6 Business Profile History Business Overview Products, Markets Oldest company in South India established in 1844.Company’s Indian Operation from Quilon in 1907.Acquired by RPG in 1988.Largest Employer in Kerala.Business OverviewManufacture of Tea & Rubber spread over 58,000 acres.Managing Plantations - 13 Tea & 11 Rubber.Pineapple, Banana, Pepper, Cardamom Etc.Engineering Division, Tissue Culture, Consumer Marketing, Clearing & Shipping.Products, MarketsTea - Orthodox, CTC, Organic, Packet, Flavored Tea bags.Rubber - Centrifuged, TSR, Sole Crepe, Latex Crepe.Markets - Domestic & Export to Russia, Ukraine, Europe, Egypt, Sri Lanka, Pakistan, Turkey & Middle East.
7 Business Excellence Rubber plantation company in India Tea producer in South India.Producer of pineapple in India.Corporate nursery with over 4.50 lac plantsEmployer in Kerala after the State Governmentbesides providing indirect employment to an equal numberLARGEST
8 Business ExcellenceHarrisons Malayalam Limited is the Winner of 7 Awards in the The Golden Leaf International Award 2009 organized by the Indian Tea Board and judged by an International Jury of Tea Tasters.
9 Premium Single Estate Teas ProductsTEAPremium Tea BagsPremium CTC & Orthodox TeasPremium Single Estate TeasOrganic TeaPopular TeaRUBBERPale Latex CrepesISNRCenexOTHER CROPSPineappleBananaPepperCardamomCoffee
10 Plantations TEA Location Estates Factories Wynad (North Kerela Tamil Nadu)AchoorTouramullaChundaleArrapettaSentinel RockWentworthMayfield1 CTC4 Orthodox1 CTC/OrthodoxVandiperiyar(Eastern Kerela)WallardieMoongalarPattumalay1 OrthodoxMunnarHigh Range(Kerela)Upper SurianalleLockhartPanniar2 CTCTotal1312 FactoriesRUBBERLocationEstatesFactoriesMooply Valley(North Kerala)MooplyPalapillyKundaiKaliyar3 FactoriesCenex, Indian Standard Natural Rubber (ISNR) andSkim GradesRanni Valley(Central Kerala)KoneyKumbazaLahaiMundakayamCenex, ISNR & Skim Grades.Venture Valley(South Kerala)NagamallayIsfieldVenturePLC/Sole CrepeTotal117 FactoriesPlanted6030 HaTotal14124 HaPlanted7366 HaTotal9293 Ha
12 Top Exporters (mln kgs) Tea Producers Top Producers (mn kgs)20082007China11601140India980986Srilanka318305Kenya346370Turkey155178Indonesia148150Vietnam144Bangladesh5958Others440468Total 37503803Top Exporters (mln kgs) 20082007Kenya383344Srilanka299294China297289India196179Vietnam115111Indonesia9584Argentina7674Malawi4047Uganda4244Tanzania2529Bangladesh810Zimbawe6Others6462Total16461575
13 Consumption is increasing more than production TEA : INDIAN SCENARIOThe Indian tea consumption demand is chugging along at about 2.5 – 3% CAGR , which is a demand growth of about million kg of tea.Consumption is increasing more than production
14 Tea prices would firm up more since domestic consumption was buoyant. TEA : INDIAN SCENARIOIndia’s Tea auction is switching to Digital Trading to achieve higher volumes , ensure fairer prices and lower transaction costs.Demand is coming from countries like Pakistan, Iran, Iraq and Egypt.Area under production is likely to remain Stagnant as major tea producers are of the view that the increased production should come from-Higher yield per hectare-Improved techniques of productionTea prices would firm up more since domestic consumption was buoyant.
