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Indo Rama Synthetics India Ltd.

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Indo Rama Synthetics India Ltd.

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    1. Indo Rama Synthetics (India) Ltd. Analyst Meet Quarter 2 & H1 2006-07 Results and The opportunities ahead Mumbai 18 October, 2006

    2. 2 Agenda Crude & Raw Material Comparative Fibre scenario & Polyester Factors influencing the performance of Indo Rama and the way forward Indo Rama’s Expansion Project Indo Rama Performance

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    6. 6 MEG Supply-Demand Scenario MEG is a cyclical business. MEG usually operates with 5-7 years of misery and 2 or 3 years of joy. In this cycle we have now had more than 2 or 3 good years due to the lack of investments in the late ’90s and early 2000. So that is why => MEG having had several good years - the prolonged good results have lead to a large amount of investment - in both the Middle East and also in Asia. The spate of investments has lead us to looking in the medium term to a sizeable MEG surplus. MEG is a cyclical business. MEG usually operates with 5-7 years of misery and 2 or 3 years of joy. In this cycle we have now had more than 2 or 3 good years due to the lack of investments in the late ’90s and early 2000. So that is why => MEG having had several good years - the prolonged good results have lead to a large amount of investment - in both the Middle East and also in Asia. The spate of investments has lead us to looking in the medium term to a sizeable MEG surplus.

    7. 7 Polyester tolling margins at historical low

    8. 8 Comparative Fibre Scenario & Polyester

    9. 9

    10. 10 Availability of cotton has decreased

    11. 11

    12. 12 Promising Outlook Global trade in textile & clothing to touch $ 700 – 800 bn by 2010 from existing $ 460 bn India’s export to grow from $ 15 bn to $ 50 bn in 2010 Even considering only a 15% share of the incremental global opportunity of over $ 300 bn Share in global textile trade to grow from about 4% today to 6% by 2010 With GDP growth of 6-8%, domestic per capita consumption expected to rise from 4.7 Kg. (World : 9.9 Kg.) to 6-7 Kg. by 2010

    14. 14 In Short…

    15. 15 Factors influencing the performance of Indo Rama and the path ahead…

    16. 16 Negative factors

    17. 17 Positive factors

    18. 18

    19. 19 Way forward Reduced production cost : Commissioning of new polyester plant ? Economies of scale and advanced technology Reduction in raw material cost due to improved PTA & MEG supply domestically as well as internationally Reduction in power & fuel cost due to reduced FO prices and commissioning of CPP Increased demand of Polyester : Less availability of quality cotton due to increasing demand Domestic Polyester consumption showing rapid growth Huge export potential after Quota free regime Thus both top line & bottom line are expected to show healthy increase in future quarters to come

    20. 20

    21. 21 Advantage Indo Rama India

    22. 22 Performance Update

    23. 23 Financial Highlights - IRSL

    24. 24 Financial Highlights - IRSL

    25. 25 Financial Highlights - IRSL

    26. 26 Financial Highlights - IRSL

    27. 27

    28. Indo Rama’s Expansion Project

    29. 29 Polyester Capacity Expansion – Existing V/s Planned

    30. 30 Benefits from Capacity Expansion Manufacturing & scale of economies strengthened by the doubling of capacity Reduction in Power cost : Power production cost from CPP is 38% lower Optimum utilization of energy efficient common utilities Right timing of plant expansion with robust demand of Polyester from 2007 coupled with long term softening of raw material prices

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