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Welcome

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Goodlass Nerolac Paints Ltd

Analyst Meet3rd May 2005

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Company Snapshot

Head Office Lower Parel, Mumbai

Founded in 1920

No. of Branches 66

Manufacturing Locations

Lote, Chennai, Ahm., Jainpur, & Bawal (Commissioned on 18/3)

Customer Base Over 11500

Employees 1959 (Including Group Cos.)

FY 05 Group Revenue

1163 Cr

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Group Companies

Goodlass Nerolac Paints Ltd. Mumbai

Industrial, Automotive & Architectural Coatings

Nipa Chemicals Ltd.Chennai

Pre-Treatment Chemicals

Chemguard Coatings Ltd.Chennai

High Performance Coatings

Polycoat Powders Ltd.Mumbai

Powder Coatings

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Presentation Sequence Performance Financials Road Ahead

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Performance

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Paint Industry Growth expected to be 14% with

Industry size of Rs7750Cr. Organized sector doing better with

15% growth and market size of Rs5400Cr.

Architectural business benefited by high growth in housing sector

Industrial business riding high on growth in Automobile business

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Revenue Growth-GNP

684 708791

9251069

0

200

400

600

800

1000

1200

2000-01 2001-02 2002-03 2003-04 2004-05

CAGR 11.8%

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Industrial Business Initiatives Acrylic CED lines Export of Acrylic CED New Business Value Engineering Color Centre Marketing Cell Focus on Job Coating Business for PC

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Decorative Business Initiatives

Project Disha- Strategy building exercise Focus on Key Segments

House Hold Auto Refinishes Wood Finishes Large Commercial

Brand building New Advertising films

Consumer scheme-HDD Contractors’ CRM program Making channel responsive Profitable Mix/ New products

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Manufacturing Excellence Started in August 2003 at Lote & extended to Jainpur

& Chennai in 2004 to set in process of continual improvement in:

Manufacturing standards Employee involvement Skill sets of employees

Using Tools like Six Sigma & TPM Resulting into reduction in Factory level losses

6000 New ideas implemented OEE (Overall Equipment Efficiency) introduced to

measure asset utilization led to: Reduction in breakdowns by 25% Improvement in OEE by 33%

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Manufacturing CapacityLocation

STATE

Lote

MAH

Jainpur

UP

Vatva

GUJ

Chennai

TN

Bawal

HARYProducts Decorative

IndustrialDecorative Industrial

Industrial Decorative Industrial

Industrial

PC, PTC

Annual

Capacity

31000

MT

61000

MT

9000

MT

17000

MT

20400

MT

Certification QS- 9000

ISO- 14000

OHSAS- 18001

QS- 9000

ISO- 14000

OHSAS- 18001

QS-

9000

ISO-

9002

-

Total Installed Capacity 138400 MT

Capacity utilization 03-04 65%

Capacity utilization 05-06 56%( 65% without Bawal)

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Awards & RecognitionsAward Location AreaGreentech Foundation Award- Gold/ Silver Jainpur/ Lote Safety

NITIE Lakshay 2004- Bronze Supply Chain SCM

DSIR National Award R&D ACED

Best Vendor Awards from:Gabriel, MUL, HMSI, Eicher Motors

Industrial Marketing

Consumables

Toyota Motors Nipa Chemicals/ GNP

Quality & Cost

Association of Business Communicators of India (ABCI)

Web Site & Environment Report

Certificate of Merit/ Commendation

Desh Bandh Paper (Maya Ram Surjan Trust)

Best Visual Impact

Goody Vision – Internal Magazine

India’s Best Managed Company- Business Today/ A.T. Kearney

Corporate Best Managed Company

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Financials

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Highlights Turnover of over Rs1069Cr., up by 16% PBT at Rs. 137Cr., up by 55% Net Profit at Rs. 92Cr, through improved

performance in all businesses (59%) EBIDT of 14.9%, up by 42% EPS high at Rs36.05, up by 59% (Effective

increase after Bonus) Market Cap of Rs.1350, almost doubled Dividend rate 115%

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Market Cap

138 184237

678

1350

0

200

400

600

800

1000

1200

1400

'00-01 '01-02 '02-03 '03-04 '04-05

(Fig. In Rs. Crores)

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Demonstrated Impressive Position(Creating Value for Stakeholders)

Customers

Employees

Shareholders

Society

Technologically superior coatingsServiceValue EngineeringIndividual Development- DC/ Trg.Creating a positive climateFollowing standards of CGConsistent returns

CSR activities in select areasCSR & Environment Reports

Suppliers Joint development/ ResearchReliability Program

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Road Ahead

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Road Ahead En cash on housing growth Retain leadership in Industrial & PC Enhance Brand visibility

Reach to Media Reach to Analysts Reach to customers

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Growth Drivers

New Products in Architectural coatings Wood finishes business Alternate channel for rural marketing Brand building Influencers’ management & Demand generation

activities Increase Service Efforts in Industrial business Technology leadership Ride on ancillary export business New lines Powder coating business in white goods industry

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Concerns Volatile Growth pattern of Automobile

business Rising pressures on pricing from

Industrial customers Rising Raw Material prices Inflation affecting interest rates

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Outlook Industry growth of 10-11% Inflationary trends in raw material

prices (R/M)

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Decorative Paints Walls  

Interior  

Exterior

Woods

Metals

Industrial Paints

Automotive Coatings

General Industrial Coatings

High Performance Coatings

Powder Coating

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Nerolac Paints comes to your doorstep through Nerolac Home Stylers. With Nerolac Home Stylers you can rest assured that the painting of your home will be a hassle free experience.

Nerolac Home Stylers provides professional help in providing product consultancy and color consultancy. It delivers a high quality job through its trained and experienced painters under the supervision of Nerolac supervisors. Also Home Stylers gives a 1 year warranty on the job executed by us.

 

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How Does it Work: Contact Nerolac Home Stylers

by calling at toll free number

•He will guide you on the available product range and also suggest a product suiting your requirements.• He will be equipped with professional color tool that will help you make a correct color choice.•He will suggest the correct painting system to ensure durability of paint.•He will give you an estimate for the entire painting job and also indicate the timelines for completing the job.•He will get the trained and experienced painters to execute the job.•He will supervise the job from time to time to ensure quality service.•On completion of the job he will hand over the warranty certificate to you

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Future Prospects….

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Case Facts : The Indian Paints industry Rs. 6600 crores.

Asian Paints –Market Leader( 44% Share)

Wood Finishes market Rs. 300 crores 1. Solvent-based and Water-based 2. Matt and Gloss 3. Spray-on and Brushable

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Types of Wood Finishes and their Market Share in India

Wood Finish Market in India

10%

30%

12%

48%

PU

Melamine

Alkyd

Lacquers &SpecialityProducts

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Water Based PU Wood FinishesAdvantages : Environmentally safe Brushable Extra training not

essential No odour (associated

with Solvent ) Not hazardous to health Does not yellow over

time

Disadvantages : Not as durable as

Solvent More Expensive Less protection from

moisture

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Current and Potential Competition

Current Competition:

Sheenlac ,Pidilite , Sirca , Linea Coats, ICA, MRF Tyres

Potential Competition:

Goodlass Nerolac, ICI Paints, Berger Paints

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Pricing:Type of Wood Finish Cost to the customer

(Labour+Material)

1) French polish Rs. 10 per square feet

2) Alkyd Rs. 15 per square feet

3) Melamine Rs. 30-40 per square feet

4) PU (solvent based) Rs. 80-120 per square feet

5) PU (water based) Rs. 120-150 per square feet

6) Polyester Rs. 200 per square feet

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Thank You