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Various Types of Steel – 2011-12

Vision : Godrej in Every Home and Work Place Mission : Enriching Quality of Life Everyday Everywhere Values : Integrity | Trust | To Serve | Respect | Environment. Various Types of Steel – 2011-12. Current Trends. Extremely price sensitive market.

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Various Types of Steel – 2011-12

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  1. Vision : Godrej in Every Home and Work Place Mission : Enriching Quality of Life Everyday EverywhereValues : Integrity | Trust | To Serve | Respect | Environment

  2. Various Types of Steel – 2011-12

  3. Current Trends • Extremely price sensitive market. • Consumers demanding more value for each Rupee spent • No compromise on quality and after sales service. • Consumer seeking : • Experience and bonding with the product. • Are conscious of environment and seeking eco-friendly products – Products should be certified for 3/4/5 star rating. • Constant Innovation for : • Better Aesthetics • More Functionality • Latest technologies • Dealers and Retailers are required to spruce up show rooms and offer more comfort to prospective buyers. • Display entire range of Products. Image Image Image Image

  4. DEMAND DRIVERS • Summer Temperature Rising • With Fastest growing middle class society in Asia CAGR in excess of 20% expected during next 5 years. • As per the National Council for Applied Economic Research, MIDDLE CLASS families have an annual income between • Rs.3.4 Lacs to Rs.17 Lacs at 2009-10 price levels. 6th Pay Commission also to enhance purchasing power. • Customers are offered zero interest charges. NIL processing fees and zero down payment to woo customers. • LG and Samsung strategy of multinationals, for aggressive market penetration. Japanese companies are bridging price gaps. They propose to encash on strong brands like Daikin, Hitachi, National, in the • air conditioning sector. • Also investing in manufacturing and R&D Centres in India. • Replacement cycle of white goods and other consumer durable sredudced from 9/10 years to about 4/5 years. Middle class • segment buying more than one unit e.g. 2/3 Acs, 2 TVs, etc. • Penetration levels : • 18% Refrigerators • 6% Washing Machines • 1% Microwave • 2% Air conditioners • Shows a huge market yet to be tapped • Effective branding and advertising has lead to increased consumer awareness with a growing preference for new models with • more features at the same price point. INNOVATION – KEY TO SUCCESS

  5. RAW MATERIAL - STEEL • 1. QUALITY PARAMETER • * Sheets = Table Top Flatness (Bow Height max. 2 mm) • * Surface free from any surface defects • * Right angle / diagonal accuracy. • DELIVERY CONDITIONS & EXPECTATIONS • * Strictly on time – In the right mix of various sizes, nominal penalty on a per M/t basis – Purpose to reduce inventory to 2 • days from current level of 8 days. • * Panels to be pre-inspected and certified by vendor. • * Flexibility in quantities to take care of market fluctuations. Vendors to be flexible. Fluctuation of + 25% of ordered • quantities to be accepted. • FUTURE TRENDS • * Door Panels for premium models – PVC on GI – mostly imported from Korea, Taiwan. • * PPGI – for new manufacturing locations. • * Plastics for side panels / door – New technology using High impact Polystyrene + ABS • * Refrigerant Gas – R134 Cooling Gas, eco friendly.

  6. Macro trends – Economic DevelopmentFavourable Economy Trends Economist Intelligence Unit Economist Intelligence Unit Pvt Consn & Infrastructure to boost economy growth. India will spend 9% of its GDP (US$1 Trillion on Infrastructure over the next 5 years) … Technopak Technopak High Economy and Infrastructure growth

  7. Macro trends – Economic DevelopmentFavorable demographic trends • India to become less • poorer • Highly affluent • households (> 10 L) • to increase from 4 mn to 12.5 mn in • urban India and from 1.4 mn to 3.6 mn • in rural India. • The middle class is the big story in urban • and rural India • No of individuals across general education • levels to increase from current 659 mn • to 806.5mn by 2020 • Growth in education levels to drive • consumerism

  8. Retail Trend Rapid Retail transformation Journey of Organized Retail Indian retail industry – Large but highly unorganized M&A Shakeout, Consolidation, High investment End to end supply chain mngmnt, back end operations technology processes Range, portfolio format options Per capita Retail space Entry, Growth, Expansion, Top line focus 2000 2005 2008 2011

  9. Retail TrendConsumer Durable Retail trends Consumer Durable retail – Overall a small segment but Big within organized Total retail industry Breakdown of Organised Retail US $281 bn Source: Marketing White book 2010 Source: Marketing White book 2010

  10. Retail Trend Consumer Durable Retail trends 19% growth Consolidation in the industry happening at a rapid pace with 19% growth in organized retail consumer durable outlets

  11. Durable Industry Perspective Growth seen in consumer durable ownership by households fuelled by access to electricity as well as financing to purchase and operate electric appliances

  12. Applaince Industry Industry Perspective Indian Durable industry* Market: 2010-11 Television Refrigerators Washing Machines Air Conditioners MWO Units: 87 Lakhs Value: 9770Crores Units: 36 Lakhs Value: 3400 Crores Units: 35 Lakhs Value: 7650 Crores Units: 135 Lakhs Value: 12875 Crores Units: 12.5 Lakhs Value: 875Crores Growth Over 2009-10 Units: 6% Value: 11% Growth Over 2009-10 Units: 8% Value: 6% Growth Over 2009-10 Units: 21% Value: 27% Growth Over 2009-10 Units: 26% Value: 28% Growth Over 2009-10 Units: 15% Value: 14% Major growth being witnessed in Air conditioner and MWO categories, where product penetration is still low while moderate growth in Refrigerator category * Godrej Categories

  13. The future trend– Categories poised for further growth Domestic Industry Ref 2010-11 : 34549 Cr. 2014-15 : 66461 Cr. CAGR : Refrigerators : 12%; Washing Machines : 18% Air Conditioners : 26%; Microwaves : 12%; TV : 13% 2.22

  14. GAD-Performance 10-11&Business Outlook 2011-12 Godrej Product Mix movement Refers Air Conditioners 1475 cr 2045 cr 10% 3% 3% 22% 3% 17% 43% 17% 11% 12% 38% 66% 58% Washers • Category value in Cr. • Category mix in % MWO CTV 45% 334% New businesses to drive growth 2.22 Value in Rs. Cr.

  15. ESTIMATED STEEL CONSUMPTION 2010-11 M/t 10.0 Million Refrigerators : 1,80,000 4.0 Million Washing Machines : 48,000 4.2 Million Air Conditioners 42,000 ------------ 2,70,000 =======

  16. GODREJ – Laurels, Credos, Awards, Recognition • Godrej Eon Refrigerators awarded : • The “Design Excellence Aware” by Business World and Material Institute of Design. • CNBC Awaaz Consumer Award for three consecutive years. • Readers’ digest felicitated Godrej with the “Most Trusted Brand gold Award’ for four consecutive years. • FMCG Federation of India honoured Godrej Eon with the Most Preferred Frost Free Refrigerator Brand at the 5th Consumer • World Awards. • In 2008, the Urjavaran Foundation felicitated the company with the Best Model Impact towards Energy Efficiency • Offering 100% Green Refrigerator since 2002, when research revealed the dangers of CFC/HFC/HCFC laded refrigerants. • Product development and relevant technology done through our in-house R&D manned by more than 100 engineers and • Designers • National Readership Survey data shows that every third household in India owns a Godrej Refrigerator. • Only Godrej manufactures refrigerators which are 100% CFC, HFC and HCFC free.

  17. THANK YOU

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