Satia Industries Limited has informed the Exchange regarding Investor Presentation
e
SATIA INDUSTRIES
LIMITED
An ISO 9001,
14001
& OHSAS
18001
company
Manufacturer
of Quality
18_ 1848
Writing, Printing & Speciality {BJQI
ECO
MARK
?
with
Paper
CIN:
- L21012PB1980PLC004329
Sil/CS
Date:
19.11.2019
-=7--::-=-??????????????----.??????????????????
The Manager, Listing Department, BSE Limited, Phiroze
Jeejeebhoy
Dalal
Street
Mumbai-400001 _Scrip Code:
539201
Dear Sir/ Madam,
Towers
The Manager Listing Department National Exchange Plaza, Bandra-Kurla
Mumbai
- 400
Symbol:
SA TIA
Stock Exchange of Plot
India Ltd no. C/1, G Block,
Complex, Bandra 051.
(E)
Sub:
Submission
of Analyst/
Investor
Presentation
Pursuant Regulations, 2015.Please
to Regulation 30 of the SEBI enclosed
find
(Listing Obligations and Disclosure updated Investor
Presentation.
Requirements)
Thanking you,
Yours
sincerely,
For
Satia
Industries
Ltd
,l)vvJ;
(Rakesh Kumar Company Secretary
Dhuria)
Registered Office & Mill : VillageRupana, Sri Muktsar Sahib-152 032, Punjab, India. Ph.: 262001, 262215, 263585
Fax : 01633-263499
email: satiapaper@gmail.com
Branch:
Branch:
Branch
613-615, Naurang House, 21, K.G. Marg,Connaught Place, New Delhi-110001 8 • C, Madhya Marg,Chandigarh -160018 S.C.0. No. 90 - 92, Sector : 304, Navjeevan Complex, 29, Station Road, Jaipur-302006, Rajasthan Ph.: 2371055, 2379554
Ph.: 0172-2780022/23, 4618377
Ph.: 23710351/52/53
Fax:
e-mail:
Fax: 23718191 Fax: 0172-4648600, satiaindustriesltd@gmail.com satiapaper.jpr@gmail.com
satiapaper@rediffmail.com
0141-2374433
e-mail:
SIL - 005187
SATIA INDUSTRIES LIMITED
INVESTOR PRESENTATION November 2019
SATIA INDUSTRIES LIMITED AN ISO 9001, 1400 & OHSAS 18001 COMPANY
1
Executive Summary
Company Overview
Key Clientele
• Incorporated in 1980, Satia Industries Limited (SIL), is one of the biggest and completely integrated Wood and Agro based paper manufacturers. • SIL’s products are extensively used in the printing of books, directories, envelopes, diaries, calendars, computer stationery, annual manufacture copy reports, etc.
around
• SIL has long standing relationship with State Text book Corporations 40% of and revenue from these organisations. • The remaining revenue attributes to the Public and Sector Companies.
Private
comes
Manufacturing and Distribution Network:
FY19 Financial Snapshot
• Manufacturing plant based out of Muktsar with capacity to manufacture 1,05,000 MT per annum. • Completely integrated manufacturing operations with 3 paper machines, 100% in- house power generation and effluent treatment. • Strong Distribution Network: 70 dealers and 3 branch offices.
Operational Revenue INR 7,384 Mn
EBITDA INR 1,641 Mn
EBITDA Margin 22.22%
PAT INR 878 Mn
PAT Margin 11.89%
ROE 29%
ROCE 26%
2
SATIA INDUSTRIES LIMITED AN ISO 9001, 1400 & OHSAS 18001 COMPANY
Company Overview
3
About The Company
• Incorporated in 1980 by Dr. Ajay Satia, Satia Industries Limited (SIL) started its
commercial production of printing and writing paper at Muktsar, Punjab in 1984.
• SIL is one of the biggest Wood and Agro based paper plants in India manufacturing
paper using wood chips, veneer waste, wheat straw, sarkanda, etc.
• The Company has a fully integrated manufacturing facility, which includes paper
machines, pulping machinery, chemical recovery plant and power generation plant.
• Fully integrated production facility gives superior advantage in terms of cost efficiency and environmental compliance, ultimately leading to superior margin profile compared to peers.
• With a view to improve the quality of pulp and also to save on cooking chemicals, a
Continuous Digester has been installed by the Company.
• The product profile includes Super Snow White, Snow White, Photocopier paper, Map litho, Colored paper, Ledger paper, Cartridge paper, Duplicating, bond paper - with and without watermarks and Chromo (Art) paper from GSM range 42 to 200 GSM.
• Satia Industries Limited market its product through dealer network located all over
India and through Branches at Jaipur, Delhi & Chandigarh.
