www.aiaengineering.com 1
Sept 2009
Company Presentation
www.aiaengineering.com 2
1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
www.aiaengineering.com 3
Industry: Mill Internals
High Chromium wear resistant parts for grinding & crushing equipment
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Industry: Mill Internals (cont’d)
Grinding Media Liners Diaphragm
Rollers & Table liners Blow bars / Hammers Dipping Tubes
Cement & Mining as key end-user industries
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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
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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
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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
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1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
www.aiaengineering.com 9
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
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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
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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
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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
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
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
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
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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
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Global Footprint in 75 countries
Countries where AIA/Vega products are sold
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Total Solutions Approach = Long Term Client Relationships
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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
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AIA/Vega Global Presence
Offices being opened in 2009
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1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
www.aiaengineering.com 19
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%
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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%
www.aiaengineering.com 21
1.1. Industry OpportunityIndustry Opportunity
2.2. Business + ManagementBusiness + Management
3.3. Financial SnapshotFinancial Snapshot
4.4. Growth StrategyGrowth Strategy
www.aiaengineering.com 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
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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
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Thank You
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