Transcript Slide 1

THE INSTITUTE OF MANAGEMENT CONSULTANTS OF INDIA
13th National Convention
SME – Going Global
IFGL REFRACTORIES LIMITED
Kolkata
ABOUT THE GROUP
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S K Bajoria Group headquartered in Kolkata
IFGL Refractories Limited, the flagship
company – engaged in manufacture of
specialised refractories for the steel industry
Other interests include - Insurance &
Reinsurance Broking, Third Party Administrator
for health insurance for domestic as well as
overseas and manufacture of Ceramic Eye ball,
hip joint and dental powder.
DATES OF INCORPORATION
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Indo Flogates Ltd (INDO)
: January 8, 1979
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IFGL Refractories Ltd (IFGL) : November 22, 1989
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INDO amalgamated with IFGL : April 1, 1999
Erstwhile INDO FLOGATES LIMITED
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Incorporated on January 8, 1979
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Jointly promoted by Flogates Limited of UK
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Started manufacturing facilities with Slide
Refractories and systems for teeming of steel
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Diversified its product base by adding new products –
Furnace
Gate
Valve
Systems
&
Refractories,
Spray/Gunning Mass, Purging Refractories & Systems,
and many others.
Gate
IFGL REFRACTORIES LIMITED
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Incorporated on November 22, 1989
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In technical collaboration Harima Corporation of Japan –
which was subsequently merged with Krosaki
Corporation to form Krosaki Harima Corporation
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For manufacture of Continuous Casting Refractories and
Tap hole sleeves used in the Steel industry – started
manufacturing in February 1993
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Set up as Import substitute project when the duties were
over 110%
SHAREHOLDING PATTERN
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Indian Promoters
- S K Bajoria Group
Foreign Promoters
- Nissho Iwai Corporation, Japan
- Krosaki Harima Corporation, Japan
Others - Public
No. of Equity Shares
Face Value of Equity Shares
Current Market Price
-
34610472
Rs.10/Rs.87/-
: 57.95%
: 9.90%
: 4.57%
: 27.58%
RANGE OF PRODUCTS
ISOSTATIC PRODUCTS
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Ladle Shroud
Sub Entry Nozzle/Shroud
Monoblock Stoppers
Tundish Nozzle
Magnesia Carbon Taphole Sleeves
FLOW CONTROL REFRACTORIES
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Ladle Slide Gate Refractories
- Plates, Nozzle & Well Block
for the Flocon, Interstop and Krosaki System
GAS PURGING REFRACTORIES
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Purge Plug & Seating Block for the Ladle
TECHNICAL TIE-UPS
PRESENT
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Krosaki Harima Corporation, Japan
(subsidiary of Nippon Steel)
Central Glass and Ceramic Research Institute, Kolkata
PAST
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Flogates Limited (Vesuvius UK Ltd), UK
Magneco/Metrel Inc, USA
Feuerfest Siegburg,Germany
IFGL – EFFECT OF 90’S
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Customs duty being reduced from over 110% to
around 60% and then further around 50%
Rupee devalued twice
Export incentives announced and duty free
imports allowed against exports
Indian as well as Global recession in Steel
New projects and expansions in steel industry
deferred
IFGL – IMPACT
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Started making losses
Erosion of capital to the extent of 65%
Huge interest burden on account of project loan
– average interest cost of over 22%
Interest – around 18% of turnover
Default in repayments & interest payments to
Financial Institutions
IFGL – RESTRUCTURING
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Reduction of share capital to the extent of 65% to wipe off the loss
Avoided being referred or going to BIFR
Promoters bringing further capital to the extent
of Rs.10 crores
Funds utilised to repay the overdue principal and
interest due to FIs
Some portion of interest funded to Equity and
Debentures
OPERATIONS AFTER RESTRUCTURING
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Major operational restructuring and cost cutting
exercise undertaken
VRS for employees
Made small profits till 2002 though the turnover
remained more or less at same levels.
Improved working capital management
Repaid all the loans and became debt free by
31/3/2001
Merged INDO FLOGATES LIMITED – a profit making
company – tax advantages of carried forward loss
IFGL – GROWTH PHASE
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Turnover increased by 63% in 2003, 25% in 2004
and 21% in 2005
Less than 5% exports in 2000
Over 65% exports in 2006
Improved cash flows – interest cost less than 1%
of turnover
Debt Free
IFGL – AREA OF OPERATION
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Over 65% exports
Customers in over 35 countries
Agent network in over 25 countries
Relationship with Mittal Steel
Strong service team to support application of
products
MONOCON - OPPORTUNITY
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MONOCON - a UK headquartered company with
manufacturing facilities in five countries – UK,
USA, Brazil, China and Taiwan
A cash generating company
Ernst & Young, representing the seller
approached us with this offer
Financial DD done by PWC
ICICI Bank UK – support for financing the
acquisition
Acquired on September 10, 2005
SYNERGIES
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Both serve the steel industry
Monocon Products – complimentary to IFGL
products
IFGL exports in over 35 countries. Monocon
exports in over 55 countries
Monocon – strong presence in UK, USA, Southeast Asia
IFGL strengths in India, South Africa, Iran, Turkey
IFGL’s strength in Mittal Steel
SCENARIO-POST ACQUISITION
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First Indian refractory company to acquire
abroad
Truly a Global player – with six manufacturing
bases
Exploring China a little more – additional
manufacturing facilities to take advantage of raw
material and cheap resources
Operational restructuring