Delivering Health and Prosperity - KS · PDF fileDalda. Recently launched refined...
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© 2011, K S Oils Limited. All Rights Reserved. Disclaimer: The information contained herein is subject to change without notice. This material was used during an oral presentation; it is not a complete record of the discussion. K S Oils Limited accepts no liability whatsoever with respect to the use of this document or its content. All product names and company names and logos mentioned herein are the trademarks or registered trademarks of their respective owners.
KSOI.BOKSO@INKSOILS526209
Delivering Health and ProsperityInvestor Presentation
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Agenda
Section Slide No.
The Company 03
Industry Dynamics 10
K S Oils Background 26
Company’s Products and Markets 38
Manufacturing 40
Markets and Distribution 48
Historical Financial Performance 50
Strategy & Growth Initiatives 56
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The Company
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The Company
K S Oils Limited (“KSO" or “K S Oils” or “the Company”) is one of India’s leading integrated edible oil company
Code: 526209Listed Since 1994
Code: KSOILSListed Since 2007
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The Company
Madhya Pradesh Rajasthan W. Bengal
Morena Kota Haldia
Ratlam
Guna
Integrated Manufacturing Plants
integrated capacities for crushing, refining, solvent extraction and vanaspati.
Strong Distribution network1,400 Distributors and over 200,000 retailers
Strong brandsin crude mustard and soya refined oil
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Key Highlights – Indian Edible oil market
The branded edible oil segment (~ 25% of the total market) is expected to grow by 25-30% p.a. in the next few years.
Mustard Oil INR 130 bn.
Other Edible OilsINR 620 bn.
Indian Edible oil market size Estimated value: INR 750 bn.
Growth Estimate
8% p.a.
Branded edible oils
emerging as one of the
high growth segments
in Indian FMCG
industry
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Key Highlights
Increasing focus on retail packs and pouches
Strong distribution network
Strong brands
Wide product range to suit local tastes and preferences
Largest rapeseed crusher in IndiaAdvantage
K S Oils
K S Oils is well-positioned to capture this opportunity
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Key Highlights
Excellent Track Record
• Excellent sales and profit growth
• Revenues have grown at a CAGR of 46% p.a. for the last five years while EBITDA has grown at a CAGR of 77% p.a.
• Increase in EBITDA margins from 4.5% in FY06 to 11.82% in FY10 on account of shifting revenue composition in favour of branded trade packs and consumer packs
• Successfully transitioning to an FMCG company
• Increase in branded revenue from 293 crs. in FY06 to 2,496 crs. in FY10
• Growth in Retail packs from 10% of the total turnover in FY06 to 35% in FY10
• Highest margin earner in the industry
Strong Distribution
Network
• Strong presence in mustard oil consuming regions – 37 C&F agents, 6 company depots, 1,400 Distributors and over 200,000 Retailers
• Initiated expansions into new markets and organized retail formats with refined edible oil products
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Key Highlights
• Largest crushing capacity in India - 4,400 MT/day located in Madhya Pradesh and Rajasthan
• Integrated facilities at the country’s strategic raw material and consumer belts
• Captive power generation and in–house packaging units
• Part of an established business house belonging to the Garg family from Morena, Madhya Pradesh dealing in agro based products for the last 150 years
• Present management includes representatives from the fifth and sixth generation of the family
Strong management with decades of experience in agri commodities
Quality manufacturing facilities
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Industry Dynamics
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World Consumption PatternWorld consumption of 17 Oils and Fats
Source: Oilworld (www.oilworld.biz)
11
Source: Oilworld (www.oilworld.biz)
Soya Oil, 19.40%
Palm Oil, 13.80%
Other Oils/
Animal Fats,
40.30%
Rape Oil, 10.60%
PKO & CNO, 5.80%
Sunflower Oil,
10.10%
1990-91: 81.8 Mn. MT
Soya Oil, 22.3%Palm Oil,
27.4%
Other Oils/
Animal Fats,
25.0% Rape Oil, 12.8%
PKO & CNO, 5.1% Sunflower
Oil, 7.5%
2008-09 : 163.15 Mn. MT
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Macro-economic situationIndian edible oil economy is world’s fourthlargest after USA, China and Brazil (India accounted for 8.2% of world oilseeds, 6.53% oil meal production and 10.26% of world consumption of edible oils in Oil year 08-09)
2nd largest import bill item for Indiazero level import duties by government to help domestic players in sourcing raw material at best and low prices
Increasing health consciousnesspreference for packaged products (hygiene factors and avoidance of any adulteration) and low-saturated fat cooking mediums
Branded 30%
Unbranded 70%
Branded Mustard Edible Oils Growth rate 40% p.a.
