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CORPORATE PRESENTATION

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In 2001, Asahi Glass Co., Japan decided to bring the India operations under one ... when we began, to the current situation of India's largest glass ... – PowerPoint PPT presentation

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Title: CORPORATE PRESENTATION


1
CORPORATE PRESENTATION
  • 9th November, 2004

2
Corporate Profile - Background
Established as Asahi India Safety Glass
Ltd. Commercial Production 14th March,
1987 Equity Structure Labroos 24
Asahi Glass Co. Ltd. 24 Maruti Udyog
Ltd. 12 Public 40 Initial Equity
Rs. 1.85 crores Products Automotive Safety
Glass
Initial equity increased to Rs. 7.40 crores
through two successive bonus issues made by the
Company.
3
Corporate Profile - Merger of Floatglass India
Ltd.
  • In 2001, Asahi Glass Co., Japan decided to
    bring the India operations under one roof, by
    passing on control of Floatglass India Ltd. to
    AIS driven by the evidence of AISs
    performance. The formal takeover of Floatglass
    India Ltd. was completed in February 2002.
  • Floatglass India Ltd. was subsequently merged
    into AIS.
  • Post merger, the equity structure of AIS stands
    as under

Total equity currently stands at Rs. 8 crores, up
from the pre-merger level of Rs. 7.40 crores.
4
Corporate Profile Past Perspective
These figures contain, in brief, the story of
AISs growth from a supplier of automotive
tempered glass to Maruti Udyog (Suzuki) when we
began, to the current situation of Indias
largest glass company, with profitable growth
flowing from all the actions taken since the
birth of the organization.
5
Corporate Profile Present
  • AIS today is the largest glass company in
    India, manufacturing wide
  • Range of international quality automotive safety
    glass and float glass. AIS
  • has the following two operating business units
  • - AIS (Automotive)
  • - AIS (Float)
  • AIS (Automotive), one of the two operating
    business units of AIS,
  • is Indias largest manufacturer of world class
    automotive safety glass
  • and is, in fact, one of the largest in the field
    in Asia.
  • AIS (Float), the other operating business
    unit, is the leading
  • manufacturer of international quality float
    glass.

AIS is in the process of transforming itself from
being a manufacturer of world- class products to
a solutions provider. AIS is now moving up the
exciting value chain of glass by providing
design, products and services that make glass
more versatile, more user friendly.
6
Key Initiatives Achievements
7
Value-creating growth - Creating shareholder value
  • AISs growth plans are designed to create a
    stronger company and enhance shareholder value.
    Example
  • - An investment of Rs. 1000 in equity
    shares of AIS at the time of the IPO in 1987 had
    grown over 500 times into a holding of Rs. 5
    lakhs.
  • - The investment of Rs. 1000 in the IPO had
    generated dividends of Rs. 22,406 until 2003-04.
  • - A holding of 100 equity shares of a face
    value of Rs.10 each had grown into a holding of
    4000 shares of a face value of Re. 1 each
    through bonus issues and a sub-division in the
    face value of the Companys equity shares.
  • AIS has been guided by the financial goal of
    generating free cash flows from operations to
    earn a rate of return on capital employed (ROCE)
    of 40 per cent and to pay out 25 per cent of
    profits as dividends.

8
Business de-risking
  • AISs transition from an automotive glass
    manufacturer supplying a single customer to
    becoming Indias largest glass company is
    reflective of its de-risking strategy. This has
    helped AIS
  • - Improve competitive advantage
  • - Expand business platform
  • - Reduce business risk
  • - Enhance strategic position
  • AISs growth strategy is aimed at realizing the
    vision of becoming Indias leading integrated
    glass company, with a meaningful presence in
    every part of the automotive and architectural
    glass businesses leading to the eventual
    effective capture of value across the complete
    chain.

9
Quest for Excellence
  • AIS has been benchmarking its operational
    performance to global levels and set out targets
    as milestones to achieve these levels. These
    targets are being challenged constantly.
  • As a result, shop floor performance in AIS
    (Automotive), for example, is in line with the
    best in class benchmarks on following parameters
  • - Shop floor yields, at over 96 per cent
  • - Customer claims, within 100 ppm
  • - machine uptime, in the range of 98 per cent
  • Production in AIS (Float), the erstwhile
    Floatglass India Ltd., has gone up by over 37 per
    cent, compared to FY 2000-01 levels, the last
    year before the takeover. AIS (Float) achieved a
    record production of 31.36 million csqm. in FY
    03-04, against the rated capacity of 29.2
    million.

