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RPG Enterprises Respond, Perform, Grow

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Presentation on theme: "RPG Enterprises Respond, Perform, Grow"— Presentation transcript:

1 RPG Enterprises Respond, Perform, Grow
7 Business Sectors, 20+ companies, 60,000+ employees, 4,00,000 + shareholders

2 RPG Enterprises – Business Sectors
Companies Business Sectors KEC International RPG Cables CESC Noida Power Co.* Integrated Coal Mining * CEAT Spencer`s Retail Spencer`s Travel Phillips Carbon Black Zensar Technologies Harrisons Malayalam Raychem RPG RPG Life Sciences Saregama India Transmission Power Tyre Retail Carbon Black IT Speciality Entertainment Revenue FY 2009 Rs. 14,500 crs 2

3 RPG Enterprises - Financials
( Rs. Crs ) Revenues (FY`09) EBIDTA Net Profit Market cap* Promoter Holding Institutional CESC 3,200 640 410 4,175 52% 37% KEC International 3,428 200 116 2,268 42% 43% RPG Cables 358 24 (7) 76 34% 9% CEAT 2,558 53 (16) 36% Phillips Carbon Black 1,180 (48) (65) 269 50% 19% Harrisons Malayalam 291 23 8 138 11% Zensar Technologies 922 140 86 386 24% RPG Life Sciences 144 26 7 50 51% 16% Saregama India 135 6 (8) 118 53% * As on 29th July, 2009 3

Investor Presentation August 2009


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 Overview Manufacture 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, Markets Tea - 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 plants Employer in Kerala after the State Government besides providing indirect employment to an equal number LARGEST

8 Business Excellence Harrisons 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
Products TEA Premium Tea Bags Premium CTC & Orthodox Teas Premium Single Estate Teas Organic Tea Popular Tea RUBBER Pale Latex Crepes ISNR Cenex OTHER CROPS Pineapple Banana Pepper Cardamom Coffee

10 Plantations TEA Location Estates Factories Wynad (North Kerela
Tamil Nadu) Achoor Touramulla Chundale Arrapetta Sentinel Rock Wentworth Mayfield 1 CTC 4 Orthodox 1 CTC/Orthodox Vandiperiyar (Eastern Kerela) Wallardie Moongalar Pattumalay 1 Orthodox Munnar High Range (Kerela) Upper Surianalle Lockhart Panniar 2 CTC Total 13 12 Factories RUBBER Location Estates Factories Mooply Valley (North Kerala) Mooply Palapilly Kundai Kaliyar 3 Factories Cenex, Indian Standard Natural Rubber (ISNR) and Skim Grades Ranni Valley (Central Kerala) Koney Kumbaza Lahai Mundakayam Cenex, ISNR & Skim Grades. Venture Valley (South Kerala) Nagamallay Isfield Venture PLC/Sole Crepe Total 11 7 Factories Planted 6030 Ha Total 14124 Ha Planted 7366 Ha Total 9293 Ha

11 Tea Scenario

12 Top Exporters (mln kgs)
Tea Producers  Top Producers (mn kgs) 2008 2007 China 1160 1140 India 980 986 Srilanka 318 305 Kenya 346 370 Turkey 155 178 Indonesia 148 150 Vietnam 144 Bangladesh 59 58 Others 440 468 Total  3750 3803 Top Exporters (mln kgs)  2008 2007 Kenya 383 344 Srilanka 299 294 China 297 289 India 196 179 Vietnam 115 111 Indonesia 95 84 Argentina 76 74 Malawi 40 47 Uganda 42 44 Tanzania 25 29 Bangladesh 8 10 Zimbawe 6 Others 64 62 Total 1646 1575

13 Consumption is increasing more than production
TEA : INDIAN SCENARIO The 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 SCENARIO India’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 production Tea prices would firm up more since domestic consumption was buoyant.

