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Kohinoor Maple Leaf GroupPAKISTAN

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Who We Are

Pioneers of industrial and commercial development in

Pakistan, having 80 years of management experience.

Ranked amongst the top five groups of Pakistan both in

the textile and cement sectors.

Annual revenues in excess of US$ 350 million.

Market capitalization worth of US$ 216 million

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KMLG’s Current Business Portfolio

Maple Leaf Cement Factory Limited

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Kohinoor Textile Mills Limited

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Maple Leaf Capital Limited(Newly Incorporated)

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Cement Industry of Pakistan

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Pakistan Cement Industry

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Cement is one

of the major

industries of

Pakistan.

Major Industry

Pakistan

currently

consumes 147

kgs per capita

of cement.

This number is

expected to

rise

dramatically.

Pakistan’s

strategic

location has

huge

potential for

export to

neighboring

countries like

India, U.A.E,

Afghanistan,

Iraq & Central

Asian States.

Leading

players have

made huge

investment in

capacity

enhancement

and

technology up

gradation.

Huge Domestic

Demand

Significant Export Potential

Massive Expansion &

Technology Up gradation

Pakistan one of the top 15 producers

of the world

7 Associations of cements of different countries. Global Cement Magazine June 2014

Major Players of Pakistan Cement

Industry

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MLCFMAPLE LEAF CEMENT FACTORY LIMITED

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A Reliable

Strategic Partner

Offering over 330 days/year run

factor with emissions conforming to

EU standards.

Why MLCF ?

One of the largest single cement

production sites of Pakistan with

huge economies of scale.

Excellent Infrastructure and state of

the art European technology from

FLSmidth.

Energy efficient plants consuming

only 720 Kilo Calories per kg of

clinker.

Gas generation and heat recovery

systems across entire production

lines.

Only diversified cement producer

with premium Brands both locally

and regionally.

Only site with railway links resulting

in significant freight savings.

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Excellent InfrastructureLAND SqMt ACRE

OCCUPIED AND UNOCCUPIED IN FACTORY

BUILDINGS, RESIDENTIAL BUILDING, ROADS

AND GREEN BELTS

4,377,970 1,082

BUILDINGS FACTORY BUILDING SQFT

Phase II - Line I 467,339

Phase II - Line II 833,096

Phase I 153,393

White 191,377

WHRP 11,153

Housing Colony 326,009

TOTAL AREA 2,065,233

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MLCF Own Power Generation

Machine Type Nos MW

Waste Heat Recovery Boilers & Generators 1 16.000

Wartisila Engine (99% Gas, 1% Diesel) 1 15.887

Nigata Engines (60% HFO, 40% Gas)

(100% Gas Conversion in process)4 23.840

National Grid availability 1 50.000

Additional Gas is available to generate up to 14 MW of power.

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MLCF Power Mix at Current

Production Levels

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Average Cement Production M. Tons 2,960,435

MWH Required Mwh 35.14

Utilization of Sources % USD/KWH Mwh

Gas 34% 0.07 12.00

WHRP 37% 0.01 13.00

National Grid 29% 0.15 10.14

Total 35.14

Average Power

Cost per KWH

9 Cents

MLCF Energy Performance

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739

724

714

710 710 710 710 710

695

700

705

710

715

720

725

730

735

740

745

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

K,Cal / Kg of Clinker

Actual Projected

MLCF Energy Performance

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98

99

98

93 93 93 93 93

90

91

92

93

94

95

96

97

98

99

100

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Kwh / ton of cement

Actual Projected

(OPC)

Ordinary Port Land Cement

(SRC)

Sulphate Resistant Cement

(LAC)

Low Alkali Cement

(WPC)

White Port Land

Cement

98% Market share

MLCF Product Portfolio

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The company has a diversified product range and is the only

cement company in Pakistan capable of producing Grey, White,

Sulphate resistant and Low alkali cement.

MLCF QMS Certifications

QMS ISO 9001:2008

• Certification by : Lloyds Registered Quality Assurance (UK)

API Spec Q1

• Certification by :American Petroleum Institute (API)-USA

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These certificates confirms that MLCF has developed and

implemented highest quality management system to

demonstrate its ability to consistently provide a product that

meets customer and statutory and regulatory requirements, and

to address customer satisfaction through the effective

International Product Quality Standard

Certificates

Indian Standard Approved

Sri Lankan Standard Approved

South African

Standard Approved

OPC GREY CEMENT

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These certifications confirms that our products meet the

respective country's cement standards requirements.

International Product Quality Standard

Certificates

Indian

Standard Approved

Malaysian

Standard Approved

OPC WHITE CEMENT

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These certifications confirms that our products meet the

respective country's cement standards requirements.

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Geographical Advantage of

Pakistan and MLCF

A-grade quality of

limestone.

Deposits over 1,000 years

requierment.

Limestone Reserves of Pakistan

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MLCF

Pakistan’s Geographical Advantage

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Future Prospects of Cement in

Pakistan

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Demographics of Pakistan

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A young population means faster and more urbanization.

