Gujarat Alkalies and Chemicals Ltd.

2nd Nov. 2007, Mumbai

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 Company – An Overview

Baroda Complex Dahej Complex

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 Share Holding Pattern as on 30.09.2007
• GACL is An IS-ISO-9001, 14001 and 18001 Company
promoted by the Government of Gujarat in 1973
• Paid up capital of the company is Rs. 734.4 Millions
• The broad share holding pattern is as under :

Shareholders (%)
Institutions 17.23
Non-Promoter Corp. Hold. 13.35
Promoters 36.72
General public / others 26.65
Foreign 6.05
Total :- 100.00

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 Board of Directors
Dr. Manjula Chairperson (Chief Secretary,
Subramaniam, IAS GOG)
Smt. V L Joshi, IAS Principal Secretary( Energy
and Petrochemicals, GoG)
Shri G C Murmu, IAS MD, GIIC Ltd.
Shri G M Yadwadkar Nominee Director of IDBI Ltd

Shri H N Sinor Chief Executive

Indian Bank’s Association
Dr. Sukhdev Scientist

Shri Guruprasad Managing Director

Mohapatra, IAS

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 Highlights of the Company
 Company commenced commercial operations with 37,425 MTA of
Caustic Soda in 1976.
 Increased production capacity of Caustic Soda to 4,00,000 MTA
and changed over to environment friendly Membrane Cell
Technology during 1989 to 1994 – the first Chlor-Alkali
manufacturer to do so
 Added value added products like Sodium Cyanide,
Chloromethanes, Hydrogen Peroxide, Potassium Hydroxide and
Potassium Carbonate, Phosphoric Acid, Aluminium Chloride, Poly
Aluminum Chloride, Chlorinated Paraffin Wax etc.
 Has a basket of 26 products
 Maintaining its leadership in Caustic-Chlorine in the country with
18 % share 5
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 Highlights of the Company
 Company has been maintaining its plants near 103% capacity
utilisation as against 80% Caustic Soda industry average.
 Total income of the Company has reached Rs.10880 Millions.
 Small workforce (1529 employees) with high productivity
(Turnover per employee :- Rs.7.1 Millions as on 31-03-2007)
 Record Accident free days of 1559 at Baroda Complex and 946
days at Dahej Complex as on 31st Oct, 2007.
 Excellent Labour Relationship - Never lost a man day due to
labour relations since inception
 Professional Management - Eminent Board of Directors
 Proximity to both raw material suppliers and end users
 Depreciated plants, significant debt already paid back
 Continuous support of Government of Gujarat
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 Market Share
Product No of players % Share in Total
Market

Caustic Soda 34 18%

Cyanide Salt
Chloromethanes
Potassium Carbonate
Hydrogen Peroxide
Phosphoric Acid
Aluminium Chloride
2 33%
4 20%
2 80%
4 35%
2 50%
5 (Organize) 33%

 Value Added Products are providing dual benefits to GACL

 Hedging GACL against the Cyclical Fluctuations of the
Chlor Alkali Industry
 It is a major player in the value added products
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 Critical Success Factors
GACL scores on most of the critical success factors :
• Supply of Power at Low Cost
• Closeness to Sources of Raw material
• Proximity to Market
• Environment Friendly Membrane Cell Technology
• Integrated Value Added Products
• ERP/IT Driven Business Management
• Professional Management and dedicated employees
• Dedicated Effluent discharge pipelines
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 GACL CDM Projects
 GACL has taken initiatives for the CDM projects since
May 2002.

 Company is the first PSU in the country to get the Host

country Approval for its CDM Projects.

 GACL CDM Projects are based on Fuel Switch Over

and Energy Efficiency. Company has received Rs. 16.56
crores in F.Y.-2007-08 towards CDM Projects.

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GACL v/s Sensex (BSE)

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 GACL - Product Mix

3% 2% Caustic Soda
3%
4% Chlorine
5%
Chloromethanes

7% Phosphoric Acid-85%

Hydrogen Peroxide
52%
Potassium Carbonate
10%
Power

Hydrochloric Acid-
30%
14% Aluminium Chloride

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Sectoral Outlook : Chlor-Alkali
● GLOBAL
 Chlor-Alkali industry is one of the 20 largest chemical
industry in the world.
 Global Chlor - Alkali industry is driven by demand–
supply of Chlorine
● INDIA
 In India, 45% of the chemical industry is dependent on
Chlor-Alkali.
 34 units having Total Capacity 23 lakh MT p.a.
 Average Industry capacity utilisation at about 80%
 Imports of 1.70 lakh tonnes
 Indian Chlor-Alkali industry driven by Caustic Soda.

