Presentation is loading. Please wait.

Presentation is loading. Please wait.

Indorama Polymers “IRP” Q1, 2006 Analyst Meeting 15 May 2006 The Stock Exchange of Thailand DISCLAIMER: This presentation does not constitute an invitation.

Similar presentations


Presentation on theme: "Indorama Polymers “IRP” Q1, 2006 Analyst Meeting 15 May 2006 The Stock Exchange of Thailand DISCLAIMER: This presentation does not constitute an invitation."— Presentation transcript:

1 Indorama Polymers “IRP” Q1, 2006 Analyst Meeting 15 May 2006 The Stock Exchange of Thailand DISCLAIMER: This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any IRP Shares. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. For the convenience of the interested investors the management is presenting the financial data in US Dollar also. However, the translation method does not confirm with GAAP and is based on the method developed by the management which will be followed consistently in future.

2 Agenda n Fundamentals n Q1, 2006 Financial Update n Projects in Progress n Focus: Lithuania n Outlook

3 Guiding Philosophy VISION To be one of the leading global producer with key focus on people and processes thus making INDORAMA one of the most admired companies in the world MISSION Continuously upgrade quality of products and services through people involvement and world class processes to attain customer delight thus becoming a preferred supplier and institutionalise people learning as a key factor for business growth 1

4 Major Shareholders 2 Note: As on March 29, 2006, book closure for annual general meeting of shareholders APL Group, the main promoters holdings are held Beacon Global and Indorama Holding IRP, total issued and paid-up capital Baht 1,382 million

5 Group Structure ^Indorama Polymers Public Company Limited “IRP” PET Polymers: 126,000 tpa 51% 99.9%100% ^ Expanded capacity in December, Now 90,000 tpa ^^ Expanded capacity in December, Now 116,000 tpa ^^^Lithuania plant commissioning expected in Mid * Joint venture with Serm Suk Pcl which holds 40% and DEG holds 9% *Petform (Thailand) Limited “PTF” Preforms, Bottles and Closures Asia Pet (Thailand) Limited “APT” Amorphous PET Polymers: 110,000 tpa ^^StarPet Inc., USA “SPT” PET Polymers: 200,000 tpa ^^^UAB Orion Global Pet, Lithuania “OPT” PET Polymers: 198,000 tpa 20%60%20%

6 Production Process PTA MEG IPA CP PlantSSP Plant Bottle Blowing Closures Asia Pet Petform IRP StarPet / Orion Global Pet Amorphous PET Polymers *0.84 *0.35 *0.02 *Tons of Input for 1 ton of PET polymers 4 Preforms

7 IRP Capacity 4% of Global Demand in % 154% 170, , ,000 5

8 Demand Growth: New Applications Carbonated Soft Drinks Ketchup and Sauces Liquor / Wine BEER Milk Iced TeaEnergy DrinksJuices Lubricating OilPaintsFoodToiletries & Cosmetics Water 6

9 PET: Demand Growth and Per Capita n Demand growing by 1 million tons per annum n World per capita consumption is 1.7 kilos per annum n Higher per capita consumption in North America (8 kilos) and West Europe (5 kilos), still growing at 7-8% per annum Global demand of 12.3 million tons, growing at 8-10% p.a. Source: Tecnon Global 7

10 PET Polymers demand growth in all regions Source: Tecnon 8 11,416 12,331 13,281 14,208

11 PET: Demand distribution Source: Tecnon CSD demand growth of 6-7% Water demand growth of 10-12% Others include beverages and food Sheet include food and non-food Beer, developing stage, high growth potential Source: PIRA International Convenience is the key to growth of packaging materials Consumers prefer usability or occasion specific packaging Priority for product safety and functionality 9

12 Cans Vs PET, New Equations n During past four years, Aluminum prices increased from 1400 to 2400 $/ton or by 71% while PET prices increased from 830 to 1,150 $/ton or by 38% n Aluminum prices are high due to energy costs and tight demand supply n In 2007,US Aluminum price will further increase when new contracts are negotiated n 360 ml bottles replacing Cans Source: Industry Data 10

