Hindusthan National Glass & Industries Limited Corporate Presentation
Industry Overview
Global Packaging Industry As per World Packaging Organization, the global packaging industry is expected to be USD 597 billion by 2014 • with ten year historical growth at ~ 3.1% CAGR • Projected to grow at ~ 3.5% CAGR in the medium term mainly driven by growth in emerging markets (Asia Pacific region) Geography End-User 5% 13% 34% 27% Liquor Europe 9% Beer Asia, Oceana, Africa & ME Food North America 52% 11% Pharma South & Central America Others 34% 15% Source: Owens-Illinois, Inc. - Investor presentation, March 2010 3
Packaging Industry - India World glass container per capita consumption in Kg. Market Overview • At USD14 bn, Indian packaging industry has been Indonesia 1.2 growing at ~ 15% over the last few years India 1.9 • Expected to accelerate further with increasing urbanization, growing middle class and Brazil 4.8 expansion of modern retail 5.9 China • Indian glass container market is estimated to be Japan 10.2 around USD 1.1 bn and is growing at the rate of ~10% p.a. Mexico 19.5 • Entry barriers in Indian Container Glass industry is USA 27.5 owing to capital intensive nature 27.5 UK • Top 3 players are HNG, HSIL and Piramal Glass Spain 50.3 • Low per capita glass container consumption of 1.9 kg in India as compared to other countries France 63.9 (refer chart alongside). South Korea 89 • Strong economic drivers for end-user segments (liquor, 0 50 100 beer, pharmaceuticals, food, cosmetics etc.) 4
End user Industry Overview B IMFL – Volume CAGR 10% Packaged Food – Volume CAGR 12%* e e r Region-wise Demand Region-wise Demand (Mn Cases) (US$ Bn) West 30 347 North 315 20% West 20% 25 287 North 277 29% 250 29% 21 222 18 15 East 13 10% South South 25% 50% East 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 17% * Assuming value growth of 7% out of overall growth of ~19% Source: Datamonitor, Capital Market Estimates Source: ASSOCHAM study, Capital Market Estimates Beer – Volume CAGR 11% Pharmaceuticals – CAGR 13% Region-wise Demand (US$ Bn) (Mn Cases) 329 North 45 West 308 20% 280 25% 39 250 35 219 31 195 27 24 East 10% South 45% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Source: Datamonitor, Capital Market Estimates Source: AM Mindpower Solutions 5
Company Overview
60 Years’ Experience in the Glass Industry Company Overview Group Structure � Incorporated in 1946, promoted by the C K Somany Group Listed on BSE since � Started operations with 30 TPD furnace at Rishra in 1952 HNGIL Mar 1995 & on NSE since Apr 2009 � Organic & inorganic expansion from 1,100 TPD in 2001 to ~4,300 TPD in FY13 11.2% 100% 100% 99.7% � Market leader and the only pan-India player in the container glass HNG Float Glass HNG Global Glass Equipment Quality Minerals industry. Ltd GmbH (India) Ltd Ltd � New plant of 650tpd each to help consolidate position in South & West Manufacturer of 320 TPD glass Capital Goods & Mineral Supplier to Float & Processed container facility at Spares Supplier to Glass Industry � Brownfield expansion at Nashik, Maharashtra commissioned in Glass Gardelegen, Glass Industry Q1 FY13. Germany � Greenfield expansion at Naidupeta, Andhra Pradesh commissioned in Q2 FY13. � Catering to all segments – IMFL, Beer, Pharma & Vials, Foods & Beverages (F&B), Cosmetics � Foray into global market through acquisition of assets of Agenda Glas AG, Germany in May 2011 7
Shareholding Shareholding Pattern as on date Promoters 69.98 Public Shareholding 30.02 Insurance Companies 0.10 Bodies Corporate 4.86 Financial Institutional Investors 7.27 Individuals & Others * 17.79 Total 100.00 * Includes 16.76% held as Treasury Shares in the Company Total 87.3 million shares Listed at: National Stock Exchange (NSE) - HINDNATGLS Bombay Stock Exchange (BSE) - 515145 Calcutta Stock Exchange (CSE) - 10018003 8
