IIL - Investor Presentation - FY2012

8/10/2019 IIL - Investor Presentation - FY2012

1/39

Insecticides (India) Limited

CORPORATE PRESENTATION

August 2012


2/39

INDIAN AGROCHEMICAL INDUSTRY OVERVIEW


3/39

Industry overview

The size of Indian agrochemicals market is expected to be around Rs 15,000 crores by 2015

Arable land stagnation Rise in MSP

Low pesticide consumption Increased institutional credit flow

Structural enablers to catalyse strong growthtrajectory going forward

Current under penetration of agrochemicalsin India with pesticide consumptionamongst the lowest globally

Rising pressure to increase foodproductivity given land shortage and rise inpopulation

Rising prices of crops on the back ofMinimum Support Prices (MSP)

Use of costlier hybrid seeds

Increasing awareness of farmers

Labour shortage for agricultural activities

on the back of NREGA Continued financial support from

Government through subsidies and greaterflow of institutional credit

105

110

115

120

125

130

135

FY80

FY83

FY86

FY89

FY92

FY95

FY98

FY01

FY04

FY07

FY10

mh

ectares

880 980 1,030 1,110

1,080 1,100 1,1201,285

2,0002,300

3,0003,200

-

700

1,400

2,100

2,800

3,500

FY09 FY10 FY11 FY12E

Rs/quintal

Paddy Grade A Wheat Arhar

17.0

12.0

7.0 6.6

2.5

0.4

-

3.0

6.0

9.0

12.0

15.0

18.0

Ta

iwan

Japan

Korea

USA

EU

India

Kg

/hec

tare

-

500

1,000

1,500

2,000

2,5003,000

3,500

4,000

4,500

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

RSbn

SourceDepartment of Agriculture, research reports


4/39

COMPANY OVERVIEW


5/39

IILs goal

Help farmers to reduce input cost and better their yields

Help to bring new generation products in reach of all farmers - big,small and marginal

Help increase awareness and lead advancement in agricultural practices

Value For Money


6/39

0

100

200

300

400

500

600

700

800

Ju

l-09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-

10

May-1

0

Ju

l-10

Sep-1

0

Nov-1

0

Jan-1

1

Mar-

11

May-1

1

Ju

l-11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Ju

l-12

IIL Sensex

Company overview

Incorporated in 1996 and listed in 2007

Large and diversified product portfolio providingcomplete solution for crop protection

Over 160 products, over 100 brandedformulations and over 750 SKUs

Track record of new product launches

Judicious mix of in-house development, brandacquisitions, technical collaboration andmarketing arrangements with global players

Wide sales and distribution network across India Over 230 sales representatives, over 3,000

distributors, c.50,000 retailers and 26 depots/branches

An ISO 9001:2000, ISO 14001 and OHSAS 18001

certified company

Large portfolio across multiple segments

23

11

8

1

65

25

20

18

88

36

28

19

0 20 40 60 80 100

Insecticides

Herbicides

Fungicides

PGRs

Institutional Branded formulations

Outperforming the index

Notes Figures have been rebased to 100

624

119


7/39

Company overview (cont.)

State-of-the-art manufacturing facilities at Chopanki,

Udhampur, Samba and Dahej

Established manufacturing infrastructure for

both technicals and formulations

Recently commissioned new units with sufficient

capacity to enable sustained long term growth

New technicals manufacturing facility and R&Dfacility under construction

Strong R&D capabilities

R&D center recognized by DSIR and Ministry of

Science & Technology

Accredited with NABL

Successfully registered 27 technicals of which 15

technicals have been commercialized

Currently in advanced stages of registration of

about 20 technical grade pesticides

Udhampur, J&KFormulations

Sambha, J&KFormulations

Dahej, GujaratFormulationsTechnicals to be commissioned

Chopanki, RajasthanFormulations and Technicals

R&D centre


8/39

Milestones

2002: Commissioning of plant at Chopanki (Rajasthan) for manufacturing wide range of innovative

end-to-end agrochemicals solutions

2003: Acquired all brands of Montari Industries

2004: Commissioning of another plant at Samba (J&K)

2005: Received ISO 9001-2000 certification, R & D Lab set up at Chopanki

2006: Acquired exclusive rights to sell Thimet brand in India from AmericanVanguard Corp, USA; Received ISO 14001-2004 certification

2007: Successfully concluded IPO; Commissioned Technical plant at Chopanki

2008: New R&D unit (at Chopanki) bagged ISO 18001:1999 certification

2009: Construction of new manufacturing facilities at Udhampur (J&K)

2010: Began construction for multi product technical plant with 10,000TPA capacity at Dahej (Gujarat)

