Polyplex (Thailand) Public Limited...

Polyplex (Thailand) Public Limited CompanyPolyplex (Thailand) Public Limited Company

Presentation at the SET Opportunity Day

Friday, 3rd December 2010

Website : www.polyplexthailand.com

Contents

• BOPET Film Industry• Polyplex group

• Polyplex Competitive Strength• Polyplex Competitive Strength

• PTL : Financial Performance

• Current Industry Scenario & Outlook

2

Film business ‐ Value Chain Polyplex’s area of operation

PTA SupplierPET

IndustrialIndustrialBuyersBuyers

RES

MEG Supplier

BAS

BuyersBuyers

SIN

Supplier SE

FILMS

ConvertersConverters FMCG FMCG S CompaniesCompanies

3

BOPET Thin Film Application

4

BOPET Thick Film Application

5

BOPET Film• BOPET is mainly segmented into Thin & Thick Films

– Thin Film : 50 Micron & Under (75% of total BOPET)

– Thick Film : Over 50 Micron (25% of total BOPET)Thick Film : Over 50 Micron (25% of total BOPET)

• The industry capacity is mainly divided based on above Thickness segments.

• Some lines are designed to produce intermediate range of Films from 12µ to 100µ100µ

• Major End use of BOPET Film are

– Imaging & Graphics

– Magnetic Tape

– Packaging & Metalizing : Main Segment for POLYPLEX

– Electronics / Electricals/

– Other Industrial

6

BOPET Film – Influencers on Price

COST DRIVEN FACTORS

CRUDEOIL PRICE IMPACT ON POLYESTER

MARKET DRIVEN FACTORS

CRUDE OIL PRICE IMPACT ON POLYESTER FILM (60%)

PTA MEGENERGY COST (FUEL / POWER)ENERGY COST (FUEL / POWER)LOGISTICS COST

CURRENCY VOLATILITY DEMAND – SUPPLY BALANCECOUNTRY EXPORT COMPETITIVENESSIMPORT INTENSITY CURRENCY WAR

TRADE AGREEMENTS AND BARRIERSPROTECTIONISM, ANTI‐DUMPINGBILATERALISM & REGIONAL TRADE

7

BOPET Global Demand SupplyBOPET Thin Film "KMT" 2004 2009 2014 E BOPET Thick Film "KMT" 2004 2009 2014 ECapacity 1,388 2,171 3,166 Capacity 626 847 1,137 Production 1,235 1,806 2,781 Production 479 587 829 Capacity Utilisation % 89% 83% 88% Capacity Utilisation % 77% 69% 73%Demand 1,235 1,806 2,843 Demand 479 587 829 Imaging & Graphics 8 6 4 Imaging & Graphics 203 161 133 Magnetic Tape 94 22 7 Magnetic Tape ‐ ‐ ‐ Packaging & Metallising 730 1,232 1,998 Packaging & Metallising 4 17 32

f f

Electrical / Electronics 59 90 187 Electrical / Electronics 142 248 443 Other Industrial 344 456 647 Other Industrial 131 161 221

*Source: Industry Sources

• Largest End use :Flexible Packaging ‐ which accounts for more than two‐third oftotal Thin Film used.

• Thin Film demand has witnessed a CAGR of about 8% Per Annum (2004‐09) andexpected to grow at CAGR of 9 5% (2010 2014)expected to grow at CAGR of 9.5% (2010‐2014).

• Thick Film market has grown at a CAGR of about 4% per annum (2004‐09) and isexpected to grow at CAGR of 7.2% (2010‐2014).

Th b CUF i b d “N Pl t ” C it A hi bl k CUF i 85%• The above CUF is based on “Name Plate” Capacity. Achievable peak CUF is 85%‐90% for Thin Film and 70% ‐ 75% for Thick Film against Name Plate Capacity.

8

Packaging :Sustainable Growth

• Diversified application of BOPET has resulted in Sustainable Growth at better than World GDP Growth ratesWorld GDP Growth rates.

