feb11_hng corp.pdf - Hindusthan National Glass & Industries Limited.

CORPORATE PRESENTATION
December, 2010

Disclaimer
Corporate Presentation (the “Presentation”) of Hindusthan National Glass & Industries Limited (HNG), as contained in this document, is
based on management estimates and is being provided to you (herein referred to as the “Recipient”) only for information purposes. The
sole purpose of this Presentation is to provide preliminary information on the business activities of the Company, in order to assist the
recipient in understanding the Company. This Presentation does not purport to be all inclusive or necessarily include all information that
a prospective investor may desire in evaluating the Company. The Company expressly disclaims any and all liability for any errors
and/or omissions, representations or warranties, expressed or implied, as contained in this document.
This Presentation contains certain forward looking statements, which are based on certain assumptions of future events over which the
Company exercises no control. Hence this involves number of risks and uncertainties which could cause the actual results to differ
materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but
are not limited to: Company’s ability to manage growth, competition, attracting and retaining skilled professionals, time and cost
overruns, regulatory approvals, market risks, domestic and international economic conditions, changes in laws governing the Company
including the tax regimes and exchange control regulations.
The Company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the
Company. This Presentation may not be photocopied, reproduced or distributed to others at any time without prior consent of the
Company. Upon request, the Recipient will promptly return all material received from the Company without retaining any copies thereof.
In furnishing this Presentation, the Company does not take any obligation to provide the Recipient with access to any additional
information on the Company or its Subsidiaries. This Presentation should not be deemed an indication of the state of affairs of the
Company nor shall it constitute an indication that there has been no change in the business or state of affairs of the Company since the
date of publication of this Presentation.
Any clarifications / queries, as well as any future communication, regarding the Company should be addressed to the Company. “This
presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, invitation, or a solicitation of any
offer, to purchase or sell or subscribe, any shares of the Company and should not be considered or construed in any manner
whatsoever as a recommendation that any person should subscribe for or purchase any of the Company’s shares.”
2

Table of Contents
• Introduction of the Company
• Industry Snapshot
• Business Overview
• Float Glass Business
• Business Strategy and Expansion Plans
• Financial Snapshot
3

Introduction of the Company

Overview
Growth in respective Economies
Industry leader – market
share ~ 55%
Diversified customer
base across all market
segments
Pan-India presence
Successful turn around
of loss making
acquisitions
Strong focus on value
creation through
strategic initiatives
Robust start in high
growth oriented Float
Glass business
Decline Low growth Medium growth High growth Not illustrated
Professionally run
organization with
competent management
HNG: Unique and only of its kind in high growth Indian market
5

Vision
“To create a world-class glass
manufacturing plant that pursues
Quality, Cost Reduction, and
Productivity Improvement measures in
a truly holistic manner, leading to
Customers‟, Shareholders‟,
Employees‟ and Suppliers‟
Satisfaction; this integrated effort will
result in the Company becoming an
Industry Benchmark and a role model
for systems, processes and results”
6

Corporate history – Milestones
1952
Foundation
Stone laid for
first plant at
Rishra
1964
Start-up of
second plant
at
Bahadurgarh
1970
Formation of
GEIL (HNG‟s
Engineering
Subsidiary) in
collaboration
with Wheaton
2002
Acquisition of
Owens
Brockway
India Limited
(plants at
Rishikesh,
Puducherry
and Pune)
2005
Acquisition of
the Glass Unit
of Larsen
&Toubro at
Nashik
2007
Acquisition of
the
Neemrana
unit of
Haryana
Sheet Glass
2010
Start-up of
production at
HNG Float
Glass in Halol
7

Corporate structure
Hindusthan National Glass &
Industries Ltd
- Consolidated net revenues: INR 13,834 m
- Standalone net revenues: INR 13,599 m
Glass Equipment
(India) Ltd.
100% 100%
Quality Minerals Ltd
47.4% 1
HNG Float Glass Ltd
(HNGFL)
Capital Goods & Spares
Supplier to Glass Industry
Net revenues: INR 366 m
Mineral Supplier to Glass
Industry
Net revenues: INR 29 m
Manufacturer of Float &
Processed Glass
Net revenues: INR 275 m
Note:
1 HNGFL is proposed to be made a Subsidiary
2 All figures of revenues are of FY 2010
3 All Values are in INR million
8

Organization
HNG Board
Chandra Kumar Somany,
Chairman
Sanjay Somany,
VC & MD
Mukul Somany,
VC & MD
HR & Admin
Procurement
Manufacturing
Finance
Commercial
Marketing
Professionally managed organization with clear delegation of responsibilities and authority.
9