2011: Bagged NABL accreditation; acquired Monocil, a popularbrand ; commissioned manufacturing units at Dahej andUdhampur (J&K)

2012: Launched Nuvan, Hakama and Pulsor in collaborationwith AMVAC and Nissan


9/39

Management team

Finance

Pankaj Gupta

CS

P.C. Pabbi

Vice President

Production

Sanjeev Aggarwal

GM

Rajesh Aggarwal (MD)

Information

Technology

Sandeep Aggarwal

CFO

H.C. Sharma

DGM

H. C. Aggarwal (Chairman)

Marketing Admin & HR

K.V. Patel

Unit Head

R. S. Verma

Sr. Manager

M.K. Singhal

GM

V.K. Garg

GM

Sanjay Vats

GM

Purchase

V.K. Singhal

GM

Abhai Shanker

GM

Anand Banka

Project Head

B.P.S. Rana

DGM

S.K. Choudhary

Project Manager

Sanjay Vats

GM

Venkat Rao

GM

R&D

Dr. Mukesh

DGM

Ashok Bangde

GM

O.P. Karnani

Unit Head


10/39

BUSINESS OVERVIEW

Product and Brand Portfolio Management


11/39

Strong brand portfolio

IILs portfolio consists of several market leading brands

Thimet, Monocil, Lethal, Victor, Indan, Sharp, Arrow, Hijack,Care, Bravo and Avone are some of IILs key brands

New products launched in current year include Nuvan, Pulsor andHakama

Sales of top 4 brands Thimet, Lethal, Monocil and Victor -

constitutes about Rs 144 crores (26% of FY12 turnover)

Umbrella strategy applied for new product launches via brandextensions such as Lethal Super, Victor Plus, Victor Super etc.

Established the Tractor Brand of insecticides for easy recognition of

all IIL products Tractor Brand has high brand equity amongst farmers and is

leveraged during all new product launches

Continued focus on branding activities, promotion through brandambassador and other marketing initiatives


12/39

Pan-India presence

RewariHazipur

Bhubneshwar

GhaziabadHissar

Bangalore

Coimbatore

Hyderabad

Bhatinda

Howrah

Karnal

Ludhiana

Jaipur

NagpurRaipur

Ahmedabad

Sriganganagar

Ranchi

Pune

Sindhanur

GuwahatiSiliguri

Gadarpur

Indore

26 depots across 24 locations Over 230 sales personnel and over 3,100distributors

Rajasthan

S: 8

D: 155

MP

S: 10

D: 180 Chhattisgarh

S: 5

D: 56

Jharkhand

S: 2

D: 18

Maharashtra

S: 14

D: 94

J&K

D: 18

Haryana

S: 15

D: 189

Gujarat

S: 6

D: 172

Karnataka

S: 14

D: 344

Orissa

S: 5

D: 39

Punjab

S: 36

D: 336

Bihar

S: 10

D: 44

Assam

S: 4

D: 29

Tamil Nadu

S: 14

D: 187

U.P.

S: 21

D: 203

Uttarakhand

S: 3

D: 47

AP

S: 52

D: 992

Total Sales personnel (S) : 237Total Distributors (D) : 3,107


13/39

Re-launch expertise

IIL has a proven record of acquisitions of high recall, but off-shelf brands and theirsuccessful re-launch into leading brands

Lethal, acquired from Montari in 2002 is a shining example

One of the most successful Brands of IIL with several brand extensions

introduced Sales contribution of all Lethal variants in FY12 was Rs 37 crores (around 7% of

turnover)

Monocil, acquired from Nocil in 2011, is a more recent example

One of the leading agrochemical products in India and highly accepted among

the farming community Sales contribution in FY12 was Rs 33 crores (around 6% of turnover)


14/39

IIL has successfully partnered with several global players to marketleading brands in India

American Vanguard Corp (AMVAC)

Thimet Technical collaboration initiated in 2006

Nuvan Technical collaboration started in 2012

Nissan Chemicals

Hakama New marketing collaboration started in 2012

Pulsar - New marketing collaboration started in 2012

Partnership arrangements with other companies such as BASF,UPL, Syngenta and Makhtesham Agan

Proven partnership experience


15/39


16/39

BUSINESS OVERVIEW

Manufacturing and R&D Excellence


17/39

Manufacturing facilities

Chopanki (Rajasthan)

Formulations and technicals facility

Samba (J&K)

Formulations facility

Income tax exemption (100%) expected from current year uponcompletion of capacity expansion, for a period of 5 years

Udhampur (J&K)

New formulations facility commissioned in FY12

Income tax exemption (100%) for 5 years, starting in FY2012

Dahej (Gujarat)