15 Tea : Price Rise Tea 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 INDIAN AUCTION PRICES (Calendar Year) 2002 2003 2004 2005 2006 2007 2008 Yearly average (Rs/Kg) 42 40 47 43 51 50 67 Year on Year (%Change) -4.76% 17.50% -8.51% 18.60% -1.96% 34.00% HML Sale (CY 08) Avg. Price/kg Sale (tonnes) Sales (Rs. Crs) Auction 66.32 10111 67 Packet 98.85 949 9 Bulk 66.24 4154 27 Export 69.83 3076 21

16 HML Production vs Avg. Realisation
Low production due to unfavourable Climatic Condition . In tonnes FY 05 FY 06 FY 07 FY 08 FY 09 PRODUCED 13544 13651 13238 12068 12649 BOUGHT 970 2250 3750 2757 4465 TOTAL 14514 15901 16998 14825 17114 The 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

18 Rubber

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 Rubber Consumption Production 2010 10.51 9.78 2015 12.03 11.51 2020 13.72 13.57 Consumption of natural rubber has surpassed production , globally as well as in India

20 Ribbed Smoked Sheet (RSS- 4)
Rubber : Price Ribbed 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 tonnes FY 05 FY 06 FY 07 FY 08 FY 09 PRODUCED 8133 7279 6307 6402 6000 BOUGHT 100 200 1200 3275 6051 TOTAL 8233 7479 7507 9677 12051 The average price of rubber was Rs per kg against RSS IV average of about Rs per kg in Q1 FY10. .

22 Rubber Talk Rubber is a Product of synthesis and the yield per tree ranges from 4 to 5 kgs per year depending on the clones. Immature Phase 6 to 7 years Special efforts are on to reduce this period Mature Phase Present – 28 years Proposed – 24 years Rubber Board recommendation – 20 to 24 years Tapping Interval Trees are tapped once in 3 days in the first 13 years and once in 2 days during the balance period Tapping task After 13 years of Downward tapping Tree is tapped for 11 years Upward Downward tapping : 400 trees per tapper per day Upward tapping : 350 trees per tapper per day Tapping commences at 5.30 am and is comlpleted by 8.30 to 9.00 am Latex is collected 3 hours after completion of tapping

23 HML’S RUBBER SALE Rubber is largely sold in the domestic market via agents and dealers HML 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 : Replanting The 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.

25 Others

26 Tissue Culture Harrisons 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 plants Largest corporate collection of Budwood germplasm of Rubber This 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. Products Syngonium Philodendron Banana Spathyphyllum Cordyline Ficus Yucca Calathea

27 Financials

28 Revenue Break-up FY 09 Total Income Rs. 291 Cr
Rs. Crs Sales FY 09 FY 08 Change (+/-) Tea 132 91 45% Rubber 150 105 43% Others 9 6 FY 09 Total Income Rs. 291 Cr Previous year Rs. 205 Cr 28

29 HML Revenue Growth is at a CAGR of 19 %
Robust Growth since FY04 (in Rs. Crs) Particulars FY 04 FY 09 CAGR % Total Income 134 291 19% PBT 5 8 10% Cash Profit 11 7% Net Worth 209 308 8% Market-cap * 42 72 12% * As on March 31,2009 HML Revenue Growth is at a CAGR of 19 % 29

30 Q1 FY10 Performance Particulars Q1 FY`10 Q1 FY`09 % Change
(in Rs. Crs) Particulars Q1 FY`10 Q1 FY`09 % Change Sales 69.68 70.30 -1% Other Income 0.26 0.17 53% PBDIT 7.37 10.94 -33% PBIT 6.30 10.23 -38% PAT 2.93 6.76 -57% During the quarter, there was an extended dry spell experienced in South India Steep increase in the wage rates also led to an increase in operating costs


32 ADVANTAGE HML Land Assets worth above Rs.2000 crs Unparalleled
Largest Rubber Plantation in India Strong hold on South Indian Market Expertise to manage large work force Unparalleled Domain Knowledge. Land Assets worth above Rs.2000 crs ADVANTAGE HML

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 Plan Top 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.

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 VISIT Mattupetty (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 breathtaking Waterfalls cascading down a hill from a height of about 1600 meter Wallardie & 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 workforce Winner 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 disabilities Providing 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

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