Operational Revenue (INR Mn) & EBITDA Margin (%)
7,384
6,421
5,708
4,336
12%
16%
19%
22%
21%
4,283
FY16
FY17
FY18
FY19
H1-FY20
Revenue (INR Mn)
EBITDA Margins %
Raw Materials Used of Total Volumes
Waste Paper Based 5%
Wood Based 30%
Agro Based 65%
4
Key Management Personnel
R.K. Bhandari (MBA) - Joint Managing Director
Looks after marketing and other administrative responsibilities since the last 32 years Chirag Satia - Executive Director
Dr. Ajay Satia Chairman & M.D
Chirag has been driving force behind new inititatives since he joined in 2015 and looks after Finance, Accounts and Commercial Operations. His enterprising spirit and forward looking vision has added new energy to the workforce. A.C. Ahuja – Director
• Dr. Satia set up the integrated paper
mill in 1984.
• His
vision to adopt
technological changes and economies of scale along with timely capital infusion has brought the unit among the best in the industry in terms of pulping strength, power self-sufficiency, effluent treatment and meeting the environmental norms.
• Dr. Satia has a passion for work and enterprising unparalleled possesses spirit for expansion and modernisation.
• His greatest strength lies in building and retaining a strong and trusted team which has turned his dreams into reality.
Ex. Executive Director IFCI, Delhi Hardev Singh - Director (Technical)
Has a wide experience in installation of projects Arun Kumar Gupta - Director (Independent)
Senior Chartered Accountant Ashok Kumar Gupta - Director (Independent)
A CAIIB and has 35 years of experience in Banking Dr. Priti Lal Shivhare (MSC, Ph.D. Chemistry) - Director (Independent)
A scientist in Central Pulp and Paper Research Institute, Saharanpur, (U.P)
Inder Dev Singh – Director (Independent)
A retired personnel of PNB and has studied B.Com. and LLB and is a CAIIB
Dinesh Sharma – Director (Independent) Masters in Chemical Engineering
S. K. Arora – Director (Independent) Senior Chartered Accountant
Ashok Khurana (C.A.) - VP-Finance
R. K. Dhuria – Company Secretary
L.L.B.
5
Key Milestones
Started production using a single paper machine with the capacity of 4,950 MTPA
1984
Production crossed 10,000 MTPA
1993
Power cogeneration plant (5MW) was installed
Increased capacity of the power plant to 23.30 MW
Additional Power generation capacity of 10.45 MW and New Solar plant with capacity 2.29 MW were installed
2003
2011-12
2016-17
Achieved a significant production
2018-19
1980 Incorporation of the Company
1989 Second paper machine was installed
1998 Third paper machine and 200 MTD pulp mill were installed.
2006 A Chemical Recovery Plant and power plant (5MW) were installed
2014-15 The Capacity of Chemical Recovery Plant was enhanced and also installed a Pulp Bleaching Plant
2017-18 Added Solar Capacity of 3.25 MW
6
Geographical Presence
Region-wise sales for FY19
Jammu & Kashmir 1.3%
J
Punjab 8.4%
Haryana 3.7%
Rajasthan 9.1%
Gujarat 1.4%
Maharashtra 13.7%
Telangana 0.9%
Export and Others 10.4%
Region-wise sales for FY19
Delhi 12.8%
Uttar Pradesh 18.1%
Assam 5.8%
West Bengal 2.3%
Bihar 0.8%
Madhya Pradesh 2.1%
Chhattisgarh 5.4%
Odisha 3.8%
7
Distributors (70)
Branch Offices (3)
Manufacturing Plant (Muktsar)
Manufacturing Facilities
Pulping Facilities
Paper Machines
Chemical Recovery Plant
Power Generation
Segment
Description
Digester
• Continuous for oxygen pulp, cooking delignification and chlorine dioxide bleaching has been installed.
• Capacity of paper machines varies with operating speed and GSM of paper.
• Proposed: 300 TPD, already Environment
for
applied Clearances
• Installed
Chemical two Recovery boilers with a capex of INR 850 Mn to process black liquor reconversion into caustic soda.
for
• Project
target
for commissioning is two and a half years subject to all Govt. permissions.
• It also helps in environment
compliance.
• Installed
turbine three generating sets at a total capex of INR 871.6 Mn and a solar power plant at capex of INR 224.2 Mn.
8
Capex Plan
Agro – Residue
Wood chips
Waste Paper
CRP
In-house power generation
Current Capacity 1,05,000 MT of Paper
Capex of INR 500 Cr
Capacity Expansion of 1,00,000 MT of Paper
Updates • Additional land has already been
purchased
• Set of Equipments & Machinery
has already been ordered
• Final Hearing for environmental compliance is expected to take place with the Ministry of Environment & Forests, Delhi • Finances have been tied up for
the project
Plant to be commissioned by the end of Q4-FY21
Funding
Internal Accrual 35%
Debt 65%
A similar greenfield capacity expansion of 300 TPD would cost around INR 1,000 Cr and would take a timeline of around 40 months to be operational.
