Company Overview and Investment Feasibility

Corporate Headquarters: Level 14, Red Crescent Jashim Trade Center, 114 Motijheel Commercial Area, Dhaka 1000
Shipyard: Nayanagar, Gazaria, Munshigonj
Tel: +88 (02) 9512258
Fax: +88 (02) 9513061
www.threeanglemarine.com
 ABOUT

• Three Angle Marine Limited (TAML) was incorporated in 2010, and

since then it has become one of the most prominent and fastest
growing shipbuilder in Bangladesh. The Company focuses on new
construction and repair of different conventional and non-
conventional marine vessels. The objective of the company is
primarily to carry out building and repairing activities of marine
vessels. Within a very short time we have achieved some remarkable
milestones in the field of shipbuilding in Bangladesh. It currently owns
the largest private shipyard in the country. In terms, of construction
revenue earned from Government work orders, we are the second
largest.

• Legal Structure: Public Limited Company
• Incorporation Structure: 2010
• Developed Land: 3,779.25 decimal which is equipped as
follows:
• 5 storied administrative building (each floor space
6,400 sft & total floor space 32,000 sft)
• 12 nos. 1 storied building for various purposes of
total floor space 56,400 sft:
 2 Worker Accommodation area of Total area =
19,800 sft
 Fully equipped Canteen, total area = 6,000 sft
 Medical Aid Station, Total area = 600 sft
 Galvanizing & Foundry Shop, Total area = 1500
sft
 Machine Shop, Total area = 3,000 sft
 Outfitting & Overhauling Shop, Total area =
3,000 sft
 Carpentry Shop, Total area = 1,500 sft
 Consumables Store, Total area = 3,000 sft
KEY CORPORATE INFORMATION
& COMPANY PROFILE
 Warehouse, Total area = 4,800 sft
 Steel Material Stockyard, Shot Blasting &
Priming/Paint Shop, Total area = 6,000 sft
 Generator Room, Total area = 7,200 sft
• 4 Nos. Cranes (75 mt, 55 mt, 25 mt and 12 mt)
• 3 Nos. Tower Crane covering shipping area
• 3 Nos. CNC Steel Cutting Machine
• 1 Nos. Overhead Crane
• 1 Nos. Spray Painting Machine
• 6 Nos. High Pressure Sand Blasting Machine
• 3 Nos. Winch for lifting ship in shipways
• 6 Fabrication Yards of Total area = 259,800 sft
• Numerous Welding Equipment
• Boundary Wall of 1424 ft x 778ft
• Own Power Plant, 2MW Diesel based Power
Generator
• 6 Nos. Permanent Slipways (600ft x 18ft)
• 1 Helipad

Total Number of Employees
Total Vessels Delivered So Far
Current Work Orders in Hand
Upcoming Work Orders
Clients
Certifications
Vessels Certified by
International Classification
Bodies Such As:
KEY CORPORATE INFORMATION
~700
136 Vessels worth BDT 565.38 crore
15 work orders of GoB worth BDT 381.45 crore
4 work orders of GoB worth BDT 329.98 crore
BIWTA Bangladesh Inland Water Transport Authority – the government authority
that controls the inland water transport of Bangladesh
BIWTC Bangladesh Inland Water Transport Corporation – the government
company that owns & operates river vessels, ships & ports in Bangladesh
ISO 9001:2008
Bureau Veritas (BV) France
Lloyd's Register (LR) United Kingdom
Registro Italiano Navale (RINA) Italy
Nippon Kaiji Kyokai (NKK) Japan
 FINANCIAL HIGHLIGHTS

PARTICULARS Bangladeshi Taka*

Total Assets BDT 376.25 crore
Total Shareholder’s Equity BDT 134.83 crore
Paid-up Capital BDT 88.00 crore
Revenue BDT 155.18 crore
Gross Profit BDT 44.20 crore
Operating Income BDT 37.41 crore
Profit before Tax BDT 22.28 crore
Net Profit after Tax BDT 14.87 crore
*As at 30-June-2019
 CURRENT MARKET DEMAND
• There has been a recent jump in the growth in the domestic market for
vessels, backed by soaring imports (annual imports totaled 4 cr. Tons
three-four years ago and it exceeded 13 cr. Tons this year) and ongoing
works to build large infrastructures.
• As per the report, 300 vessels would be required in the next two years and
the construction is under way for nearly 100.
• BIWTA and BIWTC has started to floating tenders worth BDT 5,779 Crore
for the 35 Dredger and 35 Vessels project.. Out of these tenders, TAML has
already won quite a few.
• Furthermore, as far as the international market is concerned, it may be
mentioned here that Japan, South Korea and China are building very big,
specialized and hi-tech ships, and they are not interested in constructing
smaller vessels.
• Globally, this small- and medium-sized ship market is worth around
$200bn. If Bangladesh can get 1% of this market, then it amounts to $2bn.
 CURRENT SUPPLY

