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Ganesh Polytex LtdCorporate presentation
August 2010
BSE Code: 514167
Bloomberg Code: GNPL IN
Reuters Code: GNSP.BO
www.ganeshpolytex.in
Recycling used PET bottles into fibers
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Recycling 1 ton of PET
saves 1.5 tons of Carbon
Dioxide vs. land filling orincineration (Credit :
WRAP)
Recycling 1 ton of PET
containers saves 6 cubicmeters of landfill space
32% more energyefficient than glass
bottles per 1000 gallons
beverages delivered
Low per capita
consumption: India
0.3kg vsworld avg of
over 2kg
Recycling each plastic
bottle can conserve
enough energy to light a60W light bulb for up to
6 hours
PET Facts
Contribute 68% and 18%
less solid waste by
weight vis--vis glass and
aluminum containers
Glass and Aluminum
containers yield 230%
and 175% more
atmospheric emissions
vis--vis PET.
PET is the fastestgrowing polyester
application. Indian
market to grow 7.5% in
FY11
Accounts for 40% of
global packaging mix
PET is fast replacing
glass and aluminum in
packaging market
Recycled PSF made from
waste PET bottle eating
market share ofcotton
andwool
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It takes hundreds of years for a PET bottle to
decompose, recycling is the only method to
protect the environment; as of now only about
30-40% of bottles are recycled! The use of PET
bottles is growing at 7% YoY
Ganesh Polytex is Indias largest player in PET
Recycling, growing @ 40% CAGR over last four
years; has drawn interesting growth plans
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Indian PET resin demand 500,000
tpa, growing at ~7.5% p.a. against
Recycling Capacity of near about
250,000 tpa
Excess of 325,000 tpa PET waste by
2012 >>>>>>> 125% more than
the current recycling capacity4
6
16
30
26
28
31
51
6
12
10
4
10
19
20
1
90
82
74
66
64
53
49
48
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Eastern Europe
Latin America
Western Europe
Australasia
World
Asia Pacific
Middle East & Africa
North America
CAN Glass PET
Usage pattern set to go up in
PETs favor for
cost, convenience, energy savingbenefits
Huge recycling
opportunity as recycling
rate in US 27%, EU 46%
PET Recycling Opportunity
High scope of growthPET is one of the fastest growing segments in plastics providing a hygienic, durable and user friendly packaging
solution for all kind of bottled drinks, beverages, pharmaceuticals, liquor, chemicals, and other liquid products.
With life style changes and higher disposable income, demand of Pet bottles is set to grow at much faster pace
as the per capita PET consumption in India is 0.3 kg, visavis world average of 2.1 kg in 2008.
Source:Euro monitor
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Ganesh Polytex Ltd. (GPL) has been churning out Polyester staple fibers and Yarns fromused PET bottles for years.
Mr. Shyam S Sharma, 68 year old technocrat got inclined towards entrepreneurship in thelate 1980s after working with various Birla group companies for more than two and half
decade
In 1995 the company hit upon the idea to manufacture green fiber or recycled PSF fromused PET bottles with a capacity of 6,000 tpa at Kanpur Unit. This plant was imported from
South Korea with technical know-how. Over the years the capacity has grown three fold to
18000 tpa
Looking at the enormous potential in the sector, in 2006 GPL set up its 2nd plant atRudrapur, Uttaranchal with a waste PET bottle processing capacity of 7,200 tpa. By 2008,
GPL ramped up the capacity to 21,600 tpa. In the recent expansion in March10 the
capacity got enhanced to 39,600 tpa taking the overall capacity to 57,600 tpa
Brief Profile
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Vision & Mission
Vision
To become a Global Corporate citizen committed to recycle every PET bottle which is thrown into waste
with world class recycling facilities and to create wealth for our stakeholders through conducting business
around social and environmental concerns
Mission To be a high performance organization by making the best use of resources and empowering people.
To be the preferred choice of our customers by providing world class customer services.
To maintain high levels of quality in our products through innovative Research and technology
development in our processes, products and applications.
Building relationships with stakeholders based on trust, transparency & ethical business conduct.
To contribute to the cause of making our planet a better place to live in for the present and future
generations.
