Contents Contents Introduction Tea Oil & Gas Infrastructure Financials Conclusion
Introduction Assam Company India Limited (Assam Co.) - Over the years Assam Co. γ Assam Co. is currently engaged in Tea, Oil & Gas and Infrastructure businesses. γ 1839 First Company to establish Tea Estates, brand Premium Tea, Founded as a first Tea Export, establish Tea Seed Estates, Organic Tea Farm and transact Company in the world Electronic Tea sales. γ Oil was first discovered in India by Assam Railway & Trading Company, an associate company of erstwhile Assam Co. 1892 Associate Company discovers Oil in the North East India γ Building SEZs in Hydrocarbon & Power Sector in a area spanning over 1000 acres in the state of Gujarat. γ Professional and experienced management engaged across all [year] Ventures to build up a SEZ in segments. Gujarat 3
Company Background Oil & Gas Tea 18 Tea Estates are being monitored Domestic Presence by 15 factories with a total of over 14000 hectares with cultivation in Participating Interest in 3 Assets under over 8600 hectares. consortium with various partners in the lucrative Assam-Arakan basin Over 15 mn kgs of Quality Tea produced in year 2009 Amguri, AA-ON/7 & AA-ONN/2005/1 in partnership with Canoro Resources In-house production and R&D Limited, ONGC & OIL. Division – currently in process of extending the production cycle Overseas Presence 17% stake in Austin Exploration Limited, Infrastructure Australia Developing Hydrocarbon & Power JV with DMS Exploration Services, LLC, sector specific SEZs in an area of USA with exploration interests in over 1000 acres in the State of Australia and United States. Gujarat 4
Corporate Structure Assam Company India Limited Tea Infrastructure Oil & Gas Assam Oil Gujarat Hydrocarbons Assam Estates Ltd (100%) & Gas Ltd (100%) and Power SEZ Limited Namburnadi Tea Duncan Macneill North East Company Ltd (92.98%) Natural Resources Ltd Hydrocarbon Ltd (100%) (100%) Camellia Cha Bar Ltd Austin Exploration (100%) Limited (17%) 5
Tea – Sector Perspective 1050 1023 999 982 1000 981 γ Declining production levels over the last 956 946 945 933 950 927 few years due to rain shortfall in Assam, 893 Sri Lanka and Kenya. Global Shortage of 900 Tea is likely in 2010 850 800 γ Domestic Per capita consumption is 2004 2005 2006 2007 2008 expected to grow at 3% - 3.5% annually. Demand Production The increase in the domestic consumption Black Tea Demand and Production in India (in Million Kgs) is expected to further widen the demand- supply gap leading to firm Tea prices Others China 29% 29% γ Assam has witnessed less rainfall in January 2010 and it might impact the production of the high quality Tea in February – March 2010 Kenya 9% India Sri Lanka 25% 8% Percentage of total Tea production 6
Tea – Company Overview γ Pioneer in producing quality Tea for almost two centuries – First to produce Tea in the world, today it has over 14000 hectares (over 8600 hectares under cultivation) under 18 Tea Estates in Assam γ One of the most reliable Tea exporters in India and exports about 17% of its total production to major markets like Europe, Russia & Middle East γ Reliability in terms of quality and commitment to on-time performance over the years have associated Assam with various esteemed clients – The Company’s client portfolio includes name as – R. Twinings, Taylors of Harrogate, Tetley GB Ltd, Gebrender Hollenhampt (GMBH) and Ahmad Tea Ltd. γ Recognized for its quality of Tea, stringent operational norms and premium welfare of human resources γ Supplier of choices to almost all the major Tea blenders in the country 7
Tea – Operational Details Key Figures (2009) Destination wise break up of exports (01.01.09 to 31.12.09) Total Production: 15 Million Kgs Country L/Kgs Value (Lac Rs) Gross Margin on Tea sales: 37% GERMANY 0.81 213.22 NETHERLANDS 1.1 315.03 Average selling price: Rs 133 per kg UNITED KINGDOM 17.15 2616.59 (domestic & export market) UNITED STATES OF Export Sales quantity: 39 Lac Kgs AMERICA 1.41 172.57 JAPAN 0.01 2.4 Domestic Sales quantity: 116 Lac Kgs IRAN 11.27 1987.05 SAUDI ARABIA 1.2 178.2 SRI LANKA 5.85 865.73 Total 38.79 6350.79 γ Current year realization over Rs 150 per kg – trend likely to remain firm in foreseeable future γ Optimal mix of exports and domestic sales & auctions to maximize realization γ Sales mix varies Year – to – Year depending on the market situation 8
