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INVESTOR AND ANALYST MEET
June 21 2011
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DISCLAIMERThis presentation does not constitute or form part of any offer or recommendation or solicitation topurchase or buy or deal with in any securities of Godrej Industries Limited (GIL) (the Company), norshall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with,any contract or commitment thereof.
This presentation contains statements that constitutes forward-looking statements. These statements
include descriptions regarding the intent, belief or current expectations of the Company or its directorsand officers with respect to the results of operations and financial condition of the Company. Thesestatements can be recognized by use of words such as expects, plans, will, estimates, outlook,projects or other words of similar meaning. Such forward-looking statements are not guarantees offuture performance and involve risks and uncertainties, and actual results may differ from those in suchforward-looking statement as a result of various factors and assumptions which the Company believes to
.
revise any forward-looking statement that may be made from time to time by or on behalf of the Company.Actual results might differ substantially or materially from those expressed or implied. Importantdevelopments that could affect the Company's operations include changes in industry structure, significantchanges in political and economic environment in India and overseas, tax laws, import duties, litigation and
.
No representation, warranty, guarantee or undertaking, express or implied, is or will be made as to, and no
reliance should be placed on, the accuracy, completeness or fairness of the information, estimates,.
relevance, accuracy and adequacy of the information contained in this presentation. Any opinionsexpressed in this presentation are subject to change without notice. None of the Company, promoters orany other persons that may participate in this presentation shall have any responsibility or liabilitywhatsoever for any loss howsoever arising from this presentation or its contents or otherwise arising in
2 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
connection therewith.
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AGENDA
Company Overview
Investment Rationale
Godrej Agrovet Deep Dive
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COMPANY OVERVIEW
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BALANCED PORTFOLIO OF GROWTH BUSINESSES
CHEMICALSown business
Fatty alcohols, fatty acids, glycerin & surfactants
Key ingredients for personal care, home care &Revenue growth in FY 11 31%
PBIT growth FY 11 85%
GODREJ
specialized consumer products
Animal Feeds - cattle, layer, poultry & aqua feeds Revenue rowth in FY 11 20%
(75.2%) -
Poultry & processed meats
Townships, Residential & Commercial projects
PBIT growth FY 11 103%
PROPERTIES(70.6%) Presence in 11 cities across India 83.6 million sq ft of development area
ncome grow n
PBT growth FY 11 - 26%
PROPERTY
DEVELOPMENT
(40% )
2.8 Mn sq ft to be developed in prime Mumbai suburb
Mixed use development with best-in-class design and sustainable green buildings
FMCG(GCPL -21.6%)
Home care, Personal Care , Foods & beverages
Leadership in Insecticides & Hair color segment
GCPL
Revenue growth in FY 11 78%
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. A third of revenues now coming from international operations
Net profit growth in FY 11 52%
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INVESTMENT RATIONALE
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INVESTMENT RATIONALE
r n v n
systematic va ue crea on approach
Proven track record of value creation
strong value of underlying assets
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POWERFUL BRAND
One of the most well known brands built around trust and reliability
500 million consumers use at least one Godrej product everyday
$2.86 billion brand valuation determined by global brand consulting
9 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
agency Interbrand
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LEADING MARKET POSITIONS
Oleo-chemicals & Surfactants Household insecticides
#Animal feeds
Oil Palm plantations
Liquid detergents
Soya milkHair color Processed Chicken
Soaps
Sugar confectionery
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INVESTMENT RATIONALE
systematic va ue crea on approach
Proven track record of value creation
strong value of underlying assets
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OUR CREATE GROUP PORTFOLIO STRATEGY
Consumer & Chemicals
Realstate
A ri
Transformation Drive to full potentialEmergent Focused incubation of new
businesses
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CONSUMER (GCPL) Largest Indian home & personal care company Leading positions in core categories in the domestic market:
No. 1 in hair colours, household insecticides, and liquid detergents; No. 2 in soaps
Sara Lee stake acquisition has led to a more diverse and balanced domestic
ortfolio
Recent international acquisitions establish platform for becoming a leadingemerging markets FMCG company
Strong positions in core categories internationally home care, hair care andpersonal wash
Unparalleled track record of value creation among FMCG companies in India
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LEADING PRESENCE IN DOMESTIC CORE CATEGORIES
Key categories Key brands Category market share Rank
Soaps .