Shareholding pattern
Particulars
% Shareholding
(as on September, 2010)
Promoters 69.98
Public Shareholding
Insurance Companies 0.37
30.02
Bodies Corporate 3.14
Financial Institutional Investors 7.27
Individuals & Others* 19.24
Total 100.00
* Includes 16.76% held as Treasury Shares in the Company
Total 87.4 million shares of face value of (INR. 2.00) each.
Listed at: National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
Calcutta Stock Exchange (CSE)
10

Overview
• Current capacity of 2,825 Tpd – producing over ~ 15m bottles per day ranging from 5 ml to 3200 ml
• Expanding to ~ 4,150 Tpd over the next 2 years
Standalone operations
30,000
25,000
16.8%
20,000
15,000 7,016
10,000
5,000
1,175
Successfully combated the
impact of recession and
increase in global crude prices
21.0%
10,212
13,110
18.0%
2,147 2,359
Sales CAGR: ~ 25%
PBITDA CAGR: ~ 39%
23.3% 25%
13,599
20%
15%
10%
3,163
5%
-
FY2007 FY2008 FY2009 FY2010
Net Revenue (INR m) PBITDA (INR m) PBITDA margin
0%
11

Pan – India presence
• Manufacturing locations in all regions in
the Country
• Pan-India presence enables :
Delhi
◊ Lowering overall landed cost to
customers and ensuring JIT
Kolkata
supplies.
◊ Comprehensive coverage of the
key customers across India
Mumbai
Bengaluru
Hyderabad
Naidupeta
Chennai
Plant Locations
Marketing Office
Upcoming Greenfield Mega
Project
12

Inorganic growth
January 2002
◊ Acquired Owens Brockway India Ltd, a subsidiary of
Owens Illinois, USA.
◊ Capacity acquired: 700 Tpd (plants at Puducherry and
Rishikesh).
◊ Closed the 3 rd
October 2005
commercially not viable.
plant of the Company at Pune, since
◊ Acquired loss making unit of Larsen & Toubro
◊ Capacity acquired: 320 Tpd (at Nashik)
October 2007
– Acquired the assets Containerr Glass division of Haryana
Sheet Glass.
– Capacity acquired: 180 Tpd (at Neemrana)
Successful turnaround of loss making businesses – demonstrates strong
management capabilities
13

Ratings, Rankings & Accreditations
• Business Standard Ranking (Out of 1000 top listed corporates, as of Feb ‟10)
◊
◊
◊
In terms of Revenue – 299 th
On Operating Profit Quantum – 265 th
On Net Profit Quantum – 253 rd
• Rating by CARE (Credit Analysis & Research Ltd.)
◊
◊
Long Term credit rating of AA+ (implying high safety for timely servicing of debt obligations and carrying very low credit
risk).
Short Term credit rating of PR1(+) (implying the lowest credit risk).
• CRISIL Equity Rating
◊
◊
On „Fundamental‟ side 4/5 meaning „Superior Fundamentals‟
On „Valuation‟ Side 5/5 meaning „Strong upside‟
• Rated as the best Indian Company in the Glass & Ceramics category by Dun & Bradstreet in
year 2009
• Accredited with ISO 9001:2008 certification, ensuring stringent quality standards and ISO 22000 for
food and safety
• Rated at No.35, out of the best 500 companies by Inc.India(Comprehensive ranking of India‟s best
performing mid-sized companies) in their Sep-Oct, 2010 issue.
14

Industry Snapshot

Global packaging industry
• As per World Packaging Organization, the global packaging industry at present is estimated to be
higher than US$ 500 bn in revenues, with ten year historical growth at ~ 3.1% CAGR
• Projected to grow at ~ 3.6% CAGR in the next five years mainly driven by growth in emerging
markets (Asia Pacific region)
6.3%
7.0%
3.4%
3.2%
3.6%
3.1%
0.7%
0.5%
0.4% 0.2%
Asia Pacific Latin America Europe North America Global
10-year historical growth (1999-2009E)
Forecasted growth (2008-2013E)
Source: Owens-Illinois, Inc. - Investor presentation, March 2010
16

FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
1961
1971
1981
1991
2001
2010
Indian macroeconomic overview
10.0%
7.5%
5.0%
2.5%
7.5%
9.4% 9.9% 9.0%
6.7%
7.4%
1250
1000
750
500
250
18%
439
20%
548
26%
23%
846
683
28%
1029
32%
1162
35%
30%
25%
20%
15%
10%
5%
0.0%
0
0%
GDP growth rate
Total Population (m)
% Urban
India is the seventh largest Country by geographical area and the second-most
populous Country in the world. According to IMF estimates, India‟s GDP is expected to
grow by 8.5% in the current year.
17