Tea – Strategy Production Increase γ Strategic acquisition of available Tea factories to enhance production levels at minimum cost – Look-out for acquisition of domestic / international Tea plantations γ Improvement in process through in-house R&D facilities – Attempts to implement a 12-month production cycle as opposed to the current 9-month production cycle Yield Improvement γ Plantation of new clones in vacant patches in hectares under cultivation to improve yield per hectare γ Re-plantation of field with selection of highest quality clones and most advanced available technology to improve productivity. γ Constant endeavor to improve productivity without compromising quality – Better age profile of bushes by re-plantation and usage of high quality agri-inputs (EU / International norms) Quality Management γ Implement agreed utilization of pesticides & other fertilizers for quality assurance – Follows EU / International norms γ Pursue conventionally most proven processes to produce superior quality of tea Market Development γ Direct Exports to discerning international markets γ Strong relationships with global bidders and tea marketers 9
Oil & Gas – Overview γ Upstream presence in Oil & Gas through participating interest in various blocks. – 3 major blocks namely Amguri, AA-ON/7 & AA-ONN/2005/1 located in the state of Assam, India γ Strong partnership with pioneers of Oil & Gas – Canoro Resources Limited, Canada (listed on Toronto Stock Exchange) – Oil & Natural Gas Corporation Limited (ONGC) – Oil India Limited (OIL) γ 17% Shareholding in Austin Exploration Limited (AEL) – AEL operates in 5 E&P Prospects in Texas, U.S.A. and 2 E&P Prospects in South Australia γ Gas based power plant prospects to be materialized 10
Oil & Gas – Blocks Amguri Block Resource Estimates as per Sproule Report (2P) Production sharing contract with Area: 52.75 sq. km (approx) Canoro Resources Limited, Canada High Low Best Assam Co. – 40% Canoro Resources Ltd – 60% Oil 80 mmbbl 20 mmbbl 46 mmbbl Gas 237 bcf 107 bcf 167 bcf Current Status: γ The consortium gets premium US$ 4-5 per barrel over Bonny Light Crude due to its superior quality of the oil γ 5 Appraisal wells drilled, 3 wells under production and high success rate γ 3 producers of Oil & Gas and 1 producer of Gas producing 500 BOE/ D & 1.5 MCM γ Appraisal drilling in progress on the results of 3D seismic γ Gas Re-injection Plant is currently under implementation; process completion is expected by June 2010; following which production is likely to enhance significantly Future Plan: γ 10 more wells are being firmed up during next three years and of which 2 appraisal wells are being planned in 2010-11 and first part of 2011-12 11
Oil & Gas – Blocks Production Sharing Contracts AA – ON / 7 AA-ONN/2005/1 Assam Co. – 35% Assam Co. – 10% Canoro Resources Limited – 65% ONGC – 60% & Oil India Limited – 30% Resource Estimates as per Sproule Report (2P): Resources: To be ascertained Area: 319 sq. kms High Low Best Current Status: Oil 98 mmbbl 35 mmbbl 80 mmbbl Gas 897 bcf 121 bcf 617 bcf Exploration work is to start, awaiting PEL from the Assam Government. Current Status: Considering drilling work programme, a separate Rig has been deployed by the Consortium. 12
Infrastructure γ Developing Hydrocarbon & Power sector specific SEZs in over 1000 acres in Vilayat, Near Dahej, in the state of Gujarat, India γ Formed a 100 % owned SPV (Special Purpose Vehicle) by the name of Gujarat Hydrocarbons and Power SEZ Limited (GHPSL), formerly known as Gujarat Hydrocarbon & Energy SEZ Ltd Current Status: γ Physical possession of around 700 acres of land had been taken. Rest of the land is under acquisition and same will be completed soon. γ Considering the option for setting up a dedicated jetty in Dahej to cater the need of proposed unit in the SEZ. The Company has approached authorities in Gujarat to allocate the site for the jetty in Dahej. γ Currently negotiating terms with various large Multi National Companies for an Anchor Tenant. 13
Key Financials All figures in Rs. million 270 276 1,939 280 2000 1,740 1,532 1,388 1,350 210 1500 153 114 140 1000 100 70 500 0 0 CY 2005 CY 2006 CY 2007 CY 2008 CY 9M CY 2005 CY 2006 CY 2007 CY 2008 CY 9M 2009 2009 Net Sales EBIDTA 183 200 150 CAGR (5 years) 102 86 100 Net Sales Over 10% 75 34 50 PAT Over 48% 0 CY 2005 CY 2006 CY 2007 CY 2008 CY 9M 2009 Profit After Tax 14
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