Hair colour #129.4%
Household36.6%
Liquid detergents#186.3%
14 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
Source: A.C. Nielsen (MAT 11)
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7 ACQUISITIONS MADE IN FY 11 GLOBALLY
ompany ey ran s a egory
Godrej Sara Lee(India) 51%stake
Householdinsecticides, homecare
#1
Megasari
(Indonesia)
Household
insecticides, air care,
#2 (HI); #1 (Aircare); #1 (Baby
wipes),
Issue &Argencos(Argentina)
#1 in severalLatam markets
Hair color
Tura (Nigeria) #2Medicated Soaps
SalonSelectives (UK)
Hair color
Swastik &Genteel (India)
Personal care, laundry #2 in laundry
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ea ng presence n core ca egor es an a por o o o marquee ran s
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STRONG FINANCIAL PERFORMANCE
4000 800,
3000
653
60078% 55%
2,0412000
420400
52%
1000 200
0
FY 10 FY 11
Sales
FY 10 FY 11
PBT PAT
16 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011Note: Values in Crore
Financials are for GCPL Consolidated
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REAL ESTATEGODREJ PROPERTIES LIMITED
Brings the Godrej Group philosophy of innovation and excellence to the real
estate industry
Ke stren ths are:
Differentiated business model: Joint venture model which is asset light, capital
efficient, and highly scalable
Godrej Brand: Among Indias most trusted brands in an industry known for relative
lack of transparency
(Ahmedabad, Chandigarh, Mangalore)
National presence: With projects in 11 cities, has emerged as a successfulnational developer
Godrej Group MOUs: Access to land parcels owned by Godrej Group gives
further abilit to ex and
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NATIONAL PRESENCE FOR GODREJ PROPERTIES
Chandigarh
NCR
Kolkata
Ahmedabad
MumbaiPune
Hyderabad
Mangalore Bangalore
Chennai
Kochi
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FINANCIAL RESULTS FOR GODREJ PROPERTIES
750 300
559213 205
28%
390
500
166 162200
26%
250 100
0 0
FY 10 FY 11
Sales
FY 10 FY 11
EBITDA PBT
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REAL ESTATE
VIKHROLI DEVELOPMENT PROJECT
In January 2011, GPL unveiled its 35-acre mixed development projectThe Trees at Vikhroli
pprox . m on sq o pr me proper y o e eve ope n um a
JV between GIL & GPL on profit sharing basis
GIL would effectively be beneficiary of 82.4% of profits (through its direct40% share in profits + its 70.6% stake in GPL)
GPL has already begun construction of Godrej One - a 0.75 million sq ftcommercial office building and progress is on schedule
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CHEMICALS
Indias leading manufacturer of oleo-chemicals & pioneer in
Caters to the raw material needs of high growth consumer goodssectors Personal care, home care, tyre industry & specialised
applications
Reliable supplier to global MNCs Ex orts to over 60 countries across 6 continents
FY 11 revenues of 1023 crore are 31% increase from previous year
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PRODUCTS USED AS INPUT MATERIAL IN A VARIETY
Products Applications Drivers for GIL
Cosmetics (Shaving, Facial
creams)
Movement into specialty fatty acid
to drive growth glycerin
PVC processing Pharmaceutical, Humectants,
Cosmetics
the range of applications
Fatty alcohols CosmeticsIndustrial applications, Personal care,
Export sales to drive growth Developing direct relationships withMNC clients to meet their global
,
Shampoos, Conditioners
Toothpaste,
Export led growth
Plans to:Surfactants
Cosmetics, Detergents
Gain greater share of existingcustomer businesses
Upgrade to value added
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STRATEGIC SHIFT TO HIGH MARGIN PRODUCTS
De-risking strategy resulted in increased sales in high margin products.