Indian Glass Packaging Industry
• At US$ 14 bn, Indian packaging industry has been growing at
~ 15% over the last few years
World glass container per capita
consumption
◊ Expected to accelerate further with increasing
urbanization, growing middle class and expansion of
South Korea
(kg)
89.0
modern retail
France
63.9
• Indian glass container market stood at US$ 0.8 bn in FY09
Spain
50.3
with a growth of ~ 12% over FY08
UK
27.5
◊
Entry barrier owing to capital intensive nature
USA
27.5
◊
Top 3 players are HNG, Piramal Glass and AGI
Mexico
19.5
Glaspac
Japan
10.2
• Low per capita glass container consumption of 1.4 kg in India
as compared to 27.5 kg. in US and 10.2 kg. in Japan
• Strong economic drivers for end-user segments (liquor and
beer, pharmaceuticals, food, cosmetics, etc.)
China
Brazil
India
Indonesia
5.9
4.8
1.4
1.2
18

Liquor
Cases in millions
• Size of Indian IMFL market is estimated to be ~ US$
4.5 bn with total sales volumes of 236m cases
250
200
190
214
236
• Industry projected to grow at 10-12% p.a. over next few
years
Growth Drivers:
• Low per capita consumption in India of 1.8 litres as
against 8.7 litres in Europe and 8.5 litres in USA
• Increasing disposable incomes
• Youth & Middle-Aged population expected to increase
from ~ 48% of population (2001) to 54% in 2011
• ~ 485m people in the drinking age and another 100m
likely to be added over next 5 years
• Cultural change – acceptance of social drinking and
growing drinking habits in women
• Increasing deregulation by state governments
150
100
50
0
49 56 57
2007-08 2008-09 2009-10
HNG Supply Liquor Industry Volumes
Increasing awareness of health &
hygiene issues leading to greater
usage of new glass bottles.
19

Beer
Cases in millions
• Size of industry in terms of volumes: 191 m cases
• Industry projected to grow at 12-15% p.a. over next few
years
250
200
150
157
174
191
Growth Drivers:
• Low per capita consumption in India of 1.3 litres,
compared to global average of 24 litres
• Increase in disposable income
• Increasing exposure to beer, mainly due to increase in
100
50
0
19 20 21
2007-08 2008-09 2009-10
HNG Supply Industry Volumes
number of outlets
• Rising popularity of beer among urban working women
Given the growth of beer industry
in India, there is large potential for
the new glass bottles.
20

Food
• As per Government of India‟s Vision 2025, the food processing
Figures in MT – HNG Glass
bottles
industry is expected to more than double in size from the current
US$ 70 bn to ~ US$ 150 bn in 2025
CAGR: ~15%
100,625
Growth Drivers:
• Increase in disposable income
• Changing lifestyles of urban and rural middle class
• Increasing health consciousness with shift from traditional
unpackaged formats to packaged, branded goods
• Increasing working women population
• Increase in penetration of glass containers – currently 10-12% of
all food and beverages are packed in glass containers in India as
compared to 40-50% in developed markets
66,040
FY2007
FY2010
21

Soft Drinks
• The Indian soft drinks market is estimated to be ~ US$ 1.8 bn
with carbonated drinks contributing US$ 1.5 bn and juices US$
0.3 bn
• Overall industry growing at ~ 8% p.a. with fruit drinks/ juices
Figures in MT – HNG Glass
bottles
CAGR: ~ 38%
51,852
category growing at ~ 25% p.a.
Growth Drivers:
19,731
• India‟s consumption amongst one of the lowest in the world
at 5 bottles (equivalent to 8 oz) p.a.
• Increase in disposable income
• Increasing penetration in rural India and faster urbanization
• Introduction of healthier fruit based substitutes / juices and
energy drinks to tap newer market aspirations
FY2007
FY2010
22

Pharmaceuticals
• India's Pharmaceutical Industry is the 3 rd largest in the world in
volume terms and 14 th in value terms
Figures in MT – HNG Glass
bottles
95,009
• The Indian domestic market is currently ~ US$ 12.3 bn and is
growing at CAGR of 12-15% as against a global average of 4-7%
◊ Projected to grow to US$ 20 bn by 2015
83,460
Growth Drivers:
• Increase in disposable income
• Increased health awareness and propensity / capacity to spend
• Expansion of healthcare facilities in the rural and far-flung areas
to further boost demand
FY2007
FY2010
Glass Bottle market has
experienced a de-growth of
5% CAGR due to penetration of
PET Bottles
• Increasing penetration of customized insurance plans would drive
affordability of healthcare services
23