Other Edible Oils - 80%
Mustard Oil 18-20%
Indian Edible Oils Market – INR 750 bn.Overall growth rate 8% p.a.
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Indian Edible Oil Industry: Overview…
India accounts for 8.2% of world oilseeds output (2008-09);
6.5% of world oil meal production; 6.1% of world oil meal
export; 5.3% of world vegoil production; 13.8% of world vegoil
imports; and 10.26% of the world edible oil consumption.
“ “
Source: Oil WorldThe Independent Forecasting Service for Oilseeds, Oils & Meals
Hamburg / Germany (Website: www.oilworld.biz)
India has ~ 15,000 oil mills, 711 solvent extraction units and over 585 refineries employing more than one million people.
With an annual consumption of ~ 17 mn tons, the per capita consumption is at 14.5 kg p.a., which is very low as compared to the world average of 23.90 kg p.a.
• Domestic supply is estimated at 8 mn tons while the rest is imported. • By 2015, per capita consumption is expected to be between 17-18 kg p.a.
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Indian Edible Oil Industry: Overview
• Mustard, soyabean and palm oil account for over 75% of total edible oil consumption (excluding butter).
• Only around 16% of Indian households consume branded edible oils.
• Among branded oils, refined oil accounts for 60% of consumption and crude oil (only filtered) accounts for the balance.
• Branded edible oils have penetrated 31% of households in urban areas and only 9% in rural areas.
• The edible oil sector in India is largely unorganized with a few organized players.
Popular cooking mediums used in India includesunflower oil, mustard oil, groundnut oil, soyabean oil, palm oil and coconut oil
Edible oil is sold in India either in consumer packs(5 lt. and less than 5 lt. pack sizes), bulk packs (15 kg/ lt.) or as loose oil in tankers or barrels.
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India’s Edible Oil Consumption
Palm Oil has the highest consumption in India ~40% and is almost entirely imported. Mustard oil is the largest domestic oil and constitutes 12% of total consumption.
India’s Per capita consumption is assumed to equal current world average of 24.5 kg per person p.a. in next 10 years. India’s total consumption of edible oil is expected to double from current 16 Mn. Mt. to 32 Mn. Mt. by 2020.
-
2
4
6
8
10
12
14
16
18
20
2006 2007 2008 2009 2010
Palm Oil Soybean Oil Mustard OilSunflower Oil Groundnut Oil Other Oils
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COOIT’s Estimates of India Oilseeds Crop for 2010-11 (Nov. - Oct.)
Sr.no.
Oilseeds/ Solvent Extracted Oils
OilRecovery
%
Oil -Seeds
Marketable SurplusFor Crushing & Oil
Availability
Total Marketable
Surplus
Total OilAvailability
Kharif (Summer)
Rabi* (Winter)
I. OILSEEDS
1 Groundnut (in shell) 40 5.93 0.87 1.08 1.95 0.78 2 Soybean 17 9.35 8.55 - 8.55 1.45 3 Rape/Mustard/Toria 33 6.42 0.10 6.12 6.22 2.05 4 Sunflower 35 0.81 0.14 0.67 0.81 0.28 5 Others 2.36 1.39 0.58 1.97 0.85
SUB TOTAL 24.87 11.05 8.45 19.50 5.41 II. OTHER OILSEEDS
10 Cottonseed 12.5 10.23 9.73 - 9.73 1.17 11 Copra 65 0.65 0.65 - 0.65 0.42
SUB TOTAL 10.88 10.38 - 10.38 1.59
III. SECONDARY SOURCE (Rice Bran, Oil Cakes and other Minor Oilseeds) 1.36
iv. BUTTER, as Fat (as per Oilworld) 2.25
Grand Total 35.75 21.43 8.45 29.88 10.61
Figs. in Mn. metric tonnes
* Rabi Season 2009-10
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Rapeseed and Soybean growing areas
Minor growing areas
Major growing areas
Soybean
Mustard/ Rapeseed
Minor growing areas
Major growing areas
Ratlam
GunaMorenaKota
Location of KSO’s Plants
Haldia
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India’s Edible Oil Consumption
Consumption in India during Nov.10 to Oct.11 is estimated to be ~18 Mn. MT
Consumption
ImportsIndia will have to import ~ 9.5 Mn. MT to meet the shortfall and increased demand.
