hindusthan national glass & industries limited presentation.pdf · hng global gmbh hng float...
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Corporate Presentation
Hindusthan National Glass & Industries Limited
Industry Overview
Global Packaging Industry
• As per World Packaging Organization, the global packaging industry is expected to be USD 597 billion by 2014
with ten year historical growth at ~ 3.1% CAGR
• Projected to grow at ~ 3.5% CAGR in the medium term mainly driven by growth in emerging markets (Asia
Pacific region)
34%
34%
27%
5%
Geography
Europe
Asia, Oceana, Africa & ME
North America
South & Central America
52%
15%
11%
9%
13%
End-User
Liquor
Beer
Food
Pharma
Others
Source: Owens-Illinois, Inc. - Investor presentation, March 2010
3
Packaging Industry - India
• At USD14 bn, Indian packaging industry has been
growing at ~ 15% over the last few years
• Expected to accelerate further with increasing
urbanization, growing middle class and
expansion of modern retail
• Indian glass container market is estimated to be
around USD 1.1 bn and is growing at the rate of ~10%
p.a.
• Entry barriers in Indian Container Glass industry is
owing to capital intensive nature
• Top 3 players are HNG, HSIL and Piramal Glass
• Low per capita glass container consumption of
1.9 kg in India as compared to other countries
(refer chart alongside).
• Strong economic drivers for end-user segments (liquor,
beer, pharmaceuticals, food, cosmetics etc.)
89
63.9
50.3
27.5
27.5
19.5
10.2
5.9
4.8
1.9
1.2
0 50 100
South Korea
France
Spain
UK
USA
Mexico
Japan
China
Brazil
India
Indonesia
World glass container per capita consumption in Kg.Market Overview
4
5
IMFL – Volume CAGR 10%Beer Packaged Food – Volume CAGR 12%*
Beer – Volume CAGR 11% Pharmaceuticals – CAGR 13%
Region-wise Demand(Mn Cases)
195 219
250
280 308
329
2010 2011 2012 2013 2014 2015
North
20%
East
10%
South
45%
West
25%
Region-wise Demand
North
20%
East
10%
South
50%
West
20%
1315
18
21
25
30
2010 2011 2012 2013 2014 2015
(US$ Bn)
North
29%
East
17%
South
25%
West
29%
Region-wise Demand
24 27
31 35
39
45
2010 2011 2012 2013 2014 2015
(US$ Bn)(Mn Cases)
* Assuming value growth of 7% out of overall growth of ~19%
Source: ASSOCHAM study, Capital Market Estimates
Source: AM Mindpower SolutionsSource: Datamonitor, Capital Market Estimates
Source: Datamonitor, Capital Market Estimates
End user Industry Overview
222250
277 287315
347
2010 2011 2012 2013 2014 2015
Company Overview
7
Company Overview
� Incorporated in 1946, promoted by the C K Somany Group
� Started operations with 30 TPD furnace at Rishra in 1952
� Organic & inorganic expansion from 1,100 TPD in 2001 to ~4,300 TPD in
FY13
� Market leader and the only pan-India player in the container glass
industry.
� New plant of 650tpd each to help consolidate position in South & West
� Brownfield expansion at Nashik, Maharashtra commissioned in
Q1 FY13.
� Greenfield expansion at Naidupeta, Andhra Pradesh
commissioned in Q2 FY13.
