Www.aiaengineering.com 0 Sept 2009 Company Presentation.

www.aiaengineering.com 1

Sept 2009

Company Presentation


1.1. Industry OpportunityIndustry Opportunity

2.2. Business + ManagementBusiness + Management

3.3. Financial SnapshotFinancial Snapshot

4.4. Growth StrategyGrowth Strategy


Industry: Mill Internals

High Chromium wear resistant parts for grinding & crushing equipment


Industry: Mill Internals (cont’d)

Grinding Media Liners Diaphragm

Rollers & Table liners Blow bars / Hammers Dipping Tubes

Cement & Mining as key end-user industries


Process Critical Input for Grinding

Non availability

Product failure

Grinding Operations can come to a halt

Leads to

Leads to

Optimal design for

given application

• Consistent end product quality

• Increased production volume

• Reduce process costs

A small component of grinding cost, but essential for continuous production


Industry Size & Scope

• Global market for Mill Internals for mining and cement sectors estimated

at 3 mn MT (Rs 125 bn) and growing at 4-5% per annum

– Mill internals are consumables in grinding mills

– Their design and properties (abrasion, corrosion, impact resistance) are critical to

grinding process efficiency

• Demand driven by new projects and replacement for wear parts

• Industry moving from cost of parts to total cost of ownership, driving

innovation in product development and total solutions

– Move from forged grinding media to high chrome cast media

– Total solutions include design of parts, metallurgy to meet the specific requirement

of the material being ground – varies from plant to plant


Industry size

India 25 KTIndia 25 KT

Mining Sector Demand at 2.4 mn MT

Cement Sector Demand at 300,000 MT

Consumable Demand Project Demand

(mn MT) Estimated

production

Incremental

production

Grinding

media Mill internals

Grinding

media Mill internals Total

2003-04 1937 67 43,010 187,000 20,100 5,025 255,135

2004-05 2007 70 44,551 193,700 21,000 5,250 264,501

2005-06 2079 72 46,161 200,700 21,600 5,400 273,861

2006-07 2154 75 47,817 207,900 22,500 5,625 283,842


Company Overview

• AIA Engineering Limited (‘AIAE’ ) promoted by Mr Bhadresh Shah, a first generation entrepreneur, began operations in 1978

• A niche manufacturer of impact / abrasion / corrosion resistant high chrome castings with rated capacity of 165,000 MT per annum

• Products include grinding media , liners, diaphragms etc for cement, mining & utility industries, with focus on application and end to end solutions

• Strong focus on metallurgy, process technology – for product development and process improvement to facilitate total solutions to customers– Basic know how through collaboration (1991 to 2000 ) with M/s Magotteaux, Belgium– Collaboration with Southwestern Corp, UK for process improvements (vertical mills)

• Global marketing presence, through 100% owned subsidiaries / branches in USA, UK , ME , Australia and Philippines– Supply contracts with global cement majors like Lafarge of France, Cemex of Mexico and

Holcim of Switzerland & commercial relationships with OEMs like F L Smidth of Denmark – Domestic customers include leading cement manufacturers, mining companies, major thermal

power plants and OEMs


1978 - 1985

Initial years

1985 - 1991

Develop high

chrome application

s

1991 - 2001

Foreign Joint

Venture

2001 onwards

Indepen-dent

global foot print

Milestones

2005

IPO

2008

100K Mt plant fully

commi-ssioned

2009

$ 200 million

revenue mark


AIA Engineering – A Total Solution Provider

Metallurgy Design

Application

M D

A

M D

A

MM DD

AA

Application : Working Conditions

Design of Part

Physical & Metallurgical Properties


Manufacturing Process

Shot Blasting

Charge

Melting

Sand Preparation

Molding

Molds

Charge is heated in Furnace

Liquid Metal (of desired composition) is poured in the molds

Mold Knock off

First Inspection

Breaker Drum

Dimensional Inspection

Final Inspection

Heat Treatment

Molten metal is allowed to solidify in the molds after which mold is knocked off

Ferro Chrome +

Scrap

Fettling/ Machining

HardnessRAMicro

Grinding MediaOther Castings

Individual balls are separated from the bunch in the breaker drum

Grinding Media and Other Castings are Heat Treated to achieve the desired metallurgical properties