The imported oils mainly constitute crude and refined Palm oils from South-East Asia and Soya Degummed oil from South America.
ProductionThe Local Oil production in India as per Trade estimates will be around 8.36 Mn. MT
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Imports of Edible & Non-Edible Oil by India
Nov. 08 to Oct. 09 – 8.18 Mn. MT Nov. 09 to Oct. 10 – 8.82 Mn. MT
Palm oil imports accounted for ~74% in the last oil year – global sourcing at best prices helping Indian edible oil companies fulfil the increased per capita consumption.
19%
60%
14%
7%
0%
Soyabean Oil (Degummed) Crude Palm Oil Refined Palm Oil Sunflower Oil Others
12%
65%
15%
7%
Soyabean Oil (Degummed) Crude Palm Oil Refined Palm Oil Sun Flower Oil
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Regional Consumer Preferences
Mustardnorth-east, central, north and east
Groundnut west
Palm central and south
Soyaben north and central
Sunflower
largely consumed in urban India, in relatively small quantity Strategic Location of KS
Oils to address mustard cultivating / consuming belts
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Key Players and Brands: Mustard Edible OilCompany Brand Remarks
K S OilsDouble Sher, Kalash, KS Gold
Largest player in the mustard edible oil market (crushing capacity of 4,400 MT/ day)
NDDB DharaGCMMF (Amul) is the sole selling agent for Dhara and markets this brand through its wide distribution network
Agro Tech SudhamRefined mustard oil which is marketed in the Eastern market
Bunge DaldaRecently launched refined mustard/soyabean edible oil in Eastern market
Gokul Refoils Gokul Capacity of 690 MT/ day for mustard crushing
Shri Hari Industries
Engine Established brand in Rajasthan
Vijay Solvex ScooterAcquired the brand 5 years ago; crushing capacity of 325 MT/day
Adani Wilmar Fortune Kachi GhaniRecent entrant in crude mustard oil (third party manufacturing)
Ruchi SoyaMandap and Ruchi Gold
Presence in crude and refined mustard oil (third party manufacturing)
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OutlookThe demand for edible oils is expected to increase from current levels of 16.6 million tonnes in 2009 to 22.5 million tonnes by 2015.
-- The Solvent Extractors' Association of India
“
India’s dependence on imports is expected to increase to the extent of ~44% of its consumption requirement. The improvement in yields and the increase in area under cultivation are expected to ensure that domestic oilseed production is sufficient to meet only ~56% of consumption requirement.
Particulars 2015
Total Demand (Million Tonnes) 22.5
Total area under Oil seeds (Million Hectares) 30
Yield (Tonnes/ hectare) 1.3
Production of Oil seeds (Million Tonnes) 42
Domestic supply of edible oils (Million Tonnes) 12.5
Total edible oil imports (Million Tonnes) 10
Imports as share of demand 44%
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Mustard Oil Industry: Mustard Seeds
• The uniqueness of mustard lies in the fact that it has a very high oil content (~40-42% by weight) and that it is a hardy short duration crop requiring nominal amount of water and fertilizers
• Mustard seeds have a shelf life of 3-4 years and mustard oil is a natural preservative with antioxidants, which makes it the preferred oil for pickles
• Rajasthan (~42%), Uttar Pradesh(~15%), Madhya Pradesh & Chhattisgarh (~14%) contribute 71% of the total Indian production
• The balance 32% is cultivated in Punjab & Haryana, Gujarat, West Bengal, Assam, Bihar, Himachal Pradesh & Orissa
• Mustard is a winter crop, it requires a temperate climate to prosper. The sowing period in India is during the early Rabi season i.e. October to November
• The crop starts flowering in the months of December, January and February. The harvesting period is from February to May
Mustard Seed Cultivation Cropping Pattern
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Mustard Oil: ‘The Heart-friendly Oil’
91
51
43
27
19
18
15
15
13
12
9
8
7
7
39
47
19
48
44
75
23
29
16
16
77
61
1
1
8
1
1
57
1
11
2
10
9
54
33
38
9
54
57
18
14
21
71
Coconut Oil
Palm Oil
Lard
Cottonseed Oil
Peanut Oil
Rice barn Oil
Olive Oil
Soybean Oil
Corn Oil
Sunflower Oil
Flaxseed Oil
Safflower Oil
Mustard Oil
Saturated Fat Monounsaturated Fat Polyunsaturated Fat
Alpha-Linolenic Acid – Omega 3
Linolenic Acid – Omega 6
Comparison of Dietary fatsMustard Oil has the least amount of saturated fat as compared to all other edible oils
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Mustard Oil: ‘The Heart-friendly Oil’A study was conducted among 350 cases of heart attack in eight hospitals and 700 normal people in Delhi and Bangalore by a team comprising experts from
All India Institute of Medical Sciences, New Delhi
Boston
St. John’s Medical CollegeBangalore
Dr K Srinath Reddy from AIIMS, renowned scientists involved in the study, says
Use of mustard oil was associated with a two-fold lower risk than was use of sunflower or other oils, Similarly, those who use mustard oil for frying foods lower their risk for heart attack by 71 per cent.