• The growth in packaging segment proves it resilience to recessionary factors.

9

Segment wise Demand of BOPET Film4000

575630147

140

137

15

11

9

7

3000

3500

710766

820868

293333 338

389444

508575

181178

172 167

160

154

5542

3228 22

17

2000

2500

1698 1863 2030474524

568616

638 617659

710

201222

255293

211198

18194

1000

1500

734 842 951 1046 1149 1249 1392 1545 1698

0

500

• BOPET (Thin + Thick) Film demand expected to grow @ CAGR of 9%

2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E

Packaging Other Industrial Electrical Imaging Magnetic Tape( ) p g @

• Packaging is expected to grow @ CAGR of 10%

10

Structural Shift in Application of BOPET

3500

4000

17%

4%• P-I-E segment tocontinue to grow atrobust rate

2500

3000

7%1%

24%

•Electrical segmentto witness highestgrowth rate of 13%.

1500

2000

12%12%5%

26%

14%g

•Growth in Electricaldue to newapplications

500

1000

43%

28%

52%

55%

K MT

applications.

•Packaging to followclosely at 10%

0

2004 2009 2014 E

Packaging Other Industrial Electrical Imaging Magnetic Tape

•Imaging and Tapesto experience“Negative” growth

11

g g g g g p Negative growth

Packaging: Growth Drivers

Changing Consumer Habits, convenience is the key

Consumer demand for fresh and healthy food, beverages drivingneed for intelligent as well as high barrier packing

Emergence of strong Retail sector

Securing product from counterfeiting

Sustainability ‐ Growing concern on carbon footprint, promotion ofGreen Technology

12

Contents

• BOPET Film Industry

• Polyplex groupP l l C titi St th• Polyplex Competitive Strength



13

Polyplex Group – Global PresenceT k Pl t 3 India : Plant 1 & Plant Thailand:Turkey: Plant 3 India : Plant 1 & Plant

4Thailand: Plant 2

Factories

Warehouses

Manufacturing Locations – India (PCL), Thailand (PTL) & Turkey (PE)

14

Distribution Companies – USA (PA) & China (PTSL).Warehouses – 12 in USA, 3 in Mexico, 1 in Poland & 1 in Guangzhou, China

Polyplex Group StructurePolyplex (Asia) Pte. Ltd. (PAPL) SINGAPORE

Polyplex Corproation Limited (PCL/Polyplex India)

INDIA

100%

Private Investor

Polyplex (America) Inc. (PA) USA

Polyplex (Thailand) Plc.. (PTL/PolyplexThailand) THAILAND

Public/ Institutional Shareholdrers

9.88%

9.88%

16.5%% 43.5%

40%80.24%

Polyplex (Singapore) Pte. Ltd. (PSPL) SINGAPORE

Polyplex Trading (Shenzhen) Co. Ltd. (PTSL)

100%

100%

40%80.24%

( ) Co. td. (PTS )CHINA

l l l l k

Outside Interest

Investment Company

100%

Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi(PE/ Polyplex Turkey) TURKEYManufacturing Company

Distribution Company

15

Polyplex Group:Serving Customers WorldwideServing Customers Worldwide

More than 1,200 Customers in 80 countriesMore than 1,200 Customers in 80 countries

• Customer solution oriented sales and technical services teams (region specific ) & Global Innovation C t

• Distributors & agents increase reach and service small customersCentre

PCL‐ SAARC, GCC and Africa

PTL‐ SEA, Far East & Oceania

PE ‐ Europe & CIS countries

small customers

• Customer centric customized delivery model:

– Container loads drop‐shipped for cost‐effectiveness

• Distribution subsidiaries in PA ‐ North and South America, Canada & Mexico

PTSL‐China

– Local warehousing support for higher flexibility & security

16

Polyplex : Business StrategyTurkeyTurkeyIndiaIndiaThailandThailand

• We’re a fully integrated global manufacturer of plastic films with ConcentricWe re a fully integrated, global manufacturer of plastic films with Concentric Diversification into BOPP & CPP

• Our vision is to continuously grow, create value and establish global leadership in h l f l bthe plastic film business

• We’re expanding to meet demand in new geographies and for new applications like Extrusion lamination, Silicone Coated release films etc.

