Sri Lalita Cement

of Semi Finished Integrated Cement Plant at Southern India (2MTPA Clinker, 1MTPA Cement plant with 15MW captive Thermal Power Plant) Business Sale Overall capacity additions in the industry is expected to slow down by 50% i.e. 13MTPA/annum during FY18-22 vs 23MTPA/annum during FY12-17, expected growth at CAGR of 5.40%. Domestic consumption expected to grow at 7.5%, and reach upto ~65% of the installed capacity over next 5 years Major demand drivers for cement are Housing segment (67%) and Infrastructure (13%) and Government has shown thrust of development in both these segments Positive industry outlook with expected growth at CAGR of 8-8.5% in next five year with better margins Pg 9 East (West Bengal, Chhattisgarh, Odisha, Jharkhand) 49.4 MTPA Pg 11 Pg 4 INSTALLED CAPACITY AND KEY MARKETS IN EACH OF THE GEOGRAPHIC REGIONS Pg 3 Pg 8 Market Overview……………….. Demand & Supply……............... Favorable Policies....................... About Arcil………..……............. About Sri Lalitha Cements Ltd. & its Features.............................. Technology setup & Site Specifics…….………................... Present Status & Additional Capex requirement………......... Infrastructure & Location Advantage................................... Commercial Advantage….......... Site & Mine Images..................... Pg 7 Central (Uttar Pradesh, Madhya Pradesh) 52.8MTPA North (Rajasthan, Punjab, Haryana) 85.6MTPA Pg 12 Pg 6 Table of Contents Pg 5 West (Gujarat, Maharashtra) 57.6 MTPA Pg 14 South (Tamil Nadu, Andhra Pradesh, Karnataka) 132.7 MTPA Market Overview Union Budget 2017-18 Auction of 13 blocks of Limestone since amendment to MMDRA, 2015 Year Installed capacity (mnt) Production (mnt) Production Growth (%) Demand (mnt) Demand Growth (%) Capacity Utilization(%) FY09 76 62 10 57 14 82 FY10 95 67 8 60 6 71 FY11 111 68 2 62 3 61 FY12 124 72 5 61 -1 58 FY13 136 75 5 62 1 55 FY14 146 78 4 63 2 54 FY15 148 78 -1 63 -1 53 FY16 148 79 1 63 0 53 FY17 153 82 5 66 5 54 FY18E 153 88 7 71 7 58 FY19E 154 94 7 76 7 61 FY20E 160 101 7 81 7 63 FY21E 164 107 6 87 7 65 Southern India-Demand & Supply Policies favouring Investment in Cement Sector Housing Loans The Union Budget has proposed to assign infrastructure status to affordable housing projects and facilitate higher investments and better credit facilities, in line with the government’s aim to provide housing for all by 2022 which will boost cement demand. The increased allocation to rural low-cost housing under Pradhan Mantri Awaas Yojna-Gramin Scheme to Rs. 23,000 crore(US $ 3.45 billion) from Rs. 16,000 croe(USD 2.4 billion) in FY 17. Allocation of Rs. 230 crore as budget of 12th Five year plan toward connectivity of rural areas to highway. Both the gramin schemes are likely to drive 2 per cent increase in cement demand. Note: Estimated increasing capacity utilization supplemented with increase in demand is expected to turn into better margins Pradhan Mantri Awas Yojna and Pradhan Mantri Sadak Yojna - Gramin Scheme The National Housing Bank will refinance individual housing loans of about Rs 20,000 crore (US$ 3 billion) in 2017-18. The Finance Minister proposed to complete 1 crore houses by 2019. All these developments are expected to boost cement demand. Post amendment to Mines and Minerals (Development and Regulation) Amendment Act, 2015, Central Government has decided to change the allotment of mines through Auction process from FIFO. Since April 2016, Various State Governments have allotted 13 mines aggregating reserve of 1,815 mnt and the biggest among the lot was at Kutchh having reserve of 325mnt won by Adani Cements. Change in policy of allotment of mines has been supplemented well with pace of auction announcement by government SLCIL had initially envisaged to set-up an integrated unit of 1 MTPA Clinker, 1 MTPA Cement and a 15 MWCPP (132Kv Power line) at Nalgonda Cement