● The Chlor-Alkali industry is regionalized in terms of demand

and pricing.
● China’s export subsidy of 13% withdrawn w.e.f. July’ 2007.

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 Sectoral Outlook
Chlor-Alkali
● International price of Caustic soda is firming up due to
increase in crude prices. FOB prices in China has touched to
USD 280-290 PMT

● International price of Chlorine is more than USD 300 PMT

● Higher Chlorine prices will result in additional Chlorine

based investment in India and additional export of chlorine
base products.

● GACL is working on long-term Chlorine- Caustic supply

with companies like Lubrizol, Pidilite, GNFC etc.

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 ECU Price Trends
ECU Prices with Caustic Soda Flakes/Prils

23000
22000
21000
Rs/ MT

20000
19000
18000
17000
16000

Ju 7
Au 6

Ju 7
07

07

7
6

7
Au 7
Se 6

N 6
6

Se 7

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7

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pt

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ov
Ju

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Ap
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Jul,06-Oct07

Increasing trend from April, 2007 onwards

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 Future Growth
● Alumina production expected to double
by 2010. Estimated Contri-
Sectors Growth bution
● Textile industry expected to double in (%) (%)
the next 5 years.
Aluminum 10 12
● Chemicals industry expected to grow at
12% - 15% p.a. in the next 5 years. Chemicals 12 9
● Rising literacy levels resulting in the Newsprint,
growth of the paper industry 8 30
Paper

● Average estimated growth of 8.9% in Soaps &

8 14
Caustic Soda. Detergents

● Growth in Paper and Pharma Industries Manmade

9 25
shall increase demand of Hydrogen Fibers
Peroxide & Chloromethanes
Others 10 10
respectively.
Avg growth
● Gujarat leads in Chemical Industry and 8.9
in Alkalies
proposed SEZs.
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Peer Comparison – 2006 - 07
Rs. in Million

Bihar Kanoria Punjab Sr. Rayal.

Co_Name
Caustic GACL Chem. Alkalies Alka.
Net Sales 1430 10448 4301 2017 3780
RMC % Sales 34.2 31.2 46.7 72.5 38.5
PFC %
Expenditure
4.1 21.9 18.8 0.0 25.8

Exp % Sales 54.5 65.7 83.1 87.1 79.2

PBIDT 713 3985 843 263 785
Interest 107 377 264 126 306
Profit After
Tax
338 1866 195 10 181

Equity 233.9 734.4 167.3 205.0 675.0

EPS (Rs.) 14.4 25.4 11.7 0.5 2.7
Book Value
(Rs.)
63.2 117.0 116.2 27.7 25.3

PBIDTM(%) 49.9 38.1 19.6 13.03 20.8

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 GACL – FY07 Key Financials
Particulars H1 H1 Var % FY07 FY06 Var %
(Rs. Crs) (2007-08) (2006-07)

Net Sales 544.13 513.58 5.95 1045 944 11

Operating 208.63 198.03 5.35 399 413 -3
Profit
Interest 14.35 17.68 -18.83 38 39 -3
Tax 13.17 44.81 -70.61 87 97 -10
PAT 133.59 95.34 40.11 187 198 -5
Equity 73.44 73.44 - 73.44 73.44 -
EPS (Rs.) 18.19 12.98 40.14 25.40 26.96 -6
Book Value 134.06 104.00 - 117 96 22
OPM % 38.34 38.56 -.56 38 44 -13

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 NET WORTH OF THE COMPANY
Rs. in Crore
07-08
Particulars up to 06-07 05-06 04-05 03-04
30.09.07
Share Capital 73.44 73.44 73.44 73.44 73.44
Reserves & Surplus 948.63 815.04 649.64 468.41 336.71
Misc.Expenditure to
the extent not (37.60) (29.28) (19.68) (27.44) (28.57)
written off
Net Worth 984.47 859.20 703.40 514.41 381.58
Book Value Per Share 134.06 117.00 95.78 70.05 54.86
Increase in Book
14.58 22.15 36.73 27.69 -
Value (%)
Dividend Paid (%) - 25 20 15 7.50

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 ACCOUNTING RATIOS
S 07-08
r.N Particulars Unit Up to 06-07 05-06 04-05 03-04
o. 30.09.07
Gross Profit / Net
1 % 38.34 38.17 43.69 44.86 35.22
Sales
Profit Before Tax
2 % 26.97 26.18 31.21 29.82 12.66
to Net Sales
Profit After Tax to
3 % 24.55 17.86 20.97 15.98 9.05
Net Sales
Interest Coverage
4 Times 14.54 10.57 10.48 6.78 3.11
Ratio