13 Industry Attractiveness n Global demand 12.3 million tons projected for 2006 and growth at 8-10% per annum u New applications fuelling high growth rates, 2-3 times global GDP growth, i.e. energy drinks, flavored water, iced tea and others n Market movements in packaging reflect preferred packaging material u PET preferred over glass, PVC and other polymers u Better properties than other packaging materials u Consumers prefer convenience of PET for purity, light weight and resealable u Beverage producers prefer PET for being cost effective 11

14 Source: Industry prices PET prices move in tandem with raw materials 12 Histrorical, Wide PET spreads on lower RM costs Narrow PET spreads on rising RM costs

15 Crude impact marginal on PET spreads n Crude price increase absorbed in petrochemical chain u Petrochemical prices increased u Petrochemical spreads were higher on tight supply, low investments Post-SE Asian crisis in u Additional supply in year result in decline in spreads n PET prices move in line with raw material prices u Able to pass rising costs in past 2 years u Historically, PET spreads widen on lower raw material costs u Reversing petrochemical cycle will be beneficial (refer slide 12) 13

16 Source: CMAI PTA: Capacity additions outstrip demand increase 14 Note: Asia includes Middle East

17 MEG: Surplus Availability Source: CMAI 15 Note: Asia includes Middle East

18 Agenda n Fundamentals n Q1, 2006 Financial Update n Projects in Progress n Focus: Lithuania n Outlook

19 Surge: Profits 30% YoY 16 (in US$)

20 Financial Performance: Consolidated 17 (’000) Note: Average Exchange Rate

21 Higher sales in premium markets Note: Sales quantities are indicated by % 47% 8% 18% 27% 19% 66% 9% 6% Spread - $229/tonSpread - $232/ton 18

22 Surge: Profits 26% YoY 19 (in Baht)

23 Post-IPO, Higher Returns to Shareholders 32% *Q and Q1, 2006 based on post-IPO issued and paid-up capital of Baht 1,382,197,870 In UScentsIn Baht 49% 20

24 Key ratios (in Baht) Lower leverage 21 On higher base of capital employed and equity

25 Financial Position Includes Baht 1,693 million (Euro 35.8 million) debt of Orion Global Pet 22 (Baht’ 000)

26 Cash flow 23 (Baht’ 000)

27 Key Ratios: Comparison 24

28 Agenda n Fundamentals n Q1, 2006 Financial Update n Projects in Progress n Focus: Lithuania n Outlook

29 Petform, Thailand Preforms & Closures Expansion and Bottling Project  Preform 4th machine and Closure 3rd machine installed and started commercial production in Q1, 2006  In April, 2006, Bottle blowing project completed and started commercial production  Capital expenditure of Baht 248 m. upto end of Q1, 2006 balance around Baht 70 million to be capitalized in Q2, 2006  Loan draw down of Baht 260 m. upto Q1, 2006 (Sanctioned Baht 260 m.)  Interest during construction period to be capitalized and charged to P&L from Q1,

30 Orion Global Pet, Lithuania PET Polymers Greenfield Project  Ongoing work at site, installation of plant & equipment, storage facility and utilities  Capital expenditure of Euro 66.8 m. upto end of Q1, 2006  Loan draw down of Euro 35.8 m. upto end of Q1, 2006 (Sanctioned Euro 57.5 m.)  Interest during construction period to be capitalized and charged to P&L from Q3, 2006  Commissioning in Mid

31 StarPet Inc., USA PET Polymers Expansion Project  Site work and railway siding work in progress  Plant and equipment supply agreements signed  First lot of plant and equipment to arrive in May, 2006 at site  Capital expenditure of around US$ 4 m. upto end of Q1, 2006  Loan draw down US$ 1.2 m. upto end of 2005 (Sanctioned US$ 31 million)  Interest during construction period to be capitalized and charged to P&L from Q1, 2007  Start-up of commercial operations in January,

