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Sunshine Papers India limited Information Memorandum Strictly Private & Confidential January 2015 Factory: Donthamuru Village, Balabadrapuram - Rajanagaram.

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Presentation on theme: "Sunshine Papers India limited Information Memorandum Strictly Private & Confidential January 2015 Factory: Donthamuru Village, Balabadrapuram - Rajanagaram."— Presentation transcript:

1 Sunshine Papers India limited Information Memorandum Strictly Private & Confidential January 2015 Factory: Donthamuru Village, Balabadrapuram - Rajanagaram Road, Rangampeta Mandal, East Godavari District, A P, INDIA Corporate Office: 3 rd floor Santhi Ceramics, Opp. Indian Overseas Bank Rayudupalem jn., Kakinada. Liaison Office: Rajahmundry

2 Paper Machine Tissue Machine

3 Concept  To Set up Export Oriented Tissue Paper Mill (EOU) to produce International standard Premier quality Specialty Tissue paper using imported primary & secondary fiber with latest and fully atomized paper machine.

4 Project Scope  Capacity : 15,000 TPA Tissue Manufacturing Facility  Product : Tissue Paper in Rolls, Sheets & Converted Tissue  Location : Donthamuru village, Balabadrapuram – Rajanagaram Road, Rangampeta Mandal, East Godavari District  Estimated Project Cost : Rs 55 Crores ( US $ 9 million)  Raw-Material Primary Fiber (Wood Pulp ) and Secondary Fiber (Recycled Fiber / Waste Paper) Gas for the Power Plant  Future Strategy : Add 250 TPD Board Manufacturing Facility

5 Promoters The Core Promoter Management team consists of professionals having vast experience in India and abroad in project mgmt, technology & engineering, fiber mgmt, marketing & commercial, etc. The core team has over 140 man-years of direct experience in general management, Paper Making, Paper Marketing Financial Management and networking T Raja KishoreManaging Director P. Venkat ReddyDirector Finance T. Satya PrasadDirector B. WilliamDirector - Admin Prasad ReddyDirector V S T Mallikarjuna RaoDirector Technical

6 Location Land: The company has acquired 29 acres of land at Donthamuru village, Balabadrapuram - Rajanagaram Road, Rangampeta Mandal, East Godavari District. Advance Paid for another 9 Acres adjacent land and Registration is under process.  Location Advantage: Proximity to the National highway, Railway Station & Airport (Rajahmundry) 25 Kms, Sea Port (Kakinada) 35 Kms. Abundant water available in the site and also near by lake and canal Effluent Disposal: Already built drainage is passing adjacent to the site, which facilitates for the disposal of effluent if any. Availability of trained man-power Proximity to Natural gas

7 Raw-Material  Raw-materials required are Primary Fiber (Wood Pulp / Virgin Fiber) and Secondary Fiber (Recycled Fiber / Waste Paper) for the paper unit and Gas / Coal for the Power Plant Wood Pulp The annual requirement of wood pulp is estimated at 3,000 tpa and this will be imported from Europe, North / South America, and Indonesia Waste Paper: Requirement of waste paper is estimated at 20,000 tpa.We shall procure waste paper from USA and Europe. Gas Efforts are on to secure 1500 mmbtu Natural Gas sanction. Ministry of Petroleum and Natural gas. referred the proposal to Bagyanagar Gas Authorities for further action.

8 Product Mix  Product Profile The paper machine will have an installed capacity of 15,000 TPA of Tissue paper. Soft tissue 20 Tons per day Soft Tissue for Conversion 5 Tons per day Hard Tissue 25 tons per day Company has the flexibility to change product-mix to cater to the changing market demand/ requirements from time-to-time to maintain and improve profitability.

9 Marketing Arrangements Export – 70% Tissue Paper in Jumbo Reels and Sheets to Identified Prospective converters in Middle East & Africa Domestic – 30% Tissue reels/sheets/converted tissue packs through established distributors / convertors

10 Market Scenario Global tissue paper business is $30 billion, and volume is over 20 million t. North America and Europe account for over 60% of consumption. World average per capita consumption of tissue paper is 3.4 kg. India’s per capita tissue paper consumption is dismally low at 0.01 kg as compared to China at 4.5 kg and 23 kg in North America. The Indian tissue paper market is at an inflexion point and is expected to grow at a CAGR of 20% in the next 3 – 5 years, with the organized segment growing even faster. This growth will be driven by increasing hygiene awareness, disposable income and deeper penetration of organized retail. World tissue paper demand is forecast to grow by 3.2%/yr up to 2010. The annual increase is about 780,000 tones, and the market is expected to reach 28.3 million tones by 2010. The growth corresponds to the combined capacity of 26 medium-size (30,000 t/yr) or 13 large (60,000 t/yr) tissue machines per year. Growth prospects are best in China and other Asia, where economic growth, rising standards of living, rapid growth of travel, hotel businesses and fast food chains all contribute to the demand growth. The eastern European market is also likely to grow clearly above average during the next 10 years.