• Continually balance our Product & Market Portfolio to increase stability of our Earnings.

• J di i i f O h Off h d N h• Judicious mix of On‐shore, Off‐shore and Near‐shore strategy.

17

Polyplex Group: Existing Capacities

5100058000

PET FILM (151,000 TPA)MET FILM (42,500 TPA)

51000

42000

58000

16300

15200

11000Polyplex :Product Portfolio

PET Film 151 KTPA,CPP 10KTPA, BOPP 35 KTPA

INDIA THAILAND TURKEY

151000

3500010000


Offli C 310 M SQM

7760057600

PET RESIN 192,200 TPA

160150

Offline Coater 310 Mn SQM

PET FILM (TPA) BOPP (TPA) CPP (TPA)57000


SILICONE COATING (Mn Sqm)‐India

EXTRUSION COATING (Mn Sqm)‐ThailandINDIA THAILAND TURKEY

18

Polyplex Group capacities: 2012Polyplex Group Capacity

1200

1400

80,000

90,000

100,000

m)(in tons)

PET BOPP CPP PET Chips Metallizer Silicon Coating Extrusion Coating

35,000

‐10,000

800

1000

50,000

60,000

70,000

city (in M

illion Sqm

erial and M

etallizer

,

650400

600

20,000

30,000

40,000

Coating Capa

Base Film

, Raw

Mate

54,600 42,000 89,000 77,600 57,000 85,600 20,400 15,200 19,600 160 ‐

0

200

‐

10,000

Base Film Raw Material

Metallized Film

Coated Film Base Film Raw Material

Metallized Film

Coated Film Base Film Raw Material

Metallized Film

B

Mio Sqm

• The above capacities include Silicone Coated Film under implementation in Thailand & Thin PET film line expansion ( Including Resin + metallized film line) under implementation in Turkey

India Thailand Turkey

19

in Turkey.• Off‐ line coater represents Silicone Coating line in India and Extrusion Coating line in Thailand

Polyplex: Continuous Growth…250 000

35,000 10,000

10,000

200,000

250,000

CAP

196K MT

231K MT

35,000

10,000

150,000

A

C

I

T120K MT

120 000

151,000

185,600 100,000

Y

IN

62K MT

91K MT

20,000

62,000 91,000

120,000

0

50,000 MT

20K MT

From 20 KMT capacity in 2002, we have become a TOP 5 Manufacturer of Thin BOPET Fil ith it f 151 KMT d ddi f th 31KMT b 2012 I

2002 2003 2005 2007 2010 2012BOPET BOPP CPP

BOPET Film with capacity of 151 KMT and adding further 31KMT by 2012. In addition existing BOPP capacity of 35 KMT and CPP Capacity of 10 KMT

20

Polyplex Thailand : Journey So FarThailand

Apr/ Nov2003 PET Film – Line 1 & 2

Sep 2004Feb 2005

July 2005

Chip Plant –Batch /Continuous

Metallizer-1 Turkey

April 2008

May 2008 Metallizer -2

Extrusion Coated Film

PET Film – Line 1December2005

y

Metallizer - 1

Chip Plant

March2006

December 2006

March 2010 Cast Polypropylene Film

Expected H1 FY 2011-12 Silicone Coating line

Metallizer -2

PET Film - Line 2May 2008

May 2008

FY 2011 12

21

PET Film Line-3, Metalliser + Chips line

Expected Q4 FY 2011-12

Projects Under Implementation

SILCONE COATING LINE – THAILAND• Investment size – USD 19 44 million including working capitalInvestment size – USD 19.44 million, including working capital.