• As per the Saudi Gazette, the leading English-language daily newspaper

published in Jeddah, Saudi Arabia, while there are more than 100 shipyards
in the Bangladesh engaged in traditional shipbuilding, there are 11
shipyards that are capable to build “class” ships (i.e. vessels that are
certified by international classification bodies.
• The demand for vessels mentioned in the previous slide require class
certification and therefore the work needs to spread amongst these 11 odd
shipyard.
• So, even, if we take the average, then there is around BDT 525 crore worth
of work order up for grabs per shipyard in BIWTA and BIWTC only.
• However, given the fact Three Angle Marine has the largest shipyard in the
country and also considering that they are the 2nd largest contractor of
BIWTA and BIWTC, it is expected that around BDT 1,500 Crore worth of
work order will come their way.
 GOVERNMENT POLICIES

• The incentives from the Government

of Bangladesh currently includes
streamlining the procedures for
export of a completed vessel, as well
as the granting of “Green Channel”
status on imports made by
shipbuilders and SROs have been
issued to lower import duties.

• Furthermore, the Ministry of

Industries have forwarded a draft
policy, titled “Shipbuilding Industry
Development Policy 2019” to the
Cabinet.
 LONG TERM PROSPECTS
• The Bangladesh Regional Waterway Transport Project 1 (to be implemented by
BIWTA) has a commitment of US$ 360 million (BDT 3,060 crore) to improve the
inland waterways leading to more domestic and regional connectivity.

• The National Economic Council has approved the Bangladesh Delta Plan 2100
according to which, GoB will spend US$37 billion (BDT 314,500 crore) by 2031 to
implement various projects under the plan. These includes:

• Dynamizing Inland Water Transport Systems: Regular capital and maintenance activities for
maintaining flow and transport in the rivers, develop reliable water system conditions for
long term sustainable Inland Water Transport, provide optimal levels of surface water for
navigation and develop, maintain and operate inland river ports, landing ports and terminal
facilities in ports.

