Welcome
July 6, 2007
Lalbhai Group

Commenced manufacturing activities in 1908

Textiles, Chemicals, Engineering, Finance

Group sales US$800 million

Health, Education, Culture
The Arvind Mills Ltd
Indian Institute of Management, Ahmedabad
Atul Ltd

Founded in 1947 by Kasturbhai Lalbhai

Manufacturing and marketing of chemicals

Create wealth, generate employment, be self reliant
A moment of historic significance
An aerial view of Atul site
Manufacturing sites
2
Land
1300 acres
Effluent treatment plant
30000 cubic metres‫׀‬day
Secured solid waste disposal facility
50000 MT
Captive power plant
40 MW
Water storage (2 weirs)
2 million cubic metres

1150 houses

2 schools

Medical centre

Recreational facilities
JVs
Partner
Duration
Area
American Cyanamid
1947-2000
Agro‫׀‬Pharma
American Home
Products
2000…
Pharma
ICI
1955-1995
Dyestuffs
Ciba
1960-1999
Polymers‫׀‬Pharma
Intermediates
Customers World-wide
Sales
Rs cr
10 0 0
895
814
800
681
600
566
400
200
0 3 -0 4
0 4 -0 5
0 5 -0 6
0 6 -0 7
Profit
Rs cr
from operations
80
62
62
60
43
40
20
34
33
31
15
7
0
0 3 -0 4
0 4 -0 5
PBDT*
Excluding VRS
0 5 -0 6
PBT*
0 6 -0 7
Financial Highlights 06-07
05-06
06-07
Rs cr
Growth over PY
% of Budget
A
A
B
Net Sales
814
895
915
10%
98%
Contribution
240
234
265
(3)%
88%
Contribution %
29
26
29
PBIDT
91
90
109
(1)%
83%
PBDT
62
62
76
0%
82%
PBT
33
31
43
(6)%
72%
Profit Reconciliation: CY vs PY
Rs cr
Operating PBT 2005-06
33
Reduction in profit due to:
Higher sales to production ratio over PY
Higher repairs & maintenance
Increase in raw material prices (net), etc
Higher depreciation
(11)
(4)
(30)
(2)
Total reduction
(47)
Increase in profit due to:
Dollar appreciation
11
(Rs1.01|$ on $106 m exports)
Contribution on incremental sales
24
Lower employee cost
4
Exchange difference on FCL
6
Total increase
45
Operating PBT 2006-07
31
Cash Flow from Operations
Rs cr
06-07
05-06
Inc|(Dec)
Operating profit before capital changes
80
87
(6)
Inventories
37
(38)
75
Debtors
(37)
(14)
(22)
Other receivables
(7)
(12)
4
Creditors & other payables
23
18
5
Cash generation from operations
96
40
56
Tax payments
(17)
(2)
(15)
VRS payments
(5)
(21)
16
74
17
57
Net cash flow from activities
Cash Flow from Operations (continued)
Rs cr
06-07
05-06
Inc|(Dec)
74
17
57
(46)
(54)
8
22
(14)
36
Interest payments
(28)
(29)
1
Dividend payments
(10)
(7)
(3)
Dividend receipts
5
4
1
Other inflows
7
83
(76)
24
0
24
Net cash flow from operations
Uses:
Capex
Proceeds (repayments)
from borrowings
Net increase in cash|equivalents
Position of Borrowings 2006-07
Rs cr
06-07
05-06
Inc|(Dec)
Secured Loans
319
308
11
Unsecured Loans
49
41
8
Total
368
349
19
Note:
One loan of US$5.5 m availed end of March
has been parked partly as short term FDR amounting
to Rs16 cr carrying 11.25% p.a. interest rate.
Gross Block
Gross block
Rs cr
CY
PY
Inc|(Dec)
715
688
27
Division
Project
Amount
AG
Indoxacarb 40 TPA
6.50
AR
p-Cresol 10,000 to 12,000 TPA
2.00
AR
p-Anisic acid 150 TPA recovery
1.70
CO
Benzathrone Toluene extraction
1.20
CO
Vat Green 1 120 TPA
1.10
COR
Wyeth assets
8.00
Others
6.50
Total
27.00
AG
Salient features
 3rd largest producer of 2,4D in the world
 Increasing domestic distribution network
 Increasing input prices
 Reducing formulation margins
 Shrinking demand in Indian market
Strategic actions planned | under implementation
 Increase brand business
 Reduce variable cost of production
 Introduce value added products