Business Overview

Summary
• Largest Glass Container manufacturer in India (~ 55% volumes) with about six decades of
experience. Present capacity of 2,825 Tpd
• Robust financial position
◊
◊
During the period of FY07 to FY10, standalone sales grew at a CAGR of 25% while
PBITDA grew at a CAGR of 39%
Enjoys economies of scale owing to size and has best in class PBITDA margins
• Strong manufacturing platform spread across India through six manufacturing units
• Markets container products to several top clients including United Spirits, SAB Miller, HUL,
Nestle, Glaxo, Heinz, etc.
• Highly experienced and competent management team
• Compliance with Health, Environment and Safety regulations in India
• Group is committed to CSR
25

Competitive benchmarking
Player
Market
Cap (INR)
Capacity
(tpd)
Sales
(consolidat
ed) FY10-
INR
HNG 22.70 bn 2,825 13.8 bn
Piramal
Glass
8.46 bn 1,115 11.0 bn
Other comments
• Produces glass bottles to liquor, beer,
pharmaceuticals, food and carbonated drinks
industries
• Produces glass bottles for cosmetics, pharma,
food and beverages for both domestic and
international markets
• Key segment: Cosmetics & Pharma
Vitrum Glass NA 130 NA • Produces amber glass containers for pharma
Haldyn Glass 0.74 bn 320 1.34 bn
• Produces glass bottles for liquor, cosmetics,
pharma, food and beverage
Hindusthan
Sanitaryware
8.65bn 950 8.06* bn
• Glass Division named “AGI Glaspac”
• Produces glass bottles for liquor, pharma, food
and beverage
• *Total revenues of the company ( includes revenues from sanitary-ware business)
26

Volume Mix (FY 2010)
End user segment
1
Others,
11%
North, 42%
Geography
Pharma,
11%
East, 20%
Food,
13%
Liquor,
50%
Beer,
15%
West, 16%
South, 22%
1 Others includes soft drinks
27

Customers – Some names
Liquor
Beer
Food
Carbonated drinks
(Soft drinks)
Pharmaceuticals
28

HNG’s Share of Top 10 Customers
HNG's Share in the Total Requirement of Top 10 Customers in
2009-10 (%)
100
95
90
80
70
60
50
40
60
65
55
60
80
40
70
80
50
30
20
10
0
United
Spirits
Limited
United
Breweries
Limited
Pernod
Ricard
India
SAB Miller
India
Allied
Blenders &
Distillers
Coca Cola
India
Pepsico
India
Bajaj Corp
Limited
Shiva
Distilleries
John
Distilleries
Limited
29

Manufacturing Facilities
Plant details: Rishra (West Bengal)
Description
Year of start of
operation
Installed capacity
Production in FY10
Furnaces
Other comments
1952 (Area: 38.3 acres)
805 tpd
207,748 MT
3 (13 manufacturing lines)
• On-site bottle printing facility
• Amber, flint and green glass
manufacturer
Rishra
30

Manufacturing Facilities (contd.)
Plant details: Bahadurgarh (Haryana)
Description
Year of start of
operation
Installed capacity
Production in FY10
Furnaces
Other comments
1964 (Area: 57.9 acres)
655 tpd
180,831 MT
3 (15 manufacturing lines)
• On-site bottle printing facility
with four decorating lines
• Amber and flint glass
manufacturer
• Foundry and mould workshop
• Energy feed through captive
power generating facilities
Bahadurgarh
31

Manufacturing Facilities (contd.)
Plant details: Rishikesh (Uttarakhand)
Description
Year of acquisition
Installed capacity
Production in FY10
Furnaces
Other comments
2002 (Area: 14.3 acres)
425 tpd
116,054 MT
2 (1 furnace used for Green glass
manufacture; 6 manufacturing
lines )
• On-site printing facility with
three decorating lines
• Green, flint and Georgia green
Rishikesh
32

Manufacturing Facilities (contd.)
Plant details: Puducherry (Union territory)
Description
Year of acquisition
Installed capacity
Production in FY10
Furnace
Other comments
2002 (Area: 46.5 acres)
370 tpd
114,745 MT
1 (4 manufacturing lines)
• On-site printing facility with three
decoration lines
• Sand beneficiation plant, foundry
and mould workshop
Puducherry
33