32 Indorama Polymers, Thailand PET Polymers Expansion Project  Increase capacity of PET Polymers by 36,000 tpa at existing site  Supply agreements signed with plant & equipment suppliers  Proposed capital expenditure of US$ 5 million  Financing with US$ 4 million long term loans and balance from internal cash  Interest during construction period to be capitalized and charged to P&L from Q1, 2007  Start-up of commercial operations in January,

33 Agenda n Fundamentals n Q1, 2006 Financial Update n Projects in Progress n Focus: Lithuania n Outlook

34 Strategically located in the gateway of EU and CIS Lithuania Lithuania, EU member and recognized as the prime transport center in the region linking the EU with the East, CIS & Russia 40

35 Growing economy attracting FDI Source: Lithuanian Department of Statistics, 41

36 Klaipeda: Free economic zone and transport hub Orion Global Pet Plant Location Klaipeda, a transport and logistics hub with a developed infrastructure 42

37 Port of Klaipeda - the biggest container port in Baltic States and open for investments Klaipeda, a free economic zone with developed infrastructure and tax benefits Klaipeda is a big transport hub connecting sea, land and rail routes from East to West Port of Klaipeda has been designated the EU's regional priority port, linked to all major ports in EU an ice free port capacity of more than 30 million tons per year Source: Klaipeda State Seaport, 43

38 Europe Continues to be a Net Importer Demand outstrips supply, imports to continue but domestic producers at advantage over imports Source: Tecnon 44

39 Demand outstrips Supply…Room to grow PET producers in Europe market: IRP capacity represents 6.3% of the capacity Total demand around 3.5 million tons and demand growth of 7-8% per annum equivalent to around 250,000 tons per annum 45

40 Key highlights Economies of scale, OPT will have the largest single line plant in Europe Low capex cost, around US$ 485 per ton compared to peers Low Conversion cost, comparable to Asia of around US$ 80 per ton considering low cost base, a developing economy, and required manpower around 110 persons Availability of key raw materials, PTA & MEG, available in Europe and suppliers in Asia and USA have manufacturing facility in Europe Demand exceeds supply, marketing will be concentrated in the markets of Greater Europe including CIS & Russia which are supply deficit regions. OPT will substitute imports and capture growing demand through sales to: Global Convertors, customers of the Group in Asia and USA Global Brand Beverages, customers of the Group in Asia and USA Regional Convertors 46

41 Agenda n Fundamentals n Q1, 2006 Financial Update n Projects in Progress n Focus: Lithuania n Outlook

42 Spread * Quantity = Profits Committed volume growth upto year PET Polymers: Current PET capacity 206,000 tons 2007 PET capacity 524,000 tons Completed: Forward integration into bottles for 150m. pieces Capacity increase in preforms by 42% and closures 50% Expansion in line with growth plans of customers Growth 154% More than 1 Billion pieces 47

43 Outlook PET Polymers demand growth at 8-10%, replacing aluminium and glass as cost effective and convenience of use Asian operating rates to improve with limited new capacity additions Raw materials in a long market, increasing supply, and larger volume purchase to leverage favorable prices …IRP, Prepared and Enthusiastic Raw material prices are rising and we expect to pass rising costs to our customers 48

44 IRP Positioning n 7th largest global PET producer with end-2006 capacity at 524,000 tons n Only PET producer with production facility in Asia, Europe and North America enabling to capture demand growth in all markets n Regional presence provides ability to service large global customers at low logistics cost n Large volume purchase of raw materials enable higher volume discounts thereby increasing spread n High capacity utilization resulting in lower conversion costs n New plants of economic size at lower capex 49


Download ppt "Indorama Polymers “IRP” Q1, 2006 Analyst Meeting 15 May 2006 The Stock Exchange of Thailand DISCLAIMER: This presentation does not constitute an invitation."

Similar presentations


Ads by Google