IFGL Refractories Limited
An Indian Multi-national
Disclaimer
Certain statements in this presentation concerning our future growth prospects, are
forward looking statements, which involves a number of risks and uncertainties that
may cause actual results to differ materially from those in such forward looking
statements. Risk and uncertainties relating to these statements include and are not
limited to risk and uncertainties relating to fluctuations in sales, earnings, our ability to
manage growth, intense competition, our ability to manage operations, fluctuations in
demand, our ability to successfully complete and integrate potential acquisitions,
performance of our subsidiaries, political instability and changes in legal restrictions
and general economic conditions affecting our industry. The Company may from time
to time make additional written and or oral forward looking statements. 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.
Page 1
IFGL Refractories Highlights
•
One of the best known Special Refractory Manufacturer of India
•
Largest exporter of Refractories from India
•
Crossed Rs 1000 Million Export in 2007-08
•
Recipient of CAPEXIL Special Export Award for Refractories for five successive
years
•
Star Export House –recognised by Ministry of Commerce
•
Quality System certified- BS EN ISO 9001: 2000
•
Reputed for introducing new technology products in India
•
Uninterrupted Dividend paying (since 2002-03)
Page 2
Industry Scenario & Opportunities
Page 3
Refractory Industry Overview
Global Refractory Production
4%
World Steel
Crude Steel Production
5%
16%
37%
26%
Rest of World
China
RestOfAsia
Europe
US
India
12%
End use- segments
7%
3%
4%
Steel
Cement
Glass
Non ferrous
Others
12%
74%
Page 4
2007 – 1,343 million tonnes growth of 7.5%
2006 – 1,244 million tonnes growth of 8.9%
2005 – 1,142 million tonnes
World Steel – on growth path after consolidation
World Crude Steel Production
Million MT
1600
1400
1200
1000
970
848 850 904
799
789
777
755
1069
1142
1244
1344
800
600
400
200
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Page 5
Global Market Opportunities for Refractories
Steel Scenario
•
BRIC led growth has revitalised Steel IndustryBRIC’s share in world production grown from
31% in 2001 to 48.2% in 2007
•
Strong growth expected to continue as Steel
consumption still very low in Developing regions
•
Increased demand for Special Refractories,
being consumable to Steel Industry
•
Limited competition for Special
Refractories
•
Buoyant outlook for Steel Industry, both in
Indian and Overseas markets
Page 6
Indian Steel Industry – a bright future
•Resources
•Abundant Iron Ore reserves
•Strong Managerial skills in Iron and Steel
making
•Large pool of skilled Man-power
•Established steel players with strong skills in
steel making
•Developments
SAIL,TISCO, ESSAR,JSW have announced
ambitious Capacity expansion plans
Arcelor Mittal and POSCO major International
players coming to India
Year
•Opportunities
•High economic growth driven by industry
•Faster Urbanisation
•Increased Infrastructure Asset Building
•Automobiles and component industry growth
•Policy
•Pro-active stance of Govt.