New state-of-the-art manufacturing facility; formulationscommissioned in FY12 and technicals to be commissioned inthe current year

Large area sanctioned in a PCPIR (Petroleum, Chemical andPetrochemical Investment Region) zone offering significantexpansion opportunity


18/39

R&D

R&D center recognized by Ministry of Science and Technology andDepartment of Scientific & Industrial Research

Facilities are NABL accredited

New state-of-the-art R&D center in Chopanki (Rajasthan) expectedto be ready in the current year

Successfully registered 27 technicals with additional 20 technicalsin advanced stages of registration

Focus areas for R&D initiatives Identifying and manufacturing high value added products

Developing complex new molecules for introduction ingenerics market

Developing eco-friendly formulations

Leveraging expertise for CRAMS

Mission of

IILs R&Dinitiatives

EVERYBEST CAN BEBETTERED


19/39


20/39

Farmer awareness initiatives

IIL actively organizes several farmer awareness initiatives to

familiarize them with the latest developments in farming practices andnew technology advancements

Dr. Dada:Novel concept introducing techno-commercialmembers as the expert for all queries in the field and to help trainfarmers in new technologies

Jagrukta Abhiyan: Campaigns and awareness drives organizedto educate farmers about best practices and new developments


21/39

CSR initiatives

IIL is involved in a host of CSR initiatives aimed at raising farmer awareness and enabledevelopment. Some of the key activities where IIL is involved include

Encourage the farmers for the inclusion of pulses and/or vegetables in crop rotationto increase farm income

Promote new agricultural techniques amongst the farmers through crop seminars,farmer meeting, demonstrations and field days at farmers fields

Provide literature for the control of various pests, such as weeds, insects and diseases,to create awareness amongst the farmers

Educate the farmers regarding the safe and judicious use of agrochemicals

Adopt schools and encourage girl child education


22/39

BUSINESS OVERVIEW

Financial Performance


23/39

Growth trajectory of IIL

IIL has grown at approximately 33% year on year from FY2003-FY2012

We expect revenue growth to be around 45% this year and 35% in FY14,with IIL well poised to exceed Rs 1,000 crores of revenues in FY14

4275 106

133

184221

294

397

478

554

800

-

100

200

300

400

500

600

700

800

900

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13E

Rscrore


24/39

Performance across segments

Revenue split across agrochemicalsegments (FY12)

Revenue split across market segments(FY12)

61.5%

28.0%

6.7%3.7%

Insecticides Herbicides Fungicides PGRs

Total = Rs 554crores

79.1%

20.9%

Branded formulations Institutional sales


Going forward, we expect our institutional sales to grow at a high rateon the back of increased technicals manufacturing capacity


25/39

Diversity and focus

Revenue split across diverse regions(FY12)

Revenue split indicating strong in-house manufacturing (FY12)

Going forward, we expect to continue serving diverse geographicalmarkets and leverage our in-house manufacturing expertise

15.7%

17.1%

10.1%

11.2%

8.3%

5.8%

31.8%

Punjab A.P. Haryana

Maharashtra UP Karnataka

Others

Domestic Branded sales = Rs 434crores

91.9%

8.1%

Manufactured in-house Traded



26/39

Financials as on 31-3-2012

Summary Profit& Loss statement

Rscrores

Gross revenues 554

Net sales 522

EBITDA 56PBT 43

PAT 33

Summary BalanceSheet

Rscrores

Net worth 182

Non current liabilities 44

Current liabilities 294Total equity & liabilities 520

Net fixed assets(including CWIP)

143

Other non current assets 29

Current assets 349

Total assets 520


27/39

FUTURE PROSPECTS


28/39

Future prospects

Capitalize on IILs strengths and pursue

Product acquisitions to compliment our product portfolio

Marketing arrangement with global partners to enhance portfolio

Further growth of our existing product offerings and lines

Realize growth through commissioning of new manufacturing facilities andenhancing capacity and investing in R&D

Build on existing market share and achieve economies of scale withmanufacturing of new technicals

Introduce new generation products

Promote brands whose technicals is manufactured in-house


29/39

Roadmap for growth

IIL intends to leverage its expertise in successful brand launches, R&D

focus and enhanced manufacturing capacity to fuel its future growth

Continued focus onestablishing strong brands

Enter into manufacturingand marketingarrangements with globalpartners

Employ an umbrellastrategy to introduceproduct extensions

Increase focus on exportmarkets

R&D focus includingin CRAMS segment

Focus on increasing

number of technicalregistrations

Enhanced backwardintegration with

increase in technicalsmanufacturingcapacity

Increase margins

Enhanceinstitutional sales

Significant capacity

enhancement informulationsunderway


30/39

Growth through R&D

Focus on developing a strong pipeline of registrations

IIL has over 20 technical registrations in the pipeline, several of which are inadvanced stages of approval

