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Presentation Analysts Investors Meeting 26-09-2016
Presentation Analysts Investors Meeting 26-09-2016
Sep-16
The Company
Group STEEL STRIPS GROUP
Chairman R. K. Garg
Managing Director Dheeraj Garg
Business Category Design, manufacturing and marketing of Steel Wheel Rims for Passenger
cars, Utility vehicles, 2/ 3 wheelers, Tractors, Light/ Heavy commercial
vehicles and OTRs
Manufacturing 1. Dappar (Punjab) - North India
locations 2. Oragadam , Chennai (Tamilnadu) -South India
3. Jamshedpur (Jharkhand) - East India
4. Mehsana, Gujarat – Alloy Wheel
Technical collaborator Ring Techs Co. Ltd., Japan (A group company of Sumitomo Metal, Japan)
Capacities Total 16.6 million nos p.a.
Sep-16
Foot Print
Manufacturing Locations-
Capabilities Dappar, Chandigarh
Location: Chandigarh Ambala Highway
Capacity:
7.25 Million for Passenger cars,
DAPPAR
MUV’s, 2& 3 Wheelers.
PLANT
1.75 Million for Commercial Vehicles,
Tractors and OTR’s.
Area: 160,000 sq. meters of land with
55,000 sq. meters of built up area.
Manpower: App. 1800 people.
Equipped with Govt. of India
approved Research and Development
Centre
TRACTOR WHEELS
Diameter - 10"-30"
Width - 4.5"-15"
Single Piece: Fixed & Adjustable
2-3 WHEELERS, CAR & MUV’S:
Diameter - 12” to 20”
Width - 2.5” to 8”
Sep-16
Manufacturing Locations-
Capabilities Oragadam , Chennai
Location: App.35 Kms from Chennai
Capacity:
6.0 Million for Passenger cars & MUV’s.
Manpower: App. 700 people.
CHENNAI
PLANT
Sep-16
Manufacturing Locations-
Capabilities Jamshedpur , Jharkand
Location: Close proximity to Tata Motors
and Tata Steel.
SOP: July 2010.
Capacity:
1.6 Million for C.V. Wheels
Manpower : App. 200 people.
HCV
Width : 5.5"-13"
JAMSHEDPUR Dia : 15"-24"
PLANT
Construction, Mining & Industrial Wheels
Width : 5.5"-22"
Dia : 15"-24"
Sep-16
Partners in Success
Sep-16
Partners in Success
Sep-16
Partners in Success
Sep-16
SSWL Export Customers Locations
Russia
UK Germany
Poland
Canada Netherlands Slovakia
France Romania Japan
Austria Hungary
Spain S Korea
Italy
Morocco
Egypt U.A.E.
Thailand
Colombia
Brazil
Argentina
Customers Locations
Sep-16
New Domestic Business Allocations (Steel Wheels)
Segment SoB
Tractor 38%
200 195
175 180
150
100
50
-
2011-12 2012-13 2013-14 2014-15 2015-16
Sep-16
Sales Performance Turnover Volumes
No. of Wheels in Mn
14.00 13.17
12.47
12.00
11.04
10.19 10.11
10.00
8.00
6.00
4.00
2.00
0.00
2011-12 2012-13 2013-14 2014-15 2015-16
Sep-16
Segment Wise Volume Mix
120.0%
100.0%
10.6% 7.7% 6.5% 8.4%
6.1% 7.4% 10.2% 11.2%
80.0%
60.0%
60.2% 59.6%
61.6% 58.2%
40.0%
20.0%
23.2% 25.4% 21.6% 22.3%
0.0%
2013-14 2014-15 2015-16 Q1 2016-17
Mix is now tilting towards heavier wheels thus improving realization and margin.
Sep-16
Plant Wise Capacity Utilization
100%
90% 37.39%
56.49%
83.07% 95.73%
80%
70%
46.04%
60%
60.77%
50% 65.14% 69.33%
40%
30%
85.11%
20% 88.53%
87.77% 93.81%
10%
0%
2013-14 2014-15 2015-16 Q1 2016-17
Utilization levels across all the facilities have moved up. The growth is substantial in case of Jamshedpur
Sep-16
Exports Turn over
Volumes
1600
1400
1200
1000
800
1533 1513
1426
1285
600 1206
400
200
0
2011-12 2012-13 2013-14 2014-15 2015-16
Sep-16
SSWL Performance Q4 and FY16
(Rs in Lacs)
Q1 Q4 Growth Q1 Q1 Growth
2016-17 2015-16 2016-17 2015-16
Gross Sale 36,309.18 34,419.63 5.49% 36,309.18 32,643.84 11.23%
43.00 40.09
38.00
33.00
28.00
25.83
13.00
8.00
3.00
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Cash Accrual vs Secured Term Debt Repayment (Rs Cr)
120
103.2
100
60 72.0
53.1
52.9 56.6 57.5
40
20
0
2011-12 2012-13 2013-14 2014-15 2015-16
180.0 164.1
160.0
140.0 118.5 128.2
120.0 105.0
100.2
100.0
80.0
60.0
40.0
20.0
-
2011-12 2012-13 2013-14 2014-15 2015-16
Growth Driver
70.00%
12.00
60.00% 56.25%
10.00 9.24
50.00%
8.00
6.70 37.40%
40.00%
6.00
30.00%
4.00
20.00%
2.00 10.00%
- 0.00%
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Sep-16
ROCE Trend
14.0%
13.2%
13.0%
10.0%
9.0% 8.5%
8.2%
7.5% 9.0%
8.0%
7.0% 7.3%
6.0% 6.7%
6.2%
5.0%
4.0%
2011-12 2012-13 2013-14 2014-15 2015-16
ROCE% ROCE (Adjusted for revauation reserve & cwip)
Even with Alloy Wheel project in 2016-17 ROCE is expected to remain in double digit.