15 Tea : Price RiseTea prices have increased in all the auction centers across the world in Jan-Jun 2009 over the same period last year.Indian teas fetched the world’s third largest price average (after Srilanka & Kenya) .SOUTH INDIANAUCTION PRICES(Calendar Year)2002200320042005200620072008Yearly average (Rs/Kg)42404743515067Year on Year (%Change)-4.76%17.50%-8.51%18.60%-1.96%34.00%HML Sale (CY 08)Avg. Price/kgSale (tonnes)Sales (Rs. Crs)Auction66.321011167Packet98.859499Bulk66.24415427Export69.83307621
16 HML Production vs Avg. Realisation Low production due to unfavourable Climatic Condition .In tonnesFY 05FY 06FY 07FY 08FY 09PRODUCED1354413651132381206812649BOUGHT9702250375027574465TOTAL1451415901169981482517114The average price of tea increased by 48.29% to Rs per kg in Q1 FY10
17 Tea : Infilling/Replanting The existing tea bushes are about years old.Originally about 6700 bushes were planted per hectare which was considered optimum at that time.Over the years the bushes have come down substantially which has resulted in decreased productivity.In the process of infilling new high yielding clones are being planted in the existing fields thereby increasing the population (to approx 9000 bushes per hectare) which will contribute to increasing the productivity by more than 50%.The benefits arise only after 4 years which is the optimal stage from when commercial harvest is possible.The projected expenditure for infilling is Rs. 1 Crs per annum for the next 3 years.Replanting being planned to increase Yield per hectare
19 Rubber : Global Supply Crunch Global consumption of natural rubber is projected to increase at 3 to 5 % per year up to 2015, largely because of rising demand by China, Europe, Russia and India.(mln tonnes)World Natural RubberConsumptionProduction201010.519.78201512.0311.51202013.7213.57Consumption of natural rubber has surpassed production , globally as well as in India
20 Ribbed Smoked Sheet (RSS- 4) Rubber : PriceRibbed Smoked Sheet (RSS- 4)Indian Prices have managed to surpass International Prices which augurs well for the Domestic Rubber Industry.
21 HML Production vs Avg.realisation In tonnesFY 05FY 06FY 07FY 08FY 09PRODUCED81337279630764026000BOUGHT100200120032756051TOTAL823374797507967712051The average price of rubber was Rs per kg against RSS IV average of about Rs per kg in Q1 FY10..
22 Rubber TalkRubber is a Product of synthesis and the yield per tree ranges from 4 to 5 kgs per year depending on the clones.Immature Phase6 to 7 yearsSpecial efforts are on to reduce this periodMature PhasePresent – 28 yearsProposed – 24 yearsRubber Board recommendation – 20 to 24 yearsTapping IntervalTrees are tapped once in 3 days in the first 13 years and once in 2 days during the balance periodTapping taskAfter 13 years of Downward tapping Tree is tapped for 11 years UpwardDownward tapping : 400 trees per tapper per dayUpward tapping : 350 trees per tapper per dayTapping commences at 5.30 am and is comlpleted by 8.30 to 9.00 amLatex is collected 3 hours after completion of tapping
23 HML’S RUBBER SALERubber is largely sold in the domestic market via agents and dealersHML publishes daily prices on its website and based on that price transactions takes place.HML rubber sales at a premium to tyre grade rubber, generally the buyers are sacttered and are large in numbers.However some of the big corporate buyers include Hindustan latex (for medical purpose), Radhu Product (for rubber thread), Indus Medicare (for medical purpose) , Harpex (for cycle tyre) etc.The export of rubber is limited to only 4-6% of the produce. India is a net importer of Rubber.
24 Rubber : ReplantingThe life of a rubber plant is approximately 35 years.Why Replanting ????Old rubber plants need to be phased out with new clones when their economic yield drops.We have Lower productivity because of old low-yielding plants and the current tapping cycle is 28 years.To boost up productivity, accelerated replanting with new generation clones has been planned, which will reduce the tapping cycle to an optimum 24 years thereby increasing the output per tree.The projected expenditure for replanting for the next 3 years is about Rs. 8 Crs per year.
