2 Disclaimer The information contained in this presentation is only current as of its date and consists of information that is already in the public domain or that is not price sensitive. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. It is advised that prior to acting upon this presentation, independent investigation including seeking advice of your financial, legal, tax and professional advisors as to the risks involved may be obtained and necessary due diligence, etc may be done at your end. This presentation may contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, and political, economic, legal and social conditions in the countries we operate in. This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.
3 EKC – An Introduction Established in June, 1978 Began with a Joint venture with Kanto Koatsu Yoki Manufacturing Company of JapanPioneer in production and development of Industrial and CNG cylinders with dominant market share in South Asia and Middle EastLargest global player in the Large Pressure Vessel spaceThree manufacturing plants in India and one each in Dubai, China and U.S.A.Existing capacity of 1 Million cylinders of all sizes mainly by way of organic and acquisition growthAmbitious organic growth plans in India and ChinaAlmost 1000 employees on rolls worldwide experienced in R&D, production and managementQuality control processes approved in more than 20 countries
4 EKC – Key MilestonesIncorporation of Everest Kanto Cylinder (P) Limited1978First commercial production at Aurangabad Plant1981Commencement of exports to Gulf countries1986Commissioning of Tarapur Plant1988Development of CNG cylinder for the markets1998Supply of CNG Cascades1998Export to European countries1998More than 150,000 cylinders produced and dispatched2001Commencement of production at Dubai Plant2004Listing of Equity Shares and Gandhidham unit goes onstream2005Doubling of Capacity in Dubai and initiation of China Project2007Acquisition of CPI, U.S.A. and commencement of production in China2008
6 EKC – Key Customer profile Industrial CylindersPraxairBOC India LtdInox Air Products LtdAdvanced SiliconAir ProductsAir LiquideCNG CascadesMahanagar Gas LtdIndraprashtha Gas LtdBhagyanagar Gas LtdGujarat AdaniOEMs for CNG CylindersHyundaiToyotaSuzukiTata Motors LtdEicher Motors LtdAshok Leyland & Co LtdSwaraj MazdaSpecial CylindersDefence Department in IndiaUS Navy
9 EKC’s Competitive Edge First mover advantage in CNG space in AsiaExisting Production Capabilities & Capacities and expansion plans leading to economies of scale which gives edge over competitionNew manufacturing facilities to adopt cost effective technologies and processesSupply Chain Advantage – Relationship with Tenaris going back to 15 yearsStrong Customer relationship especially with OEMs and after market playersRegulatory approvals in over 20 Countries1 US$ = rS
10 EKC – Manufacturing Facilities LocationEstablished / AcquiredProduct Range (In Lts.)Capacity (In Nos.)IndustrialCNGJumboTotalAurangabad19781-21110,000-Tarapur198521-28080,000160,000Dubai2003196,000Gandhidham20051-280140,000200,000340,000China20081-280 and Jumbo120,00010,000210,000USA4,000GRAND TOTAL410,000596,00014,0001,020,000
12 H Results HighlightsHigh Growth in Turnover driven by organic expansion in China and inorganic acquisition of CPI, USAGrowth in CNG business continues to be robust with increased penetration of Indian, Middle East and CIS marketsSignificant increase in output from Dubai unit and optimum utilisation of Indian facilitiesEBITDA margins increase substantially aided by increased selling prices and better product mix and despite steep devaluation of INR vis a vis US$Higher interest, Depreciation and amortisation mainly due to acquisition of CPI and commencement of China operations
15 H1 2008-09 Results Highlights Turnover by Markets
16 H1 2008-09 Results Highlights Turnover by Products
17 Global NGV growth outlook Benefits of Natural Gas Vehicles includeReduced Particulate and greenhouse gas emissions and safer than most liquid fuelsWidespread availability of NG which can also be derived from renewable sources like biogasTechnically proven and available at lower costCan be used in all types of vehiclesMinimal processing or refining requirementsNGV growth has more than doubled during last five yearsAs per Gas Vehicles Report dated June 2008, there are 8.5 Million vehicles worldwide and IANGV projects that this would increase to a level of 50 Million vehicles by 2020
18 Global NGV growth outlook Among top 10 countries, the number of NGVs has increased from a level of 1.7 Million in 2001 to a level of 7.6 Million in March 2008EKC has a significant presence in six of these countries which still have a low penetration rate of NGVs in the overall vehicle populationInternational Gas Union has projected that the total global NGV population shall increase to a level of Million by the year 2030 and the final target shall be announced in 2009
19 Global NGV statistics – Top Ten countries No. of NGVs (In ‘000)CountryMarch-01March-08Argentina7351699Pakistan2001650Brazil2721533India25822Iran1730Italy370433Colombia9252China36201Bangladesh22160Ukraine35120Total17057600Top ten countries represent 89% of global NGV populationCompound Annual Growth rate (CAGR) over last 7 years- 24% globally42% for Asia and CISVery low penetration rate of NGV vehicles6.1 % globally5.9 % for Asia and CIS2.0% for high growth markets like India and China
20 Natural Gas Scenario to positively impact CNG business in India Natural Gas infrastructure spans 8000 Kms with product pipeline of KmsCompressed Gas Distribution (CGD) networks in 19 cities- More than 0.8 M vehicles on CNG- More than 0.8 M households connectedExpression of interest for CGD in 68 cities to be implemented over 2-5 years with investment ranging from US$ 50 – 200 Million in each cityProjected Gas Supply expected to increase from MMSCMD to a level of about 200 MMSCMD in
21 EKC’s Global Business Outlook China plant commenced production in May 2008 and large line expected to go into production very shortlyIntegration activities with CPI progressing well resulting in improved production levelsBillet Piercing Plant to be operational in this fiscal year and this is expected to lower cost of production thereby making the products more cost competitiveJumbo Cylinder Plant in India is scheduled to go into production in Q and EKC expects to penetrate the untapped Indian market for such products by leveraging CPI’s capability in this line of businessEKC is venturing into the market for light weight CNG cylinders mainly required by OEMs in Europe and Asia and this project is expected to go into production in Q This would result in much higher value addition besides providing value to customerINR expected to continue to be under pressure but overall impact not significant on the bottomline
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