“• The reason for the protective effect of
mustard oil is that it is rich in alpha Linolenic acid which is a source of omega-3 polyunsaturated fatty acids, known for giving protection to heart.
• Alpha Linolenic acid reduces the adhesion-aggregation tendency of blood platelet which should decrease the risk of heart attack.
Published in
“
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K S Oils Background
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The Company
K S Oils is in the business of manufacturing and marketing of branded crude mustard (rapeseed) oil and refined mustard/other edible oils
The Company is the largest processor of rapeseed in India
• Largest player in the crude mustard oil market
• Largest exporter of rapeseed deoiled Cake (2009-10)
• Significant presence in the refined oil market (soyabean/ palm)
• Other products include vanaspati, Soya deoiled cake, solvent oils, fatty acids and other oils
Manufacturing and DistributionManufacturing facilities are located in Madhya Pradesh, Rajasthan and West Bengal. Strong distribution network with 37 C&F agents, 1,400 Distributors and over 200,000 Retailers.
Code: 526209Listed Since 1994
Code: KSOILSListed Since 2007
Estd: 1985
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The promoters
The Company is part of an old established business house belonging to the Garg family from Morena, Madhya Pradesh dealing in agro based products for the last 150 years
The Promoters are currently engaged in the edible oils business only
Mr. Ramesh Chand Garg Chairman
• belongs to the fifth generation of the Garg family.
• has vast experience in businessof agriculture commodities, project expansion, sales and distribution
Mr. Sourabh Garg Vice - Chairman
• is from the promoter family• is actively involved in green field
project activation and new infrastructure initiatives
• also looks after the product expansion initiatives
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Management Team
Name Designation Profile
Sanjay Agarwal
Managing Director
He has over 20 years of experience in this sector and is the main driver in the Company’s expansion & growth; key person driving backward integration.
Sunil AlaghHead - Marketing Advisory Committee
Ex-CEO of Britannia and one of the most celebrated Marketing Guru’s in India. He formulates the Marketing and Brand strategies of the company.
R Ganesh Executive DirectorHe has been a strategic advisor to top companies on policy issues. He is in charge of the K S Oil’s HRD policies.
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Board of Directors
Name Designation Profile
Jimmy Mahtani DirectorHe is nominee of Baring Private Equity Asia III Mauritius.
Vivek Sett Director He is nominee of New Silk Route Advisors.
P K Mandloi Independent Director
He has extensive experience in the banking sector and guides the Company in financial matters.
Dr. R S SisodiaIndependent Director
He is a Doctorate in agriculture and looks after quality control areas R&D.
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Corporate Social Responsibility• The Garg family are founders of a school teaching
1,200 students from nearby rural areas.
• A not-for-profit organization, it is the only school in Morena that has high education standards, state of the art computers and recreational facility like horse riding and ample greenery.
• The Company has been instrumental in promoting local brick industry using Company’s coal ash remnants from boiler
• The Company employs about 3,500 people, directly & indirectly.