Share of s ecialt chemicals increased to 33% in the overall revenue mix ascompared to 29% last year
Percentage share of products to Division's turnover
33.8%
40.8%
31.6%
35.6%
33.2%
40.0%
35%
40%
45%
22.3%
29.2%
26.3%
20%
25%
30%
3.1% 3.6%5%
10%
15%
.0%
Speciality Chemicals Fatty Acids & Glycerin Fatty Alcohol Others
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FY 2008-09 FY 2009-10 FY 2010-11
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CAPEX UPDATE
The manufacturing facility at Ambernath will be on a 20 acre plot of MIDC land and wouldNew Oleo-chemicals manufacturing facility at Ambernath, Maharashtra
,
Capex Outlayou crore.
Capex Timeframe
2 3 years ; expected to be fully operational in FY 2013-14
Progress update
Civil work of Phase-1 in progress (Boundary wall, Land Filling & Underground Watertank).
Other clearances / permission to be obtained on track
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CAPEX UPDATE (Contd)
The new splitting plant and fractionation plant will augment capacity for manufacture ofNew Plant at existing Factory at Valia, Gujarat
Capex OutlayAbout 50 crore.
Capex Timeframe
15 18 months ; expected to be fully operational in FY 2013-14
Progress update
Work undertaken for Phase-1: Fractionation column with storage tanks ase- o t e pro ect expecte to e comp ete y arc .
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SALES CROSS 1000 CRORE
1250 100
1023
1000 7531% 85%
781750 49
50
500
25250
0
FY 10 FY 11
Sales
FY 10 FY 11
PBIT
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LOOKING FORWARD FOR CHEMICALS
Continue to build strong global position in long chain fatty alcohols
Leverage competitive advantage India has in Rapeseed oil increase share ofhi h mar in derivatives of ra eseed oilin the ortfolio
Maintain leadership position as domestic supplier of Alpha Olefin Sulphonate
Expand product portfolio with adjacenciesto current offering.
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AGRI BUSINESSESGodrej Agrovet (GAVL) is a diversified agribusiness with FY 2011 sales of about
1,900 crore
poultry and aqua feed
Oil palm plantations largest oil palm cultivator in India
Agri inputs niche player focused on plant growth regulators, herbicides, etc.
Poultry JV with Tyson Foods, the worlds largest meat processor
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STRONG FINANCIAL RESULTS FOR GAVL
1,8972,000 100
1,581
1,500
20%
6975
1,000 50
103%
500
34
25
- 0FY 10 FY 11
Sales
FY 10 FY 11
PBIT
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TRANSFORMATION
A GREAT PLACE TO WORK
1st in excellence in HR through technology among top 15 Best Employers in India
GCPL 4overall Best employer by
Outlook Business Aon Hewitt
GPLin real estate and construction industry
among top 100 Best Employers in India
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TRANSFORMATIONKEY HR INITIATIVES
o re er es aunc e
50 senior leaders went through extensive talent development process to receive
Process supported by faculty from Harvard Business School and Columbia University
Employee satisfaction survey conducted across all domestic and international
Long-term incentive schemes modified to further align with shareholder returns
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TRANSFORMATION
GODREJ BRAND EQUITY
Hosted Godrej Power Play for theLifestyle reality show
First brand in India to foray in mass
-
Campaign awarded:
Gold for Best Cam ai n in Countr ,consumers across brackets.India
Gold in Best Brand BuildingCampaign category pan Asia
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T
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TRANSFORMATION
EMBRACING SHARED VALUE ACROSS THE GROUP
E.g. Climate
chan e
Revenue growth
e.g. new, greenAddress SocialProblems
E.g. Quality
StrengthenDrivers of
Competitiveness
products
Improved talenteducation pipeline
e concep o s are va ue can e e ne as po c es an opera ng prac ces aenhance the competitiveness of a company while simultaneously advancing the
economic and social conditions in the communities in which it operates.