26 Tissue CultureHarrisons Malayalam, has its Plant Tissue Culture Unit at Hosur about 40 kms from Bangalore, India's Garden city.Largest corporate nursery with over 4.50 lac plantsLargest corporate collection of Budwood germplasm of RubberThis state of the art tissue culture lab has its attention focused on quality and delivers a quantity of Four Million plants per annum to its customers.Harrisons has carved a niche for itself in this segment by its successful propagation of rare and superior plants and has been exporting to the world market since 1992.ProductsSyngoniumPhilodendronBananaSpathyphyllumCordylineFicusYuccaCalathea
28 Revenue Break-up FY 09 Total Income Rs. 291 Cr Rs. CrsSalesFY 09FY 08Change(+/-)Tea1329145%Rubber15010543%Others96FY 09 Total Income Rs. 291 CrPrevious year Rs. 205 Cr28
29 HML Revenue Growth is at a CAGR of 19 % Robust Growth since FY04(in Rs. Crs)ParticularsFY 04FY 09CAGR %Total Income13429119%PBT5810%Cash Profit117%Net Worth2093088%Market-cap *427212%* As on March 31,2009HML Revenue Growth is at a CAGR of 19 %29
30 Q1 FY10 Performance Particulars Q1 FY`10 Q1 FY`09 % Change (in Rs. Crs)ParticularsQ1 FY`10Q1 FY`09% ChangeSales69.6870.30-1%Other Income0.260.1753%PBDIT7.3710.94-33%PBIT6.3010.23-38%PAT2.936.76-57%During the quarter, there was an extended dry spell experienced in South IndiaSteep increase in the wage rates also led to an increase in operating costs
31 ADVANTAGE & OTHER INITITIATIVES ADVANTAGE HMLGROWTH INITIATIVESTEA TOURISMCORPORATE SOCIAL RESPONSIBILITIES
32 ADVANTAGE HML Land Assets worth above Rs.2000 crs Unparalleled Largest RubberPlantation in IndiaStrong hold onSouth Indian MarketExpertise to managelarge work forceUnparalleledDomain Knowledge.Land Assets worthaboveRs.2000 crsADVANTAGEHML
33 Growth Initiatives Expansion Plan Business Plan Modernize all Tea & Rubber factories with State – of - the art technology.Convert CTC Factories to Dual manufacture.Implement ERP with real time connectivity to remote location for better operational efficiency.Set up distribution network in India & Abroad.Business PlanTop Line to grow by increasing manufacture of Tea & Rubber from bought Leaf & bought Latex operation.Increase profitability by improving productivity, Plant capacity utilization & proper commodity price discovery.Optimum Land utilization through scientific infilling & replanting in Tea & Rubber.Exploring possibilities for tea tourism.
34 TEA TOURISM PLACES TO VISIT Kerala has emerged as the most acclaimed tourist destination of the country in the recent Past with foreign tourists crossing 3.67 Lakhs mark in 2006.PLACES TO VISITMattupetty (13 km from Munnar) : Situated at a height of 1700 Mts famous for its highly specialized dairy farm..Over 100 varieties of high yielding cattle are reared here. The Mattupetty lake and dam , just a short distance from the farm,is a beautiful picnic spot.Pothamedu (6 km from Munnar) offers an excellent view of the tea, coffee and cardamom plantations in Munnar. ideal for trekking and long mountain walks.Nyayamakad (10 km from Munnar) Land of breathtakingWaterfalls cascading down a hill from a height of about 1600 meterWallardie & Moongalaar Tea Garden Located just 18 km from Thekkady which is one of India's most fascinating natural wildlife sanctuaries, where you can watch wildlife at close range.
35 Corporate Social Responsibility An equal Opportunity employer with 7700 men and 8800 women workforceWinner of FICCI awards thrice for corporate initiatives in family welfare as a result of its Comprehensive Labour Welfare Scheme – aimed at improving the quality of life of the employees and their dependents.Pioneer in corporate social responsibility in Kerala with initiatives such as “Rakshita” a centre for development of children and adults with multiple disabilitiesProviding free medical aid for underprivileged in Rural Kerala.The only company in this sector to bag the Kerala State Pollution control award for its factory on more than one occasion emphasizing the responsibility and initiative taken by the company in preserving the natural resources for future generation.35