9
Paper Cutlery Segment
• Prime Minister Sh. Narendra Modi gave an ambitious call to eliminate all single-use plastic products in the country by 2022 and SIL plans to make most of this opportunity in the national movement to replace plastic and styro foam from food delivery packaging with sustainable packaged products
• The company has already entered into Virgin fibre based Cup stock segment and plans to venture into the paper cutlery segment with an initial capital outlay of INR 15-18 Cr
• To establish this segment SIL has plans to enter into a partnership with an MNC
which is one of the world’s largest leading food brands
• SIL will be producing the finishing products of sustainable packaging and the marketing operations will be handled by the proposed Associate in India and abroad
• Target for commencement of production is Q1-FY21
>
Initial Production Capacity of 8 TPD
To be enhanced to 32 TPD
Online food delivery is fuelling substantial acceleration in food packaging demand. We expect this segment to gain traction by FY21.
10
Paper Making Process
Stage 1
Agro Residue
Wet Washing
Cleaned Raw Material
65%
Wastewater
Clarifier & Biogas Plant
Continuous Cooking with caustic soda which passes through steam at 165 Degree Celsius
Cooked Pulp & Black Liquor
(Sodium Lignate)
Unbleached Pulp Washing, Refining, Screening & Cleaning
Brown Pulp
Elemental Chlorine Free Bleaching (Environ- ment Friendly)
Black Liquor
Caustic Soda Recovery Section
W h i t e P u p
l
Requires higher amount of Caustic Soda (Sodium Hydroxide)
Wood Chips
t-lmb
30%
Imported Wood Pulp
5%
Hydra pulper (disintegrat ion)
Refined & stored in a chest
Stage 2 Stock Preparation
Different types of Pulp (Agro, wood, imported wood) is mixed in different proportions as per the required quality additives like AKD, PAC, whitening Agent, Wet End Additives and Fillers
Stage 3 Paper Making
Sheet Forming-> Wet Sheet
De-watering through 3 stages: Vacuum Suction, Pressing, Evaporation (Drying)
Calendaring for smoothness and evenness
Roll Forming
Stage 4 Converting and Finishing
Sheeting
Rewinding
Cutting
11
Effluent Treatment
Recovery Boiler Organic matter burns and acts as fuel
Black Liquor
(Sodium Lignate)
Inorganic matter becomes Sodium Carbonate
Treated with Calcium Hydroxide
Calcium Carbonate (Limestone) Sold in markets
Sodium Hydroxide (Caustic Soda) Reused after 90 -95% recovery rate
Wheat straw wet washing waste water is used to produce Biogas
Waste water from paper machine is clarified and reused in washing of pulp in bleaching stages
Maximum circulation of bleaching plant filtrate
Final effluents are first treated at the Effluent Treatment Plant & then passed to the Eucalyptus Plantations
12
Top Clients
£
L. A
vS’sjc’fr sn cwrfe'sfsra
Bal Bharti
Assam State Text Book Production & Publication Corporation Ltd.
Odisha State Bureau of Textbook
BurdaDruck
Burda Druck India Private Limited
Chhattisgarh Pathya Pustak Nigam
Rajasthan Rajya Pathyapustak Mandal
Burda Druck India Private Limited
West Bengal Text Book Corporation Ltd
Himachal Pradesh Board of School Education
Indian Railways
13
Myths Vs Realities of the Paper Industry
Myth
Reality
Denuding forests
Paper industry in India is also agro and rural based. Industry led agro/farm forestry in collaboration with farmers have brought over 125,000 hectares under pulp wood plantations.
Disturbs ecological balance
It is wood positive. The industry grows more trees through its agro-forestry initiative than it harvests. Moreover, pulp and paper industry consumes only 3% of the national requirement of wood while major consumption is as fuel wood (89.5%) and timber (7.5%).
The sun has set on India’s paper industry
Overall paper consumption is projected to increase to 24 million ton in 2024-25 from 15 million ton currently. Every one kg increment per capita consumption results in additional demand of more than 1 MTPA.
Technologically outdated
An investment of more than USD 5 Bn. has been made by the industry during the last five years in capacity enhancement, technology upgradation and various acquisitions.
Unsustainable industry
Paper is biodegradable, recyclable and sustainable.
Puts undue strain on water and energy resources
Lobbies for access to forests repeatedly
Earlier, paper mills used to consume 200 cubic meters of water to produce a ton of paper. Now, the integrated mills have reduced the usage to 50 cubic meters with efforts on for 40 cubic meters.
Out of the total degraded forest land of 29 Mn hectares, the paper industry is asking for only 10%. Growing pulpwood trees on degraded land will lead to a fillip in rural employment and add to the green cover of India.
14
Certifications
^
Certificate of Sr* Registration (cid:127)**J&kMf.btmJfym. Satia Industries Ltd.
Village - Rupana. Muktsar - Malout Road.Muktsar - 152032 (Punjab).India.
This is to certify that
/
t
I
Certificate of
^
4-”-* Registration
This is to certify that
7J*W
Satia Industries Ltd.