5 Earning Per Share Rs./Share 18.19 25.40 26.96 19.65 9.08

Cash Earning Per
6 Rs./Share 53.18 49.13 50.81 47.13 23.89
Share

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 ACCOUNTING RATIOS
Contd…
07-08
Sr.
Particulars Unit Up to 06-07 05-06 04-05 03-04
No. 30.09.07
Book Value
7 Rs./Share 134.06 117.00 95.78 70.05 54.86
Per Share
Price Earning
8 Rs./Share 4.51 4.58 5.67 6.82 4.20
Ratio
Debt Equity
9 Times 0.11 0.26 0.53 1.02 1.62
Ratio
Debt Service
10 Coverage Times 1.77 1.13 1.49 1.79 1.10
Ratio
Return on
11 % 27.14 19.25 25.76 25.61 14.92
Net Worth
12 Current Ratio Times 1.57 1.72 1.86 2.62 2.54

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 PROJECTS ON HAND
Project Investment Status
( Rs. Crore)
Projects on Hands
38 TPD Hydrogen 112 Commissioned in July,07
Peroxide (on 100 %)
Aluminum Chloride 50 Expected to start commercial
production in Nov’07.
100 TPD Flaking Unit 11.50 Expected to be commissioned by
December, 2007.
24 MW Wind Farm 122 Expected to be commissioned by
Energy February, 2008.
New Projects under Deliberation
Caustic Soda 400 350-500 TPD
Power Plant 450 90 MW
Hydrogen Peroxide 175 75 TPD (on 100 %)
Total 1320.5

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Likely Increase in Turnover at
current market price
Projects Turnover
( Rs. Crore)
38 TPD Hydrogen Peroxide
50

Aluminum Chloride 50

100 TPD Flaking Unit Balancing Activity

24 MW Wind Farm Energy Saving in Power Cost

Caustic Soda 360

90 MW Power Plant Low Cost Power
75 TPD Hydrogen Peroxide 100

Total 560

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 Future Expectations
● Being a basic chemical an expected growth of
8-9% in consumption.
● Upward movement in ECU prices with
stabilisation of Chlorine off-take.
● Introduction of value added Chlorine based
products.
● Joint ventures / Tie-ups expected to yield
positive returns.
● Future expansions in Caustic– Chlorine and
other products.
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 DISCLAIMER
● STATEMENTS/INFORMATION IN THIS PRESENTATION DESCRIBING THE
COMPANY’S OBJECTIVES, PROJECTIONS, ESTIMATES, EXPECTATIONS OR
PREDICTIONS MAY BE FORWARD LOOKING STATEMENTS/ INFORMATION
WITHIN THE MEANING OF APPLICABLE SECURITY REGULATIONS AND LAWS.
THESE STATEMENTS/ INFORMATION ARE BASED ON CERTAIN ASSUMPTIONS
AND EXPECTATION OF FUTURE EVENTS. ACTUAL RESULTS COULD HOWEVER
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED. IMPROTANT
FACTORS THAT COULD MAKE A DIFFERENCE TO THE COMPANY’S OPERATIONS
INCLUDE GLOBAL AND DOMESTIC DEMAND-SUPPLY CONDITIONS, FINISHED
GOODS PRICES, RAW MATERIALS COST AND AVAILABILITY, CHANGES IN
GOVERNMENT REGULATIONS AND TAX STRUCTURE, ECONOMIC DEVELOPMENTS
WITHIN INDIA AND THE COUNTRIES WITH WHICH THE COMPANY HAS
BUSINESS CONTACTS AND OTHER FACTORS SUCH AS LITIGATION AND
INDUSTRIAL RELATIONS.

● THE COMPANY ASSUMES NO RESPONSIBILITY IN RESPECT OF FORWARD

LOOKING STATEMENTS/INFORMATIONS HEREIN WHICH MAY UNDERGO
CHANGES IN FURTURE ON THE BASIS OF SUBSEQUENT DEVELOPMENTS,
INFORMATION OR EVENT.

● THE STATEMENTS/ INFORMATION HEREIN MAY NOT BE CONSIDERED AS AN

ADVISE OR INVITATION FOR INVESTMENT IN THE STOCKS OF THE COMPANY.
THE INVESTORS SHOULD USE THEIR OWN JUDGEMENT AND DISCRETION
BEFORE TAKING ANY DECISION FOR INVESTMENT IN COMPANY’S SHARES.

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