MCPI Private Limited. (Formerly MCC PTA India Corp. Private Limited, Materials Chemicals and Performance Intermediaries Private Limited)

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1 MCPI Private Limited (Formerly MCC PTA India Corp. Private Limited, Materials Chemicals and Performance Intermediaries Private Limited) 1

2 AVAILABILITY OF FEEDSTOCK KEY DRIVER FOR GROWTH OF TEXTILE INDUSTRY IN EASTERN INDIA 16 th November,

3 Cotton Scenario - India Source : Cotton Corporation of India Indian Cotton Scenario Area of crop cultivation is restricted. Year on Year Production is also witnessing drop. Per hectare yield of around 560 kg/hectare is still lower against the world average of about kg /per hectare. 3

4 Cotton Vs Virgin Polyester Yarn/Fibre Growth Trend Polyester production will catch up with Cotton production by 2020 CAGR : 7% Polyester growth has strong Co-relation with GDP growth. Polyester is growing in line with GDP. Cotton production on the contrary should be flat. Main drivers for Polyester Growth : - Low Price than Cotton. - Limited availability of Cotton. - Changing Consumer behavior. - Improvement in functional properties of Polyester. Estimated Polyester growth should be 7%. 4

5 Major Raw material for Polyester C 6 H 4 (COOH) 2 C 2 H 6 O 2 PTA 860 Kg MEG 340 Kg Polyester 1 MT Polyester Yarn Polyester Staple Fibre (PSF) PET Polyester Film Drawn Textured Yarn (DTY) Fully Drawn Yarn (FDY) 5

6 TOTAL POLYESTER DEMAND Indian Polyester has witnessed a growth of around 10% in last decade. Polyester Fibre & Yarn contributes to more than 60% of total demand. 6

7 Polyester Price Movement Price Contribution Yarn margin is steadily increasing. Fibre margins remain stable even after capacity expansions. Film margins squeezed because of over capacity, however slowly improving. 7

8 PTA Supply Demand Balance - India India to become balance from 2019, although regional imbalance remains. 8

9 India Polyester Production Map 0.02 MMT Polyester production is heavily concentrated in the West 0.3MMT 0.1 MMT 0.2 MMT 0.2 MMT 0.2 MMT 0.1 MMT 0.5 MMT 1 MMT Mil. Ton 0.7 MMT 3.3 MMT 9

10 Major Polyester & PTA Manufacturers 2.2 MMT DAHEJ (2014) RIL 0.5 MMT PANIPAT IOCL 1.7 MMT HAZIRA RIL MCPI 1.27 MMT Around 0.9 MMT of PTA moving out of East to West and North. PRESENT POLYESTER PRODUCERS CURRENT PTA PRODUCERS 10

11 International PTA/PX Price Trend Huge capacity additions in China Price stabilized although margin remains low. 11

12 MCPI Stable PTA Source in Eastern India 12

13 COMPANY PROFILE Business : Manufacturing and selling Purified Terephthalic Acid (PTA) Capacity : 470,000 tons per annum [Phase I] 800,000 tons per annum [Phase II] Plant Location : Haldia, Purba Midnapore, West Bengal Total Investment : Rs. 1,475 crores (US$ 380 M) [Phase - I] : Rs. 1,962 crores (US$ 400 M) [Phase-II] Turnover : Rs. 5,505 crores ( FY ) Main Raw materials Commercial Operation : Paraxylene (PX ), Acetic Acid (Solvent) : April 2000 [Phase - I] : March 2010 [Phase - II] 13

14 SHAREHOLDING PATTERN MCPI Holdings Limited Mitsubishi Chemical Corporation West Bengal Industrial Dev. Corp % 9% 90.42% Major Group Companies in India Haldia Petrochemicals Ltd TCG Real Estate TCG Digital TCG Life Sciences 14

15 Quantity (KT) PTA Production - MCPI New Plant (HP) commissioned

16 Growth Opportunity Eastern India East India is a big market for polyester makers with demand of almost 1 Million Ton. Bangladesh Polyester Imports from India - Polyester Filament yarn exports to Bangladesh estimated to reach 68 KT in with CAGR 39%. - Also polyester woven fabric export is gradually increasing with CAGR 19%. 16

17 Polyester Consumption by Capacity Wise Source : Office of Development Commissioner (Handloom) Source : Ministry of Textile Technology upgradation Low cost financing To promote Power loom in Eastern Region 17

18 Profitability of Continuous Polymerisation (CP) Project in Eastern India Project : 600 MT/Day CP Plant [200 MT/D each of FDY, DTY, PSF] Price Premise FDY DTY PSF Unit Price (Rs/MT) 123, ,000 82,000 Annual Production (MT) 72,000 72,000 72,000 Annual Revenue ( Rs. Cr) Proforma Profit & Loss Account 100% Utilization 80% Utilization Rs. Cr. Rs/MT Rs. Cr. Rs/MT Total Revenue 2, ,000 1, ,000 COST PTA , ,500 MEG , ,040 Other Variable Cost 183 8, ,486 Fixed Cost 148 6, ,539 Total Cost 1,660 76,857 1,358 78,565 EBITDA , ,435 Depreciation 48 2, ,752 EBIT , ,684 Interest [11% p.a. on Term Loan] 92 4, ,297 PBT , ,387 TAX (30% + 12% S.C.) 194 8, ,858 PAT , ,529 Pay back Period 3.1 years 4.4 years 18

19 Pre-requisite for development of Textile Industry Spinning Infrastructure Required Available in Eastern India : 1) Availability of competitive Raw Material. Weaving Processing Garmenting 2) Developed industrial land and related infrastructure by State Government. 3) Electric Power & Water supply at competitive rates. 4) Incentives from State Government to boost Textile industry in Eastern India. 5) Availability of Skilled and cheap labour. Retail

20 Way Forward India hold huge potential for Polyester Growth. High Population. Low Per Capita Polyester Consumption (around 7kg/capita compared to China 31 kg/capita) Low Wages ( $/Month compared to China of $/Month) Eastern India holds huge opportunity for investment in Textile & Apparel as there is huge demand including Bangladesh. MCPI can support such growth with stable supply of feedstock (PTA). Come & Invest in East 20

21 THANK YOU 21