across key user industries –
liquor, beer, pharmaceuticals and food
◊ Planning entry into Perfumery segment
Strategic initiatives
Emerge as a value driven manufacturer through increasing production of light weighted bottles thus enhancing margins
Setting up of a large Glass Manufacturing complex at Andhra Pradesh and proposed Greenfield projects in North and West India
Implemented high quality information systems (Business Intelligence modules and Performance Management Systems) to closely monitor and improve key operating metrics
Leverage capabilities of acquiring and turning around underperforming global assets by
replicating the model already successfully achieved in India
Higher complimentary cost advantages in sourcing higher volumes of IS machines and spares from GEIL, 100% subsidiary
Reinvest in fresh capacity to continue to take advantage of significant end user industry growth
◊ Increasecapacity of container glass by 3,150 tpd in next 5 years
Acquired four units in last eight years to enhance competitive edge by increasing geographic presence and acquisition of new customers
Leveraged existing relationships with customers and service their growing needs in other countries with supplies being made out of facilities in India
47
Strategic initiatives (contd.)
Brought modern management practices into play to enhance production, reduce cost and
strengthen overall efficiency (introduced NNPB technology in 2008)
Emerge as a leading player in the Float Glass container business in India
◊ Current market share of 15% and projected to grow further
◊ Further capacity of c. 1,000 tpd planned to be added to existing capacity of 600 tpd
Captive mining for silica procurement for Rishra plant (West Bengal) and Float Glass plant
(owned by HNGFL)
Technology tie up with Global majors
Implementation of information systems to closely monitor and improve key operating metrics
48
Expansion plans
49
Capacity
addition (tpd)Investment Other comments
Greenfield in
Andhra Pradesh
650 INR 7.0 bn
• Land has already been allotted
• Project commenced from July‟10• Targeted project completion date is Mar‟12
Greenfield in
North650 INR 6.0 bn • Land under identification
Greenfield in
West650 INR 6.0 bn
• Procurement of equipment for the new facility
• Civil work to commence soon
Maintenance
capex/ Rebuild1,045 INR 11.4 bn • Maintenance and furnace rebuilds
Other expansion plans include
Acquisitions (domestic and international) and would be guided by the “ value buy” proposition, as in the past
JV with OMCO, Belgium for Moulds/ Moulds Accessories
Shift to gas in manufacturing process, by replacing Furnace Oil and LPG at Bahadurgarh and Neemrana;
agreement signed with Essar for supply of Coal Bed Methane to Rishra plant
Designing and mould manufacturing facility in the Company, with own Foundry
◊ Proposed JV with OMCO, Belgium to provide furthercost advantage
Economies of scale in procurement of Raw Materials/ Consumables
Competitive advantage in sales – quantity and pricing
Introduced NNPB for the first time in India thus reducing bottle weight and producing more bottles,
boosting margins
Sand Mining – Bankura, Sand beneficiation plant for Rishra unit
◊ Currently exploring opportunities for other plants as well. Assurance of long term supplies,
economy and betterquality
Increase in transportation fleet – ensuring both economy and in-time delivery
Enhancing margins
50
Bahadurgarh Already in place
Neemrana Commenced in September, 2010
Rishra Expected by April, 2011
Financial Snapshot
All values in INR million
Consolidated P&L
Particulars FY08 FY09 FY10
Net Revenue 10,291 13,305 13,834
Net Revenue growth 46.7% 29.3% 4.0%
PBITDA 2,165 2,388 3,192
PBITDA Margin 21.0% 18.0%1 23.1%
PBIT 1,455 1,634 2,323
PBIT Margin 14.1% 12.3% 16.8%
PAT2 1,205 1,081 1,541
PAT Margin 11.7% 8.1%1 11.1%
52
Note: 1 Due to high global crude prices, overall recession in global economy and some losses in financial derivative transaction2 PAT does not include adjustments for share in associate company
Realisation, volume and revenue
53
765,478 782,585695,820
14,677
17,127 17,377
-
225,000
450,000
675,000
900,000
FY 2008 FY 2009 FY 2010
-
10,000
20,000
30,000
40,000
Sales Quantity in MT (LHS)
Average Realisation in INR/MT (RHS)
13,110 13,599
10,212
21%
18%
23%
-
6,000
12,000
18,000
24,000
30,000
FY 2008 FY 2009 FY 2010
0%
5%
10%
15%
20%
25%
30%
Sales in INR m (LHS)
PBITDA margin (%) (RHS)
54
Realisation by segment
SegmentNet Realizations (INR/MT) CAGR
(2008-10)FY2008 FY2009 FY2010
Food 14,655 17,730 18,377 12.0%
Soft Drinks 15,873 18,107 20,132 12.6%
Beer 12,242 15,433 16,066 14.6%
Liquor 13,852 16,658 16,503 9.2%
Pharmaceuticals 16,505 19,117 19,726 9.3%
Toiletries 15,593 18,787 18,560 9.1%
Vials 25,643 29,404 29,246 6.8%
Household 20,077 21,445 22,363 5.5%
Total 14,677 17,127 17,377 8.8%
Realisation has further increased by approximately 6-7% w.e.f. 1 August 2010
Particulars FY08 FY09 FY10
Net Fixed Assets 8,979 9,904 11,380
Investments 1,139 1,021 1,446
Net Working Capital 3,074 4,087 4085
Total Assets 13,192 15,012 16,911
Shareholders equity 8,799 9,490 10,545
Secured Loans 2,896 4,180 5,495
Unsecured Loans 1,313 921 171
Deferred tax liabilities 184 421 700
Total liabilities and equity 13,192 15,012 16,911
Long term debt/ equity 0.17 0.35 0.36
Total debt/ equity (x) 0.5 0.5 0.5
Consolidated Balance Sheet
55
All values in INR million
Operating in a capital intensive industry, the Company has been able to maintain a
total debt/ equity ratio of 0.35x
Hindusthan National Glass & Industries Ltd. (HNG)
THANKYOU
For any queries/to obtain more info, please
write at investor.relations@hngil.com
Annexure
Management team
58
Jagdish Prasad Kasera, Senior President
Over 40 years of experience. Joined Company in Jan-98. Responsible for operations and M&A
Worked with several prominent groups - Williamson Magor, Usha Martin, Aditya Birla and Ispat
Fellow member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. Also a Qualified Cost Accountant.