• Target markets – Europe, US and Asia

• Applications – Used as a release liner for Label liners, graphicpp , g parts, medical liners and Shingle Tapes

• Capacity – Dependant on the product mix being run on the lined i ifi tl diff t d t t 200and can vary significantly across different product types – 200

million sq.mts to 600 million sq.mts

• Financial closure achieved.

• Expected to be operational in H1 of FY 2011‐12.

22

Projects Under Implementation

THIN PET FILM LINE – TURKEY•Investment size – USD 79 million, including working capital.

•Capacity – Fully integrated line – Backward integration into resin and forwardintegration into metalized film

•Thin PET film line – 31,000 MT pa, p

•High speed Metallized Film line – 8,600 MT pa

•Polyester Resin plant – 28,000 MT pa

•Financing Pattern:•Debt Borrowing – Approx. 50 Million USD ‐ Financial closure expected to be donewithin Q4 of FY 2010‐11Q

•Balance to be funded out of internal accruals

•Main machinery ordered and down payment made.

•Expected to be commercially operational in Q4 of FY 2011‐12.

23

Contents


• Polyplex group

• Polyplex Competitive Strength• Polyplex Competitive Strength• PTL : Financial Performance


24

Polyplex : Competitive Strengths• State‐of‐the‐artmachineries at all locations

• Backward Integration enables:g– Consistent quality

– Development of new and specialty application products

– Assured supplies

• Forward integration and Concentric diversification enables us to ff l t toffer more value to customers.

• Customer engagement initiatives

• B fit f Gl b l• Benefits of Global presence

• Focus on Operational Excellence – Better efficiencies, lower operating costs etc

25

operating costs etc.

Polyplex Group: Changing Paradigm

Year Capacity (MT)

Product Market Space/Focus

Source of Competitive Advantage( ) p / g

Pre‐2002 20,000• Domestic & Export focus.• Operational Excellence

• Low cost Operational Excellence

• Global manufacturing and customer base

• Near ShoringC t S i

2003‐07 90,000 • Operational, Intellectual & Emotional Integration

• Customer Service• Customer Intimacy

2009 + 200,000

• Leveraging Economies of Scale• Delivering Profitable Value• Concentric diversification

• Innovation

Concentric diversification

26

Contents


• Polyplex group


• PTL : Financial Performance • Current Industry Scenario & Outlook

27

Financial performance :H1 “2010‐11”

H1 2009-10

H1 2010-11 YoY %

Production (PF+MF)-MT 53,705 55,886 4%

Total Revenues 3,558 4,670 31%

EBITDA 687 1 445 110%EBITDA 687 1,445 110%

Profit before Tax 445 1,223 175%

Profit after Tax (excl.minority int) 431 1,175 172%

28

Financial Figs in Mn THBProduction Qty includes only BOPET Film.

Financial performance:Q2 “2010‐11”Q2

2009-10Q1

2010-11Q2

2010-11 QoQ% YoY%

Production (PF+MF)-MT 26,917 28,267 27,619 -2% 3%

Total Revenues 1,747 2,133 2,561 20% 47%

EBITDA 327 543 902 66% 176%EBITDA 327 543 902 66% 176%

Profit before Tax 211 431 792 84% 275%

Profit after Tax (excl.minority int) 200 412 762 85% 280%

29

Financial Figs in Mn THBProduction Qty includes only BOPET Film.

