Sample 1 Information Memorandum
Sample 1 Information Memorandum
GROWTH OPPORTUNITIES IN NON-WOVEN INDUSTRY ABOUT PURE FILTERS PRIVATE LIMITED (PURE)
• Global consumption of Technical Textiles, which are • PURE, founded in 2002, is a leading company in non-
used for their functional properties, than their woven products. It manufactures non-woven fabrics
aesthetic traits, has grown with development and and value-added products using multiple
industrialization. In 2010 it was estimated to be technologies, sells to domestic & global customers.
~23.8 mn tonnes and growing at 4% p.a. Technical
• PURE is led by a polymer engineer & first generation
textiles could be woven (73%) , nonwoven (20%),
entrepreneur, Mr. XXXX XXXX, and backed by an
knitted and other (7%) etc.
expert management team with over 100 years of
• While USA, Western Europe consume with over 23% cumulative work experience.
and 22% of global technical textiles produced
• PURE started with manufacturing of filtration
respectively, China consumes ~13%. The importance
products, and has now produces a range of
of emerging markets (BRICS countries, Middle East,
nonwoven products for filtration (air & liquid),
South East Asia, Africa, Latin America) is rising due to
cleaning & oil absorbents, automotive & in-house
continued industrialization and increasing income.
décor, healthcare & medical, fashion, apparel &
• The Indian Technical Textiles industry has grown to accessories and packaging applications.
Rs. 63,000 crore (USD 11 bn) in 2011-12 from Rs.
• PURE has two manufacturing facilities near Pune in
41,000 crore (USD 8.2 bn) in 2007-08 at 11 % growth
the state of Maharashtra, which is an automobile
p.a. It is expected to grow to Rs. 1,58,000 crore (USD
manufacturing hub in India.
29.3 bn) by 2017, with a projected CAGR of ~20%.
• PURE’s clientele includes reputed names such as
• In India, woven technical textiles are more common,
Grupo Antolin, 3M, Visteon, Fleetguard Filters,
with nonwovens amounting to a small 5% of the
Pusula, amongst others. It has entered in long term
overall Technical textiles market (Vis-à-vis global
supply contracts / agreements with many such
average of 20%), this represents low penetration.
clients for their specialty product needs. This
Indian nonwovens market size is estimated to be
provides PURE with significant competitive
about USD 550 mn (1,400 mn sq. m) in 2012.
advantage over its peers in the nonwovens space.
• Strong governmental support, a growing middle
• Significantly, till 2011, combined revenues of
class and a large textile infrastructure already in
company’s client base was about USD 9-10 mn. Over
place provide India with a natural advantage as its
a period of last 2 years, there has been phenomenal
nonwoven industry develops. The industry in India is
shift in the Company’s growth strategy and a
growing in terms of both production and
combined topline of its customer base now totals up
consumption (at 13% p.a.). Yet apart from the large
to USD 900-1,000 mn. This indicates a huge target
MNCs, many foreign nonwoven producers have yet
market for its products.
to establish themselves in India.
• In 2007, the company joined hands with I- Ventures,
• Amongst durable and disposable nonwovens
a growth capital fund, seeking funds for growth &
consumption in India, durables account for >80%,
expansion. ABC provides inputs to PURE to secure
and are likely to constitute significant percentage in
key strategic, banking relationships and financing
the near term.
arrangements.
• PURE achieved a revenue CAGR of ~20% from FY10
to FY13, with 25% EBITDA margin and about 9% net
margin for FY13.
BUSINESS OVERVIEW
PURE Filters manufactures synthetic nonwoven fabrics This facility, with an installed capacity of 1,000 tonnes
and value-added products. These have specific provides PURE with deep product innovation
functional properties and are used in varied sectors. The capabilities that allow it offer customized solutions to its
foundation of PURE’s business was laid a decade back, in clientele.
year 2002 by Mr. XXXX XXXX, a Polymer Engineer who
In addition to Pimple Jagtap, PURE has set up one more
after working with Reifenhauser, a leading German
facility at Koregaon Bhima, 30 km from Pune for various
nonwoven technology company.
nonwoven converting machines. The Company has a
XXXX started the business of manufacturing team of 55 people, including engineers, managers and
intermediate filter components used in air filtration and skilled workers. The Company is now planning to
HVAC systems. PURE imported nonwoven fabrics, consolidate the manufacturing facilities into one state-
finished them and exported the finished products. The of-the-art facility and targets to have an installed
user industries catered by PURE were Hospitals, capacity of 2,500 tonnes by December, 2013. It has also
Pharmaceuticals, Organized Retail (shopping malls). qualified for Technology Upgradation Fund Scheme
PURE later integrated backwards in the filtration space, (TUFS) scheme of the Govt. of India.
to produce filter fabrics. The business firm was later
In addition to filtration products, it forayed in more
converted to a private limited company in 2008.
nonwoven products with applications for wider set of
The size of Indian Technical Textiles industry was sectors. Aim has expanded to several areas of business
estimated to be Rs. 63,000 crore(USD 11 bn) in 2011-12 apart from filtration like oil spill control, sound
and is slated to grow at a CAGR of ~20% over next 5 Insulation for automotive and diesel engine filtration,
years. Though, the manufacturing of technical textiles in face masks, respirators for healthcare applications. It
India is commoditized. Many nonwoven products are also manufactures filtration products including bags for
imported and there is dearth of indigenous innovation. the bag filters, pleat insert for panel filters, media for air
filtration and air filters.