•Encouragement for overseas investments
Page 7
Steel
production
% Growth
Mln tons
2002-03
34.7
2003-04
38.7
11.53%
2004-05
43.4
12.14%
2005-06
46.5
7.14%
2006-07
50.7
9.03%
Steel production- Current production & Planned capacity
200
Current
(2005- Planned
06)
200
Steel Production (Mn Tons)
180
160
140
120
100
80
70
51
60
39
43
46
FY 05
FY 06
56
62
40
20
SAIL
13.5
RINL (Vizag)
3.5
Tata Steel (Jamshedpur) 4.7
Tata Steel (Orissa)
Tata Steel (Jharkhand)
Tata Steel (Chattisgarh)
Essar (Hazira)
2.5
Essar (Orissa)
Essar (Jharkhand)
Essar (Chattisgarh)
JSW (Vijaynagar)
3.5
JSW (West Bengal)
JSW(Salem)
0.3
Ispat
2.2
26.0
10.0
10.0
6.0
12.0
5.0
7.5
4.0
6.0
3.2
10.0
10.0
2.0
5.0
Current
(2005- Planned
06)
POSCO (Orissa)
Arcelor Mittal (Orissa)
Arcelor Mittal (Jharkhand)
Mukund
0.8
Jindal Stainless ,JSL
0.6
Jindal Stainless ,JSL, Dubri
Bhusan (Orissa)
Bhusan (Jharkhand)
JSPL (Chattisgarh)
1.2
JSPL (Orissa)
JSPL (Jharkhand)
Jayaswal NECO
0.6
EAF/IF/Others
13.0
Total Crude Steel
0
FY 04
FY 07E FY 08E FY 09E FY 10E FY 20E
Page 8
46.4
12.0
12.0
12.0
2.8
1.2
1.6
2.8
3.0
2.4
6.0
5.0
2.0
20.5
200.0
Proposed state-wise New Capacity
J’khand:
38 mtpa
W Bengal:
14 mtpa
Ch’garh:
9 mtpa
Orissa :
50 mtpa
AP:
3.3 mtpa
Karnataka: 9.7
mtpa
IFGL Plant
Page 9
SAIL
Tata Steel
RINL
Essar
Bhushan
JSPL
JSW
Ispat
Mittal
POSCO
IFGL - Introduction
Page 10
Brief history of IFGL Refractories
1979
Indo
Flogates
founded
1970s
1983
Collaboration
with Flogates
UK
1980s
• Manufacture of Flocon
Slide Gate Mechanism
& refractories
1993
IFGL
Refractories
Founded
Collaboration
with Harima
Corp., Japan
1999
Purchase
of stake
from
Vesuvius
Indo
2000
Flogates
Awarded
merger
ISO 9001
with IFGL
Refractorie
s
1990s
• Manufacture of Slide Gates for
Furnace and convertors
• Manufacture of Continuous
Casting Refractories started
• Manufacturing IPV Porous Plug
started
• Export Thrust
Page 11
2005
Acquired
Monocon
Group
2006
Acquired
Goricon
Group
2000s
• Lances
• Darts
• Monolithics
• Castables
Highly efficient international manufacturing operations . . .
Monocon International
Refractories
Denaby, UK
Tianjin Monocon
Tianjin, China
Mono Ceramics Inc
Michigan, US
Monotec Refratarios
Fortaleza, Brazil
Page 12
IFGL Refractories
Products:
•Continuous Casting refractories
•Slide Gate system & refractories
•Ladle bottom Porous Plugs
•Tap Hole Sleeves
•Furnace Gate & refractories
•Cast Products
•Monolithics/Castables
•ZIRCON & Zirconia Nozzles
Works:
Corporate Office:
Technical Collaborator:
Sector ‘B’
Mcleod House
Kalunga Industrial Estate
Krosaki Harima Corporation, Japan
3, N S Road
P.O. Kalunga – 770 031
Kolkata-700001
District – Sundargarh
Orissa - India
India
Page 13
(A Subsidiary of Nippon steel)
Production Facilities- UK & America
Office & Works:
Davy Road, Old Denaby,
South Yorkshire, UK
•
ISO 9001 accreditation
•
Products
–
Lances
–
Tundish spray
products
–
Slag control darts
–
Other Monolithics
Engineering Products
–
Slag control Dart
machines
–
Ladle & EF Monocators
–
Tundish spray
machines
–
SPV
•
•
Office and works:
Pipestone Road
Benton Harbor
Michigan 49022
USA
•
ISO 9001
accreditation
•
Products
–
Lances
–
Precast &
Castables
–
Purge Plugs
Page 14
•
Office in Sao Paulo
•
Works:
Av. Jandira, 316Conj.4
Cep 04080-001
Sao Paolo
Brazil
•
Products
–
Tundish spray
–
Precast
–
Castables
Production Facilities- China
New
plant
•
•Office & Works:
Tianjin Economic
Development Area
Tianjin 300457
P R China
• Products
- Slag Control Darts
- Cast Products
- Purge Plugs
• Office & Works:
Tianjin Economic
Development Area
Tianjin 300457
P R China
• Products
- Monolithics
Page 15
Worldwide Marketing
Network