• It supports 50,000 families like farmers supplying their produce and dependent downstream industries like transporters, brick factories, farmers, distributors, etc.
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Awards & Recognition
KS Oils is one of the fastest growing companies in India.
The Economic Times
ET500
India’s most financially sound companies
BW REAL 500
Best Value Creator
(small cap)2008
Business Today
5th Most Investor Friendly Company
Oilman of the year
The Solvent Extractors’ Association of India
a Premier Association of Vegetable Oil Industry & Trade
Highest Processor of Rapeseed Oilcake
2004-05 | 2005-06 2006-07 | 2007-082008-09 | 2009-10
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Shareholding Pattern
As on 31st March, 2011
33
Promoter 35.01%
FIIs12.51%
Baring Asia & New Silk Route
14.53%
GDRs 11.72%
MFs & FIs 0.86%
Public 25.38%
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K S Oils Operations
• Sourcing: mustard seeds from Rajasthan, M.P., U.P. and Delhi• The Company also does bulk sourcing of seeds from NAFED • Bulk crude oil is either imported or sourced from Madhya Pradesh and Delhi
• Facilities located in Madhya Pradesh, Rajasthan & West Bengal• Total installed capacity
• Solvent Extraction – 4,200 MT/ day• Vanaspati – 250 MT/ day
• Crushing Capacity – 4,400 MT/ day• Refinery – 1,600 MT/ day
• Sales through C&F Agents and Company Depots• North-East and Eastern Region: goods dispatched to branches and
depots via. Railway racks and sold directly to Distributors.
• Mustard oil (Double Sher & Kalash brands)• Refined oils (Kalash, KS Refined & KS Gold brands) • Vanaspati (KS Gold & KS Gold Plus brands)
Products and Brands
Sourcing
Manufacturing
Distribution
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Financial Performance Summary
INR
in m
illio
ns
Margin
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SWOT Analysis
• Management experience of decades in this business
• Largest integrated solvent/ rapeseed crushing capacity in India
• Established brands in crude mustard oil, refined oil and vanaspati
• Efficient and flexible manufacturing facilities
• Captive power production (92 windmills - 78 MW)
• Loyal customer base
• Secure raw material supply
• Extensive distribution network
• Among the highest margin earners in the Indian Edible Oils sector
Stre
ngth
s
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SWOT Analysis
Wea
knes
s
• Currently limited presence in West India and no presence in South India
• Ongoing consolidation in the mustard/ domestic oilseed sector and conversion of unorganized (70%) to organized market (30%)
• Continued growth in the Indian edible oil industry fuelling need for organic growth through greenfield projects to tap other cultivating regions
• Backward integration(plantations and power generation) and forward integration (value added products for personal care and oleo chemicals)
Opp
ortu
nity
Thre
ats
• Competition from substitutes (refined edible oil brands) for KSOL’s refined oil products
• Weak regulatory environment in India – spurious and adulterated oil being available in the market
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Company’s Products and Markets
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Company’s Brands
Kalash is the flagship brand for mustard oil well known for purity, pungency and colour
Double Sher has 30% market share in North East India and enjoys a premium over other brands. It has high penetration and acceptance in the rural areas
The Company has established brands with high brand recall in their respective segments:
Brand extensions for refined oil with high customer recall for purity
KS and KS Gold are well accepted brands in the refined oil as well as Vanaspati segments.
Mustard Oil(Kalash and Double Sher)
Refined Oils (Kalash, KS andKS Gold)
Vanaspati (KS Gold and KS Gold Plus)
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Manufacturing
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ManufacturingStrategic LocationsThe manufacturing units are located in Morena, Ratlam, Guna in Madhya Pradesh and Kota in Rajasthan and a Port based Refinery in Haldia, West Bengal
Integrated PackagingThe operations of the Company are fully integrated with in-house packaging department which completely meets the Company’s requirements of tin, HDPE jars, pouches and PET bottles
The integrated nature of the manufacturing units of the Company’s divisions is a very important source of KSOL’s high profitability. Significant operational efficiencies by reducing power and fuel costs, chemical costs and increasing automation have been achieved
Ability to process varied oilseeds and any crude edible oil
The facility is well equipped to switch to
processing of any crude edible oil
Operationally efficient
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Manufacturing
DivisionTotal Current
Capacity
Crushing 4,400 MT/day
Solvent Extraction 4,200 MT/day
Refinery 1,600 MT/day
Vanaspati 250 MT/day
Factories One of the most modern and integrated state-of-the-art edible oil manufacturing plants in India
Current Capacity
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Manufacturing – Integrated Process Flow Chart
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Mustard Kachchi Ghani (Crude) Oil• Kohllu has been traditionally used in the
manufacture of mustard oil; in the process the seeds are broken in open air, during the process certain enzyme is released. This enzyme provides the pungency to the oil.