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28

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30

30

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35

35

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39

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-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00Country wise Comparison Median Age (2013)

Median Age (Years)United Nations Department of Economic & Social affairsTechnical Paper No. 2013/3World Population Prospects The 2012 Revision (Volume I: Comprehensive Tables)

Worldwide Per Capita

Consumption of Cement

26Associations of cements of different countries. Global Cement Magazine June 2014

MLCF STRATEGY

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• Initiated in 2009

•Basis …. McKinsey 7 S Model

Long Term Strategic Plan

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McKinsey 7S

Structure

SystemsStrategy

Skills Style

Staff

Shared

Goal/

Values

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Ha

rd “

Ss”

So

ft “Ss”

McKinsey 7S

The basic premise

of the model is that

there are seven

internal aspects of

a successful

organization that

need to be in

harmony.

Structure

SystemsStrategy

Skills Style

Staff

Shared

Goals/

Values

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Ha

rd “

Ss”

So

ft “Ss”

McKinsey 7S

The basic premise

of the model is that

there are seven

internal aspects of

a successful

organization that

need to be in

harmony.

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Structure

SystemsStrategy

Skills Style

Staff

Shared

Goals/

Values

McKinsey 7S

Shared

Goal/

Values

• To be a top 3 EBITDA % player in the cement industry

• Embedding of Core values

• Higher EBITDA % achievement through focus on Energy,

Distribution and Branding

• Cross functional teams to drive strategy Structure

Strategy

• Integration of quality & audit department

• IT Leverage across value chainSystem

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McKinsey 7S

Skill • Strategic advantage through Human Capital development

• Drilling down core values and Fast track development through

Management development Program

• Informal interactive leadershipStyle

Staff

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McKinsey 7S

Shared

Goal/

Values

• Major areas of focus in

order to be the top 3

EBITDA % player in the

cement industry.

Energy

Distribution

Brand Loyalty E

BIT

DA

%

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McKinsey 7S

Shared

Goal/

Values

• Embedding of core values.

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Cross

Functionality

Collective

WisdomCreativity

Empathy Integrity

McKinsey 7S

• Strategy on Energy.

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Strategy

•50% pet coke in line II

•Optimization of WHRP output

•Energy reduction through Six Sigma projects

•Reliability Centered Maintenance through 5 why

analysis

•Coal fired power plant

•Dryer project for white cement

•TDF

•Coal transportation through train

Knowledge Driven

CAPEX Driven

McKinsey 7S

• Strategy on Distribution.• Moving closer to our customers by becoming a distributor

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Strategy

Head Office based Sale

System

500 DealersSynchronized

through IT

RegionalBased Sale

System

McKinsey 7S

• Strategy on Branding.

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Strategy

Truck Drivers

Management Team

Call Center

Schemes:

• Hotel

• Khazanz

Promotional

Events

Dealers Retailers

Master

MISTRI

Scheme

Masons

Promotion

Schemes

Customers

Industry Rivalry

Supplier Power

Threat of new

Substitutes

Customer Power

Strategy Validation through Porter Model

Cost

Focus

Differentiation

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Threat of new

Entrants/Technology

Industry Rivalry

Supplier Power

Threat of new

Substitutes

Customer Power

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Threat of new

Entrants/Technology

Strategy Validation through Porter Model

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Supplier Power

Customer Power

Threat of new

Substitutes

Threatof new

Entrants/Technology

Strategy Validation through Porter Model

Bargaining power of suppliers reduced through:

National

GridSNGPL

Fuel Transporters

• Alternate Fuels (pet coke)

• Optimization of In house

power generations & island

mode (WHRP)

• Reduction in kilo calories

(six sigma)

• Coal Fired power plant

• Coal transportation through

railway

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Supplier Power

Customer Power

Threat of new

Substitutes

Threatof new

Entrants/Technology

Strategy Validation through Porter Model

Bargaining power of customers reduced through:

Brand

Loyalty

Large Dealer / retailer

Network

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Supplier Power

Customer Power

Threat of new

Substitutes

Threatof new

Entrants/Technology

Strategy Validation through Porter Model

Threat of New Entrants

LOW

Threat of New Technology

LOW

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Supplier Power

Customer Power

Threat of new

Substitutes

Threatof new

Entrants/Technology

Strategy Validation through Porter Model

Very Low

Strategy Validation through Porter Model

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Energy strategyCOST

Branding&

Distribution strategy

DIFFERE

NTIATION

White CementFOCUS

Strategy

Strategy Validation through Porter Model

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Short term

Achieve full capacity utilization through export

Medium term

Launch small packing and cement wash application

Long term

Launch white cement putty

Structure

Strategy Validation through Porter Model

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Cost of non conformance

•Focus •Differentiation•Capacity to sell

Cost

of

energy

Capacity

to produce

Team RCM

Team Energy

Team Improvement

Branding & distribution

team

System : Integration of Quality & Internal Audit

Reduced non-conformance through fusion of Quality &

Internal Audit

Facilitate re-engineering by making them part of each team

Strategy Validation through Porter Model

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Quality

Audit

System : IT Leverage across value chain

Strategy Validation through Porter Model

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IT

Order Intake & Booking

Order Dispatch

Hot Spot

Call Center

RCM

NC System

Click System

IT is the focal point of all teams

and all new initiatives

Skill : Strategic advantage through Human Capital Development

Strategy Validation through Porter Model

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Investment in trainings & development

increased manifold

Training linked to promotion & development

Customized training in technical areas

Mandatory core skills for all management

employees

CEO Driven

Staff : Drilling down core values and Fast

track development through Management

development Program

Strategy Validation through Porter Model

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•Drill down core values to supervisory level

•Enhance screening at entry level.