Shot Blasting

Charge

Melting

Sand Preparation

Molding

Molds



Mold Knock off

First Inspection

Breaker Drum


Final Inspection

Heat Treatment


Ferro Chrome +

Scrap

Fettling/ Machining

HardnessRAMicro




Shot Blasting

Charge

Melting

Sand Preparation

Molding

Molds



Mold Knock off

First Inspection

Breaker Drum


Final Inspection

Heat Treatment


Ferro Chrome +

Scrap

Fettling/ Machining

HardnessRAMicro




Shot Blasting

Charge

Melting

Sand Preparation

Molding

Molds



Mold Knock off

First Inspection

Breaker Drum


Final Inspection

Heat Treatment


Ferro Chrome +

Scrap

Fettling/ Machining

HardnessRAMicro





Marketing

• International marketing presence – under ‘Vega’ brand– Wholly owned subsidiaries and offices covering USA , UK, Middle East, Australia

– Technical team in key offices servicing customer requirements

– Established relationships with cement majors / technology suppliers• Holcim (Switzerland), Lafarge (France), Cemex (Mexico), FL Smidth

– Now focusing on opportunities available in global mining & utility sectors

• Domestic business spread across cement and utility/mining sectors– ACC Limited, Gujarat Ambuja Cement Ltd., Ultra-tech Ltd., Grasim Industries Ltd.,

etc- in cement segment

– Kudremukh Iron Ore Company Ltd., Hy-grade Pellets, Hindustan Zinc, Bharat Aluminium Company-in mining segment

– Major thermal power plants and OEMs in the utility segment


Global Footprint in 75 countries

Countries where AIA/Vega products are sold


Total Solutions Approach = Long Term Client Relationships


Organisation Structure

AIAE

Welcast Steels Limited (WSL)

Vega, ME

Vega,UK

Vega,USA

Manufacturing subsidiaries Marketing subsidiaries

Ba

ck

gro

un

dP

rod

uc

tio

n &

S

ale

s

• WSL is a listed entity. AIAE holds 72 % of its equity

• 100% subsidiary

• Vega, ME owns 100% of Vega UK

• Vega, UK owns 100% of Vega USA

• Manufactures Grinding Media

• Sells directly to AIAE and to its customers

• Direct Sales to Middle East, South East Asia and South America

• Direct Sales to North America and part of Central America

• Direct Sales to European Region, Russia, Africa, Turkey and other erstwhile CIS Countries

165,000 MT manufacturing capacity Domestic & international sales operations


AIA/Vega Global Presence

Offices being opened in 2009


Consolidated Financials ( In INR )

** Annualised

Rs.in Millions

PARTICULARS FY 05 FY 06 FY 07 FY08 FY09

Sales 2937 4070 5230 6912 10233

EBIDTA 469 919 1407 1955 2717

EBIDTA / Sales (%) 16% 23% 27% 28% 27%

Interest 28 53 24 17 21

Depreciation 33 71 82 136 203

Tax 136 252 346 460 750

NP after minority interest 269 524 943 1333 1736

PAT / Sales (%) 9% 13% 18% 19% 17%

Capital Employed 1483 3316 5184 6379 8324

Networth 875 2741 4918 6100 7726

ROCE (%) (EBIDTA-DEP/CE) 29% 26% 26% 29% 30%

RONW(%) (PAT/NW) 25% 19% 19% 22% 22%


Consolidated Financials ( In USD )

** Annualised

USD in Millions

PARTICULARS FY 05 FY 06 FY 07 FY08 FY09

Sales 67 91 120 173 201

EBIDTA 11 21 32 49 53

EBIDTA / Sales (%) 16% 23% 27% 28% 27%

Interest 1 1 1 0 0

Depreciation 1 2 2 3 4

Tax 3 6 8 11 15

NP after minority interest 6 12 22 33 34

PAT / Sales (%) 9% 13% 18% 19% 17%

Capital Employed 34 74 119 159 164

Networth 20 62 113 152 152

ROCE (%) 29% 26% 26% 29% 30%

RONW(%) 25% 19% 19% 22% 22%


Growth Strategy

Expand focus on global mining & utility segments

Capitalize further on predominant position in Cement in India & global markets

Increased R&D focus to further strengthen total solutions capabilities

Focus on strategic relationship / commercial partnerships with international partners to gain access to newer markets

Exploring backward integration opportunities for sourcing of certain key inputs and setting up a power plant


Proposed Capacity & Plans

0

50,000

100,000

150,000

200,000

250,000

Existing Jun-07 Q408 Mar-09

115,000

Capacity in tons

Implementation

Further expansion of manufacturing

capacity (by de-bottling to 200,000)

65,000115,000

165,000

FY 2010-2011

200,000

Dec - 2005 June - 2007 April - 2008


Thank You

Www.aiaengineering.com 0 Sept 2009 Company Presentation.

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