11 Product Usage  Product Usage Tissue paper is a thin, strong, translucent paper used in sanitary products, such as toilet tissue, paper towels, facial tissue, kitchen towels and napkins At-home" Tissue market accounts for about 63% of the entire tissue market and away-from- home" market, represents the remaining 37%. Tissue Paper targeted customers are wholesale to janitorial supply companies, hotels, offices, restaurants, schools, and the government. A small quantity of tissue is used in absorbent products (such as diapers, wipes, and feminine hygiene products) and is also used for wadding and as a base stock for waxing and wrapping.. Tissue paper consumption patterns vary between regions. Toilet paper is the main product in all regions except Middle East, where facial tissue dominates for religious and cultural reasons. Tissue paper is a consumer product, and branding is a vital part of its marketing. In addition to manufacturers' brands, the leading retailers have introduced their own private-label brands. In Western Europe, about half of all consumer tissue is sold under private labels. In some countries like Germany and Switzerland, the share of private labels is already well over 60%. In North America and many other regions, the share of private labels is much smaller, though gradually increasing. The consolidation and globalization of retail chains support this development

12 The total project cost is estimated at Rs 55 Cr. The total cost has been arrived based on the initial estimates by company’s Technical consultant and indicative quotations received by the company. A summary of the Cost of project is furnished in the table below: Project Cost EstimatesRs in lacs. Land1000.07 Building& Civil Construction 613.17 Plant & Machinery (Imported) 1317.00 Plant & Machinery (Indigenous) 1011.30 Engineering Design210.00 Misc Fixed Assets68.46 Contingencies311.24 Deposits 105.00 Preliminary and Preoperative Expenses484.13 Margin Money for Working Capital253.65 Total Project Cost5458.01 Project Cost

13 Means of Finance The project is proposed to be funded at a Debt/ Equity ratio of 1: 2 and the financing pattern for the project is proposed as under: Means of Finance Rs. In Lacs Equity Promoters / Strategic Investor / Private Equity: 1858.01 Debt Financial Institutions / Banks 3600.00 Total Project Cost 5463.68

14 Summary Profitability Statement INR Lacs 2016201720182019202020212022 CapacityMT 15,000 Total ProductionMT 52501050012000 Capcity Utilization%35%70%80% Net SalesRs.2715522663926622675468897027 Cost of ProductionRs1767382346414826492550265133 Cost of SalesRs1586361645624809491550165122 Profir before InterestRs976131314961469148815151540 Profit before Tax Rs.7057299611011111012171309 Net ProfitRs.7057299611011111012171309 NP as % of Sales %26%14%15% 16%18%19% Cumulative cash accruals Rs.54467011771819256734224669 BEP (%) of Installed capacity %18.3747.8242.4238.5335.3032.3430.12 DSCR (Gross) 2.001.371.651.78 1.99 2.27 5.99 Project Profitability DSCR Average 2.31 IRR 21%

15 Current Status Sr. No. ActivityExpected Date of Completion 1Acquisition of LandCompleted 2IEM from Ministry of Industry & Commerce vide letter No.765/SIA/IMO/2008 Dated14/3/2008 Completed 3Project Technical Feasibility Study by APTICOCompleted 4Arrangement of Water Available 5Temporary Power for Construction – under process 6Registered with Vizag Special Economic Zone for 100% EOU StatusCompleted 7Consent from AP Pollution Control Board Completed 8Advance paid for additional land for future expansionsUnder process 9Applied with concerned authorities for building and other constructions Under process 10 Applied under single window clearance from Govt.AP for incentives, Under Process

16 Project Implementation schedule Sr. No. ActivityDate of Commencement Expected Date of Completion 1Acquisition of LandCompleted 2Statutory ApprovalsCompleted 3Design & EngineeringCompleted 6Building Construction May 2015 December 2015 7Arrangement for WaterCompleted 4Machinery Indent May 2015July 2015 5Machinery Delivery July 2015January 2016 8Overhauling & Erection January 2015March 2015 9Recruitment of manpower March 2015January 2016 10Raw Material Purchase February 2016March 2016 11Trial Production April 2016May 2016 12Commercial Production June 2016June 2016 onwards 13Release of first batch of finished goods June 2016 June 2016 onwards

17 Justification  Tissue is a Specialty Paper and generates higher revenues  Usage of Tissue Paper is growing at a rapid speed all over the World  Per Capita consumption of Tissue paper in China, India, Africa and Rest of Asia is below 2 Kg as against per capita consumption of 22 kg in North America and 13 kg in Europe and Japan. This indicates significant growth potential for Tissue Paper in Asia, Africa and China  New volumes to depend on imported fiber due to shortage of wood supplies in India and thus making premier grades of Specialty varieties such as Tissue paper generates higher revenues and project is more viable.

18 Proposal  Total Project Cost: 55 Cr, Equity: 18.5 Cr and Debt: Cr36  We Invite Promoters to invest 5 Cr and join us as co-promoters on mutually agreeable terms.  In addition to the basic works done so far, we take the responsibility of arranging Cr Debt from Overseas funding / Indian Banks / Suppliers Credit from Machinery suppliers.  Considered conservative workings such as highest possible manufacturing cost and lowest possible end product price for project profitability and under any circumstances profitability will be at par or higher than what is envisaged in the projections.

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20 THANK YOU Compared to using virgin wood, paper made with 100% recycled content Uses 44% less energy, Produces 38% less greenhouse gas emissions, 41% less particulate emissions, 50% less waste water, 49% less solid waste and of course 100% less wood. Think Eco-Friendly - Management, Sunshine Papers India Limited.


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