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PET Recycling Business
Eco Friendly
PET is non Bio-degradable in nature which puts ecological balance for a toss
PET beneficiation is a noble environment friendly endeavor through whichmaterials spurned by society is transformed into things for human use
In days ahead various government bodies are likely to dole out incentives to
the organizations engaged in such environment friendly activities
Scalable
Packaging containers are growing at 1.5x to GDP which will yield enough wastematerials to be recycled
Growth stems from high rate of consumption behavior pattern seen across
several sectors like pharmaceuticals, beverages, liquor, personal care etc. Sustainable
Increasing awareness among citizens for cleanliness will drive the movement ofPET recycling in line with other waste materials like plastics, paper, metals etc
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Industry Potential
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Industry Potential
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Polyester Staple Fiber (PSF) is kind of Polyester Fiber made directly from Purified Terephthalic Acid (PTA) & MEG or PET Chips or
from Recycled PET Bottle Flakes. PSF made from PTA & MEG or PET Chips is known as Virgin PSF and PSF made from Recycled PET
Flakes is called Recycled PSF
Product/Process Overview
Mono
Ethylene
Glycol
(MEG)
Poly Ethylene
Terephthalate
(PET) chips
PET Containers
and Films
PFY and PSF-
Virgin grade
~20% Recovered and
recycled
PET Flakes
+
~80% wasted (Land Fill
and incinerated)
Textile & Non-
textile
Applications
Regenerated PSF
Break down toraw materials
Chemical Process Mechanical Process
Unviable till date-High
scale process presupposes
huge waste as feed stock .
Purified
Terephthalic
Acid (PTA)
Regenerated POY
Future Plan
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Manufacturing Process
Raw material storage Yard:Input raw Material - Used
PET Bottles in acompressed state
Sorting & Washing: Sortingbottles to remove non- PET
materials. Shredding PET
Bottles to convert intoFlakes
Dryer section: Vacuumdrying in the dryer to
remove the moisture fromthe flakes
Spinning, winding and CANcollection: Heating, melting, extruding to form
filament.
Fiber Line:Drawing, Spinning, Finishing, Crimping , Cutting for
final fiber
Storage and dispatch offiber: Bale storage andloading trucks as per the
sale
Raw Material
The company has tied up with franchisee vendors in different cities to procure the PET waste bottles which is the main raw
material
Finished product finds application for spinning of yarn, stuffing in toys and other life style products like
pillows, quilts, mattresses and furniture, non-woven carpets and fabrics, medical & packaging textile, geo textile, fur
fabrics, construction and paper industry and other technical textile
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Divisional Breakup
Capacities
Division Capacity
Recycled Polyester Staple fiber (RPSF) 39,600 TPA at Rudrapur
18,000 TPA at Kanpur
Dyed Texturized / Twisted Filament Yarn 2,400 TPA at Kanpur
Divisional RevenueYear Recycled Polyester Staple fiber (RPSF) Yarn
Total
Revenue
(`mn)
Domestic Export
Qty.(MT) Value
(`mn)% of
total
Qty.(MT) Value
(`mn)% of
total
Qty.(MT) Value
(`mn)% of
total
2006-07 6,579 290 46% 2,136 99 16% 1,736 237 38% 627
2007-08 10,862 558 53% 4,751 236 22% 2,064 261 25% 1,054
2008-09 13,844 730 54% 6,743 368 27% 2,075 256 19% 1,354
2009-10 23,731 1,266 64% 6,565 323 16% 3,545 401 20% 1,989
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Business Strengths
Bottles
86% Films
11%
Others
3%
Global Consumption of PET Packaging
Point 1: Proliferation use of PET bottle on
the back of 7-8% CAGR growth coupled
with low scale of recycling (about 30-40%)
to yield abundant feed stocks to be recycled
41%63%
59%37%
India Global
MMF Natural
MMFShare
inchingtowards50%
Share of fiber consumption
Point 2: Indian Man Made Fiber(MMF) :
Natural fiber ratio of 41:59 to align to
global ratio of 63:37 consumption
Point 3: Raw material price for recycled PSF
insulated unlike in virgin PSF which is linked
to crude prices (PTA and MEG) thereby
ensuring stable margins with scale up of
business
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
18.0%
0
1,000
2,000
3,000
4,000
FY09 FY10 FY11E FY12E
Sales (Rs .mn) EB ITDA marg inPAT Margin
GNPLs past and projected financials
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Global Fibre consumption pattern (%)Point 4: Changing life styles and cost effectiveness
led to innovative applications of the MMF. This has
clearly helped to expand its market share. Such
trend is likely to continue. Some of the notable ones
are winter clothes, Disposables, Non-woven
technical textiles etc . Expanding market lends
growth visibility
Point 5: GPLs cost of Recycled PSF, which is otherwise 15% competitive to virgin one, is
further supported by concessional CST, Excise Duty Holiday and full IT exemption for first 5
years and 30% for subsequent 5 years at Rudrapur. Such fiscal benefits would help GPL to
combat competitive pressures and bolster profitability margin
Point 6: Industry associations like CII, have launched programs to reward companies for greenendeavor like recycling. In future, government shall extend benefits to such companies.