Village - Rupana,Muktsar - Malout Road. Muktsar - 152032 (Punjab).India.
W Certificate of tv * Registration Satia Industries Ltd.
Village - Rupana, Muktsar - Malout Road. Muktsar - 152032 (Punjab).India.
This is to certify that
has been assessed by RICL and found to comply with the requirements of
has been assessed by RICL and found to comply with the requirements of
has been assessed by RICL and found to comply with the requirements of
ISO 9001 : 2015 Quality Management System
ISO 14001 : 2015 Environmental Management System
OHSAS 18001:2007 Occupational Health & Safety Management System
For the following activities: Manufacturing and Supply of V\ riling & Printing Paper
For the following activities: Manufacturing and Supply of Writing & Printing Paper
For the following activities: Manufacturing and Supply of Writing & Printing Paper
This Certificate is Valid from 21 04 2017 Until 20042019
This Certificate is Whd from 13062018 Until 12 062019
Date of Initial Certification: 21 04 2017 1st Surveillance Successfully Conducted llnd Surveillance onor before: 2003 2019 Certification ValidUntil: 2004 2020
JAS-ANZ
A
tfnr.jas-nuorgiregister EJ!
Director Royal Impact Certification Ltd. Certificate details entered into JAS-ANZ register on 21W2017 A- 66. Greu«Row, Seew - 2 NMa- 2111301.Ma «K«ialcrg rte$«c«njKwili>'g (cid:127) 911204113883 97814187M
Phone :
This Otiteale can be iwteo at waixntemalcrai erg and wwwiaserg erg
Date of Initial Certification: 13 06 2018 1st Surveillance on or before:1205/2019 Certification Valid Until: 12 062020 IAFb a full member of International Accreditation Forum (IAF)
©
IV-
Director Royal Impact Certification Ltd. 4-66 GnuidFbK Seda- 2, Nod*- 201301. WM mm ecclnralcre »g iifogtscuttmatunalo'j Ptwie *91120 4113893.97616167W This Cefttale canlie verfiec al nm norienatcnai or
lnited Accreditation Foundation 3510.( olmar. \ornok. V A 23519. Inited Slates of America. nemPtr of IntemabonalAcaaMaun Forum fMf). the mtmbentip status can be lenfad at wwsuat^
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WniVateimthi (heproperty of Royal Impact Certification Limited Mus!be mfumed on .mooes!or if
This Certificate is Valid from 13062018 Until 12062019
Dale of Initial Certification: 13062018 1st Surveillance on or before: 1205 2019 Certification Valid Until: 12 062020 IIAF is a full member of International Accreditation Forum (IAF)
9
IV-
Inited Accreditation Foundation
3510.Colmar. SorflokAA 23509. Inited States of America.
Director Royal Impact Certification Ltd. A - 66.GnMW ftw. SecKr - 2.Nodi- 201301. tvja log "YoA'WWTmcrm oqi Phene *91120 4113893.97*1616784
This Cemteale can beveeded al: «w isorieralcra oig
Rainforest Alliance
SATIA INDUSTRIES LIMITED VILLAGE - RLPANA MUKTSAR- MALOUT ROAD MJKTSAR, WJNJAB 152026 INDIA
IS CERTIFIED FOR FOREST STEWARDSHIP COUNCIL’ CHAIN OF CUSTODY
Certttlcats Scope
Certfflcae Type: angle Cftam cf Custody
Standard^): F2C-GT[>4(HXMV2-1;FX-GT[>4IMC7 V2-0 Product groupfs): Wflng.copfnq art prwng paoer vaM from September u. 2015 to September 13.2C20 Certfllcate Regtatratwi Code RA-COOC0727S
FSC License Code: F5C-C126556 Certfflcae Issue Number IN-2015-1 Adflonaldetak
trtseaoe. ircludrgafUl istoF st info tsc org.