More recently, PURE has aligned its focus to become a
leading nonwoven products company. Its focus is on PURE’s caters to multitude of industries including
conversion of commodities into innovative products, Automotive, Fashion accessories, Hospitals,
than manufacturing the commodities. In line with this Pharmaceuticals, Retail, offices etc. It exports about
vision, it set-up a Bi-Component melt-blown technology 60% of its products to UK, USA, Australia, Malaysia,
plant in FY 2009 at Pimple Jagtap, near Pune Middle East & Europe. Company’s Net Revenue for FY12
(Maharashtra), first such plant in India. It can was USD 2.67 million at a 10.3% net profit margin. The
manufacture fibers that range from 1 to 15 microns and Company has grown at a compounded annual growth
5 to 500 GSM. rate of 24% since FY10.
PURE’S VISION
“To develop as a premier company in the nonwovens
industry with a focus on producing state of the art
nonwovens using novel technologies and emerge as
India’s premier nonwoven company”. Impurity is a passé, we only look forward to purity
• Inception of business by Mr. XXXX XXXX, with Rs.5,000 (USD 100) as capital,
FY 2003 with an aim to provide quality nonwoven fabrics to industries in filtration for
domestic as well as international markets
FY 2005 • First company in India to start manual converting for filtration products
FY 2006 • Set-up their own building and manufacturing facility for fabrics
• Set-up India’s first automated facility to convert nonwoven fabrics into filter
FY 2007
pockets
FY 2009 • Installed India’s First Bi-Component Melt-blown Line installed and commercial
production started
PURE’s manufactures nonwoven fabrics and products While filter media and oil absorbents make up around
using multiple technologies. These products have 80% of PURE’s net sales (40% each). Other products
applications across various industries as identified in including face masks, respirators contribute the
the Product Matrix below. balance.
NON-WOVEN CONVERTED
ENGINEERED MEDIAS GOODS (PRODUCTS)
7. ACCOMPLISHED MEDIAS
PURE has developed synthetic medias as per new EN 779-
2012 standards
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PRODUCT PORTFOLIO
L I Q U I D F I LT R AT I O N – P R O D U C T D E TA I L S
1. SPUN CARTRIDGES
Aquasorb is the latest development in nominal rated
meltblown filter cartridge design. It is produced with 100%
pure FDA complaint polypropylene with continuous grade
density. Meltblown manufacturing method is used for
improvement of mechanical strength and steady
maintenance of filtering accuracy by 3D polymeric fibrous
structures
Advantages
• High flow rate, low pressure drop and longer life service
• Self bonded with no chemical binder
• Applications – Food and beverage industry, chemical
industry, RO plants, pharmaceutical, etc.
Advantages
• The outer layers of the fiber provide a highly uniform
barrier for final particle filtration
• This construction results in very high dirt loading
capacity, even at a high flow rates
• There are no sewn seams used any of the filtering
layers, thus allowing high filtration efficiencies for fine
particles
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PRODUCT PORTFOLIO
L I Q U I D F I LT R AT I O N – P R O D U C T D E TA I L S
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PRODUCT PORTFOLIO
OIL ABSORBENTS & WIPES
3. LAMINATED ABSORBENTS
• These sorbents are non-linting, tough and durable.
They offer extreme softness and drapability. These
are used where soft and drapable Melt-Blown
sorbents are required. They have higher durability
which in turn reduces cost. These are best used for
rough and/or irregular surfaces. These pads or rolls
are perforated for easy and exact use. Available in
heavy and medium weights.
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PRODUCT PORTFOLIO
OIL ABSORBENTS & WIPES
5. HAZARDOUS MATS
• Hazmats are ideal for responding to spills with
unknown liquids. These pads and rolls will absorb
virtually all acid and base liquids. These products are
quickly deployed and recovered in hazardous spill
applications. They are available in Fine Fiber and
Sonic Bonded formats. These pads or rolls are
perforated for easy and exact use. Available in
heavy, medium and light weights.