Sep-16
Financial Leverage (Consolidated)
5.50 5.34
5.19 5.16
4.96
5.00
4.54
4.50
4.19
4.00
3.42
3.50
3.00
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Sep-16
Secured and Total debt (Rs Cr)
1000.00
900.00 629.13
578.65 583.58
800.00 568.07
508.17
700.00
600.00
500.00
400.00
100.00
0.00
Mar' 12 Mar' 13 Mar' 14 Mar' 15 Mar' 16
SECURED TERM DEBT TOTAL DEBT
Sep-16
SSWL ALLOY WHEELS PLANT
MEHSANA, GUJARAT
IN TECHNOLOGICAL COLLABORATION
WITH
KALINK, KOREA
Geographical Location
Mehsana, Gujarat H.O. - CHANDIGARH
MKTG. BO
MUMBAI
3. JAMSHEDPUR PLANT
(300 km from Kolkata
port)
MKTG. BO
PUNE
2. CHENNAI
PLANT
( 50 km from port )
Location Distance Customer Plant Total No. of No. of Alloy SOP Distance from
capacity wheels Wheels @ SSWL Alloy
Ahmedabad Airport 75 Kms (Mln Cars) required (Mln) 30% Mix (Mln) wheel plant
Suzuki 0.25 1.25 0.38 May 2017 25 Kms
Kandla Sea port 300 Kms
Ford 0.24 1.2 0.36 Functional 70 Kms
Gandhinagar 64 Kms
(Capital of Gujarat) Tata 0.25 1.25 0.38 Functional 70 Kms
TOTAL 0.74 3.7 1.12
Sep-16
Proposed Alloy Wheels Plant: Gujarat
•Capacity: Production: 1.5 Mln & Painting: 2.5 Mln; Low Pressure Die Casting with Diamond Cutting
•Investment: Approx USD 50 Mln. Kalink will invest USD 2 Mln in SSWL.
d. Sea Port proximity hence cheaper imported Raw Material and easy access for Exports
Why Alloy Wheels?
•Appearance
Alloy wheels have enhanced aesthetic appeal and look much better than Steel wheels
•Weight
Lighter in weight compared to Steel wheels leading to better fuel efficiency of the car and helps in adhering to
stricter emission norms
•Strength
Aluminum mixed with other metals makes alloy wheels stronger than typical steel wheels, and the
unprecedented strength of alloy wheels leads to greater control and precision steering
•Heat dissipation
Alloy wheels disperse heat better, and this decreases cracking and bending which also translates to more
efficient braking
Indian Market context
Infrastructure
India’s infrastructure has improved in the recent past & will continue improving substantially in the coming
few years with good wide roads being developed across the country.
•Demand/Supply Gap
Currently there is gap between demand and supply, further Customer is struggling to receive the desired
quality Alloy Wheel Rims from existing alloy wheel suppliers in India. SSWL has entered into technical tie
up with Kalink Korea, who is leading Alloy Wheel Manufacturer and is among top 7 of the World in Alloy
Wheel supplies. Export Quality is what Company is eyeing and will include latest technologies like
Diamond Cut Alloy Wheels.
STRENGTH WEAKNESS
1. SSWL leading supplier of Steel Wheel rims in India. 1. Growth dependent of industry. Though Company is
2. Diversified customer base, all major OEM’s are covered mitigating the same with diversified customer base.
3. Globally accepted product and excellent reputation with 2. Alloy wheel is a new product for SSWL and
Customers. manufacturing process is completely different from steel
4. In house Government approved R&D facility, equipped wheel rims. Company has mitigated the same by entering
with latest technology. Similar R&D facility will be into technology agreement with Kalink Korea.
replicated in Alloy Wheel Plant.
5. State of Art technology from Kalink Korea (Among top
seven suppliers of Alloy Wheel Globally).
6. Facility is well connected by all means of transport.
OPPORTUNITY THREAT
1. New Entrants will pose a threat, however considering
1.Growing demand for Alloy wheels. Shift happening from the gap in demand and supply there is sufficient cushion
Steel Wheel Rims to Alloy wheels across all variants of to allow multiple entrant. Further SSWL plant will cater to
passenger vehicle. export quality wheels which will put is miles ahead of
2. Demand Supply Gap which is expected to reach competition.
around 2.6mn wheel rims in 2018-19 2. Slow down in domestic market. Company is mitigating
3. Anti dumping duty on imports of Alloy Wheels ($2.15/Kg this threat by eyeing export quality wheels and both
China/ $1.18/Kg Korea/$1.06/Kg Thailand) domestic/ export market will be captured.
4. Absence of dependable source of Quality Alloy Wheels As
maker in India.
Alloy Wheels opportunity analysis
Kosei-Minda, Chennai
Enkei, Pune 1. Annual Installed Capacity of 0.84 Mln wheels
1. Annual Installed Capacity of 0.96 Mln wheels 2. Quality issues with high rejections %
2. No immediate capacity expansion plans 3. High operating costs due to expensive Power, Gas
3. No available spare capacity and Labor
4. Caters to only Japanese OEM’s in India as a policy 4. New plant in Bawal, Haryana with capacity of 1 Mln
with SOP April 2016
Kalink has 2 plants for Aluminum Alloy wheels: Korea (1.6 Mln wheels) and China (2.8 Mln wheels)
Strong history of supplying Competitive and Quality wheels to OEM’s such as VW, Audi, Nissan, Chrysler,
Completion
Sr. No. Activity Status
month
Sep-16
Thank
You
Sep-16