• Pungent mustard oil/ Kachchi Ghani is very popular in the northern, eastern and north-eastern states of India
• The process of extracting oil using only expellers results in high temperatures thus losing its pungency. In the Kohllu process, temperatures are controlled to maintain the pungency and hence, the Kohllu process is critical from consumers need and preference for pungency in mustard oil
• The process begins with the cleaning of the mustard seeds which are then loaded through conveyor belts in to the Kohllus (cold press crushers)
Rapeseed
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Mustard Kachchi Ghani (Crude) Oil• The Company has skilled labour trained in the
art of manufacturing pungent oil through this method
• Manufacturing Kachchi Ghani oil from Kohllu is relatively less scalable, thus creating significant entry barriers for new players.
• 22% oil is obtained in the Kohllu, which is extremely pungent and inedible (pungency factor of ~0.38). The residue oil cake is further processed in the expellers. This results in 13% oil which has pungency of ~0.12.
• Both the oils obtained (i.e. from Kohllus and the expellers) are blended to obtain the perfect blend of edible oil with pungency of ~0.27 to 0.28
• The mustard Oil cake is then fed into solvent extractor via conveyors to extract the remaining oil .
Kohllu – Cold press crusher for high pungency Mustard Oil
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Other facilitiesSolvent ExtractionThe mustard oil cake in the solvent extractor is sprayed with Hexane, which extracts the remaining 7% oil. Through the distillation method, the hexane is separated completely to yield solvented oil. The deoiled cake is exported as cattle feed to south-east Asia, South Korea & China. The solvented oil is sent for refining
This solvent extraction process is used for soyabean seeds as well, from which ~ 18% oil is extracted
Solvent Extractor
RefineryRefining of oil refers to neutralised, bleached and de-odorised oil. The process is carried out in vacuum at high temperatures
VanaspatiThe process involves hydrogenation of refined oil. Vanaspati obtained is filled into containers and taken for cold room treatment where the temperature is reduced in a controlled manner which facilitates the final finishing required for the grainy texture
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Other FacilitiesPackagingIn-house packaging department completely meets the Company's requirements of tin, HDPE jars, pouches and PET bottles. The equipment includes offset printers, pouch filling machines, tin automatic filling machine and automatic bottle filling plant
PowerCaptive Power production capacity of over92 Windmills (78 MW)
Effluent TreatmentThe effluent treatment plant handles the entire effluents of K S Oils. The effluent treated water is completely recycled in-house resulting in zero release of effluents
Quality Control (“QC”)The QC lab does standardization as per AGMARK, V.Q.P and P.F.A. parameters
The Company was awarded the ISO 9001:2000 certification for Quality Management Systems for Manufacturing and Supply of Edible Oils
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Markets and Distribution
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Markets and Distribution
The company has 1,400 Distributors and over 200,000 retailers serviced by the company’s 275 member strong marketing team
Company’s markets are classified as:
• North East region (NE) & East (West Bengal & Bihar) where the Company is the market leader and which contributes ~ 28% of Company’s oil revenues;
• Central & North India - Uttar Pradesh, Madhya Pradesh, Delhi, Rajasthan, Himachal, Haryana, Punjab and Jammu & Kashmir.
For each market mentioned, the Company has a distribution network:
• For the East and NE Region, goods are transported through railway racks. Kolkata, Guwahati and Dimapur are the major railway arrival points for the Company’s goods in this region. The Company has its own depots in these stations.
• For the rest of India, the Company has set up a network of C&Fs and Depots to cater to Distributors and Wholesalers.
Markets Distribution Network
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Historical Financial Performance
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Historical Profit & Loss StatementINR. Mn.