Cluster near Raghunathapalem village.In due course, SLCIL decided to augment its clinker capacity by 1 MTPA, in addition to the old project configuration. Hence with the revised configuration, SLCIL would be in a position to manufacture 2 MTPA of clinker,of which 1 MTPA clinker would be grounded to cement production and 1 MTPA Clinker to be sold in open market. The project is at ~60% completion and suffered due to mismatch in financing arrangement during change in scope. About Arcil Salient Features About Sri Lalitha Cement Industries Ltd. FCB Horomill and Gearless Mill drive technology used in raw mill grinding and cement grinding respectively with following advantages: High cement quality About 30% lower production costs compared to competition About 50% saving in input energy consumption Easy Operation & Maintenance Long term reliability AEROBELT technology from Australia adopted in material conveyors leading to substantial savings in input energy consumption. Orbit cooler from Walchandnagar Industries in clinker cooling circuit. Above state-of-the-art technology have been chosen for the cement plant which shall offer 30% cost savings Plant is self reliant in Power Arcil (Asset Reconstruction Company (India) Limited, is sponsored by India’s respectable Banks like ICICI Bank, State Bank of India, IDBI Bank and Punjab National Bank along with multiple Banks and FIs. Arcil has been established to acquire financial assets from banks and FIs with the objective of revival, restructuring focused management of assets and maximization of recovery. Arcil is registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) as a Securitization Company and Reconstruction Company and is a financial institution within the meaning of section 2(h)(ia) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Site Specifics If viewing this brochure a) Digitally :click on the icon b) Physical Copy: Type the url in your browser (8) Malis corrumpit adversarium ei eos. Nec ei quaestio interesset. Eum id noster scribentur, ex justo dissentiunt vel. Tibique rationibus referrentur et eum, nec petentium instructior eu, oratio aliquid disputando in cum. An sanctus perpetua vel. Ut dicant inermis admodum has. Usu cu tation vivendo patrioque, te idque nulla dissentiunt vim. Id dicunt scripta eos. Ut dicant inermis admodum has. Usu cu tation vivendo patrioque, te idque nulla dissentiunt vim. Id dicunt scripta eos, graecis scriptorem est ei, qui ut facilisi conceptam. Ei duo etiam eirmod sanctus, soleat alterum est te. https://goo.gl/Kw2uhb Rs. in Crore Sr No. Particulars of Capex Amount Heads of expenses for modification A. Hard Costs 1 Land & Land Development 3.00 Expenses toward factoryland, No further expenses for fencing and mining lease/royalty cost 2 Building & Civil Works- Plant structures 22.00 Modification of Lime Stone Stacker andReclaimer, Raw Mill Building I & II, RM Blending Silo I & II,KlinPlatform Building/Orbit Cooler Building, Coal mill, Clinker Silo I & II,Cement, coal, iron ore & literate silo, Cement Mill building, Packing Plant Including Truck Loaders & Cable Trenches 3 Building & Civil Works- Non Plant structures 4.00 Additional expenses for Administrative Building, Guest House, Securitybuilding, Workshops and stores, Canteen, underground water tank, roads & drainage, weight bridge, E-type quarters 4 Plant & Machinery- Indigenous 66.00 Fabrication , Machining ofAxuillaryequipment, 500TPH Limestone Crusher system, 6000MTPD Preheater/Precalcinator, Spring Support System forHoromills3800, 6000 TPD Rotary Kiln, 6000tpd Rotary Kiln CementPackingPlant(Packing,MaterialConveyors), Grate Cooler,Bag Filters,Aerobelts, Other Belts, Electrical & Instrumentation (HT & LT), Miscellaneous fabrication, Erection & Commissioning, Additional local Work (HoroMill) 5 Plant & Machinery- Imported 7.00 O-SepaSeparator, Cement Machinery ( Mill),FCB.Cement2 