� Catering to all segments – IMFL, Beer, Pharma & Vials, Foods &
Beverages (F&B), Cosmetics
� Foray into global market through acquisition of assets of Agenda Glas
AG, Germany in May 2011
HNGIL
Glass Equipment
(India) Ltd
Quality Minerals
Ltd
HNG Global
GmbH
HNG Float Glass
Ltd
100%11.2% 100% 99.7%
Manufacturer of
Float & Processed
Glass
320 TPD glass
container facility at
Gardelegen,
Germany
Capital Goods &
Spares Supplier to
Glass Industry
Mineral Supplier to
Glass Industry
Group Structure
Listed on BSE since
Mar 1995 & on NSE
since Apr 2009
60 Years’ Experience in the Glass Industry
8
Shareholding Pattern as on date
Shareholding
Promoters 69.98
Public Shareholding 30.02
Insurance Companies 0.10
Bodies Corporate 4.86
Financial Institutional Investors 7.27
Individuals & Others* 17.79
Total 100.00
* Includes 16.76% held as Treasury Shares in the Company
Total 87.3 million shares
Listed at: National Stock Exchange (NSE) - HINDNATGLS
Bombay Stock Exchange (BSE) - 515145
Calcutta Stock Exchange (CSE) - 10018003
9
Mr. C K Somany, 80, Non-Executive Chairman
� Mr. C K Somany is an expert in glass technology, he provides policy guidelines for the management and administration
� He holds an F.B.I.M (London) degree and a degree in Glass Plant Instrumentation from Honeywell Brown, Minneapolis, USA
� Served as the President of the All India Glass Manufacturers' Association and is associated with various charitable and philanthropic organisations
� Currently the Chairman of CAPEXIL, sponsored by Ministry of Commerce & Industry, GoI
Mr. Sanjay Somany, 55, Vice-Chairman & Managing Director
� Has over 30 years experience in the glass industry and is closely involved in the technical and engineering aspects of the business
� He is a commerce graduate and holds a diploma in diesel engineering
� Served as the President of All India Glass Manufacturers' Federation (AIGMF)
Mr. Mukul Somany, 48, Vice-Chairman & Managing Director
� Over 26 years experience in the glass industry
� Led the acquisition, turnaround and integration of India business of Owens Brockway and glass business of L&T Ltd, re-engineered business processes across six units
� Currently the President of AIGMF, Executive Committee Member of CII (Eastern Region) & Member of CII National Council
Mr. Dipankar Chatterjee, 65, Independent Director
� Chartered accountant and senior partner of LB Jha & Co., Chartered Accountants and is a member of National Council of CII
� Former Chairman of CII-Eastern Region, member of the Central Council of ICAI, Chairman of the audit practices committee of ICAI
� Appointed member of the Padmanabhan Committee (set up to review RBI’s supervision over banks)
Mrs. Rita Bhimani, 70, Independent Director
� Noted Public Relations professional, Prolific columnist for mainline dailies and magazines.
� Nominated to the Hall of Fame by the Public Relations Council of India in Bangalore.
� Master’s degree holder from the University of Georgia, USA.
Board of Directors
10
Mr. Rakesh Kumar Sharma, 61, Executive Director
� Over 36 years experience in general management, EPC contracts and business development across Indian corporate sector
� Holds a graduate degree in Mechanical Engineering and masters in Marketing management
� Prior to joining HNG, he held a senior position at L&T
Mr. Ratna Kumar Daga, 72, Independent Director
� Vast experience in the fields of engineering and finance
� Former Chairman of Indian Institute of Materials Management, Kolkata, President of Calcutta Junior Chamber, President of Federation of Small & Medium Industries
� Holds PG degree in Business Management from the UK
Mr. Sujit Bhattacharya, 69, Independent Director
� Former senior partner of Lovelock & Lewes, Chartered Accountants, advisory experience in accounting, audit standards, corporate governance, business valuation &
taxation
� Fellow member of the Institute of Chartered Accountants in England & Wales, ICAI
� Was nominated as the Special Director by the BIFR, Govt of India
Board of Directors
11
Pan India Capacity of ~4300 tpd
Acquired Pondicherry &
Rishikesh plants of Owens
Brockway
Acquired L&T’s Nashik
Plant
Acquired Neemrana plant
of Haryana Sheet Glass
Brownfield expansion
at Nashik and
Greenfield plant at
Naidupeta, AP
Capacity Build-Up Through Organic & Inorganic Route
30
1100
2935
4235
30
105
1300
700
320
180
150
350
1952 2001 2002 2005 2007 2008 2010 2012 2013 2014
Total (TPD) Expansion (TPD) Acquistion (TPD)
12
Technological Strengths Leading to Smoother & More Efficient Operations
SAP Implementation for Better Integration & Standardization of Business Processes
� Accurate real-time information with enhanced visibility and operational controls
� Automation of report generation & month-end reconciliation
� Alignment of functional objectives with corporate business plan leading to better coordination across functions, manufacturing units & marketing offices
� Higher productivity through automation
� Improved customer service
� Cost control and uniform material code data across locations
� Online tracking of production and sales-related performance data
� Diversified vendor base for raw material procurement
� Captive sand beneficiation facilities
� In-house furnace maintenance & refurbishment capabilities
� Proven ability to run plants at high capacity utilization
� Draw and pack ratios consistently among the best in the
industry
Processes for Maximizing Capacity Utilization & Sales
Market Leader in Container Glass
14
Think Glass,
Think HNG
Market leader in container glass with pan-India presence, ~50% market share (including new plants in FY13)
End user segments expected to grow at double digit rate over next 3 years
Newly commissioned plants to improve market share in underserved markets
Demonstrated track record of inorganic growth through turnaround of sick units with highly skilled manpower
Use of best-in-class technology with captive developmental capabilities
Margin expansion due to higher scale & efficiency
Growth Drivers
15
Largest Container Glass Player in ~8,600 TPD Indian Market
Presence Across Segments – Play on Indian Consumption Story High Entry Barriers due to Capital Intensity
4,235
1,550
860
320 240 220 220 220 130
605
HNG HSIL Piramal Haldyn MBDL Universal Excel Janta Vitrum Others
(TP
D)
Pan-India AP Gujarat Gujarat Gujarat MH UP & GujPondi. UP KeralaPresence
Mkt.