.onjcUnj aicsf CetWcadon 233 3TU3B,25t Fiber New Yert NY 1X79 USA Rjr'orwAlance
RAINFOREST ALLIANCEIS AN FSCK ACCREDITED CERTIFIER
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15
Key Strengths
Wheat Straw is cheap and easily available locally
Low cost raw materials
$
No other paper mill in a 100 Km radius
Secure access to raw materials
Chemical Recovery Plant to treat Black Liquor, oxygen plant for Delignification, production of Chlorine Dioxide for Bleaching & Pulping
Tremendous cost savings through in-house effluent treatments/intermediates
27.95 MW capacity run on Biomass and process intermediate- Black Liquor
Co-power generation
to reduce cost
Pan India distribution network
3 Branch Offices and 70 Distributors
Long standing relationships with State Text Book Boards
Environment compliant manufacturing facilities
In-house treatment of pollutants and 540 Acres of Eucalyptus Plantations and Carbon Credit Surplus
16
SATIA INDUSTRIES LIMITED AN ISO 9001, 1400 & OHSAS 18001 COMPANY
Business Overview
17
Writing and Printing paper : Products
Snow White
Features: Brightness: 85% Whiteness: 133% Opacity: 85-96%
Super Snow White
Ultra White
Ultra Shine
Ultra Print
Features: Brightness: 89% Whiteness: 142% Opacity: 85-96%
Features: Brightness: 85% Whiteness:133 % Opacity: 85-96%
Features: Brightness: 88% Whiteness: 142 % Opacity: 85-96%
Variants: Copy Segment:52-64 GSM Printing Segment: 52-90 GSM
Variants: Copy Segment: 52-64 GSM Printing Segment: 52-90 GSM
Variants: Copy Segment: 52-64 GSM Printing Segment: 52-90 GSM
Variants: Copy Segment: 52-64 GSM Printing Segment: 52-90 GSM
Pricing: INR 60,500 to 64,000 PMT
Pricing: INR 61,500 to 65,000 PMT
Pricing: INR 62,500-65,800 PMT
Pricing: INR 62,000 to 65,500 PMT
RM Composition: Agro Pulp: 75% Hard Wood Pulp: 25%
RM Composition: Agro Pulp: 70% Hard Wood Pulp: 30%
RM Composition: Agro Pulp: 75% Hard Wood Pulp: 25%
RM Composition: Agro Pulp: 70% Hard Wood Pulp: 30%
Features: Brightness: 90% Whiteness: 145 % Opacity: 78-96%
Variants : 58-100 GSM
Pricing: INR 63,000 to 66,500 PMT RM Composition: Agro Pulp: 65% Hard Wood Pulp: 25% Imported Hard/Soft Wood Pulp: 10%
18
Writing and Printing paper : Products
Coloured Paper
Cover Paper
Natural Shade
Photo Copier
Ledger
Features: Brightness- NA Whiteness- NA Opacity – 78-96%
Variants: 48-180 GSM
Features: Brightness- 85% Whiteness- 133% Opacity – 94-96%
Variants: 100-170 GSM
Pricing: INR 67,000 to 71,000 PMT
Pricing: INR 62,000 PMT
Features: Brightness- 82% Whiteness- 70% Opacity – 92-95%
Variants: 80-120 GSM
Pricing: INR 62,000 PMT
RM Composition: Agro Pulp- 70% Hard Wood Pulp -30%
RM Composition: Agro Pulp- 75% Hard Wood Pulp -25%
RM Composition: Agro Pulp- 70% Hard Wood Pulp -30%
Features: Brightness- 90% Whiteness- 142% Opacity – 92%
Variants: 70-80 GSM
Pricing: INR 69,500-70,000
RM Composition: Agro Pulp- 65% Hard Wood Pulp -20% Imported Hard/Soft Wood Pulp- 15%
Features: Brightness- 58% Whiteness- 11% Opacity – 88-90%
Variants : 58-90 GSM
Pricing: INR 65,000 to 66,000 PMT
RM Composition: Agro Pulp- 75% Hard Wood Pulp- 25%
19
Operating Efficiency
Production, Revenue and Profit Trend
1,43,440
1,44,429
3,978
3,931
1,60,631
4,336
372
FY14
531
FY15
Raw Material Consumed (MT)
449
FY16 Column1
1,94,204
2,06,400
6,421
2,12,858
7,384
5,708
875
1,284
1,578
FY17
FY18
FY19
Total Revenue (INR Mn.)
Cash Profit (PBDT) (INR Mn.)
76.01%
1.35%
Operating Cost Bridge
0.76%
0.05%
65.26%
>
-0.37%
-4.59%
-7.95%
FY16-Operating costs as % of revenue
Raw Materials
Chemicals
Power & Fuel
Store & Spare
Packing Material
Salary & Wages
FY19-Operating costs as % of revenue
2,50,000
2,00,000
1,50,000
1,00,000
50,000
-
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
2.00%
0.00%
-2.00%
-4.00%
-6.00%
-8.00%
-10.00%
20
Strategic Advantage
Raw Material Security
Water Security
Captive Power Generation
• SIL has the capability and flexibility to use all three kinds of pulp made from agro residue, wood
•
and waste paper. It procures raw materials like wheat straw, sarkanda and wood chips from the area adjacent to the manufacturing plant in Punjab.
• No other paper mill, in a 100 km, radius ensures easy and cheap availability.
• Water is imperative at each stage of production and can lead to loss of machine days in case of
shortage.
• The fresh water requirement is 18,500 m3 /day for Agro & Wood-Based Pulp to produce writing
& printing paper 390 TPD.
• The Company has an approval from the state irrigation department for fresh water withdrawal
of 7.5 cusec from Arniwala Canal, which is at a distance of 1.8 km.
• With the high cost of power directly affecting profits of paper industries, the best option is to
install own captive power plants to manage production schedules without unplanned downtime and lower costs.
