hindusthan national glass & industries ltd. (hng)

Private & ConfidentialHNG BackgroundAbout HNGTurnaround specialistBoard of DirectorsGroup synergiesProduct offeringsExpansion plansImproving efficienciesIndustry & Peer comparisonFinancial HighlightsPRESENTATION OUTLINEPresentation Outline

Private & Confidential

Private & ConfidentialAboutThe tradition of manufacturing quality glassConstantly improving qualityUsing best in class technologyStrong financialsFullest strategic support from promotersAccumulated business knowledge of last 60 yearsCommitment to 360 qualityVast managerial poolWidening global footprintIndustry leadershipLong profitable relationship with customers and suppliers


Private & ConfidentialPioneering VisionTo 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.


Largest Player (about 65% market share) in the Indian Glass Container Market Manufactures Glass bottles for multiple segments and in multiple sizesInstalled Capacity of about 10 Lac MT/annum Has consistently invested in Technology (WDV of Fixed Asset stands at Rs. 1105 Crores as at 31st Dec., 2009)Gross Revenues of Rs. 1148 Crs. in FY08, Rs. 1439 Crs. in FY09.Number of people working in the Company: around 7000Phenomenal Growth in Revenue & Margins over the years (FY 2006 to 2009) - Sales CAGR at 47% and PAT CAGR at 64%.FY 2009 Exports at Rs. 58 Crores, with higher continued explorationThe latest long term credit rating of the Company is AA and it is PR1(+) for short term, both from CARE.Private & ConfidentialHNG A Glass Apart


HNG has successfully turned the albatross around the necks of the old managements, into cash cows with its management expertiseAce Glass Containers was acquired in the year 2002 from Owens Brockway, in order to own Pondicherry and Rishikesh Plants, which were sick units. The acquired Pune Plant, unviable, was closed with fullest assets-recovery.Subsequently, the L&T plant in Nashik, another loss making unit, was acquired in the year 2005Acquired the Assets of Haryana Sheet Glasss Neemrana Unit in Oct. 2007, revamped and attained Commercial Production in a record short time by March 2008 Today all these units contribute to wealth creation for the Company and its stakeholdersPrivate & ConfidentialTurnaround Specialist


Private & ConfidentialGrowth Organic & Inorganic19522000-012001-022004-052006-07PresentGrowthInstalledCapacity of30 TPDExpandedCapacity to1100 TPDAcquisition of Assets of NeemranaPlant Capacity2540 TPDCapacity at1800 TPD post OwensacquisitionL&T plantacquisition Capacity at 2150 TPDCapacity at 2435 TPDTogether constitute Ace Glass Containers2007-08Expanded2760 TPD


Private & ConfidentialPan India presence

LocationCapacity (TPD)FurnacesRishra7603Bahadurgarh6903Neemrana1801Rishikesh4102Nashik3601Pondicherry3601Total276011


Mr. Chandra Kumar Somany, ChairmanMr. Sanjay Somany, Managing DirectorMr. Mukul Somany, Joint Managing DirectorPrivate & ConfidentialBoard of Directors


Private & ConfidentialHNG - Accreditations


Private & ConfidentialIn-House Group Synergies (existing)Glass Equipments (India) Ltd.Glass Plant Machinery and spares manufacturer. Produces Global standards of technology at much lower costs.HNG Float Glass Ltd.Greenfield Float Glass plant set up at Halol, Gujarat at a cost of Rs. 600 Crores (Debt Rs. 350 Crores : Equity Rs. 250 Crores), having achieved the commercial production and products launched in the market. Would cater to the Realty, Automobile and domestic household sector.HNG FLOAT


*Includes 20.1% held as treasury shares in the CompanyNote: Total shares 873.39 lacs of face value Rs. 2 each, fully paid upPrivate & ConfidentialShareholding Pattern

Particular% Shareholding(as on 31st Dec, 2009)Promoters74.2Public Shareholding25.8Insurance Companies 1.2Bodies Corporate2.8Individuals21.8*



Product offerings


Private & ConfidentialWide variety of productsProduces more than 15 mln. bottles per dayRanging from 5 ml to 3200 ml High quality ISO 9001/2000Multifarious industries:Liquor & Beer PharmaceuticalsBeveragesProcessed FoodsCosmetics etc.