10
Pioneering initiatives in India
  • AIS is credited with the following initiatives in
    India
  • - First to introduce laminated safety glass
  • - First to manufacture printed glass
  • - First to introduce modular assembly window
  • - First to make complex shaped glass
  • - First to introduce tinted float glass

11
Value through world-class quality
  • AIS is the first Indian glass company to be
    credited with
  • - ISO 9002, QS 9000 and TS 16949
    certifications for the
  • production and servicing of automotive
    safety glass.
  • - ECEs E Mark and US Department of
    Transportations
  • approval for its range of automotive safety
    glass.
  • AIS has been following holistic
    systems-centric quality discipline
  • under the umbrella of Total Quality Management.
  • All the improvements and efforts at
    raising efficiency over the
  • last five years have been carried out under the
    umbrella of TQM
  • which has been spread through all processes in
    the company.

12
Technology Development
  • A key strategic initiative at AIS has
    been in the area of building
  • relevant self sufficiency in technology.
  • AIS (Automotive) is fully equipped with
    CMM, CAD and a CNC Milling station, which
    provides self sufficiency in the area of product
    development. At AIS, we have gone beyond this
    into the area of developing and building glass
    processing equipment. Example
  • AIS (Automotive) has developed its own CNC
    lines for the pre-processing of glass (cutting to
    shape, edging and washing) at 1/6th the import
    cost. The resultant automation implies a raise in
    manpower productivity cost effectively.

13
Strong Market Position
  • AIS (Automotive) is the sole glass supplier to
    almost the entire Indian passenger car industry,
    with current market share of over 90 of
    automotive glass sales to OEMs. Building
    presence in the after market has been a key
    element of the strategy to diversify sales. AIS
    currently enjoys a market share of 55 in terms
    of value.
  • Sales of automotive safety glass are made
    directly to OEM customers and through two
    nation-wide distributors, with 27 depots, to the
    direct after market, covering the length and
    breadth of the country.
  • AIS (Float) enjoys a market share of
    approximately 25 of the Indian float glass
    market.
  • Sales of float glass are made through a network
    of over 320 authorized stockists into the retail
    market spread across the country and serviced
    through its zonal offices.
  • AIS (Float) has been conferred with the
    Certificate of Recognition by CAPEXIL in
    recognition of outstanding export performance.

14
World-class Manufacturing Facilities
  • AIS (Automotive) is Indias largest manufacturer
    of world class automotive safety glass and is, in
    fact, one of the largest in its field in Asia.
  • State-of-the-art automotive glass manufacturing
    facilities, with a total production capacity of
    1.2 million car sets located at Bawal, District
    Rewari (Haryana).
  • First Indian glass company to get the QS 9000,
    ISO 9002, ISO 14001 and TS 16949 by TUS
    SUDDEUTSCHLAND, ECEs E Mark and US Department
    of Transportations approval for its entire
    product range of automotive safety glass.
  • Own power generation facilities to ensure
    uninterrupted supply of quality power.
  • AIS (Float) has a state-of-the-art float glass
    manufacturing plant at Taloja near Mumbai, with
    installed production capacity of 500 MT / day,
    the third largest in the country. The plant is
    ISO 9001 certified by TUV Bayern Sachsen.

15
Well Balanced Product Portfolio
  • AIS (Automotive) has the ability to address
    customer requirements of the full range of
    technologically advanced products in the
    automotive safety glass field.
  • Present product range includes laminated
    windshields, tempered glass for side and back
    lites, zone tempered glass for windshields,
    silver printed defogger glass, black ceramic
    printed flush fitting glass and PVC-encapsulated
    fixed glass.
  • AIS (Float) offers a diversified product range of
    international quality float glass of thickness of
    2mm 12mm, in different shades and tints of
    clear, green, grey and bronze and in varying
    sizes.
  • Product portfolio of AIS (Float) now includes
    world class STOPSOL range of international
    quality heat-reflective glass and worlds finest
    quality copper free and corrosion resistant MNG
    mirrors.

16
  • AIS FINANCIALS - H1FY05

17
Financials
  • Highlights - H1FY05
  • Gross Sales and Net Sales increased 20 and 27
    to Rs. 331.41 crores and Rs. 284.61
    crores respectively
  • Operating profit increased 9 to Rs. 64.41
    crore
  • Operating margin (PBDIT / Net Sales)
    declined 3 to 23
  • Cash profit up 10 to Rs. 63.73 crores
  • Profit after tax declined 3 to Rs. 32.80
    crores
  • Declared an interim dividend _at_ Re. 1/- (100
    on par value of Re. 1/-) on equity shares

18
Financials
  • Highlights - H1FY05 (Continued)
  • ROCE (PBDIT / ACE) and RONW recorded at 29 and
    44
  • Total debt / equity and interest bearing
    debt / equity stand at 1.92 and 0.43
    respectively
  • Financial coverage (PBIT / Interest)
    stands at 39
  • CEPS and EPS at Rs. 8 and Rs. 4