Ratan Lal Khandelia, President
Over 34 years of experience. Joined Company in Mar-99
Currently looking after Bahadurgarh, Rishikesh and Neemrana Plant
Worked with various companies, including MP Birla Group and Ferro Alloys Group. Qualified Chartered Accountant from the Institute of Chartered Accountants of India
Vinay Saran, Senior Vice President - Marketing
Over 22 years of experience in the field of consumer products and consumer durable marketing. Joined Company in 2007
Key member of the governing body of the Indian Institute of Packaging, Mumbai, All India Management Association, Kolkata, Management Association, National HRD Network and the Indian Institute of Packaging, Kolkata
Laxmi Narayan Mandhana, Chief Financial Officer
Qualif ied Chartered Accountant and Company Secretary
Over 20 years of experience in in f inance - comprising capital issues, mergers, acquisitions, banking, project activities, business evaluations and monitoring. Is associated with the Group for about seven years
Member of the Finance Committee of the Confederation of Indian Industry, Eastern Region
Expert in corporate f inance, taxation and accounts
Management team
59
Animesh Banerjee, Senior Vice President
Over 23 years of experience in polymers, pharmaceuticals, chemicals, fine chemicals, petrochemicals, dyes and intermediates, paints and varnishes, food processing and FMCG
Worked with companies like Shaw Wallace, IPCCL, Mafatlal Industries Ltd., TATA Kansai, Berger Paints
Currently looking after Rishra, Nashik and Puducherry Plant
Post graduate from IIT Kharagpur and MBA from IIM, Kolkata
Amar Chand Jain, Vice President – Tech Centre
Over 47 years in all areas of Container Glass Production. He joined the Company in 1963
Currently is a leading member of the Group Technical Centre, responsible for Research, Development, Technological Absorption, Innovations, Acquisitions and New Projects
He is a science graduate
Ram Surat Prasad Gupta, Vice President
Over 35 years of experience in various industries - electrical (lighting division Philips), mechanical (HNG & Ind.), electronics (Binatone Electronics), process industries (Sheela Foam)
He studied engineering (mechanical) and did his post graduation in management
Associated with Quality Certifications
Chandra Singh. K Mehta, Plant Head – Nashik
He started his career with M/s Hindusthan Development Corporation Limited and worked with M/s Shakti Insulated Ltd before joining HNG
He has served 21 years in the career
Management team
60
Jalaj Kumar Malpani, Vice President - Commercial
He handles corporate MIS, annual business plan and quarterly performance reviews
Recipient of Jawahar Award for meritorious performance in the area of cost reduction and cost control
Worked with SAIL for 15 years at Bokaro Steel Plant and CMO, Kolkata, and ICI India Ltd for one year. Worked closely with Mckinsey & Co in the area of inventory management and debt
Kulur Satish Shetty, Plant Head, Puducherry
Over 28 years of experience, with over 25 years in the field of glass manufacture. He joined the Company in 2006
He has worked with Bharat Electronics Ltd ,Taloja ,Maharashtra (a public sector company), Videocon Narmada Glass, Bharuch ,Gujarat, and Hotline Glass Ltd, Gwalior, Madhya Pradesh
Holds a bachelor degree in mechanical engineering from a regional engineering college, Surathkal, Karnataka
Devdutta Hoare, Exports Head
Over 19 years of experience in in marketing of industrial products in India and abroad. Joined Company in 2007
Previously worked with Dr. Beck & Co, Atul Limited and Gwalior Chemicals
He is chemical engineering graduate from Jadavpur University, Kolkata
Bimal Kumar Garodia, Vice President - Finance
Over 20 years of industry experience. He joined the company in Apr-08
Previous experience includes Bajaj Eco-tech Limited, a wholly owned subsidiary of Bajaj Hindusthan Ltd
He is qualified Chartered Accountant, Cost Accountant and a Company Secretary
Management team
61
Bishnu Kumar Kedia, VP - Materials
Joined Company in 2003
Previously worked with Khaitan (India) Limited, Agarwal Hardwares Limited and Magma Leasing Limited
B. Com. (Hons.) from St. Xavier‟s College (Calcutta University) where he scored 49th rank in the University and received national scholarship. He is qualified Chartered Accountant
Kuldeep Kumar Sharma, Plant Head – Neemrana
Over 31 years of experience in glass industry
He is B.Sc., M.A. (Eng), M.Ed.. Took training at O.I. (USA) for glass operations and quality management systems, HACCP (hazard analysis & critical control points) Course from DNV, IMS (Integrated Management System)
Shammo Roy Choudhury, AVP – HR
Has over 25 years of rich experience having worked in renowned multinationals Pfizer, Otis Elevator Co (I) Ltd & Flakt India Ltd and engineering company Shriram Bearings Ltd & Stone India Limited
He is Commerce Graduate from St Xavier‟s with Post Graduate in Industrial Relations & Personnel Management from Xavier Institute of Social Service, Ranchi
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