GrindingHoroMills 6 Plant & Machinery- CaptivePower Plant 11.00 Main Equipment of 15MW STG Set,60Tph Multi Fuel Fired AFBC Boiler https://goo.gl/b43d8y The project is ~60% complete with existing investment of Rs. 414crore, it requires further infusion of about Rs. 300 crore in following areas to complete the work: Technology Setup Sr No. Technology Partner Remark 1. Design Partners, Hyderabad Civil Design Consultants, Having track record of earlier civil work assignments for My Home Cements,Dalmia Cement, India Cement, Visakha Cement,Priyadarshini Cement, Sagar Cements etc 2. SVS Projects Private Limited Main civil contractor for plant 3. WalchandnagarIndustries Ltd., ABB- Switzerland, AIA Engineers, Fives FCB&Lile-France, Enexco Technologies ,Puzzolona Machinery Ltd, GERB Vibration, Dalian, SDA Heavy Industries,Bevcon Wayors, Crompton Graves, Siemens Suppliers of major plantand machinery and Electrical & automation. 4. BHEL,Thermal System Ltd., Ion Exchange, GERB Vibration andMatangiCooling Towers Suppliers of power plant equipments Present status & Additional Capex Requirement Present status & Additional Capex Requirement(contd.) Ut dicant inermis admodum has. Usu cu tation vivendo patrioque, te idque nulla dissentiunt vim. Id dicunt scripta eos, graecis scriptorem est ei, qui ut facilisi conceptam. Ei duo etiam eirmod sanctus, soleat alterum est te. Liber soluta volutpat ut vis. Tota rebum sed ei. Nobis eligendi ea cum, animal scribentur est ut, purto eros corpora cu mea. Vero movet honestatis cu quo. 3 MTPA integrated plant is reasonable for economies of scale Owned Limestone mine within 3 Km from plant site having reserve of 20 MT (after taking care of mining losses and other margins), sufficient for 12 years operation Further, MOU executed with erstwhile state government (AP) in 2015 for another 236 acres of land having reserve of 65MT, reserve sufficiency of another 35-40years which needs to be renewed Other raw materials like Laterite, Coal, Iron-ore, Gypsum, Fly Ash and Slag are available within a convenient distance and trucks and dumpers can easily transport the required quantities. Pet coke is available at distance of 900km and can be transported through sea port. SLCIL has already 100acres of land, 60 acres of which has been utilised for setting up the plant and CPP and additional 20 acres for colony to accommodate staff members. Remaining area of 20 acres is provisioned for development of green belt . SLCIL has acquired added 70 acres of flat continuing plot for necessary developments like railway siding and further expansion plants- Site is located 19 km off state highway and 34 km from the NH9. Sr No. Particulars of Capex Amount Heads of expenses for modification 7 Miscellaneous fixed Assets (Electrical & Instrumentation) 33.00 Purchase of additional electrical and instrumentation 8 132 KV line with Switch Yard 13.00 Power supply line from CPP to allcorners of the unit. Hard Costs- Sub total 159.00 B. Soft Costs 9 Preliminary & Preoperative Expenses 5.00 Expenses toward restart or refurbishment of existing set up if any 10 Branding 5.00 Branding need to be initiatedatleast6 months prior to the commencement of production. 11 Interest During Construction (IDC) 35.00 Consideredfor interestexpenses for outstanding debt and fresh infusion. 