• Against the huge requirement of steam at 10Kg/cm2 pressure for pulp making and steam at 4Kg/cm2 pressure for drying paper; SIL has installed 62Kg/cm2 steam pressure boilers and 27.95 MW power is co-generated from energy produced in pressure reduction which helps in huge cost savings.
21
Future Growth Strategy
03
With a strong raw material base, doubled production capacity to over 2.0 lac tons paper every year and with a flexibility to make high grade surface sized maplitho and copier paper along with our traditional stronghold in Government textbook paper market; we plan to expand our customer base and further strengthen our existing network by meeting varied needs of the customers in the face of stiff competition in the market.
02
SIL proposes to simultaneously enhance its agro, wood and recycling pulp making facilities to meet increased level of paper machines capacity along with flexibility in raw material usage. We plan to upgrade our Chemical recovery plant and cogeneration division to meet environmental challenges and also maintain our to maintain cost competitiveness.
independence in low cost power
01
SIL plans to make best of the scenario by focusing on modernization of its existing plant and machinery; quality up gradation by increasing wood pulp in its raw material mix and making surface sized paper for high speed multi colour printing and plans to double its production capacity by setting up a new paper machine in its existing premises by the end of the year 2020. The plant will be operational by 2021/2022.
22
Environmental Compliance
Environment Compliance though a legal necessity; SIL considers this as its moral responsibility and has undertaken many steps to ensure that no harm is done to the environment:
• Eucalyptus Plantation : SIL uses the natural quality of Eucalyptus Plant for natural pumping and evaporation of ground water through its leaves into the atmosphere and has developed 540 acres of Eucalyptus Plantation for waste water handling. No water is discharged into any water body.
• SIL has adequate water and air pollution control devices to meet the prescribed norms of Water and Air pollution and has got the necessary Consent to operate from the PPCB, Punjab under different Acts.
• SIL has a fish tank with the treated waste water to check fish survival in the treated
effluent and establishes that it is not harmful for aquatic life.
• Solid waste is used by card board manufacturers and boiler ash goes into land filling.
• SIL is planning to tie up with cement companies to dispose lime sludge.
• Methane is used for power generation or as fuel in the boiler.
23
Karnal Technology
Process
•
•
The Karnal Technology involves growing trees on ridges 1m wide and 50cm high wand disposing of the untreated sewage in furrows. The effluent is consumed within 12-18 hours and it is possible to dispose off 0.3 to 1.0 ML of effluent per day per hectare through this technique.
Plantation Eucalyptus plant is widely used for Karnal Technology due to the capacity to transpire large amounts of water and ability to remain active through out the year.
N /
V s
' / V / v'vU
VA for pcoofov*^
50 cm hi$i, I m w4t
Furrow hr 10*09« dupoiol. 2 m «.d*
•
•
•
•
Low Cost The expenditure of adopting this technology involves cost of making ridges, plantation and their care. The implementation does not involve skilled labour and relatively unfertile wastelands can be used for this purpose.
Zero Effective Discharge This technique utilizes the entire biomass as living filter for supplying nutrients to soil and plant. Further, as forest plants are to be used for fuel wood, there is no chance of pathogens, heavy metals and organic compounds to enter into the human food chain system.
timber or pulp,
Revenue Generation This system generates gross returns from the sale of fuel wood and the sludge accumulating in the furrows along with the decaying forest litter.
24
Corporate Social Responsibility
SIL believes that the corporate sector are economic organs of the society and therefore endeavors to make a positive difference to the society by trying to build a better tomorrow. • • •
Total amount spent in FY19: INR 11.2 Mn Total amount spent during FY18: INR 4.9 Mn The management has approved INR 25 Mn for CSR program in surrounding villages. The activities mentioned therein shall be carried out within a time frame of 5 years (2017-18 to 2021-22) The sectors identified under the scope of CSR activities are as follows:
Community Health Improvement: Periodical medical checkups, blood donation camps to be organized near the project site, eye check-up camps, health awareness camps for mother and child and health and hygiene practices
Community Education Facilities: Augmentation of furniture, blackboard, etc. in village schools, award scholarships to meritorious students, distribution of educational books, stationary, uniforms, aids, etc.
Community Welfare activities: Development of worship places as well as beautification, distribution of seeds & saplings, promotion & support to various Govt. schemes
Community Water Conservation: Rain water harvesting, ground water recharge pits and water conservation awareness programs
Community Capacity Building: Development of vocational training for technical skills, self employment trainings for women, such as, stitching, embroidery, tailoring, and handicrafts, etc.
Infrastructural Development: Village pond retrieval and R.O installation
A forestation Programs: Plantation of trees in village road sides
25
SATIA INDUSTRIES LIMITED AN ISO 9001, 1400 & OHSAS 18001 COMPANY
Industry Overview
26
Paper Industry Overview
• Globally, India is the fastest growing paper market – 5-year (FY11 - FY16) with a CAGR of
consumption is 8% in comparison to 1% globally.