Manufacturing Facilities (contd.)
Plant details: Nashik (Maharashtra)
Description
Year of acquisition
Installed capacity
Production in FY10
Furnace
Other comments
2005 (Area: 70.3 acres)
390 tpd
109,127 MT
1 (4 manufacturing lines)
• On-site bottle printing facility
with three decorating lines
• Flint glass
Nashik
34

Manufacturing Facilities (contd.)
Plant details: Neemrana (Rajasthan)
Description
Year of acquisition
Installed capacity
Production in FY10
Furnace
Other comments
2007 (Area: 12.3 acres)
180 tpd
56,795 MT
1 (3 manufacturing lines)
• Manufactures flint and amber
glass
Neemrana
35

Technology Partners
Technology sourced from Global majors helps boost operational efficiencies and product quality :
• Batch-houses from Zippe (Germany)
• Furnaces from Sorg and Horn (Germany)
• Forehearths from Emhart /Sorg (USA/Germany), PSR (UK) & BH-F (UK)
• IS machine control system from Botterro (Italy) and Futronic (Germany)
• Bottle handling equipment from Sheppee (UK), Heye (Germany) & Pennekamp (Germany)
• Annealing Lehrs from Carmet (Italy) & Pennekamp (Germany)
• Bottle inspection machines from SGCC–MSC (France), Heye (Germany) and IRIS (France)
• Bottle printing equipment from Strutz (USA), Rosario (Netherlands) & Kamann (Germany)
36

Supply chain
Procurement
• Sourcing and Service contracts with various global parties
• Strong procurement and supply chain systems in place with diversified supplier base to de-risk
operations
• Key raw materials include: silica, limestone, dolomite, feldspar, soda ash and cullet
Marketing and Distribution
• Presence of multiple manufacturing locations across the country presents a strategic advantage over
its peers yielding higher Net Sales Realization (NSR) due to lower freight cost to the customers
• Flexibility to offer JIT supplies due to lower lead
• Strategic acquisitions helped increase the geographic footprint and customer penetration
• Six marketing offices spread across India
• In-house fleet of over 100 trucks to de-risk supply side logistics
• Over 90% customers are B2B
37

Environment, Health and Safety
• Compliance with all EHS (Environment, Health and Safety) related legislations
• Emission standards maintained within norms
• Focus on zero discharge and recirculation of water
• CDM projects are registered. More are in the pipeline
• Qualified safety professionals at each plant
• Periodical risk assessments and safety audits
38

Corporate Social Responsibility
The group remains committed to CSR and some of the programs embarked upon are:
• Provision of street lighting and maintenance of a children‟s park in the colony (Tulsi Vihar) adjacent
to the plant at Rishikesh
• Sunetra Eye Clinic
◊ The Group started an eye check-up centre for underprivileged citizens in collaboration with
Calcutta Eye Research Foundation
• School operated at Bahadurgarh (Bal Bharti) that caters to the education requirements of most of
the children in the vicinity. 1,700 students registered under CBSE curriculum
• Training programs conducted for underprivileged girls.
• Regularly conducts free medical camps
• Undertaken plantation of trees in large numbers
• Maintenance of park “Maharana Pratap Square” in Kolkata
39

Float Glass Business

Summary
• A Strategic move to venture into high growth Float Glass industry through Associate - HNG Float
Glass Limited (~ 47% shareholding)
◊ Proposed to be made a subsidiary
• Indian Float Glass industry has been growing at ~ 12% CAGR over the last three years:
◊
◊
Low per capita consumption of 0.8kg as compared to 8kg in China, 12.5Kg in Europe
and 10.4kg in USA
Growth in construction and automobile sectors in India
• Plant setup at plant at Halol, Gujarat
◊ Strategic Locational advantage:
Proximity to Large consuming markets of Western and Northern India
Located on Delhi-Mumbai Industrial Corridor
Availability of Natural Gas Sources & nearness to sources all raw-materials
◊ Capacity: 600 Tpd set up at a capex of (INR 6 bn)
◊ Commenced production in Feb ‟10.
◊ Expected to break-even within the current fiscal
41

Market overview
• Nascent industry in India with just 8 float glass lines compared with 196 in China
• India‟s total installed capacity for float glass is ~ 4,700 Tpd
• Growth drivers
◊ Growth in the Construction Sector driven by
◊
◊
◊
Growth in the services sector - telecom, financial services, IT & ITeS etc
Boom in retail marketing through shopping malls
Increasing demand for affordable housing and high rate of urbanization
◊ Growth in Automobile Sector mainly driven by growth in passenger vehicles, LCV & HCV
and increased exports
42

