Tata Chemicals Limited

AGM
9 August 2010

Tata Chemicals Limited

AGM

12 August 2010
1
The Year that was – Internal Improvements and focus
on growth to counter tough Business environment
Business Environment

 Fall in Demand & Prices in most Products

 Delayed and deficient monsoons

 Positive shift in Fertilizers’ Policy

Tata Chemicals’ Response

 Operational and Financial improvements.

 Enhancing product portfolio and focus on new opportunities

2
The Year that was – Delivering growth and diversifying
portfolio
Tata Chemicals’ Achievements

Constant Focus throughout the year to Improve Balance Sheet Position

ADAPT delivers EBIDTA improvement.

Rallis enhances Agri input portfolio & gives pan India foot print

Successful Debottlenecking of Babrala Urea plant.

SWACH Launch, entering Water purification business

3
Steady Financial performance – Strengthening
the Balance sheet

Net Debt/Equity Net Debt/EBIDTA

1.11 1.11
3.93

0.77 0.81
0.66 2.64
2.28 2.09
1.72

05-06 06-07 07-08 08-09 09-10 05-06 06-07 07-08 08-09 09-10

Reduction in Debt: Stronger Balance Sheet

4
 Steady Financial performance - Improvement in
Operational Metrics
TURNOVER ( Rs Cr.) EBIDTA ( Rs Cr.) PBT ( Rs Cr.)
12652
2,002 *1,176
25.4% CAGR, 25% CAGR, 1837
9448 11.6% CAGR,
2.47x 2.44x
1.53x 917 933
748
5763 5982 1,050 601
994
3998 752

05-06 06-07 07-08 08-09 09-10 05-06 06-07 07-08 08-09 09-10 05-06 06-07 07-08 08-09 09-10

Steadily Increasing Turnover, EBIDTA and PBT, driven by Growth, Operational

improvements and better Financial management. Constant focus on value creation

* Includes one time profit on sale of investments

5
Steady Financial Performance – Shareholder Returns

Basic EPS( Rs/Share)

43.51
6.5 % CAGR,
1.28x
27.59 25.61
23.62
19.91

Steady EPS
25000 450
performance, in face of
05-06 06-07 07-08 08-09 09-10 an extremely difficult
400

Stock Price Movement

20000
Business environment
350

300
Tata Chemicals
15000
BSE 250

200
10000
150

100
5000

50

0
I2003 I2004 I2005 I2006 I2007 I2008 I2009 I2010 0

6
 Diversified Product portfolio and Revenue Base (FY 10)

Revenue Breakup - Products Revenue Breakup – Geographies

Others, 8% Other Income,
STPP, 1% 2% Europe,
Cement, 14%
2%
Urea, 12% Africa, 2%
Asia, 67%
Soda Ash, 45%

America,
17%
omplex Fertilizers,
24%
Expenditure Breakup
Materials, 52%
Vacuum Salt, 7%

Retention, 4%

Dividend, 2%
Employee, 8%
Exceptional
Items, 2%
Financial , 4% Distribution, 12%
Taxes, 3% Overheads, 13%

7
Building relationship with customers and creating value
through Brands

Consumer
Products

Chemicals
Business
Agri
Business

8
 Favourable global trends, combined with TCL strengths
for Future growth

Future Global trends Tata Chemicals’ Strengths

1. Growth driven by Emerging economies
2. Focus on Sustainability
3. Rising Population & decreasing per
capital Arable land in India to fuel
growth/Innovations in Agri Sector
1. Global Low cost position and a Balanced
portfolio in Soda Ash
2. Strong Farmer connect and leading position
in Crop nutrition and crop protection in India
3. Strong consumer connect through
Household products (Salt/Swach)

Our Sustainable way of growing will ensure inclusive growth taking care of
interests of all our stakeholders

9
Growth by capitalizing relevant skills in each
business and exploiting linkages

Living Brand and Market Leadership in

Essentials National Branded Salt player,
New Entrant in Water
purification and Fresh produce
Existing products.
Entry into newer segments for
masses based on linkages with
Farm and Industry Essentials

Industry Leadership position in Bulk

Essentials Low Cost, Balanced Soda Ash
portfolio, Global resource
Ownership
Chemicals through operational
Excellence.
Exploit linkages for entry in niche
segments

Farm Integrated Agri Player, Capturing

Essentials Presence in Crop Nutrition,
Crop protection and Agri -
Services
the growth in Agri value chain
Entry into Technology/Knowledge
based value added products and
services
Leverage relationship with farmers
to develop Unique Agri Solutions

10
Opportunity across the value chain in Indian Agri
sector, linkage from Farm to Household
Procurement
33.7%

Processing
35.7%

Logistics
11.0%

Services
7.3%
Total Indian Agri
Value Chain
Agri Inputs Branding/Retailing ~ USD 316 bn
10.5% 1.8%

Data Source – Mckinsey Study 11

 Rising Food Demand, combined with limited arable land
availability, to drive productivity improvements in India
Food demand to grow with rising population and increasing India already has 2nd largest arable land..
awareness of nutrition needs
Arable land as %
Arable land of total land
Food Demand Million hectares Percent
Million metric tonnes