• Paper demands grow in tandem (gain momentum) with the GDP growth rate in a country. Over the last 10-yr period (2006-2016), India’s paper demand grew 8.1%, whereas GDP CAGR was 7.3%. Thus, the Company believes that India’s high GDP growth rate ensures that base demand growth for paper is high.
• Moreover, paper usage per capita in India lags in comparison to most other major
economies - 13 kg p.a. vs 150-250 kg p.a. for more developed countries.
• Combined with rapidly improving literacy rates and increasing office documentation needs, we expect demand growth in writing and printing paper in India to continue [Literacy rate improved to 75% in 2016 from 63% in 2001].
• The Indian paper industry is highly fragmented with more than 1000 mills, of which about
750 mills are operational and top 3 players account for only 9% of the market.
10%
8%
6%
4%
2%
0%
-2%
-4%
5 Year CAGR % FY11 to FY16
8%
1%
1%
India
China
Indonesia
USA -1%
0%
Germany
UK
I
-3%
India has one of the lowest per capita consumption of paper
India (total 17m tons)
China (total 109m tons)
USA (total 70m tons)
Indonesia (total 7m tons)
9%
21%
32%
28%
91%
79%
68%
72%
Germany
USA
Share of Top 3
Others
27
I
Paper Industry Overview
•
India is the fastest growing major paper market in the world.
• An appreciating rupee made imports attractive in FY17.
• Anti-dumping duties were imposed by the US in 2016 and 2017, which
led to diversion of supply from US to Indian markets.
• Free Trade Agreements with ASEAN and South Korea led to an increase
in exports at 10Yr CAGR of 15% and 8%, respectively.
• Even though this dynamic may change as the rupee depreciates\anti- dumping duty is effected, open imports have already forced companies to increase cost efficiency\consolidate.
Imports grew at 9.3% CAGR from FY13 to FY18
5 000
4,SCO
4,OCO
3.5CO -
3,OCO -
2.5CC 2.0CO
1.5C0
1.DC0
5CO
0"iportvd umes in mn TPA)
(YoY growth r^es
I
FY04 FY05 FYC6 FY07 FY03 FYD9 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Qt/ imported iJ-HS)
Growth Rates
50%
- 40%
- 30%
20%
10%
- 0%
- -10%
-20%
28
(cid:127) Challenges of Environmental Compliance
• The pulp and paper industry is among the world’s largest generators of air and water pollutants, waste products and gases that cause climate change. Thus, heavy investment is required by companies to be environmentally compliant. Multiple norms have been introduced over the years, which have covered paper manufacturing companies.
CREP, 2003
CWRPP, 2012
CWRPP, 2015 (Ganga Basin States)
National Charter (In the pipeline)
• Corporate Responsibility for Environment Protection (CREP) had some key action points - utilization of treated effluent wherever
possible, reduce wastewater discharge to less than 140 m3/tonne of paper by 2005, etc.
• Charter for Water Recycling & Pollution Prevention in Pulp & Paper Industries (CWRPP), not only highlighted the Best Available Techniques (BAT) based on European Union’s BREF document, but also laid down stringent water consumption, effluent generation and effluent characteristics norms for the industry to be achieved in two phases, i.e., short-term goals (by March 2016) and long-term goals (by March 2017). Water consumption norm of 50 m3/tonne of paper produced has already been achieved by the Industry.
• National Charter is in the pipeline. Large mills have already incurred capex to adopt environmental friendly technologies and thus,
would not have a huge impact.
• Central Pollution Control Board (CPCB) advises the Central government on matters concerning air and water pollution. It has classified
pulp and paper in the Red category, which means environmental clearance for new factories would be strict.
• Recently, 12 environmentally non-compliant paper mills were issued closure notices by CPCB.
29
Indian Paper Industry is Ripe for Consolidation
High Capital Intensity - Investment in land and machinery, repairs and maintenance of mills, technology, cost of environmental compliance, growing wood plantations and establishing a distribution network all make manufacturing paper a capital intensive task.
Economies of scale - The average capacity of an Indian Paper Mill is about 21,373 TPA, which is less than 1/5th of the average capacity of European mills, and about 1/9th the size of the average US mill.
Imports will pressure inefficient players further.
It is expensive to be environmentally compliant - The pulp and paper industry is among the world’s largest producers of water pollutants and waste products. CPCB has classified Pulp and Paper industry into the Red category, which means environmental clearance for new factories would be strict.
Advent of GST - GST has been introduced at 12-18% for most paper categories which implies that the margin cushion available to small companies (likely tax avoiding) may be pressured.
Industry Stress - Multiple inorganic opportunities are available in India, which can help large players with strong balance sheets consolidate.