 Enter high price markets
AR
Salient features
 Global leader in 3 major products
 Increasing input prices
 Margins under pressure for commodity business
Strategic actions planned | under implementation
 Increase capacity of existing value added products
 Enter high price markets
 Introduce more value added products
BI
Salient features
 Volatile selling prices
 Margins under pressure being commodity business
Strategic actions planned | under implementation
 Introduce value added down stream products of
 Increase capacity of Resorcinol
 Achieve cost reduction through improved technology
CO
Salient features
 Established player in VAT dyes
 Increasing input prices
 Increasing domestic consumption
Strategic actions planned | under implementation
 Acquire synergistic vat finishing capacity
 Reorganise marketing setup
 Introduce new value added products
 Increase sourcing activity
 Introduce high performance pigments
PI
Salient features
 Global leader in one major product
 High contribution margin
Strategic actions planned | under implementation
 Increase capacity of 2 major products
 Introduce new phosgene based products
 Introduce several other intermediates pharma inters and APIs
PO
Salient features
 Increasing input prices
 Margins under pressure for commodity business
Strategic actions planned | under implementation
 Reorganise marketing set-up
 Expand capacity of BLR
 Introduce brands
Capex
Rs cr
Div|
Unit
Brief description
Project
Cost
PBT
2007-08
PBT
Full Cap
Payback Period
(Years)
1
2
2
7
2
1
2
AR
PAAL capacity increase from
1000 to 2000 tpa
3
BI
Resorcinol capacity increase
from 1300 to 2000 tpa
14
BI
New ACPD system with multiframe
cell cover for CE improvement
from 92% to 96%
3
BI
Refurbishment of existing
Mercury plant
3
PI
PTSI manufacture in PHIN
4
1
5
2
Various jobs (Div|Unit)
13
2
7
2
40
5
22
3
Grand Total
1
To run the existing Mercury plant till
2010
Major Initiatives
(Consideration|Implementation)
Div
AG
AR
BI
CO
PI
PO
Initiative
Rs cr
C|I
Sales
Catalytic chlorination|Chlorophenol
C
50
2,4 D capacity enhancement
C
30
PAA expansion
I
54
PAAL expansion
I
6
Multipurpose plant
C
36
Sulfonics
C
22
Resorcinol expansion (3000 MT)
C
34
Resorcinol derivatives
I
3
New products
I
25
Textile auxiliaries
I
7
PTSI
C
14
New PHIN products
C
6
Epoxy expansion
I
96
Total
383
Direction, value added products
AG
Brands, Introduction of new products
AR
F&F chemicals, Antioxidants
BI
Resorcinol downstream, SO2‫׀‬SO3‫׀‬Cl2 downstream
CO
Specialty dyes & organic high performance pigments
FL
Essential oils
PI
Phosgene based intermediates, other pharma inters and APIs
PO
Consumer marketing of resins
Value Added Products
(Launched)
AG
CO





Clodinafop
Imidacloprid
Indoxacarb
Metsulphuron methyl
Sulphosulphuron

Triazoles
AR


p-Anisic aldehyde
p-Anisyl alcohol
BI

Resorcinol

Vat Red 10
PI






PO
1,1’-Carbonyl diimidazole
1-Chloroethyl chloroformate
1-Chloro-2-methylpropyl chloroformate
DDS
4-Nitrophenyl chloroformate
Vilsmeier reagent

DDM
Value Added Products
(Pipeline)
CO
AG




Fipronil
Imazethapyr
Mecoprop-p
Quizalop-p
AR




p-Anisyl
p-Anisyl
p-Anisyl
p–Cresyl
acetone
phenylacetate
propanol
acetate
BI





1,3-CHD
4-Chlororesorcinol
4-n-Hexylresorcinol
R F resins
RDME
 Auxiliaries
 High performance pigments
PI









Azepine
1-CECC
1-CECF
1-CEIC
HEGC
Lauryl chloroformate
4-MPCF
PTSI
L–Valine
PO
 Small consumer packs
Brands AG
Brands PO
◄
Thank You