Highlights – HNG Float Glass
• Overview
◊ Commenced production in a record time of 21 months
◊ Plant achieved global production quality & efficiency benchmarks within a short span of 5 months
◊ Competitors include Saint Gobain, Asahi, Gujarat Guardian, Gold Plus, Sejal, etc.
• Certifications - European standards and ASPM (U.S. standards) and ISO 9001:2000
• Procurement of raw material
◊ Diversified supplier base for each raw material to reduce any business
• 25% market share captured in 9 months with a wide distribution network of 758 agents spread
across India
• Growth plans
◊ Capacity expansion by 900 Tpd
◊ Also planning a wider range to meet the market demand for value added products.
43

Competitive benchmarking
Player
Installed
capacity (tpd)
Dealer network in diff geographical regions in India
North East West South Total
HNGFL 600 161 44 320 223 758
Saint Gobain 1400 195 75 210 279 759
Asahi 1200 112 40 90 177 419
Gujarat Guardian 550 93 30 160 171 454
Gold Plus 460 68 10 48 20 146
Sejal 550 54 11 80 81 226
44

Business Strategy and Expansion
Plans

Key Success Factors
• Size and Strength of the Balance Sheet:
◊ Provides flexibility and power to negotiate with
suppliers and customers
◊ Enables the Company to build capacity and
pursue expansion plans
• Cost management and optimal utilization of
resources (manufacturing assets)
◊ Ability to manage costs and suitably placed to
pass increases (if any) to the customer
◊ Ability to sweat the assets to the maximum
extent for delivering better operational results
• Strong technological capabilities
◊ Ability to innovate and provide customers with
optimized product, ensuring sustainable
competitive advantage in the market
• Well diversified spread across verticals and
segments
◊ Presence across entire primary end user
industries and customer segments
HNG’s Status
◊ Market share of ~ 55%
◊ Low debt/equity of 0.5x
◊ Strong credit rating of AA (Long term)
◊ Diversified supplier base
◊ Strong focus on margin improvement
◊ Backward integration to reduce costs
◊ Optimum utilization of furnace capacities
◊ Introduction of NNPB technology
◊ Technology tie up with global majors
including JV with OMCO, Belgium
◊ Presence across key user industries –
liquor, beer, pharmaceuticals and food
◊ Planning entry into Perfumery segment
46

Strategic initiatives
• Emerge as a value driven manufacturer through increased production of light weighted bottles
thus enhancing margins
◊ PBITDA margin for standalone operations improved from ~ 17% in FY2007 to ~ 23% in
FY2010
• Setting up a Mega Glass Manufacturing Complex in Naidupeta, Andhra Pradesh (110Km from
Chennai)
• Enhancing SAP Information System (Business Intelligence modules and Performance
Management Systems) to closely monitor and improve key operating metrics
• Leveraging capabilities of acquiring and turning around underperforming global assets by
replicating the model already successfully achieved in India
• Investing in fresh capacity to improve market share
• Leveraging existing relationships with customers and service their growing needs in other
countries with supplies being made out of facilities in India
47

Strategic initiatives (contd.)
• Further enhancement of Product Range in NNPB
• Emerge as a leading player in the Float Glass container business in India
◊ Current market share of ~ 25% and projected to grow further
◊ Further capacity of ~ 900 Tpd planned to be added to existing capacity of 600 Tpd
• Captive mining for silica procurement for Rishra plant (West Bengal) and Float Glass plant
(owned by HNGFL)
• Building up a strong team in Technology Center to provide technical excellence across the plants
and reduce capital costs for upcoming projects.
• Ongoing technology upgradation with global majors
48

Expansion plans
Greenfield in
Andhra
Pradesh
New Furnace
in Nashik
Capacity
addition (tpd)
Investment
650 INR 5.0 bn
650 INR 4.7 bn
Other comments
• Land has already been allotted
• Project commenced from July‟10
• Targeted project completion date is Mar‟12
• Existing Plant has huge space for this
• Production expected by the end of yr. 2011
Furnace
Rebuilds
220 INR 2.0 bn • Rebuilds at Rishra and Rishikesh
HNGFL 900 INR 6.0 bn • Increase in float glass production capacity
Other plans include:
• Acquisitions (domestic and international) in the Glass Container
space guided by the “value buy” proposition, as in the past
• JV with OMCO, Belgium for Moulds & Accessories
49

Enhancing margins
• Shift to natural gas in manufacturing process, by replacing Furnace Oil and LPG across all 6 plants.
Bahadurgarh
Already in place
Neemrana
Already in Place
Nashik By September, 2011
Puducherry By October, 2012
Rishikesh, Rishra By June, 2013
• Enhanced Mould Quality for higher performance and life
• Competitive advantage in marketing – quantity and pricing
• Introducing NNPB across all plants thus reducing bottle weight and producing more bottles
• Acquisition and Operation of Captive Mining and Beneficiation of Raw Materials.
• Expansion of transportation fleet – ensuring both economy and in-time delivery
50