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GROUP WIDE INITIATIVE CALLED GOOD & GREEN
HAS BEEN LAUNCHED
Beyond Business: Building a More Inclusive and Greener India
by 2020
ensuringemployability creating agreenerIndiaachieve zero waste,
innovating forgood & green
have a third of our
and urban youth in
skilled employment
carbon neutral, positive
water balance and 30%
portfolio revenues
comprising good and/
services
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E
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EMERGENT
JV with The Hershey Company, North Americas leading chocolate manufacturer FY 2010-11 revenues were 360 crore
Market leader in the candy segment with over 20% market share
Hersheys Milk Mix sales grew by 47% in FY11; Sofit sales up by 35%;ump n sa es y ;
Product launches during FY 2010-11:
Coffee Eclairs: clairs with a coffee flavor Maha Lacto Hattrick: Three balls of Maha Lacto in flow wrap and with cricketing
eel and design theme
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EMERGENTNATURES BASKET LTD Started in 2005 as a fresh food retailer; morphed into fine food retailer in 2008 Now Indias leading fine Gourmet retail chain and a leader in the niche space
14 stores located in premium residential catchments, ,
3 New stores opened in FY 10-11 (one each in Pune, Mumbai and Gurgaon)
Caters to up-market urban consumers for authentic world food, ingredients,organic foods, health foods, delicatessen, boulangerie, and finest beverages
including wines and beer Revenues at 56 crore for FY 10-11 rew b 63% over FY 09-10
Awarded the Most Admired food retailer of the year in the Foreign FoodsCategory at prestigious Coca Cola Golden Spoon Awards - 2011
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INVESTMENT RATIONALE
systematic va ue crea on approach
Proven track record of value creation
strong value of underlying assets
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STRONG FINANCIAL PERFORMANCE
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STRONG FINANCIAL PERFORMANCE
3613 3716
4602
NET PROFIT2466
293
FY 07 FY 08 FY09 FY10 FY11
168 203
59REVENUE
FY 07 FY 08 FY09 FY10 FY11Figures in crore
38 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
Due to JVs, restructurings, acquisitions, divestitures, etc. revenue and profit figures are not strictly comparable from year to year.
HISTORY OF VALUE CREATION
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HISTORY OF VALUE CREATION
A proven track record ofvalue creation
10 year compounded annual growth rate (CAGR)
51%Godrej Industries Ltd.
39%
Godrej Consumer
Products Ltd.
ensex
Note: CAGR calculated on closing stock prices as of June 18th, 2001 and June 16th, 2011
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INVESTMENT RATIONALE
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INVESTMENT RATIONALE
systematic va ue crea on approach
Proven track record of value creation
strong value of underlying assets
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SIGNIFICANT APPRECIATION IN INVESTMENT VALUE
Company BusinessHolding
(%)
Investmentat cost
( Crore)
MarketValue* ofinvestment( Crore)
Godrej ConsumerProducts
FMCG, Personal and HouseholdCare Products 21.6 495 2,550
Godre Pro erties Real Estate and Propertyeve opmen
Godrej AgrovetAnimal Feed, Agri-inputs, Poultry &Oil Palm 75.2 163
o re ers ey oo , everages an on ec onery .
Godrej International International Trading 100.0 17
Natures Basket Fresh food & Gourmet Stores 100.0 14
MedQuist (formerlyCBay)
Medical Transcription 3.7 38 84
Others Bio- Technology, KPO, etc. 44
Total 1 228
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* as on March 31, 2011
VALUE UNLOCKING POTENTIAL
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OtherValuableinterests
5 000
6,000
7,000
8,000
Animal Feed
(FY 2011 Revenue :
6,243
6,164
2,000
3,000
4,000
GPL listed
,
Oil Palm Plantation
(FY 2011 Revenue :
115 crore)
GCPL&GPL
Rs.