• Blue Economy: Considered as a new “Development Space” for Bangladesh this includes
priority basis development of water transport, coastal shipping, sea ports, shipbuilding and
recycling, marine fisheries, coastal tourism, ocean energy, land reclamation, ocean survey &
surveillance, etc.
 WHY IPO?
• The financial benefits of getting publicly listed are numerous:
• Having access to affordable capital to furnish our expenditure goals that supplement
our expansion plans in order to be able to take up more work orders in this
undersupplied sector.
• Company’s Income Tax rate will be reduced to 25% from the prevalent rate of 35%.
• To be able to utilize the allowed portion of the proceeds to adjust our most
expensive institutional liabilities – thus reducing both our debt burden ratio as well
as operational expenses.
• The non-financial benefits are also several:
• For example, the listing procedure will bring about public awareness about the
company;
• Also, by having public investment in the company, TAML will become a much more
economically significant entity with stricter compliance and corporate governance
requirements – which we strongly believe to be good for the company in the long
run.
 SWOT ANALYSIS
• STRENGTH
1) Quality and Assurance of Revenue: Since almost 100% of the revenue of TAML is derived from Government
work orders, in terms of quality, it is the best form of revenue as it is assured and confirmed with no scope of
payment failure.
2) Excellent Short and Long Term Growth Prospects: The Government has made major allocations in these sector:
• Short Run: Tendering for BDT 5779 crore worth of projects have already started at BIWTA/BIWTC with TAML winning a
major bulk of those already. The BRWTP 1 project worth BDT 3,060 Crore (to be funded by World Bank and implemented by
BIWTA) is also underway.
• Long Run: The NEC has already approved the Bangladesh Delta Plan 2100, which has allocated BDT 314,500 Crore to be
spent by 2031 in sectors that include dynanmisation of Inland Water Transport and priority basis development of water
transport, coastal shipping, sea ports, shipbuilding and recycling, marine fisheries, coastal tourism, ocean energy, land
reclamation, ocean survey & surveillance, etc.
3) Undersupplied Sector – Therefore Competition is Very Low: There are only 5-6 shipyards who can support the
short and long-term goals as discussed above with TAML being the largest in terms of size or capacity while
being 2nd in terms of revenue earned through Government contracts.
4) Difficult Market to Enter – Therefore Competition is Expected to Remain Low: Shipbuilding is a very capital
intensive industry with high start-up costs and huge requirement of free land (that is already scarce in supply) –
moreover they also must have access to rivers and utilities such as electricity, gas, etc. These are very hard
criteria to match for new entrants.
5) Less Burden of Income Tax at Year End: As TAML mainly performs GoB contracts, so AIT @ 5% is deducted at
source on Gross Sales. As such, not only it becomes a tax compliant company automatically, it also puts less
burden on the cash balance at the year end to make tax payments via one single bullet payment. In fact, given
the amount of AIT it pays at source, combined with the AIT included in the TTI for imported materials, usually at
the year end, it turns out that no additional Income Tax payment is pending.
 SWOT ANALYSIS
• STRENGTH
6) Experience of Company and Team: The company has been performing Government contracts for 8
years now. The Managing Director of the Company himself served as an Engineer at BIWTA before
opening up this business. The management comprises of members with 16-20 years of experience
from local and international corporates and educational background from BUET as well as top
international universities.
7) Low Cost and High Productivity Labour.
8) Good Reputation and Reliability: TAML has an excellent reputation in the sector a direct result of
which has been that many noted stakeholders of this industry has invested in the company via
private placements. The Company currently has BDT 381.45 crore worth of GoB work orders in
hand and with further BDT 329.98 worth of GoB work orders in the pipeline which demonstrates
that the GoB agencies find the Company to be very reliable.
9) Accredited training institute available to train artisans
10) Management has an excellent network of international suppliers: TAML holds excellent levels of
command over these suppliers, having members who worked aboard in the Western Europe over
an extensive period of time. As such, they manage to get the best price in the market and
therefore have the lowest cost of production per unit amongst its competitors. At around 70%,
imported materials forms the largest proportion of cost of production and therefore this is a
significant advantage.
 SWOT ANALYSIS
• WEAKNESSES
1) Lack of Access to Domestically Produced Raw Materials
2) Some Banks are not internationally recognised, thus sometimes leading to additional
and high financial charges
3) Clearance of goods through customs takes a considerable amount of time, leading to
delays in shipbuilding process.
• THREATS
1) Siltation of rivers, decreasing depth of waterways and affecting size of ships that can be
built. (Mitigation: Dredging Projects already taken up by the GoB under BRWTP 1 to be
funded by the World Bank).
2) High costs involved in the banking sector (Mitigation: Almost all of the financing that
NRBC requires from local banks are to open UPAS LCs (360 days maturity from date of Bill
of Lading). As UPAS LCs are discounted and confirmed by foreign banks, finance costs are
much less (around 1.83% per quarter + LIBOR and 0.8% to 1% local deal structuring fee).
3) Increased unwarranted expenses at Customs (Mitigation: The GoB is working on a
Shipbuilding Industry Development Policy which proposes the maximum import duty to
be 2% thus making the assessment process much simpler)
 SWOT ANALYSIS
• OPPORTUNITIES
1) Infrastructure that can be converted rapidly to build ocean-faring vessels
2) International financial crisis and decreased international demand for products may
increase demand for lowest cost ships
3) 55% of world's small ships older than 20 years - need to be replaced
4) Movement out of the small shipbuilding sector by shipyards in Korea, China and to a
certain extent Vietnam
5) Setting up a Steel Plant
6) Possible future production of pipes to Class standards
7) Possible future production of wire to Class standards
8) Utilising foreign currency accounts
9) Moving some accounts to internationally reputed banks such as HSBC and Standard
Chartered to save foreign accreditation costs on bank guarantees
10) Government providing bank guarantees on foreign orders
 SOME OF THE VESSELS
DELIVERED BY TAML

M.V. AKASH 2 M.T. ARNEEB 2

M.V. RUBABA BIWTA 6 NOS ALUMINUM WORK BOAT

 SOME OF THE VESSELS
DELIVERED BY TAML

BIWTA BHAIRAB & BIWTA DHANSHIRI BIWTA BORAL

BIWTA ICHAMOTI BIWTA KHANIKA

 SOME OF THE VESSELS
DELIVERED BY TAML

BIWTA KONGSHO BIWTC MI TURAG

M.T. ENLIGHT-1 M.V. GOLDEN ROSE -07

 SOME OF THE VESSELS
DELIVERED BY TAML

M.T. OSHIN TAJ M.V. MONAZ MONZER-1

M.T. PEOPLES-1 M.T. PEOPLES-2

 SOME OF THE VESSELS
DELIVERED BY TAML

O.T. CHITTAGONG O.T. PORTLAND-1

CRANE BOAT RAFAT-2 SELF PROPELLED HOUSE BOAT

 SOME OF THE VESSELS
DELIVERED BY TAML

TUG BOAT SHAHAB O.T. BIN DAUD-1

O.T. SHANGHAI-6 O.T. SHANGHAI-7

 SOME OF THE VESSELS
DELIVERED BY TAML

O.T. SEA POWER-1 O.T. SEA LINK ANANDA

O.T. SEA LINK BIJOY O.T. SEVEN SIMAK-2

 SOME OF THE VESSELS
DELIVERED BY TAML

O.T. T.R. SHAH AMANAT M.V. BANGLAR SHAKTI-2

O.T. SHIPPERS WORLD-1 O.T. SHAGOR NANDINI-1