Industry, which is at present having low profile status will attract massive funds for expansion.
GNPL to enjoy early bird mover advantage.
68
4838 36
10
53 2
540
54 57
177 5 5
1960 1990 2000 2009
Cott on Wool Synthe ti c Ce llulos ics
Business Strengths
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Management Team
Mr. Shyam S. Sharma Chairman & MD A visionary entrepreneure.
Served the Birla group for 25 years in various senior positions and
promoted the said company in the year 1987. He is well versed with the
fiber and textile technology with a hands on experience of over 45
years.
Mr. V. D. Khandelwal Executive Vice Chairman A Post Graduate in
Commerce and having experience of over 36 years in marketing of
textile yarns. He is one of the Promoter Director and looks after the
affairs of the company since inception.
Mr. Sharad Sharma Joint Managing Director A Commerce graduatewith more than 27 years in marketing of yarns and fiber. He is engaged
with the company since 1992.
Mr. Rajesh Sharma Executive Director A Commerce Graduate with
rich experience spanning over 20 years in plant administration. Looks
after the administration of the companys Rudrapur unit.
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Strong Show
520 627
1,054
1,354
1,989
FY06 FY07 FY08 FY09 FY10
Sales (` mn)
0
50
100
150
200
250
300
FY06 FY07 FY08 FY09 FY10
0
10
20
30
40
50
60
70
80
90
100
FY06 FY07 FY08 FY09 FY10
325
473
670
858
1,025
FY06 FY07 FY08 FY09 FY10
Gross block (` mn)
EBITDA (` mn) EBITDA Margin PAT(` mn) PAT Margin
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Key Financials
Particulars/Year FY08 FY09 FY10 FY11E FY12EIncome Statement
Net Sales 1,054 1,354 1,989 2,616 3,508
Change (%) 69 28 47 32 34
EBIDTA 109 167 240 364 597
EBIDTA margin (%) 10.4 12.4 12.0 13.9 17.0
PAT 38 43 90 159 290
Change (%) 98 16 107 77 82
PAT Margin(%) 3.6 3.2 4.5 6.1 8.3
Cash Generation 74 100 159 265 454
Balance Sheet
Equity Capital 99 99 123 189 189
Preference shares 45 45 45 45 45
Reserves 104 141 251 624 876
Net Worth 247 285 419 858 1,110
Term Loan 235 302 302 656 762
W.C. Borrowings 190 245 238 342 438
Unsecured Loan 41 66 49 50 50
Net Deferred Tax 35 42 43 43 43
Capital Employed 748 940 1,051 1,949 2,403
Net Block 333 614 578 790 1,625
Capital WIP 151 5 140 700 -
Current Assets 348 440 471 637 1,007
Current Liab & Prov. 83 120 139 177 230
Net Current Assets 264 320 333 460 777
Total Assets 748 940 1,051 1,949 2,403
` mn
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Key Ratios
Ratios
FY08 FY09 FY10 FY11E FY12E
EPS 3.6 3.8 6.9 8.1 15.1
P/E 12.7 7.3 6.1 3.3
Price/Book Value 2.4 2.1 1.6 1.2 0.9
EV/EBDITA 8.2 5.1 4.8 4.4 2.6
EV/Sales 0.9 0.6 0.6 0.6 0.4
Mkt Cap/Sales(x) 0.5 0.4 0.3 0.4 0.3
ROE 20.5 18.1 24.1 19.6 27.3
ROCE 12.8 13.7 17.5 16.5 22.5
Interest Coverage (x) 3.0 2.6 3.1 4.1 5.0Debt/Equity(x) 1.1 1.3 0.8 0.8 0.7
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Way Forward
Setting up a greenfield capacity for manufacturing Recycled Chips and Recycled PartiallyOriented Yarn (POY) of 15,000 tpa from PET Bottle waste and Spun Yarn with capacity of
5,000 tpa from Recycled Fibre.
Acquiring yarn spinning capacity on job work/lease basis or taking over existing units toconvert the recycled PSF into value added yarn
Having established its pole position in the market, with the largest capacity, GPL is furtherlooking forward to expand footprint to new geographies in the realm of national as well as
international level to further scale up its business
Further, plans are afoot to integrate forward into downstream value added products liketechnical non-woven textile, geotextiles etc.. To bolster margins
To achieve `10 bn revenue milestone over next 5 years
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Thank Y ouThank Y ou
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