Private & ConfidentialHNGs Blue Chip Customer baseBeverages: Non- Alcoholic and Alcoholic PharmaceuticalsCosmetics & Processed food


Private & ConfidentialSector-wise supply


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Food14%

Beer13%

Liquor54%

Pharma12%

Others7%

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Expansion plans


Figures in MTPrivate & ConfidentialProduction Capacity

ParticularsFY08FY09FY10EFY11EFY12ERishra720720760760825Bahadurgarh690690690745745Neemrana0180180180180Rishikesh410410410410410Pondicherry360360360360360Nashik360360360360460New Facility----500Total25402720276028153480


Private & ConfidentialRamp-up in capacityHNG plans a capital expenditure of Rs. 795 Crores to further increase production capacity and rebuilds within next two years.Greenfield plant in AP : 310 Crs. ( 500 TPD)New Furnace in Nashik : 125 Crs. ( 100 TPD)Maintenance Capex : 360 Crs. ( 120 TPD)Margins expected to grow significantly with increase in capacity, better operating efficiencies and economies of scale and sharing of fruits of light weighting and NNPB initiatives. Large savings also to come from Plants switching to Gas Neemrana w.e.f. April, 2010 and Nashik w.e.f. April, 2011.



Improving efficiencies


Private & ConfidentialKey to improved resultsHigh improvement in Draw and Pack efficiencies from ~75% in FY03 to 87-89% in FY09 has resulted in higher margins Going forward, constant R&D expected to help increase efficiencies further.


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YearRishraB'GarhNeemranaRishikeshPondiNashik

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YearRishraB'GarhNeemranaRishikeshPondiNashik

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09 - 10878789888887

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Private & ConfidentialKey Reasons for Improving MarginsInstallation of natural gas operated power generators and in manufacturing process, as well as the well planned capital expenditureWorld class designing and mould manufacturing facility in the Company, with own FoundryEconomies of scale in procurement of Raw Materials/ConsumablesLight weighting, while producing stronger bottles Mutual benefit to customers and HNGHNG introduced NNPB (Narrow neck press & blow technology) for the first time in IndiaNeemrana & Nashik Units converting to Gas, Net saving of Rs 20 Crs. (approx) p.a.



Industry & Peer comparison


Private & ConfidentialPackaging IndustryUS $ 15 bln. market size in India expected to grow at 14% in the medium termThe present share of about 6-7% of Glass Packaging in the total Indian Packaging industry offers huge opportunities on account of health, hygiene and environmentIndia constitutes a mere 3% of global packaging Industry, while population constitutes 16% of global.Growth in allied industries: Food Processing, Retail, FMCG, Alcohol and Beverages, Perfumes & Cosmetics, Pharmaceuticals; is a major growth driver for glass bottles


Private & ConfidentialDown Stream DriversLiquor - Indians consume 200 mln cases of IMFL and 220 mln cases of country liquor. Increasing trend of social drinking, driving the sector growth at almost 13%.Beer - Shipments in 2009- 174 mln cases against 137 mln cases in 2007. Consumption has been increasing by 15 to 20%. Food Processing - USD 70 billion industry has grown at 13.7% in only 4 years and is expected to grow at a rate of 10% in next 5 yearsPharmaceuticals - India is the fastest growing market, where average spending has doubled over past decade. Increased consciousness for wellness leads to demand. Indian Pharmaceutical market is expected to see a CAGR of 12-15% over the next 3 years (as per IMS research).Carbonated drinks - INR 6000 Cr. industry is expected to grow at 6-8% p.a.Cosmetics - Domestic cosmetics and toiletries segment is growing at 15- 20% and current industry size is USD 950 million, which is expected to become USD 1.4 billion in 3 years time.