19
Financials
  • Highlights - H1FY05 (Continued)
  • Profitability has been impacted due to higher
    input costs, as below, which are one-time /
    non-recurring. Total impact in H1 FY05 has been
    approximately Rs. 12 crores
  • - Increase in power generation cost
  • - Increase in freight cost, mainly due to
    premium freighting to ensure uninterrupted
    supplies for our OEM customers
  • - Increase in cost of colourants and raw
    materials
  • - Increase in overheads, largely relating to
    advertising / brand building

20
AIS - Financial Results
21
AIS - Financial Results
22
AIS - Segment Results
23
AIS - AUTOMOTIVE
24
AIS - Automotive
  • Highlights - H1FY05
  • Sales up by 23 to Rs. 156.82 crores
  • Segment Profit (EBIT) increased 29 to Rs. 28.38
    crores
  • Segment Margin marginally up at 18

25
Vehicle Production for April - Sep
Car Exports 61128 in 2004 32507 in 2003
26
Vehicle Production Annual
27
AIS - FLOAT
28
AIS - Float
  • Highlights - H1FY05
  • Sales up by 19.5 to Rs. 133.50 crores
  • Segment Profit increased 18 to Rs. 13.22 crores
  • Segment Margin maintained at 10

29
INDIAN FLAT GLASS SALES IN 2004-05
Despatches in August 2004 were adversely impacted
on account of a truckers strike towards the end
of the month.
30
FLOAT
Sales Production Qty
Increase in Sales Qty by 18 over last year
Increase in Production Qty by 6 over last year
31
Market Breakup
32
Zone wise Domestic Sales
33
Sales by Thickness Colour
34
Monthly Realization Rs per CSQM ( Net of excise
and Price difference)
35
Share of Business - Float
36
Looking Forward……
37
AIS Group Vision
To be India's leading integrated glass company
AUTOMOTIVE GLASS VALUE CHAIN
Automotive glass manufacture (AIS Auto)
Allied Products distribution (eg.
sealants) (AWAGS)
Auto Glass Fitment Services
Automotive Glass distribution (AIM)
Third Party tie ups, eg. Windshield Experts
(GREEN cells indicate our existing spread of
activities and BLUE cells indicate the areas
where work has already commenced in line with
plans announced earlier)
Float Glass manufacture (AIS Float)
Value Added Products Reflective Mirror
Processing Laminated Tempered Insulated
Glass Products
Installation
Fabrication
AIS Glass Solutions Ltd.
Servicing Distributed Markets
Being considered along with 2nd float and/or at
Taloja during hot/cold repair
VALUE ADDED GLASS SOLUTIONS CHAIN
38
Capturing value chain presence
  • In the automotive glass business, AIS already
    has a value chain presence, reaching out to end
    consumer. Second automotive plant coming
  • up in Chennai, with initial capacity of 500,000
    windshields, will have a
  • capacity of 1.50 million laminated windshields
    and 1.0 million tempered car sets, after being
    fully set up.
  • In the architectural glass business, AIS has
    initiated steps to capture the value chain,
    through its subsidiary AIS Glass Solutions,
    with the setting up of architectural glass
    processing facility at Taloja, to address
  • the following segments
  • - Architectural processing glass products
  • - Product and knowledge development
  • - Glass Services
  • - Sales Marketing
  • Second float glass plant, with production
    capacity of 700 MT / day being set up in the
    State of Uttranchal.

39
EXPANSION BRIEF HIGHLIGHTS
40
2ND AUTOMOTIVE GLASS PLANT - CHENNAI
  • Asahi Indias laminated plant at Bawal, with a
    capacity to manufacture 1.2 million windshields,
    is currently operating at full capacity.
  • With most of the new capacity having been
    established by majors like Hyundai, Toyota and
    Ford in South India, the second automotive glass
    plant is being set up in Chennai in South India.
    Car production in this area is expected to rise
    from the current level of 220K to over 470K in
    next five years
  • Besides proximity to key customers, Chennai is a
    Port city, thus allowing cost reduction in import
    of raw material (such as PVB) as well as in
    possible future exports.
  • In Phase 1, only laminated plant to be
    established in Chennai with capacity of 500,000
    windshields. Plan for raising laminated capacity
    to 1.5 million windshields to be decided later,
    depending on overall demand situation.

41
2ND AUTOMOTIVE GLASS PLANT - CHENNAI
  • Commercial production of laminated windshields
    (Phase I) commencing from November, 2004. Capex
    for Phase I planned at Rs. 56 crores. Phase- I
    completed, on cost and time.
  • Plant to be set up in modular fashion i.e.
    ability to take capacity up to 1.50 million
    windshields with some de-bottlenecking and
    additional investment.
  • Plan to invest in Chennai for tempered capacity
    in Phase II during 2005-06.
  • Once fully set up, new facility in Chennai
    planned at capacity of 1.50 million laminated
    windshields and 1.0 million tempered car sets.
  • Chennai facility to include Value Addition
    capability (Assemblies, Add-ons) as required.