Ukraine
Germany
France
Romania & Slovakia
UK Italy
Poland Sweden
Russia
USA, Canada, Mexico
Turkey
Egypt
Iran
Malayasia
Aus, NZ
Chile
S.Africa
Marketing offices/ Works
Page 16
Agents
Technical Know How
•
Current
KROSAKI HARIMA CORP.,JAPAN
New Generation Slide Gate Systems
Continuous Casting Refractories
ALCAR INTERNATIONAL, U.K
Tube Changer device
for Slab Caster
Page 17
IFGL - Performance
Page 19
Consolidated Operations
Rs Million
Financial Results for Year ended 31/3/08
Particulars
31-Mar-07
31-Mar-08
Change-%
Net Sales
3226.95
3780.07
17.14%
EBITDA
499.44
553.67
10.86%
Profit ( + ) / Loss ( - ) before Tax
372.05
408.88
9.90%
Net Profit ( + ) / Loss ( - ) after tax
262.37
284.88
8.58%
15.48%
11.53%
8.13%
14.65%
10.82%
7.54%
7.58
8.23
EBITDA Margin
PBT Margin
PAT Margin
EPS
Page 20
Standalone Operations
Rs Million
Financial Results for Year ended 31/3/08
Particulars
31-Mar-07
31-Mar-08
Change-%
Net Sales
1508.19
1713.42
13.61%
EBITDA
332.32
356.88
7.39%
Profit ( + ) / Loss ( - ) before Tax
252.61
261.69
3.60%
Net Profit ( + ) / Loss ( - ) after tax
163.91
168.51
2.81%
22.03%
16.75%
10.87%
20.83%
15.27%
9.83%
4.74
4.87
EBITDA Margin
PBT Margin
PAT Margin
EPS
Page 21
Overseas Operations
Rs Million
Financial Results for Year ended 31/3/08
Particulars
31-Mar-07
Net Sales
EBITDA
Profit ( + ) / Loss ( - ) before Tax
Net Profit ( + ) / Loss ( - ) after tax
EBITDA Margin
PBT Margin
PAT Margin
EPS
Page 22
31-Mar-08
Change-%
1718.76
167.12
119.44
98.46
2066.65
196.79
147.19
116.36
9.72%
6.95%
5.73%
9.52%
7.12%
5.63%
2.84
3.36
20.24%
17.75%
23.23%
18.18%
IFGL Group - Strong financial performance
Rs Million
Rs Million
Financial performance (year ended 31 March)
0
•
•
2003
2004
2005
2006
2007
2008
Turnover
741.4
930.3
1129.2
2307.2
3226.9
3780
EBITDA
121.6
178.9
225.5
363.1
499.4
553.6
EPS (Rs)
0.86
2.49
3.45
5.37
7.58
8.23
Strong growth in Sales
Highly cash generative – EBITDA Rs 55 crores yearly and growing
Page 23
0
IFGL Refractories, India
EXPORTS & TOTAL TURNOVER
1800
VALUE(Rs Million)
1600
1400
1200
1000
EXPORT
TURNOVER
800
600
400
200
0
01-02
02-03
03-04
04-05
05-06
06-07 07-08
FINANCIAL YEAR
YEAR
EXPORT
TURNOVER
01-02
112
454
02-03
339
741
03-04
497
930
Page 24
04-05
688
1129
05-06
752
1303
06-07
870
1508
07-08
1011
1713
Global Market Opportunities for Refractories
Geographical distribution - Steel Production & IFGL Group sales
Sales
Rs million
708
1363
422
761
525
3780
Steel production
13%
4%
India
19%
14%
Europe
Asia (excl India)
Americas
Others
India
Europe
Asia (excl India)
Americas
Others
50%
Sales- Geographical
India
Europe
Asia (excl India)
Americas
Others
Steel Production
Million MT
53
365
701
180
44
1343
13%
20%
India
Europe
Asia (excl India)
23%
Americas
32%
12%
Page 25
Others
Achievements 2007-08
• New Dart Plant started operating in China
• New Product introductions:
– Full range of Castables
– Zirconia nozzles
• Integration of Goricon Production facilities into Monocon to
achieve Cost efficiencies
• All overseas subsidiaries generating profits
• Continued enhancement of Kalunga Plant capacity
• Expansion of Marketing network
Page 26
CAPEX
Capital Expenditure
120.0
106.4
106.4
Rs Million
100.0
80.0
60.0
51.3
45.9
40.0
20.0
0.0
2004-05 2005-06 2006-07 2007-08
Page 27
Capital Expenditure
Capacity- India
Capacity Shaped (Pcs)
800000
720900
700000
720900
30000
25000
624900
564900
600000
Capacity Unshaped (MT)
756000
24000
20000
15000
500000
10000
384900
400000
5000
300000
300
300
700
1000 1000
02-03
03-04
04-05
05-06
0
02-03
03-04
04-05
05-06
06-07
07-08
Page 28
06-07
07-08
Capacity- Global
Product
Location
Company
India
IFGL Refractories Ltd.