Particulars 2005-06
(A)
2006-07
(A)
2007-08
(A)
2008-09
(A)
2009-10
(A)
Total Income 6,082 10,716 20,572 31,782 40,997
Less: Raw Materials 5,290 9,073 16,874 25,625 33,454
Manufacturing Exps. – Direct 251 313 526 633 946
Gross Profit 541 1,330 3,172 5,494 6,597
Expenditure
Selling Expenses 138 238 499 771 884
Administration Expenses 131 154 354 1,102 953
Operating EBITA 272 938 2,319 3,621 4,760
Depreciation 29 45 122 268 529
EBIT 243 893 2,197 3,353 4,231
Interest and Finance Charges 72 154 375 743 1,564
PBT 172 739 1,822 2,610 2,668
Provision for Taxation 24 166 615 916 423
PAT 148 573 1,207 1,694 2,245
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Analysis
Company’s revenues touched INR
40,00o mn. in FY10, growing over 6
times in last 5 years from INR 6,082
mn. in FY 2006
This growth was on account of high growth in revenues of the Mustard and Refined oils, new capacity additions and geographical expansion into newer markets.
Overall EBITDA increased by 17.5
times from INR 272 mn. in FY 2006
to 4,760 mn. in FY 2010
This leap was driven by increase in sales of branded products and increase in sale of small SKUs.
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Historical Balance sheet INR Mn.
Particulars+ Mar-06 (A) Mar-07 (A) Mar-08 (A) Mar-09 (A) Mar-10 (A)
Sources of Funds:Shareholders Funds
Share Capital 85 221 332 356 409Equity Share Entitlement Warrants 0 238 500 0 713Deferred Government Grants 11 10 9 9 8Reserves and Surplus 373 1,434 6101 8,707 13,395
468 1,903 6,942 9,072 14,525Loan Funds:
Secured Loans 788 852 2,847 9,319 14,773Unsecured Loans 86 150 0 0 0
874 1,002 2,847 9,319 14,773Deferred Tax Liability 0 155 415 1,051 999
Total 1,341 3,060 10,204 19,442 30,297Application of FundsFixed Assets
Gross Block 597 1,378 2,904 6,920 11,738Less: Accumulated Depreciation 159 203 324 589 1,118
Net Block 438 1,175 2,580 6,331 10,620Capital WIP 0 169 1,837 3,535 787Investments 185 779 1,960Current Assets, Loans and Advances
Inventories 1,552 2,477 4,414 9,747 17,174Sundry Debtors 154 139 1,064 1,208 2,310Cash and Bank 61 131 1,496 666 1,236Loans and Advances + Deposits + other Current Assets 57 454 2,068 1,905 3,795Total Current Assets 1,824 3,201 9,042 13,526 24,515
Less: Current Liabilities and ProvisionsCurrent Liabilities 875 1,273 2,826 3,818 6,712Provisions 46 235 614 911 873
921 1,508 3,440 4,729 7,585Net Current Assets 903 1,693 5,602 8,797 16,930Misc. Expenditure 0 23 0 0 0
Total 1,341 3,060 10,204 19,442 30,297
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9 month - FY 11 (Unaudited)
Particulars Amount
Total Revenue 34,148
EBIDTA 4,141
Interest 1,598
Depreciation 467
PBT 2,075
Current Tax 464
Deferred Tax 60
Net Profit after Tax 1,551
in INR Mn.