42
AIS GLASS SOLUTIONS THE CONCEPT
  • An exercise in value addition
  • 5 year objectives
  • Consume 6000 tons of float glass per month
  • Raise glass consumption in the country from the
    current level of 0.55 kg per capita by
    introducing innovative product lines, including
  • A line of bath enclosures.
  • Standard line of glass shelving.
  • Line of specialty laminated glass called
    Frontage for burglar-resistance, energy saving
    and sound proofing applications.
  • A line of manufactured windows.
  • Establish dominant presence through the value
    chain, including through processed glass as well
    as down stream through Glass Services to provide
    a one stop shop to consumers.
  • Make AIS the No. 1 glass brand in India

43
AIS GLASS SOLUTIONS AN INTRODUCTION
Forms of AIS Glass Solutions
AIS Glass Solutions
44
AIS GLASS SOLUTIONS PRODUCTS AND SERVICES
  • Processed glass for architectural applications
  • Laminated glass
  • Tempered glass
  • Insulated glass units
  • Product lines, starting with bath enclosure line
  • Glass installation service for low volume,
    high-value jobs in top 8 urban centres
    distributed markets.

45
ARCHITECTURAL PROCESSING
  • Market size estimated to be Rs. 140 crores in
    2002-03.
  • Total glass consumption in 2002-03 estimated to
    be 21,500 tons (1792 tons/month).
  • Currently growing at 25.3.
  • Our estimates show that this growth should ramp
    up to 34.1 CAGR over 5 years.
  • At these rates, architectural processing will
    still account for about 11 of total flat glass
    consumed in the country up from 4 today. To
    put this in perspective, architectural processing
    consumed 45.3 of the flat glass produced in USA
    in 2002.

46
ARCHITECTURAL PROCESSING
  • AIS plan
  • One integrated plant with tempered, laminated and
    insulated glass at Taloja, near current float
    plant in 2004-05. Unit to commence from
    January, 2005.
  • Additional tempering lines in Chennai (April /
    May, 2005) and North India (2007-08).
  • Lamination and IG demand can be serviced from
    planned Taloja facility in this five year period.
  • Total planned capital expenditure for
    integrated facility at Taloja to cost
    approximately Rs. 20 crores.

47
2ND FLOAT GLASS PLANT
  • The Board in its meeting held on 30th October,
    2004 approved, in principle, setting up of second
    float glass plant in the State of Uttranchal.
    The facility will have a production capacity of
    700 MT / day.
  • Final cost and time schedule to be finalized and
    approved by the Board shortly, by end November,
    2004.
  • Location of the second float plant finalized,
    considering the following factors
  • Closeness to market.
  • This will be the first float plant in North
    India, which is the largest market in the
    country, with approximately 38 of total market.
  • Closeness to raw material
  • Availability of tax incentives explained in
    some more detail in the following slide.

48
2ND FLOAT GLASS PLANT TAX INCENTIVES
  • Three States in India (Uttranchal, Himachal
    Pradesh Jammu Kashmir) are offering
    substantial tax incentives, as described below
  • a) No Excise Duty for 10 years. Excise Duty is
    currently levied at an ad valorem rate of 16 of
    the ex factory selling price.
  • b) 100 Income Tax exemption for 5 years followed
    by 30 Income Tax
  • exemption for the subsequent five years.

Uttranchal offers the tax incentives as described
and is selected for AIS second float plant
considering the locational advantages and the
tax benefits.
49
LOCATIONALLY…..
  • Roorkee
  • Planned
  • Float
  • Glass Solutions
  • Auto (laminated) for after market.
  • Rewari
  • Current
  • Auto
  • Future
  • 1. Glass Solutions?
  • Taloja
  • Current
  • Float
  • Future
  • Glass Solutions
  • Chennai
  • Planned
  • Auto
  • Glass Solutions

50
FIFTEEN YEAR PERSPECTIVE…..
  • FLOAT
  • Even at an average growth of 10, from the
    current levels,
  • the Indian float market would grow to 5650 tpd
    in 15 years.
  • From the current three float plants, the
    country would require about
  • 15. Even assuming a share of 1/3rd, AIS would
    need 5 float
  • plants.
  • AUTOMOTIVE
  • Even at an average growth of 10, Indias car
    production should rise to
  • over 3 million units in fifteen years.
  • OVERALL, India should be amongst the largest
    glass markets in the
  • world.

51
GUIDING PRINCIPLES All actions of AIS
are driven by the following guiding principles
1. Creation of Value for Shareholders 2.
Customer satisfaction 3. Respect for the
Environment 4. Use of facts 5. Continuous
Improvement 6. Strengthening of
Systems 7. Upgradation of human potential by
education and training 8. Social Consciousness
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