Share50% 18% 10% 4% 2% 1% 8%3% 2% 2%
HN
G
HS
IL
Pir
am
al
Ha
ldy
n
Jan
ta
Vit
rum
Exc
el
Un
ive
rsa
l
MB
DL
Liquor � � � � � � �
Beer � � �
Pharma � � � � � �
F&B � � � � �
Cosmetics � � �
� Capital intensive business with recurring maintenance capex
� High customer stickiness
� Interdependence of output scale & timing
� Customization / bottle printing as per specs
� Significant economies of scale
� Integrated value chain from raw material mining, glass equipment &
moulds to printing
Source: Company estimates
Source: HNGIL
Dominant Share of Container Glass Market with Presence in All Segments
16
Catering to Significant Share of Customer Requirements Pan-India Player; Competitors Mainly Regional Players
HNG's Share in the Total Requirement of Each Customer (%)
MumbaiHyderabad
HNG
Naidupeta
Kosamba
Jambusar
Piramal
Padra
Haldyn
HSIL
Bhongir
Vitrum
Janta
Vadodara
Universal
Excel
MBDL
Source: HNGIL Source: HNGIL
Ghaziabad
Alleppey
Pan-India Presence Enabling Superior Customer Service
25%
40%
45%
50%
60%
60%
65%
70%
95%
John Distilleries
Pernod Ricard
ABD
United Spirit
Pepsico
SAB Miller
United Breweries
Coca Cola
Bajaj Corp
17
Customer Base Across all Segments
HNG Customer Base
PHARMACEUTICALS
BEER
LIQUOR
FOOD
SOFT DRINKS
18
Acquisition of 320 TPD Plant at Gardelegen, GermanyLocation Map
� Germany is the largest market in EU with ~20% share
� Annual demand in Germany of 3.8 million MT/year
� Acquired assets of Agenda Glas AG, one of the most modern production facilities in Europe, in May 2011.
� Agenda Glas had commenced production in Feb 2010
� Production capacity of 120,000 MT per year
� Currently produces flint glass of various SKUs
� HNG Global GmbH, is located closed to the regional raw material suppliers with easy and economic access to
all key raw materials.
� The Plant is ideally located for deliveries throughout Germany and to adjacent European Countries.
� Company’s technological edge is planned to be back pedaled in HNG’s Indian operations, as Germany is always
considered ahead in terms of technology.
� The Finished-ware quality in Germany is of superior standards than in India and it will help us embark the
upward quality journey in India.
International Operation - HNG Global Gmbh
Key Financials
Financial Details
Particulars 2014-15 2013-14 Change Y-o-Y
Net Sales 199,771 179,742 11.14%
Other Incomes 6,252 10,606 -41.06%
Increase/(Decrease) in Stock (5,565) 1,635 -440.79%
Total Revenue 200,458 191,983 4.41%
Raw Materials 62,896 53,832 16.84%
Power & Fuel 59,700 62,950 -5.16%
Packing Materials & charges 17,769 16,008 11.00%
Salaries & Wages 18,820 16,272 15.66%
Stores & Spares 6,483 6,227 4.12%
Overhead Expenses 7,114 10,258 -30.65%
Interest 25,906 25,652 0.99%
Depreciation 25,382 24,701 2.76%
Total Costs 224,070 215,901 3.78%
Amt in Rs./Lacs
9
Particulars 2014-15 2013-14 Change Y-o-Y
PBT (23,612) (23,917) -1.28%
Taxes 92 (2,099) -104.40%
PAT (23,704) (21,818) 8.65%
PBT Margin (%) -11.46% -12.56% -8.79%
PAT Margin (%) -11.50% -11.46% 0.38%
Cash Profit (PBT + Depreciation) 1,770 784 125.74%
Amount in Rs./Lacs
11
Financial Details
ParticularsAs on 31st
March 2015
As on 31st
March 2014
Share Capital 1,747 1,747
Reserve and Surplus (excluding Revaluation Reserve) 40,642 65,985
Long term Loans (LTT) 203,915 202,524
Short term Loans (STT) 65,744 53,565
Current Liabilities other than (LTT+STT) 63,527 62,392
Tangible Networth 42,388 67,732
Total Outside Liabilities 335,829 320,735
Fixed Assets (including CWIP) 242,790 265,066
Current Assets 126,205 111,112
Amount in Rs./Lacs
12
Key Balance sheet numbers
Thank You
For further information please log on to www.hngil.com or contact:
Bikash Kumar Sipani
HNG
Tel: 033-2254-3100
Email: [email protected]