12 Contingency 50.00 Contingency toward settlementof bills of existing suppliers if any, government costs for non operative period, M&A fee/expenses and other accidental expenses which may incurred during the project off take 13 Working Capital 46.00 Initial working capital infusion for initial 1.5 years Soft Costs- Sub total 141.00 Grand Total (A+B) 300.00 Infrastructure & Location Advantage Note: Soft costs in terms of IDC, Contingencies and working capital have been considered aggressively for better cushion in assessment} Rs. in Crore Sl Location Distance from plant (InKms) Remark A Nearest mode Mode 1. Vijayawada 110 Airport 2. Jaggyapet/Miriyalguda 24/50 Railway station 3. KrishnaPatnamPort 300 Port B Raw Material Procurement Type of RM 1. Warangal 141 Iron ore & Literate 2. SingreniColliers/WCLcoal mines 200/600 Coal 3. Vizag -Rashtiya Fertilizers/ Chennai - Coramadullum Fertilizers ~400/500 Gypsum 4. Mangalore 922 Petroleum refineries for pet coke 5. Thermal plants atRamagondam,Vijaywada, KrishnaPatnam,Kothagudam ~300 Fly Ash in addition to in house production from CPP 6. Mattampally 200 Additional 5MW power fromTelanganaTRANSCO C Finished Goods Sale Economical Accessibility 1 Hyderabad 220 Road Transport 2 Vijayawada (Nearest Airport) 110 RoadTransport 3 Nagpur 500 Rail Transport 4 Chennai 500 Rail Transport 5 Bangalore 662 Rail Transport (7) Note: *Better connectivity with markets keep the prices of cement constant and prevented during cyclical shocks in RM prices Commercial Advantage Sr No. Particulars Standard Cost USD/Tonne for 1 MTPA Standard Time for Completion (In years) SLCIL’s status 1 Land acquisition and Environment clearance 28 5(#) In place with all major license 2 Plant & Machinery 55 1(*) 70% of major P&M procured 3 Civil Works 15 2(*) 70% work is completed with major buildings like Magzine House, Main Crusher, Stalker, Reclaimer, Coal Mill, Blended Silo etc. 4 Erection and Commissioning 9 2(*) More than 50% P&M are erected 5 Others 18 1(*) Other costs include Interest during construction, Soft costs like arrangement for warehousing and logistics, Branding, Contingencies & preliminary and preoperative expenses, working capital etc 6 Captive Power Plant 15 2(*) 50% completed Total $140 The project cost for 2MTPA clinker, 1MTPA cement with 15MW thermal power plant at Rs. 714 crore is on lower side in comparison with the industry bench mark of Rs.1200 Crores. Further, The project completion can be achieved in 8 months as compared to 7 years for greenfield project, thus the Project is viable and technically sound. As per industry standard the project will have Ev of Rs. 1365 crore i.e. at $140/ton (Considering valuation for 1.5MTPA unit due to integrated features) Further, post completion of the existing project, the capacity of cement can be expanded to 2 MTPA by additional investment of around Rs. 110 crore which would enhance the Ev to Rs. 1820 crore. Note Key investment comparison with greenfield project. #Average time for land acquisition and environment clearance has gone up to 5 years due to amended clauses in Land Acquisition Bill 2013, Forest licenses, Mining licenses, Sand Mining Licenses etc. *Indicates simultaneous project built up activities of 2 year post land acquisition and environment license. The above factors consumes 7 years for set up of greenfield project in existing scenario Site Images Site Images Mine Images Already secured mining lease for 132.34 Acres valid till 2030. Company has entered into MOU with state government of erstwhile Andhra Pradesh for mining lease of 236 acres of government land. The minebale reserve will suffice for more than 35 years. Company is first applicant for mining on about 2916 Acres of reserve forest land . In future mining lease shall be allotted to the company by paying compensation to the forest department of Andhra Pradesh. Mining Block Reserve Contact Details: Disclaimer Contact Details: The Contents & Information contained in this brochure are intended for general marketing purposes only and should not be relied up on by any person as being complete or accurate. Interested parties are advised to conduct their own due diligence before taking any decision on the information mentioned in the brochure Srinivasa Yekabote: 9821232244 Asset Reconstruction Company (India) Ltd. The Ruby, 10th Floor, 29 Senapati Bapat Marg Dadar (West), Mumbai : 400028 Tel: +91 22 66581300/399 www.arcil.co.in CIN:-U65999MH2002PLC134884