Board of Directors Mr. C K Somany, 80, Non-Executive Chairman � Mr. C K Somany is an expert in glass technology, he provides policy guidelines for the management and administration � He holds an F.B.I.M (London) degree and a degree in Glass Plant Instrumentation from Honeywell Brown, Minneapolis, USA � Served as the President of the All India Glass Manufacturers' Association and is associated with various charitable and philanthropic organisations � Currently the Chairman of CAPEXIL, sponsored by Ministry of Commerce & Industry, GoI Mr. Sanjay Somany, 55, Vice-Chairman & Managing Director � Has over 30 years experience in the glass industry and is closely involved in the technical and engineering aspects of the business � He is a commerce graduate and holds a diploma in diesel engineering � Served as the President of All India Glass Manufacturers' Federation (AIGMF) Mr. Mukul Somany, 48, Vice-Chairman & Managing Director � Over 26 years experience in the glass industry � Led the acquisition, turnaround and integration of India business of Owens Brockway and glass business of L&T Ltd, re-engineered business processes across six units � Currently the President of AIGMF, Executive Committee Member of CII (Eastern Region) & Member of CII National Council Mr. Dipankar Chatterjee, 65, Independent Director � Chartered accountant and senior partner of LB Jha & Co., Chartered Accountants and is a member of National Council of CII � Former Chairman of CII-Eastern Region, member of the Central Council of ICAI, Chairman of the audit practices committee of ICAI � Appointed member of the Padmanabhan Committee (set up to review RBI’s supervision over banks) Mrs. Rita Bhimani, 70, Independent Director � Noted Public Relations professional, Prolific columnist for mainline dailies and magazines. � Nominated to the Hall of Fame by the Public Relations Council of India in Bangalore. � Master’s degree holder from the University of Georgia, USA. 9
Board of Directors Mr. Rakesh Kumar Sharma, 61, Executive Director � Over 36 years experience in general management, EPC contracts and business development across Indian corporate sector � Holds a graduate degree in Mechanical Engineering and masters in Marketing management � Prior to joining HNG, he held a senior position at L&T Mr. Ratna Kumar Daga, 72, Independent Director � Vast experience in the fields of engineering and finance � Former Chairman of Indian Institute of Materials Management, Kolkata, President of Calcutta Junior Chamber, President of Federation of Small & Medium Industries � Holds PG degree in Business Management from the UK Mr. Sujit Bhattacharya, 69, Independent Director � Former senior partner of Lovelock & Lewes, Chartered Accountants, advisory experience in accounting, audit standards, corporate governance, business valuation & taxation � Fellow member of the Institute of Chartered Accountants in England & Wales, ICAI � Was nominated as the Special Director by the BIFR, Govt of India 10
Capacity Build-Up Through Organic & Inorganic Route Pan India Capacity of ~4300 tpd Brownfield expansion at Nashik and Greenfield plant at Naidupeta, AP Acquired Neemrana plant of Haryana Sheet Glass 1300 Acquired L&T’s Nashik Plant 350 Acquired Pondicherry & Rishikesh plants of Owens 150 Brockway 180 4235 105 320 30 2935 700 1100 30 1952 2001 2002 2005 2007 2008 2010 2012 2013 2014 Total (TPD) Expansion (TPD) Acquistion (TPD) 11
Processes for Maximizing Capacity Utilization & Sales Technological Strengths Leading to Smoother & More Efficient Operations � Diversified vendor base for raw material procurement � Captive sand beneficiation facilities � In-house furnace maintenance & refurbishment capabilities � Proven ability to run plants at high capacity utilization � Draw and pack ratios consistently among the best in the industry SAP Implementation for Better Integration & Standardization of Business Processes � Accurate real-time information with enhanced visibility and operational controls � Automation of report generation & month-end reconciliation � Alignment of functional objectives with corporate business plan leading to better coordination across functions, manufacturing units & marketing offices � Higher productivity through automation � Improved customer service � Cost control and uniform material code data across locations � Online tracking of production and sales-related performance data 12
Market Leader in Container Glass
Growth Drivers Market leader in container glass with pan-India presence, ~50% market share (including new plants in FY13) End user segments expected to grow at double digit rate over next 3 years Newly commissioned plants to improve market share in underserved markets Think Glass, Think HNG Demonstrated track record of inorganic growth through turnaround of sick units with highly skilled manpower Margin expansion due to higher scale & efficiency Use of best-in-class technology with captive developmental capabilities 14
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