Financial Performance – Historical Data

30

Financial Performance : Key Indicators

0.60

0.70

0.80

5 00

6.00

7.00

0.30

0.40

0.50

3.00

4.00

5.00

‐

0.10

0.20

0.30

‐

1.00

2.00

2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 H1 2010‐11

DSCR C R i D/E

D/EDSCR & C. Ratio

DSCR Current Ratio D/E

INDICATOR 2005-06 2006-07 2007-08 2008-09 2009-10 H1 2010-11DSCR 2.46 2.76 3.35 3.14 2.69 5.73

31

D/E 0.44 0.46 0.69 0.72 0.57 0.42 Current Ratio 2.03 1.55 1.81 4.11 2.11 2.60

Capacity Utilization BOPET – Thailand

42,000 42,000 42,000 42,000 42,000 120%

42 000

48,000

88%95%

90%97% 99%

71%

91%

67%74%

81%

60%

80%

100%

24 000

30,000

36,000

42,000

5,000 5,000

10,250 11,000 11,000

20%

40%

60%

6 000

12,000

18,000

24,000

0%-

6,000

Financial YearPlain Film Metallized Film Plain Film Metallized Film

32

Capacity Utilization ‐ Turkey

54,375 58,000 58,000

92%89% 91% 90%

100%

54,000

60,000

29 000 29 000

81% 74%83%

57%

72% 78%

60%

70%

80%

36,000

42,000

48,000

,

29,000 29,000

10,250 11,000 11,000

50%

20%

30%

40%

50%

12 000

18,000

24,000

30,000

5,000 5,000

0%

10%

20%

-

6,000

12,000

Financial YearPlain Film Metallized Film Plain Film Metallized Film

33

Sales Mix – Region WisePTL Consolidated Sales THB 4 54 Bn

EUROPE39%

THAILAND9%

ROW2%

PTL Consolidated Sales ‐ THB 4.54 Bn

39%ASIA24%

North America26%

Note: Above region wise break up is based on Sales Value for H1 2010 - 11 at Polyplex (Thailand) Consolidated level

EUROPE North America ASIA THAILAND ROW

• Significant presence in all leading markets• The company’s sales reach in premium markets of Europe & North America validate company’s

strategy to set up manufacturing facility in Turkey and acquire the distribution company in theUS - Judicious mix of On-shore Off-shore and Near-shore strategy

34

US - Judicious mix of On-shore, Off-shore and Near-shore strategy• Well balanced region wise mix – no dependency on any single region

Sales Mix – Increasing Value Added Products

* Value added films include Chemically Coated films Metallized Film (PET + CPP)

Note: Above data is for PTL (standalone) based on Sales quantity

35

Value added films include Chemically Coated films, Metallized Film (PET + CPP) and Thermal Laminated film which have higher value addition as compared with normal plain film.

Competitor Comparison – Financial highlights

Performance

35.64% 22.61% 6.69%EBITDA Margin

PTL*(July-Sept-2010)

AJ*(July-Sept-2010)

TFI*(July-Sept-2010)

30.85% 17.54% 0.08%

23.73% 24.99% 0.07%

Net Profit Margin

ROA

g

Financial Position

33.36% 66.01% 0.21%ROE

1.89 0.61 0.48

0.41 1.64 1.92

41.25 18.73 0.02

Current Ratio

Debt to Equity

Interest Coverage Ratio

6.79 2.39 0.72

Interest Coverage Ratio

DSCR

Note : Interest Coverage Ratio = EBIT / Interest

36

DSCR = EBITDA / (Interest + Current Portion of Long Term Loan(prorated for the quarter period)*From SET filings (unconsolidated)

Stock price ‐ performance

20

25

Stock Price related trends

10

15

5

10

Q4 ‐2008 Q1 ‐2009 Q2 ‐2009 Q3 ‐2009 Q4 ‐2009 Q1 ‐2010 Q2 ‐2010 Q3 ‐2010

Annualized EPS 1.35 1.3 1.16 1.08 1.15 1.30 2.08 3.80

Share Price ‐THB per share * 3.42 3.98 4.84 6.60 6.25 6.85 8.60 22.00

Book Value of share THB/Share 5 98 5 72 6 09 6 29 6 52 6 24 6 43 7 41

‐

Book Value of share ‐THB/Share 5.98 5.72 6.09 6.29 6.52 6.24 6.43 7.41

P/E(times) ‐ based on trailing 4 qtr EPS (excl current qtr) 3.13 3.40 3.90 5.12 5.12 5.85 7.34 15.70

* Stock price of PTL as at 2nd December 2010 is 40 Baht per share.

37

Contents


• Polyplex group




38

Global BOPET – Disruption “Factors”M k D lMarket Developments

• Over the past few years demand has continued to grow despite the Economic Crisis in 2008‐09.