Financial Snapshot

Consolidated P&L
All values in INR million
Particulars FY08 FY09 FY10
Net Revenue 10,291 13,305 13,834
Net Revenue growth 46.7% 29.3% 4.0%
PBITDA 2,165 2,388 3,192
PBITDA Margin 21.0% 18.0% 1 23.1%
PBIT 1,455 1,634 2,323
PBIT Margin 14.1% 12.3% 16.8%
PAT 2 1,205 1,081 1,541
PAT Margin 11.7% 8.1% 1 11.1%
Note:
1 Due to high global crude prices, overall recession in global economy and some losses in financial derivative transaction
2 PAT does not include adjustments for share in associate company
52

Realisation, volume and revenue
900,000
40,000
30,000
30%
675,000
14,677
17,126 17,377
30,000
24,000
18,000
21%
18%
23%
25%
20%
450,000
225,000
695,820
765,478 782,585
20,000
10,000
12,000
6,000
10,212
13,110 13,599
15%
10%
5%
-
FY 2008 FY 2009 FY 2010
-
-
FY 2008 FY 2009 FY 2010
0%
Sales Quantity in MT (LHS)
Average Realisation in INR/MT (RHS)
Sales in INR m (LHS)
PBITDA margin (%) (RHS)
53

Realisation by segment
Segment
Net Realizations (INR/MT)
FY2008 FY2009 FY2010
CAGR
(2008-10)
Food 14,655 17,730 18,377 12.0%
Soft Drinks 15,873 18,107 20,132 12.6%
Beer 12,242 15,433 16,066 14.6%
Liquor 13,852 16,658 16,503 9.2%
Pharmaceuticals 16,505 19,117 19,726 9.3%
Toiletries 15,593 18,787 18,560 9.1%
Vials 25,643 29,404 29,246 6.8%
Household 20,077 21,445 22,363 5.5%
Total 14,677 17,127 17,377 8.8%
Realisation has further increased by approximately 6-7% w.e.f. 1 August 2010
54

Consolidated Balance Sheet
All values in INR million
Particulars FY08 FY09 FY10
Net Fixed Assets 8,979 9,904 11,380
Investments 1,139 1,021 1,446
Net Working Capital 3,074 4,087 4085
Total Assets 13,192 15,012 16,911
Shareholders equity 8,799 9,490 10,545
Secured Loans 2,896 4,180 5,495
Unsecured Loans 1,313 921 171
Deferred tax liabilities 184 421 700
Total liabilities and equity 13,192 15,012 16,911
Long term debt/ equity 0.17 0.35 0.36
Total debt/ equity (x) 0.5 0.5 0.5
Operating in a capital intensive industry, the Company has been able to maintain a
total debt/ equity ratio of 0.5x
55

Hindusthan National Glass & Industries Ltd. (HNG)
THANK
YOU
For any queries/to obtain more info, please
write at investor.relations@hngil.com

Annexure

Management team
Jagdish Prasad Kasera, Senior President
• Over 40 years of experience. Joined Company in Jan-98. Responsible for operations and M&A
• Worked with several prominent groups - Williamson Magor, Usha Martin, Aditya Birla and Ispat
• Fellow member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of
India. Also a Qualified Cost Accountant.
Ratan Lal Khandelia, President
• Over 34 years of experience. Joined Company in Mar-99
• Currently looking after Bahadurgarh, Rishikesh and Neemrana Plant
• Worked with various companies, including MP Birla Group and Ferro Alloys Group. Qualified Chartered
Accountant from the Institute of Chartered Accountants of India
Vinay Saran, Senior Vice President - Marketing
• Over 22 years of experience in the field of consumer products and consumer durable marketing. Joined Company
in 2007
• Key member of the governing body of the Indian Institute of Packaging, Mumbai, All India Management
Association, Kolkata, Management Association, National HRD Network and the Indian Institute of Packaging,
Kolkata
Laxmi Narayan Mandhana, Chief Financial Officer
• Qualified Chartered Accountant and Company Secretary
• Over 20 years of experience in in finance - comprising capital issues, mergers, acquisitions, banking, project activities,
business evaluations and monitoring. Is associated with the Group for about seven years
• Member of the Finance Committee of the Confederation of Indian Industry, Eastern Region
• Expert in corporate finance, taxation and accounts
58