Crore
1,000
Confectionary / Foods
(FY 2011 Revenue :
GCPLonly
TotalGIL's
share
in
market
capital
of
GPL
&
GCPL GIL's
market
Capital
43.4% share)
Oleo Chemicals
Veg Oils, etc GIL represents a unique opportunity to participate in several high
Other A ri / Poultr
(FY 2011 Revenue :
1,765 crore)
grow sec ors n n a w e rema n ng e-r s e rom e vagar es
of any single industry
With a resence in industries that are c clical Pro erties and more (FY 2011 Revenue :
481 crore)
stable (FMCG); businesses that are rural (Agrovet) and urban
(Properties); businesses that are global (FMCG) and domestic
42 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
,
the India growth story
Property
development
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GODREJ AGROVET DEEP DIVE
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GAVL DELIVERED EXCELLENT FY2010-11 PERFORMANCE
1,8972,000Sales PBIT
Annual Consolidated Results ( crore)
1,4501,581
1,400
1,600
,
600
800
1,000
,
25.0 34.2 69.3
0
200
400
Annual sales increased by 20% since FY2009-10
FY2008-09 FY2009-10 FY2010-11
, - All businesses have seen significant increases in sales and profitability
Investments in R&D, Quality, Marketing, and Tech Service have reshaped GAVL
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Launch of new businesses in drip irrigation and hybrid seeds underway
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ANIMAL FEED BACK ON GROWTH TRAJECTORY
1 2931,400
Annual Animal Feed Sales ( crore)
982
1,142
1,000
1,200
400
600
800
0
200
FY2008-09 FY2009-10 FY2010-11
Annual sales increased by 13% since FY2009-10
Volume growth across all categories, with especially strong performance from aqua feed
Return on Capital Employed (ROCE) for FY2010-11 was 133%
Launched Super Star, the best performing broiler feed in India
Acquired 51% Gold Coin stake in GGCAL and merged with Godrej Agrovet
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CURSE OF FLAT TONNAGES BROKEN IN FY2010-11
900,000Animal Feed Volumes (MT)
700,000
800,000
Other
727,450 721,962 723,379714,150
727,656 732,522
,
500,000
600,000Aqua
400,000 Layer
200,000
,Broiler
Cattle
0
,
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011
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BUSINESS CONTINUES TO BOOM IN BANGLADESH
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BUSINESS CONTINUES TO BOOM IN BANGLADESH
300
Annual ACI Godrej Sales ( crore)
252
200
250
94
156
100
150
0
50
Annual sales increased by 61% since FY2009-10
- - -
Increased feed mill productivity from 296 TPD to 350 TPD
Expansion of breeding farm planned for next year
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Planning to expand production capacity of floating fish feed and poultry feed
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STRATEGIC PRIORITIES FOR ANIMAL FEED IN FY2011-12
Highest growth in FY2011-12 expected from East, Central, and Aqua regions
Augmenting capacities, with new feed mills being established at Varanasi, Kharaghpur,Erode and Vijayawada
Expanding margins through nutrition R&D, strategic purchasing, and logistics
Shifting cattle feed sales mix towards premium (Type 1) feed
,
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OIL PALM BENEFITS FROM GLOBAL COMMODITY BOOM
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OIL PALM BENEFITS FROM GLOBAL COMMODITY BOOM
140
Annual Oil Palm Sales ( crore)
115
100
120
64
60
80
0
20
Annual sales increased by 80% since FY2009-10
supported by good monsoon, high CPO prices
FY2008-09 FY2009-10 FY2010-11
Beginning to reap high volume growth from maturing plantations
fresh fruit bunch (FFB) volumes crossed one lac MT
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OIL PALM CROSSED 1 LAC MT OF FFB IN FY2010 11
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OIL PALM CROSSED 1 LAC MT OF FFB IN FY2010-11
140,000
Annual Oil Palm FFB Production (MT)
120,460120,000
78,42183,324
80,000
100,000
47,340 49,92860,000
20,000
40,000
0FY06-07 FY07-08 FY08-09 FY09-10 FY10-11
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GOVT RENEWS FOCUS ON OIL PALM PUSHES GROWTH
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GOVT RENEWS FOCUS ON OIL PALM, PUSHES GROWTH
Oil Palm New Cultivation (Hectares)
-40,00045,000
+ 9,256
+ 4,751, ,
20,000
25,00030,00035,000
9,738
,
+ 5,322,
05,000
10,00015,000
Upto
FY05-06New
Hectares
FY06-07
NewHectares
FY07-08
NewHectares
FY08-09
NewHectares
FY09-10
NewHectares