• There has been inadequate matching capacity addition (excluding China).

• Revival of demand post the economic crisis.

Structural changes :g

• Closure of some old uneconomic lines

• Diversion of capacity from packaging to industrial segment as well as conversion of thin film lines into intermediate and thick films for new applicationsof thin film lines into intermediate and thick films for new applications.

• Heightened anxiety with the convertors to develop alternative supply options with a clear preference for onshore/ near shore suppliers.

N li iNew applications

• Optical industry /Photovoltaic (PV) industry in Advanced World.

The above Factors have resulted in a tight supply situation of BOPET Films in 2010.

39

Demand 2010: Key Drivers Consumer

StaplesPackaging of food &

Consumer Discretionary

Automotive

Industrial Segments

g gpersonal products

2008 Q4 -- --2009 +

Electronics & Consumer durables

2008 Q4 -- --2009

Existing2008 Q4 -- --

New 2008 Q4 -- --

2009 +2010 ++

2009 --2010 ++

2009 --2010 + +

2009 +2010 + + +

Consumer staples: Less susceptible to economic cycles. Cash crunch during 2008 crisis &Consumer staples: Less susceptible to economic cycles. Cash crunch during 2008 crisis &destocking in supply chain led to exaggerated “apparent” reduction in demand.

Consumer discretionary: Demand dependant on consumer confidence. Grew steadily in prerecession period, slowed down in 2008‐09, revived rapidly in 2010 with revival of consumerrecession period, slowed down in 2008 09, revived rapidly in 2010 with revival of consumerconfidence especially in the emerging economies. Further aided by pent up demand

Industrial Segments: Economic recovery & increased business confidence led to robustdemand in 2010 . Boosted by new applications especially PV with 30% + growthdemand in 2010 . Boosted by new applications especially PV with 30% + growth

40

Supply 2010: Key Drivers• Drastic reduction in “apparent” demand in Q4 2008 & Q1 2009.

• Due to fragmented nature of converting industry & diverse applications poor• Due to fragmented nature of converting industry & diverse applications, poor

visibility of polyester film demand.

• Postponement of capacity additions due to perceived uncertainty of

demand, cash crunch, risk aversion & low business confidence

• Closure of old uneconomic capacities in Europe & USA

• Increased specialization leading to rationalization of product mix by some of• Increased specialization leading to rationalization of product mix by some of

the industry leaders away from packaging film to other emerging application

41

Industry Outlook

• The demand of BOPET in flexible packaging segment isexpected to grow at more than 10% CAGR .

• Polyplex's estimate of Global Demand supply situation of Thin• Polyplex s estimate of Global Demand supply situation of ThinFilm Segment till 2013 is as follows.

P ti l / Y 2010 2011 2012 2013Particulars / Year 2010 2011 2012 2013

Demand 1,810 1,975 2,155 2,350

Capacity 1 810 1 890 2 100 2 390Capacity 1,810 1,890 2,100 2,390

Growth in Demand 165 180 195 210

Net Capacity Addition 80 210 290 180Net Capacity Addition 80 210 290 180

Supply - Demand Situation (85) (55) 40 10

Shortage Shortage Excess Balanced

42

Calendar Year

Questions & Answers

43

The views expressed here contain information derived from publicly available sources that have notb i d d tl ifi d N t ti t i d t th

Disclaimer

been independently verified. No representation or warranty is made as to theaccuracy, completeness or reliability of the information. Any forward looking information in thispresentation has been prepared on the basis of a number of assumptions which may prove to beincorrect. This presentation should not be relied upon as a recommendation or forecast by Polyplex(Thailand) Public Co., Ltd. Nothing in this release should be construed as either an offer to sell or aDisclaimer( ) , gsolicitation to buy or sell shares in any jurisdiction.

44

Thank youThank you

45

Polyplex (Thailand) Public Limited...

Documents

Transcript of Polyplex (Thailand) Public Limited...