Management team
Animesh Banerjee, Senior Vice President
• Over 23 years of experience in polymers, pharmaceuticals, chemicals, fine chemicals, petrochemicals, dyes and
intermediates, paints and varnishes, food processing and FMCG
• Worked with companies like Shaw Wallace, IPCCL, Mafatlal Industries Ltd., TATA Kansai, Berger Paints
• Currently looking after Rishra, Nashik and Puducherry Plant
• Post graduate from IIT Kharagpur and MBA from IIM, Kolkata
Amar Chand Jain, Vice President – Tech Centre
• Over 47 years in all areas of Container Glass Production. He joined the Company in 1963
• Currently is a leading member of the Group Technical Centre, responsible for Research, Development,
Technological Absorption, Innovations, Acquisitions and New Projects
• He is a science graduate
Ram Surat Prasad Gupta, Vice President
• Over 35 years of experience in various industries - electrical (lighting division Philips), mechanical (HNG & Ind.),
electronics (Binatone Electronics), process industries (Sheela Foam)
• He studied engineering (mechanical) and did his post graduation in management
• Associated with Quality Certifications
Chandra Singh. K Mehta, Plant Head – Nashik
• He started his career with M/s Hindusthan Development Corporation Limited and worked with M/s Shakti
Insulated Ltd before joining HNG
• He has served 21 years in the career
59

Management team
Jalaj Kumar Malpani, Vice President - Commercial
• He handles corporate MIS, annual business plan and quarterly performance reviews
• Recipient of Jawahar Award for meritorious performance in the area of cost reduction and cost control
• Worked with SAIL for 15 years at Bokaro Steel Plant and CMO, Kolkata, and ICI India Ltd for one year. Worked
closely with Mckinsey & Co in the area of inventory management and debt
Kulur Satish Shetty, Plant Head, Puducherry
• Over 28 years of experience, with over 25 years in the field of glass manufacture. He joined the Company in 2006
• He has worked with Bharat Electronics Ltd ,Taloja ,Maharashtra (a public sector company), Videocon Narmada
Glass, Bharuch ,Gujarat, and Hotline Glass Ltd, Gwalior, Madhya Pradesh
• Holds a bachelor degree in mechanical engineering from a regional engineering college, Surathkal, Karnataka
Devdutta Hoare, Exports Head
• Over 19 years of experience in in marketing of industrial products in India and abroad. Joined Company in 2007
• Previously worked with Dr. Beck & Co, Atul Limited and Gwalior Chemicals
• He is chemical engineering graduate from Jadavpur University, Kolkata
Ravindra Kr Sitani, Vice President-Works
• Over 26 years of experience. He joined the Company in 2007
• Previously worked with Grasim Industries Ltd, Kanoria Chemicals & Ind Ltd and Hindusthan Vidyut Prod Ltd
• He has B.E. (Hons) Mechanical and ME (Industrial Production) from BITS, Pilani
• Currently posted at Bahadurgarh Plant
60

Management team
Bimal Kumar Garodia, Vice President - Finance
• Over 20 years of industry experience. He joined the company in Apr-08
• Previous experience includes Bajaj Eco-tech Limited, a wholly owned subsidiary of Bajaj Hindusthan Ltd
• He is qualified Chartered Accountant, Cost Accountant and a Company Secretary
Chandra Kumar Tharad (Vice President –Commercial)
• Over 25 years of experience
• Previous experience includes Usha Martin and LNG Bhilwara Group
• Commerce Graduate with Calcutta University. He completed Chartered Accountancy in 1984
Bishnu Kumar Kedia, AVP - Materials
• Joined Company in 2003
• Previously worked with Khaitan (India) Limited, Agarwal Hardwares Limited and Magma Leasing Limited
• B. Com. (Hons.) from St. Xavier‟s College (Calcutta University) where he scored 49th rank in the University and
received national scholarship. He is qualified Chartered Accountant
Kuldeep Kumar Sharma, Plant Head – Neemrana
• Over 31 years of experience in glass industry
• He is B.Sc., M.A. (Eng), M.Ed.. Took training at O.I. (USA) for glass operations and quality management systems,
HACCP (hazard analysis & critical control points) Course from DNV, IMS (Integrated Management System)
Shammo Roy Choudhury, AVP – HR
• Has over 25 years of rich experience having worked in renowned multinationals Pfizer, Otis Elevator Co (I) Ltd &
Flakt India Ltd and engineering company Shriram Bearings Ltd & Stone India Limited
• He is Commerce Graduate from St Xavier‟s with Post Graduate in Industrial Relations & Personnel Management
from Xavier Institute of Social Service, Ranchi
61