FY10-11
NewHectares
Uprooting
FY09 toFY11
Current
TotalHectares
Some uprooting has taken place due to competition from other crops (e.g. sugar cane)
, farmer subsidy increasing from 23,000/ha to 45,000/ha; should halt uprooting
New allotments to GAVL by state governments offers some good news, future upside
51 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
Sangli, Kolhapur & Sindhudurg in Maharashtra
STRATEGIC PRIORITIES FOR OIL PALM IN FY2011 12
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STRATEGIC PRIORITIES FOR OIL PALM IN FY2011-12
Accelerating new area coverage, especially in TN and AP Coordinating with government on oil palm sector policy review
Leveraging Farm Management System (FMS) to drive yield improvement
Scaling up leaf & soil testing laboratory to provide farmers with custom advice
Expanding oil palm area covered by drip irrigation
Establishing oil mill (30 TPH, expandable to 60 TPH) at Chintampalli, AP
52 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
AGRI INPUTS SET FOR AGGRESSIVE FUTURE GROWTH
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AGRI INPUTS SET FOR AGGRESSIVE FUTURE GROWTH
180
Annual Agri Inputs Sales ( crore)
133
157
120
140
160
80
100
20
40
Annual sales increased by 18% since FY2009-10
FY200809 FY200910 FY201011
Agri Inputs focusing on plant growth regulators, herbicides for future growth
Hitweed sales reached 71 KL vs. 21 KL in FY2009-10
Stron efforts underwa to im rove A ri In uts roduct ortfolio
53 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
paddy herbicide registration in process; R&D on next generation PGRs
STRATEGIC PRIORITIES FOR AGRI INPUTS IN FY2011-12
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STRATEGIC PRIORITIES FOR AGRI INPUTS IN FY2011-12
Driving sales growth through Hitweed, Zymegold, and HBR Augmenting and modernizing manufacturing capacities
Reducing high working capital requirements through channel management
Registering new paddy herbicide to kickoff sales in FY2012-13
Accelerating R&D program with strong focus on plant physiology
herbicide synthesis, next generation PGRs , abiotic stress mitigation
54 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
GODREJ TYSON FOCUSING STRONGLY ON YUMMIEZ
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GODREJ TYSON FOCUSING STRONGLY ON YUMMIEZ
229250
Annual Godrej Tyson Sales ( crore)
157
185200
100
50
Annual sales increased b 24% since FY2009-10
0
FY2008-09 FY2009-10 FY2010-11
Very strong performance by Yummiez
Plannin to ex and rocessin ca acit next ear
55 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
NEW BUSINESSES (DRIP, SEEDS) ARE BEING LAUNCHED
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NEW BUSINESSES (DRIP, SEEDS) ARE BEING LAUNCHED
Formally entering seeds sector through Godrej Seeds & Genetics Ltd (GSGL)
ea quar ere a y era a , curren y r ng ea ers p eam
existing maize/paddy seed sales by Agri Inputs being shifted
GSGL to focus initial efforts on three major crops: maize, paddy, bajra
Will enter drip irrigation industry via JV; to be officially announced in July 2011
planning to produce drip laterals, drippers, and related components
-
strong synergy with Oil Palm business
56 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
HOW SHOULD WE THINK ABOUT THE FUTURE OF GAVL?
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HOW SHOULD WE THINK ABOUT THE FUTURE OF GAVL?
Godrej Agrovets mission is to improve the productivity of Indian farmers byinnovating products and services that sustainably increase crop and livestock yields.
Feed We will innovate better products
and services for Indian farmers
AgriInputs
Drip
high performanceanimal feeds
next gen PGRs, herbicides
Farmer
OPP extension services
high yield seeds,banana tissue culture
Oil
drip irrigation
We will upgrade our capabilitiesto deliver business success
a m
Poultr
R&D, NPD, marketing
manufacturing
57 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
,
REVAMPED GAVL LOGO & SLOGAN REFLECTS MISSION
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Blue = technolo
Green + leaf = agriculture
Based on GodrejGroups slogan ofBrighter Living;
incorporating newGAVL mission
58 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
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59 I Godrej Industries Limited I Investor and Analyst Meet | June-21-2011
THANK YOU FOR YOUR TIME AND CONSIDERATION
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