•Market based package

Attract

•Introduce concept of mentoring for HODs

Retain•Identify high potential achievers and run them through fast track program

Motivate

Style : Informal

interactive leadership

Strategy Validation through Porter Model

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Enhance self esteem of every

employee

Informal dressing and use of white

board culture.

Fortification of team culture

Raising and Resolutions of NCs in a methodical 5

why’s analysis.

SOP culture

McKinsey 7SRESULTS THUS FAR

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2011

9th

12.24%

2012

4th

30.14%

2013

3rd

39.00%

EBITDA position in industry

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2014

3rd

37.20%

20151st Qtr

2nd

36.05%

EBITDA Achievements

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5.55

%

Rs. 1.023 Billion

EBITDA

The Next Step

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Coal based Power Project

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Study & Design by: Fichtner Germany

For all fuels

BO

ILER

22 MW CST

TUR

BIN

E

Coal based Power Project

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Main Highlights

Capital Cost

•USD 39 Million

•Rs. 4 Billion

Average Electricity Cost per unit

•USD 0.085/KW

•Rs. 8.77/KW

SavingsVs

National Grid

•USD 0.109/KW

•Rs. 11.23/KW

Payback period

•2.5 Years

Financial Projections

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Financial Projections

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Major Assumptions 2014-15 2015-16 2016-17 2017-18 2018-19Local Sales Growth 4.70% 6.00% 7.00% 7.00% 7.00%

Grey - Local PKR/Bag-MRP 520 570 590 610 630

Grey - Sea Export USD / Tons-FOB 62 62 62 62 62

Grey - Afghanistan USD / Tons-ExFact 47 47 47 47 47

Grey - Wagha Export USD / Tons 56 56 56 56 56

White - Local 679 679 679 679 679

White - Export USD /Tons 88 88 88 88 88

Coal USD/Tons-CNF 90 95 100 105 110

Petcoke USD/Tons-CNF 100 100 100 100 100

FX Rate USD 105 110 115 120 125

Financial Projections

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2014 2015 2016 2017 2018 2019

30-Jun 30-Jun 30-Jun 30-Jun 30-Jun 30-Jun

Income Statement Actual Projected

Total Net Revenue PKR in Billion 18.97 21.59 25.04 27.42 30.02 32.86

GP% 34.39% 36.86% 41.54% 42.80% 44.70% 47.08%

Opreating Profit % 26.65% 28.59% 34.53% 36.09% 38.29% 40.96%

Net Profit After Tax PKR in Billion 2.83 3.60 4.93 5.87 7.25 8.20

NP% 14.92% 16.66% 19.69% 21.42% 24.14% 24.95%

Cash Profit PKR in Billion 5.28 5.84 7.39 8.17 9.22 10.22

EBITDA % of Sales 37.65% 38.37% 42.67% 43.61% 45.57% 47.63%

EPS (PKR/Share) 5.36 6.82 9.34 11.13 13.73 15.53

EPS Growth% -13.99% 21.37% 27.03% 16.08% 18.94% 11.60%

Share Price (PKR) 30.05 47.72 70.06 89.05 116.73 139.81

Price Earning Ratio 5.60 7.00 7.50 8.00 8.50 9.00

Book Value per Share (BVS) 27.74 33.61 40.95 49.08 59.82 71.35

P/BVS 1.08 1.42 1.71 1.81 1.95 1.96

Dividend Pay Out 0.00% 10.00% 20.00% 30.00% 30.00% 40.00%

Dicidend Yield 0.00 1.43% 2.67% 3.75% 3.53% 4.44%

Debt Reduction Plan

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Year LTL STLCash

SweepTotal

Re

du

ctio

n

Sales

% a

ge

sa

les

2011 13,878 4,085 - 17,963 (160) 13,073 137%

2012 13,800 3,249 - 17,049 (914) 15,461 110%

2013 12,109 3,278 - 15,387 (1,662) 17,357 89%

2014 10,069 2,840 (1,200) 11,709 (3,678) 18,617 63%

2015 6,433 3,000 (2,000) 7,433 (4,276) 21,281 35%

2016 5,023 3,000 (2,000) 6,023 (1,410) 23,721 25%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2011 2012 2013 2014 2015 2016

LTL

STL

Total

PKR in Million

Pakistan Railway Contract

Highlights

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Executed on

June 09,20141

Advance freight deposit

PKR 650 Million2

For Transportation of• Coal/Petcoke• Cement

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Per Month Saving PKR 45 MillionPer Year Saving PKR 672 MillionEPS Effect RS 1.27

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Thank You

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