Increased registrations shall enable the Company to enhance its presence in theinstitutional business

IIL has also invested in product registration in several other countries to diversifyits geographic footprint

New state-of-the-art R&D facility expected to be commissioned in FY13

Continue its focus on process efficiency and cost reduction

R&D activities to also focus on CRAMS business


31/39

Growth through Marketing

New product introduction through tie-ups

The Company has already launched 3 new branded formulations in the current yearthrough tie-ups with global partners

Nuvan: generic insecticide to be manufactured in-house under technicalcollaboration with AMVAC

Pulsar: patented fungicide to be marketed in India by IIL under marketing tie upwith Nissan Chemicals

Hakama: new generation herbicide to be marketed in India by IIL undermarketing tie up with Nissan Chemicals

The Company expects to generate a turnover of around Rs 70 crores in the currentyear from the sales of Nuvan, Pulsar and Hakama

New product introduction through in-house development

IIL plans to introduce several new in-house manufactured branded formulationsproducts and institutional products over the next two years

IIL shall continue to leverage on its brand positioning to launch brand extensions


32/39

Growth through Manufacturing

Manufacturing capacity expansion plan initiated in FY12 is planned tocompleted in FY13

IIL plans to invest around Rs 50 crores in FY13 for completion of the expansionplan

The Company shall set up substantial additional capacity across segments

Key benefits of manufacturing capacity expansion

Backward integration of several existing branded formulations leading toimprovement in margins

Enhanced capacity available for catering to institutional and exports business


33/39

Growth prospects

Year(FY)

Turnover(Rs Cr)

EBITDA(Rs Cr)

BrandedFormulationsSales (Rs Cr)

InstitutionalSales (Rs Cr)

2012 554 56 438 116

2013E 800 95 620 180

2014E 1,080 130 730 350


34/39

Growth prospects

Revenue growth in FY13 will be fuelled mainly by

Growth in established market leading brands

New product introductions

Enhanced institutional sales business

The Company expects its EBITDA margin in FY13 to be in the range of 12% - 13% on

the back of Backward integration of several branded formulations

Some of the new product introductions would have higher margins

Economies of scale


35/39

KEY TAKEAWAYS


36/39

IIL: Success factors

Positive industry dynamics

Demand drivers, genetic trends, gaps in food production and burgeoning demand

Participant in diversified markets Branded formulations, institutional sales & non-crop applications

Proven product acquisition model Successful repositioning of acquired products and technologies

World-class manufacturing capability High-quality, environmentally compliant and cost competitive

Growth potential in international markets and institutional business Strong fundamentals in place

Financial profile Excellent operating performance, strong financial control


37/39

IIL: Key strengths

Growing participant in a healthy industry with significant growth potential

Successful and adaptable business model

Strong all India marketing network

Diversified end-use markets - Branded & Institutional; Crop & Non-Crop

Experience of handling leading brands in the country

Committed and dedicated team with low attrition rate Strategic, efficient, cost effective and compliant manufacturing

Organization committed to customers

Entrepreneurial and financially prudent culture

In the coming years, we intend to assume a leadership position in the marketby leveraging our strengths and capitalizing on our success factors


38/39

Disclaimer

Whereas due care and caution is taken in furnishing the information contained herein, this documenthas not been independently verified and IIL disclaims all responsibility and/or liability directly orindirectly on any cause of action arising out of such information. To the maximum extent permitted bylaw, none of IILs employees or agents, nor any other person accepts any liability, including, withoutlimitation, any liability arising out of fault or negligence, for any loss arising from the use of theinformation contained in this presentation. No reliance should be placed on, the fairness, accuracy,completeness or correctness of this information or opinions contained herein.

Certain statements contained in this document may be statements of future expectations, forecastsand other forward-looking statements that are based on managements current view and assumptions.No representation or warranty, express or implied, is given as to the accuracy, completeness orcorrectness, likelihood of achievement or reasonableness of any forward-looking statements containedin this presentation. Such statements are by their nature subject to significant uncertainties andcontingencies and the actual results, performance or events may differ materially from those expressed

or implied in such statements. Readers are cautioned not to place undue reliance on any forwardlooking statement.


39/39

THANKS

Date post:	02-Jun-2018
Category:	Documents
Upload:	dharmendra-b-mistry
View:	221 times
Download:	0 times

IIL - Investor Presentation - FY2012

Documents