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Particulars Date No. of Equity Shares Amount (INR)
Equity Share Capital as on 31.03.2006 8,392,900 83,929,000 107,100 forefited shares allotted on reissuance 12.08.2006 107,100 1,071,000 Equity shares allotted on Pref. basis (INR 225 per share) 19.08.2006 900,000 9,000,000 Bonus in Ratio of 1:1 11.09.2006 9,400,000 94,000,000 Equity Shares Allotted to CVC at INR180 per share 23.12.2006 3,291,656 32,916,560
Warrants issued to CVC – 1,708,344* & Promoters – 2,300,000** at INR 180 per warrant 23.12.2006Equity Share Capital as on 31.03.2007 22,091,656 220,916,560 Shares Split in Ratio of 1:10 25.07.2007 220,916,560 220,916,560
Equity Shares Allotted to Baring Pvt. Equity Asia III at INR 41.9 per share 22.08.2007 21,479,710 21,479,710 Equity Shares Allotted to CVC Trustees at INR 41.9 per share 22.08.2007 90,720 90,720 Warrants issued to Promoters – 23,866,350*** at INR 41.9 per warrant
30,744,610 equity shares of Re. 1/- each (at INR41.9 per share) underlying the GDR's Issue of USD 31.42 Mn. 07.09.2007 30,744,610 30,744,610
273,231,600 273,231,600 Warrants converted by Promoters** 22.10.2007 23,000,000 23,000,000 19,093,100 equity shares of Re. 1/- each (at INR41.9 per share) underlying the GDR's Issue of USD 20.53 Mn. 08.11.2007 19,093,100 19,093,100 Warrants converted by CVC* 26.03.2008 17,083,440 17,083,440 Warrants converted by Promoters*** 25.10.2008 23,866,350 23,866,350 Equity Shares Allotted to New Silk Route Advisors at INR 48.43 per share 01.07.2009 27,921,406 27,921,40612,409,520 equity shares of Re. 1/- each (at INR 48.43 per share) underlying the GDR's Issue of ~ USD 12.5 Mn to New Silk Route Advisors 15.07.2009 12,409,520 12,409,520
396,605,416 396,605,416Warrants issued to Promoters – 28,807,339 at INR 54.5 per warrant**** 01.07.2009Warrants converted by Promoters**** 29.01.2010 12,346,002 12,346,002 Warrants converted by Promoters**** 30.12.2010 16,461,337 16,461,337
Total issued Equity 31.03.2011 425,412,755 425,412,755
Changes in Capital Structure
**,*** Promoters paid 50% money upfront at the time of subscription of warrants.
**** Paid 25% money upfront at the time of subscription of warrants.
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Strategy & Growth Initiatives
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K S Oils – Where does it stand today!
Largest rapeseed crushing capacity in India 4,400 MT/day
• Four times more than the nearest competitor (Gokul Refoils – 690 MT/ day)
• Integrated manufacturing facilities across 5 locations in oilseeds belt.
Market leader ~ 12.5% market share of mustard oil market (INR 130 Bn.)
25% share of the organized mustard oil market.
Dominant market share in mustard oil in 7 north east states with nearly 30% market share – brands include Double Sher and Kalash.
11
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Vision
To deliver Health and Prosperity
To achieve a turnover of INR 8 bn by 2013
To consolidate market leadership position by achieving 20% market share in mustard oil
To accelerate the conversion of the loose unbranded edible oil market to the branded retail market
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Key Objectives
Distribution • extend reach to Tier II and Tier III towns and rural India
• strengthen existing presence in Central, Northern and Eastern India
• create distribution network in Western India
Increase• brand power and obtain better pricing power
• market share from the current 12.5% to 20% in the Mustard segment
• proportion of retail packs
Improve utilization levels of its inland oilseeds crushing facilities and port based refinery
Lead in improving yields of rapeseed and soyabean farmers
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Strategy – Way ahead
Global and Domestic Growth options Backward and Forward integration
Plantation
Crude Oil Production
RefiningProcessing &
Products
Final Distribution
Secure raw material supply globally & source it from best yield geographies
Farms
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De-risking strategy
Global de-risking strategy for raw material supply
- owning palm plantations across the globe
• Proof of concept Aug. 2007364 hect. of palm plantation in Malaysia
• Fortifying strategy Mar. 200820,000 hect. of palm plantation land in Indonesia
• New acquisitions in 200935,500 hect. of palm plantation lands in Indonesia
Self sufficiency by global agri-companies in raw
material sourcing will help insulate against short
supplies and spiraling prices.
REPORT
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Indonesia
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Oil Palm Cycle
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Nursery
Several factors are taken into consideration when deciding the location of pre-nurseries to grow seedlings, including a nearby source of water, flat land, good drainage and proximity to sources of labor.
On each plantation, the Company intends to build the appropriate infrastructure to bring water sources to seedlings and allow smooth drainage.
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Immature Plantation
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Immature Plantation
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Palm Tree
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Palm Seed and Fruit
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Mature Plantation
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FFB harvesting
Delivering Health and Prosperity • www.ksoils.com 7171
Thank YouK S Oils LimitedRegistered and Corporate Office -Jiwaji Ganj, Morena 476 001, Madhya Pradesh - India.Phone: +91 7532 300000 • Fax: +91 7532 405060email: [email protected]