1.9x USA ~174 ~18

850
~160 ~49
440 India
~122 ~7
Russia
China ~103 ~15
2007 2020 ~59 ~7
Brazil
India has one of the lowest productivity across developed . . . and given competing uses, land under cultivation cannot
and developing markets increase significantly
Agriculture productivity across countries
Agriculture productivity across Countries (Kg/Ha)
Kg/ha
Permanent crops:
12,000 Growing demand for 7%
10,000
Paddy fruits and horticulture
9,500 Wheat

9,000
8,000
Maize
Residential
19%
7,000
(Rapidly
6,000 6,200 Arable land
6,000
5,000 4,800
growing 49%
4,000 4,000 populations)
3,300
2,900 2,900
3,000 2,750
2,000 Forestry: 25%
Environment
0 regulation
Egypt USA China World average India
100% = 329 million hectares

Data Source – ICRIER; NSSO, Ministry of Statistics, Mckinsey Study 12

 Estimated Indian Agri sector estimated to grow to
~ $648 bn in 2020 from ~ $ 316 bn today

PROCESSING & RETAIL

$ 648 bn
700
Processing and Retail
Processing Branding/
Produce Procurement Retailing
600
Agri Inputs
$ 316 bn $ 40 bn
500 356
USD bn

PRODUCE PROCUREMENT
400 $ 316 bn

Logistics Procure
300
128 ment

200 219 $ 69 bn $ 150 bn

152.5
100 AGRI INPUTS
71
36 648
Agro
0 Agri
Chem & Seeds Retailing Services
2010 2020(E) Equipment
Fertilizers

$ 50 bn $ 3 bn $ 15 bn $ 3 bn $ 1 bn
2020(E) Values

Data Source – Mckinsey Study 13

Rising incomes and linked Consumption Growth provide
opportunity for growth in Household consumption
Rising Disposable Incomes in India Consumption Growth in India
$ 1,107.92
$ 1647.20
per capita
per capita

$ 1076.99 $ 745.79
per capita per capita

2010(F) 2014(F) 2010(F) 2014(F)

Opportunity for Sustainable growth by meeting demand for

masses through products backed with technological and
business model Innovation

Data Source :EIU 14

 Emerging economies driving Soda Ash growth, Global
presence to a key strength in meeting demand
Soda Ash demand growth linked to World GDP growth Emerging Economies to drive growth

World 25 China 22.6 m MT 0.01

60000 57.02 m MT 80,000.00 18.4 m MT

Millions
20 0.01
14.3 m MT
50.25 m MT 15
70,000.00 $ 7,450 bn
50000 $ 4,908 bn 0.00
10
44.13 m MT $ 68,701 bn 0.00
60,000.00
5 $ 2,779 bn
40000 0 0.00
$ 57,937 bn 50,000.00
2006 2009 2012(F)
30000
$ 49,154 bn 40,000.00
3.5 India 3.m MT 2,500.00
3
30,000.00 2.65m MT 2,000.00
20000 2.5 2.2 m MT
2 $ ,132 bn 1,500.00
20,000.00
Soda Ash1.5
Demand
10000 60000 $1,296 bn 1,000.00
80,000.0
1 $ 958 bn 57.02 m MT
10,000.00
GDP (USD0.5
Bn) 500.00

0 0.00 0 50.25 m MT 0.0070,000.0

50000
2006 2009 2012(F)
$ 68,701 bn
2006 2009 2012(F) 44.13 m MT
60,000.0
40000 $ 57,937 bn
50,000.0
$ 49,154 bn
Focus and grow in 30000
Select emerging markets while maintaining 40,000.0
Global Position in Soda Ash.
30,000.0
20000
20,000.0
Data Source; IMF , EIU , Harriman
15
10000 Chemsult report
Sustainability at the core of Tata Chemicals –
Environmental stewardship, Economic value and Social capital

Community
Development
Safety Environment,
Climate Change

Sustainability
Network

Operations - Technology,
waste reduction Innovation

16
Committed to Climate change initiative

4 CDM projects registered and 44,942 mt

Certified Emission Reductions (CERs)
earned so far

Carbon conscious Growth

Opn. Carbon Abatement

2009 2015 2020

Reduce in-plant specific emissions

TCO2/mt products

Grow existing businesses in a carbon

conscious manner

17
 CSR Efforts
Enriching the quality of life of people and impacting communities

Livelihood Support & promotion

• Rural Enterprise Development
• Okhai Handicrafts promotion
• Uday – Rural BPO
• Self- help groups & Group Enterprise

Health, Education, Infrastructure

• Swasthanagn
• Divya Dristi (Eye Camps)
• AIDs Awareness
• Medical Camps
• Brick paved tracks
• Infrastructure support

18
 CSR Efforts
Caring for the environment

Natural Resource Management

• Water & Salinity Ingress Management
• Integrated Agriculture Growth
• Land Reclamation
• Pond Management

Environment Conservation
• Mangrove Plantation
• Bio-diversity Reserve
• Save the Whale Shark Campaign
• Lion Conservation
• Coral Reef Regeneration

19
Thank You

20