Construction Chemicals Market – India November 2014
Executive Summary Market
Construction chemicals market stood at INR xx bn in 20-- and is expected to reach INR yy bn in 20--, growing at a CAGR of about z% Growing focus on construction activities in India has led to significant rise in demand for construction chemicals in the Indian market Challenges
Drivers
Drivers and Challenges
Growth in Infrastructure Investment
Low Consumer Awareness
Increase in Urban Housing
Lack of Standards
Rise in Disposable Income
Price Sensitivity
Steady Economic Growth
Unskilled Labor
Continuous FDI Inflow
Trends
Focus on Tier 2 and Tier 3 Cities Use of Silicone-based Chemicals Eco-Friendly Construction Chemicals Rising Compliance with International Manufacturing Standards
Key Players
Competition
Company A
Company B
Company C
Company D
Company E
Company F
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•Macroeconomic Indicators •Introduction •Market Overview •Construction Chemicals - Classification •Major Application Areas •Penetration Rate - Key Segments •Supply Chain Analysis •Major Manufacturing Hubs •Sector-wise Demand •Drivers and Challenges •Trends •Recent Developments •Opportunity Areas •Competitive Landscape •Strategic Initiatives •Appendix CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
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Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn 15
13
d1 c1 b1
12
a1
14
c4 b4 a4
c3 b3 a3
d2 c2 b2 a2
11
Q1
Q2 2010-11
2011-12
2012-13
Q3 2013-14
Q4
Inflation Rate: Monthly % 2 1
p
r q
s
0 -1
t
-2
Jul 2013 - Aug 2013
Aug 2013 - Sep 2013
Sep 2013 - Oct 2013
Oct 2013 - Nov 2013
CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
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Specialty Chemicals – Domestic Market Overview Specialty Chemicals – Market Size and Growth
Market Segmentation Based on Product Type-20--
INR bn x4
a1
y2 Z%
x4
a2
Construction Chemicals Paints and Coatings
x3
Specialty Polymers
a6
y1 x2
a3
Homecare Surfactants Plastic Additives
x1 a5
0 20--
a4
Others
20--e
• Specialty chemicals are high value low volume chemicals used mainly because of its performance improving properties • Global specialty chemicals industry accounts for b% of the global chemical industry in 20-• Indian specialty chemicals industry is expected to reach INR cc bn by 20-- and INR dd bn by 20-• By 20--, Indian cities are likely to contribute p% of the total population and this rise in urbanization will drive the growth of specialty chemicals •Rise in urbanization will boost investments in residential, industrial and commercial sector and increase demand for paints and coatings, specialty polymers, construction chemicals, home care surfactants, paper chemicals, cosmetic chemicals, plastic additives among others
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Construction chemicals cater to demand from diverse projects across different construction sectors Indian Construction Chemicals Market Growth INR bn b4
P%
b3
x4
b2
x1
x2
x3
20--
20--
20--e
x7
x6
x5
b1 0 20--e
20--e
20--e
20--e
Construction Chemicals Market Segments • Focus on the quality and standards of construction has led to a surge in demand for construction chemicals • Construction chemicals industry in India is dominated by the organized segment
Organized
Unorganized
y1
• Top 3 – 4 players operating in the market account for nearly q% of the overall market share • Though use of construction chemicals increases the project by d-e%, these chemicals increases the longevity of the end product and improves performance CONSTRUCTION CHEMICALS MARKET IN INDIA 2014.PPT
y2
6
Drivers & Challenges – Summary
Challenges Drivers Growth in Infrastructure Investment
Low Consumer Awareness Lack of Standards
Increase in Urban Housing
Price Sensitivity
Rise in Disposable Income
Unskilled Labor
Steady Economic Growth Continuous FDI Inflow
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Trends – Summary
Focus on Tier 2 and Tier 3 Cities
Use of Silicone-Based Chemicals
Key Trends Rising compliance with international manufacturing standards
Eco-Friendly Construction Chemicals
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Opportunity Areas – Summary
Opportunity Areas
Gujarat
• •
Madhya Pradesh
West Bengal
Orissa
Indian states are focusing on infrastructure development as the primary vehicle to drive economic growth Emphasis on construction of infrastructure facilities provides a huge scope for the development of the construction chemicals market in India
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Porter’s Five Forces Analysis
Threat of New Entrants
Impact X
Bargaining Power of Suppliers
Impact X
Impact X
Competitive Rivalry
Impact X
Bargaining Power of Buyers
Impact X Threat of Substitutes
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Competitive Benchmarking (1/5) Public Trading Comparables Company A
Company B
Company C
Company D
Market Capitalization (INR mn)
Share Price (INR)
EV/EBITDA (x)
EV/Revenue (x)
PE Ratio
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Public: Domestic Company – Company A Ltd. (1/4) Company Information Corporate Address
Offices and Centres – India
Company A, Street A City B State C
Tel No. Fax No. Website Year of Incorporation Mumbai
Ticker Symbol
Head Office
Stock Exchange
Products and Services Category
Products/Services
Key People Construction Chemicals
Others
Name
Designation
Person 1
Chairman, Managing Director
Person 2
Chief Executive of Manufacturing
Person 3
Director of Legal, Compliance
Person 4
Vice-President of Business and Markets-South Asia
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Public: Domestic Company – Company A Ltd. (2/4) Financial Snapshot Total Income
INR mn
x2
Net Profit/Loss
INR mn
b2
x4 x3
Key Ratios y4 y3
a2 b1 a1
c1
x1 2010
c2
2011
Financial Summary
2012
d2 d1 2013
• The company reported total income of INR ‘d1’ mn in FY 20--, registering an increase of ‘p’% over FY 20-• The company earned an operating margin of ‘x.x’% in FY 20--, an increase of ‘y.y’ % points over FY 20-• The company reported debt to equity ratio of ‘w.w’ in FY 20--, an increase of ‘z.z’% over FY 20--
Key Financial Performance Indicators Market Capitalization (INR) Total Enterprise Value (INR) EPS (INR) PE Ratio (Absolute)
y1 y0
y-o-y change (2013-12)
2013
2012
2011
2010
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
• The company incurred a net loss of INR ‘d2’ mn in FY 20-- as against INR ‘c2’ mn in FY 20--
Indicators
y2
Particulars
Value (dd/mm/yyyy)
Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover Improved
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Decline
13
Public: Domestic Company – Company A Ltd. (3/4) Key Business Segments Agricultural Solution
Key Geographic Segments Plastics
Functional Soln.
Performance Products Chemicals Others p3 x2 x3 x4 x1 y3 y2 y4 y1 p2 z3 z4 z2 c3 c4 c2 z1 b1 a2 a3 a1 c1 b2 b3 b4 p1 20--
20--
20--
20--
India
Foreign
s2
s3
s4
20--
20--
20--
100% 50%
s1
0%
d1 20--
Key Recent Developments Description
News
Overview
• The company is one of the leading chemical companies operating in the global market with around pp production sites around the world • The company’s construction chemicals division, owned by Z Group, operates in India, Bhutan and Nepal
Product Launch
• In Mar 20-- the company launched a new brand K for the construction industry • In FY 20--, the company began the production of direct dyes and launched smart coats for paper coatings
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Public: Domestic Company – Company A Ltd. (4/4)
S
W
O
T
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