Low Per Capita Consumption of Glass in India - significant scope for growthPrivate & ConfidentialGlass Industry


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Per Capita Consumption of Glass (kgs)

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Indonesia1.2

India1.4

Brazil4.8

China5.9

Japan10.2

Philippines10.6

Argentina18.8

Mexico19.5

UK27.5

USA27.5

France63.9

South Korea89

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Per Capita Consumption of Glass

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Private & ConfidentialGrowth through downstream IndustriesPer capita consumption of Glass in India is ~1.4 kgs, as against 27.5kgs in US and UK and 5.9 kgs in ChinaThe low per capita consumption of beer in India (0.8 ltrs. v/s 22 ltrs. in China) leaves substantial scope for increase in demandIndian Pharmaceutical Industry is valued at Rs. 250 bln, growing at 10% annually. Adoption of stricter government norms and rising industry standards in quality would further boost glass packaging in the pharmaceutical industryOnly 6% of all processed food in the country is packed in glass, which offers huge scope


Private & ConfidentialGlass a preferred packaging mediumEnvironment friendlyFull recyclability Lowest pollution (life cycle)Totally inert to contents, heat and UV rays Thus does not react with packed contentsVisibility of contents Versatility of design


HNGs peer group comprises of:Piramal Glass Ltd.HSIL LtdHaldyn Glass Gujarat Ltd.Excel GlassUniversalThough we are into business of container glass, we consider following float glass players as part of our extended peer group : Asahi India Glass Ltd.Gujarat Borosil Ltd.Gujarat Guardian Ltd.Saint Gobain India Ltd.

Private & ConfidentialPeer Set



Financial Highlights


All values in Rs. million** Not annualisedPrivate & Confidential Financial Performance

ParticularsFY06FY07FY08FY09 9M FY10Net Revenue4134701610213131109818EBITDA7391175214723592556EBITDA Margin18%17%21%18%26%PAT24028160310771308PAT Margin6%0.40%16%8%13%EPS (Rs.)4.34.3218.3612.3414.98**


All values in Rs. millionPrivate & Confidential Financial Performance

ParticularsFY06FY07FY08FY09 9M FY10Net Fixed Assets348283428923988511097Investments9713114610461396Net Working Capital14322341293539124154492311396130041484316647Met by :Net Worth201771498636935210623Secured Loans15662546287441525235Unsecured Loans90612481313921371Provisions434453181418418492311396130041484316647


Private & Confidential HNGILs Rating & RankingCRISIL Rating ( As on Feb 10)On Fundamental side 4/5 means Superior FundamentalsOn Valuation Side 5/5 means Strong upsideBusiness Standard Ranking ( Out of 1000 top listed corporates, as on Feb 10)Ranking in terms of Revenue - 299On Operating Profit Quantum 265On Net Profit Quantum 253


Private & ConfidentialHNG A ConglomerateLargest Player, about 65%, in the Indian Glass Container Market through organic and inorganic growth measures in the last 8 years, more than doubling the capacity in this small periodEntered the Engineering business by acquiring AMCL Unit in NagpurSynergistic diversification by setting up of Rs.600 Crores Float glass project in the Gujarat at Halol near Baroda


Private & ConfidentialDisclaimerThis presentation may contain certain forward looking statements regarding the business prospects of companies in the HNG Group, which are estimates and thus subject to a number of risks and uncertainties and therefore the actual results could materially differ from those in the said statements. The risks and uncertainties, relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, ability to manage growth, competition (domestic and overseas), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time and cost overruns on contracts, ability to manage international operations, government policy and actions with respect to investments, fiscal deficits, regulations etc., interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcements in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Group.


Hindusthan National Glass & Industries Ltd. (HNG) THANKYOU


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hindusthan national glass & industries ltd. (hng)

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