Units
Carbon Bonded Refractories for
Continuous Casting
Slide Gate Refractories
Purge Plugs
Cast Products
Unshaped/ Castables etc.
UK
USA
Brazil
China
China
Capacity per
annum
pcs
pcs
pcs
pcs
MT
360000
300000
24000
72000
24000
Monocon International Refractories Limited
Lances
Darts
Unshaped
pcs
pcs
MT
10800
240000
30000
Mono Ceramics Inc
Lance
pcs
12000
Monotec Refratarios Ltda
Unshaped
MT
6000
Tianjin Monocon Refractories Co Limited
Unshaped
MT
24000
Tianjin Monocon Aluminous Refractories Co Limited
Darts
pcs
180000
Page 29
Future Outlook
Page 30
IFGL Refractories Shareholding Pattern & Dividend History
Public
14.94%
Dividend
25.0%
20.0%
20.0%
17.5%
17.5%
15.0%
15.0%
Mutual Funds /
institutions
13.76%
10.0%
10.0%
Krosaki Harima
4.57%
Sojitz Corp.
9.90%
12.5%
5.0%
Promoters
56.83%
0.0%
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Listed on:
•Bombay Stock
exchange
•National Stock
Exchange
Page 31
Action Plan 2008-09
LIKELY SCENE
ACTION PLAN
•
•Full Utilisation of the new Dart Plant in
China
Likely scarcity of Refractories due to:
– Pressure on supply of Raw Materials
– New Capacity / increase in Steel
Production
•2nd shift operation of the Monolithic
Plant in China
•Develop market of Zirconia nozzles and
Castables
•
Achieving full capacity utilisation in
Kalunga(Rourkela) Plant
•Debottlenecking to take care of next
1/2 years
•New Plant for CC Refractories Planned
in Kandla SEZ
Page 32
New Project CC Refractories at Kandla SEZ
•
Existing plant running very close to full capacity
•
Huge increase in demand expected due to high
growth in Steel Industry
•
Overseas Sales growing fast, driven by
– Group’s acquisitions of refractory companies
in UK, USA, Brazil and China
– Resulting in logistical support and increased
acceptance of IFGL products by overseas
customers
•
Port based plant in Western India will reduce
transit time and reduce delivery cost to
customers in Middle East and Europe
•
Project to be implemented by IFGL Exports Ltd., a
subsidiary of IFGL Refractories Ltd.
•
Capacity planned 300000 pcs per annum (existing
•
Project Cost Rs 500 Million
360000 pcs) of CC products
Page 33
Kandla
Existing plant at
Rourkela
SEZ Benefits
•Duty Benefits: SEZ units may import or procure from the domestic sources all
their requirements of capital goods, raw materials, consumables, spares,
packing materials, office equipment, DG sets etc. duty free.
•100% IT exemption (10A) for first 5 years and 50% for 5 years thereafter.
Reinvestment allowance to the extend of 50% of ploughed back profits for
further 5 years
•External commercial borrowings by units up to $ 500 million a year allowed
without any maturity restrictions.
•Flexibility to keep 100% of export proceeds in EEFC account. .
•Exemption from interest rate surcharge on import finance.
•Exemption to sales made from Domestic Tariff Area to SEZ units from Central
Sales Tax.
•Exemption from Service Tax to SEZ units
Page 34
Progress- Kandla CC Project
•
Land already acquired
•
Key Personnel appointed
•
Orders for Long delivery
equipment placed
•
Contractors / equipment
suppliers being identified
Bhoomi puja being
perfomed by company
senior executives
Page 35
Outlook for 2008-09
25%
20%
Sales
Profit
Page 36
Thank You
Page 37