30
SATIA INDUSTRIES LIMITED AN ISO 9001, 1400 & OHSAS 18001 COMPANY
Financial Overview
31
Income Statement
PARTICULARS (INR Mn)
Operational Revenue
Total Expenses
EBITDA
EBITDA Margin
Other Income
Depreciation
Finance Cost
Extraordinary Items
PBT
Tax
Profit After Tax
PAT Margin
Other Comprehensive Income
Total Comprehensive Income
EPS (INR per share)
*As per IND-AS
FY16
4,336
3,801
535
FY17*
5,708
4,799
909
FY18*
6,421
5,203
1,218
FY19*
7,384
5,743
1,641
H1-FY20*
4,283
3,369
914
12.34%
15.93%
18.97%
22.22%
21.34%
165
332
251
(16)
101
(30)
131
3.02%
-
131
13.12
211
400
245
-
475
20
455
7.98%
(2)
453
45.55
303
451
237
-
833
146
687
145
477
208
-
1,101
223
878
116
263
111
-
656
141
515
10.70%
11.89%
12.02%
(8)
679
68.67
2
880
87.77
1
516
51.50
32
Balance Sheet (IND-AS)
H1-FY20 PARTICULARS (INR Mn)
PARTICULARS (INR Mn) Equity Equity Share Capital Other Equity
Non-Current Liabilities a) Financial Liabilities
(i) Borrowings (ii) Other Financial liabilities b) Other Non-Current Liabilities c) Provisions
Current Liabilities
a) Financial Liabilities
(i) Borrowings (ii) Trade Payables
(iii) Other Financial Liabilities
b) Current tax liabilities (net) c) Other Current Liabilities d) Provisions GRAND TOTAL - EQUITIES & LIABILITES
FY18 2,226 100 2,126
FY19 3,076 100 2,976
3,574 100 3,474
1,819
1,957
2,072
910 837 3 69
1,054 823 3 77
1,109 876 3 84
1,773
1,571
2,256
676 447
468
- 164 18 5,818
537 454
516
13 44 7 6,604
783 630
662
58 116 7 7,902
Non-Current Assets a) Property, Plant and Equipment b) Capital Work In Progress c) Financial Assets (i) Investments (ii) Loans (iii) Other financial assets d) Deferred Tax Asset (Net) e) Other Non-Current Assets
Current Assets a) Inventories b) Biological Assets other than bearer plants c) Financial Assets
(i) Trade Receivables (ii) Cash and Cash Equivalents (iii) Bank balances other than
above
(iv) Other financial assets d) Current Tax Assets (Net) e) Other Current Assets GRAND TOTAL – ASSETS
FY18 3,540 3,119 295
29 35 10 48 4
2,278 526
295
1,179 13
64
23 21 157 5,818
FY19 4,505 3,827 561
H1-FY20 5,012 3,623 1,301
31 17 10 59 -
2,099 599
303
1,057 5
35
26 - 74 6,604
31 18 10 29 -
2,890 586
330
1,762 10
35
52 - 115 7,902
33
Financial Highlights Operational Revenue (INR Mn)
3 years CAGR: 19%
4,336
5,708
6,421
7,384
: ;
EBITDA (INR Mn) & EBITDA Margin (%)
3 years CAGR: 45%
FY16
FY17
FY18
ROE (%) and ROCE (%)
29%
31%
12% 12%
FY16
21%
26%
29%
26%
FY17 ROE (%)
FY18
ROCE (%)
FY19
FY19
/ /
/
i : / :
/
/
/
:
;
12.34% 535
FY16
15.93% 18.97% 22.22%
909
FY17
1,218
FY18
1,641
FY19
Debt to Equity
1.67
1.00
0.68
FY16
FY17
FY18
0.50
FY19
/ / / / :
/ /
PAT (INR Mn) & PAT Margin (%)
3 years CAGR: 88%
7.98%
10.70% 11.89%
3.02% 131
FY16
455
FY17
687
FY18
878
FY19
Net Worth (INR Mn)
1,130
1,583
2,226
3,076
/
/
:
/ /
/ : / : /
/
/ /
; :
FY16
FY17
FY18
FY19
34
Capital Market Data
60%
50%
40%
30%
20%
10%
0%
-10%
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Sensex
Satia
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Price Data (30th October, 2019)
Face Value
Market Price
52 Week H/L
Market Cap (Mn)
Equity Shares Outstanding (Mn)
1 Year Avg Trading Volume (‘000)
INR
1.0
77.0
85.00 / 47.13
7,700.0
100.0
70.4
Shareholding Pattern as on 30th September, 2019
Public 48.32%
Promoters 51.68%
35
Disclaimer
No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management Satia Industries Limited (“Company” or “SIL” or “Satia Industries Ltd.”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.
Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.
This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration there from. This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.
Valorem Advisors Disclaimer: Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable, but Valorem Advisors and the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.
For further information please contact our Investor Relations Representatives: Mr. Anuj Sonpal Valorem Advisors Tel: +91-22-4903-9500 Email: satia@valoremadvisors.com
VALOREM ADVISORS
/
36
SATIA INDUSTRIES LIMITED AN ISO 9001, 1400 & OHSAS 18001 COMPANY
Thank You
37