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PRODUCT PORTFOLIO
OIL ABSORBENTS & WIPES
Characteristics Utility
• Excellent absorbency and quick drying property due • Pharmaceutical Industry (Class IV)
to fine fiber structure • Electronics Industry
• Melt-blown wipes quickly absorb large quantity of • Chemical Industry
moisture rapidly because of capillary action resulting • Cleaning of optical products such as eye glasses,
from fine pores inside the product. Besides, their glass, mirror, camera etc.
fast drying speed enables convenience in use. It also • For removing contamination of accessories such as
has superior cleaning power. gem, precious stones
• We can offer these wipes in sheet and rolls form. • For removing pollutants of computer, monitor,
Perforation and Slitting service is also available. telephone, mobile phones
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PRODUCT PORTFOLIO
AUTOMOTIVE INTERIORS & IN-HOUSE DÉCOR
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PRODUCT PORTFOLIO
H E A LT H C A R E
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PRODUCT PORTFOLIO
GARMENTS
Advantages
• Light weight hence reducing overall weight of the
product by 40 to 50% against traditional felt
materials to achieve the same warmth
• Water repellant & Non-Allergic
• Extremely soft and has excellent draping quality Utility
• Highly insulating • They are used as thermal insulating materials in
• Breathable hence doesn’t produce sweat-like feeling jackets, sleeping bags, hand gloves, shoes, and quilts
• Can be machine washed @ 40 degrees Celsius as interlining materials.
Utility
• Thicker materials for furniture industry as well as
quilt manufacturing
• Silica gel packing materials
• Backing layer for various applications
• Used along with scatter coating as fusible materials
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M A N U F A C U T R I N G C A PA B I L I T I E S
P U R E ’ S L O C AT I O N : P U N E
PURE Filters is located at one of the largest and well- Recently, the Chakan - Talegaon belt has emerged as a
developed manufacturing hubs in India. The state of major auto hub with Mahindra & Mahindra,
Maharashtra is highly industrialized state in India with Volkswagen, General Motors, JCB, Bharat Forge,
highest installed electricity generation capacity, largest Hyundai Construction Equipment setting plant here.
number of airports and highest number of Special The Chakan – Talegaon belt has close proximity to Pune
Economic Zones (SEZs) in the country. The state is the city as well as the Pune-Mumbai Expressway.
leading producer of passenger cars, heavy and
The city is long known for its educational facilities and
commercial vehicles in the country. It accounts for
offers highly skilled workforce for various industries. It
approximately 38% of the country’s output of
has also emerged as a preferred destination for global
automobiles by value and Major automobile clusters in
IT companies. Over last decade, many IT clusters have
the state are Pune, Nashik, Aurangabad and Nagpur.
developed around Pune and as a result, real estate &
Pune, is the 7th largest metropolis in India, the construction have witnessed high growth.
2ndlargest in the state after Mumbai. It is located at
around 200 km from Mumbai and is well-
connected(both rail and road) to nearest port,
Jawaharlal Nehru Port Trust (JNPT). Regions around
Pune i.e. Pimpri, Chinchwad, Ranjangaon have evolved
as automotive clusters since early 1990s with leading
automobile players including Tata Motors, Bajaj Auto, PUNE
Force Motors, Fiat, Mercedes Benz, Cummins, Premier
Motors setting up their plants. In addition, several large
auto-component manufacturers and ancillary units are
also present here. MAHARASHTRA
AUTOMOTIVE HUBS AROUND PUNE
Chakan
Talegaon
Ranjangaon
Shirwal
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M A N U F A C U T R I N G C A PA B I L I T I E S
P U R E ’ S FA C I L I T I E S
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M A N U F A C U T R I N G C A PA B I L I T I E S
P U R E ’ S FA C I L I T I E S
Converting Lines
The Company has a range of in-house nonwoven
converting equipment. These allow it to offer value
added customized products to its customers. PURE will
soon commission thermo-bonding and needle-punch
technology at its new facility at Koregaon Bhima. It has
also established scattered coating line, impregnation
line which are essential key converting technologies for
products such as Activated Carbon Medias.
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SHAREHOLDING HISTORY
& S T R AT E G I C PA R T N E R S H I P S
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K E Y R E L AT I O N S H I P S
BASF SE
Licensing Agreement Business Expectations
In 2012, PURE entered into a licensing arrangement PURE will supply fabrics and intermediate converted
with BASF, the world’s leader company in chemicals, for products using STERON ® to clients that will be jointly
a unique patented product called STERON®. STERON ® acquired by PURE and BASF. PURE has accordingly
is useful for manufacturing artificial leather with decided to invest ~Rs. 13.5 crore (USD 2.5 mn) in
improved properties such as moisture permeability Coating Line with a capacity of 1,000,000 sq. meter p.a.
(breathability).
In the near future, at peak capacity, this could go up to
Artificial leather finds application in footwear, Rs. 56 crore (USD 10.5 mn) in terms of potential annual
automobile seats, upholstery, furnishings, sports, order.
apparel, women bags, and a host of fashion accessories
The domestic market size is estimated to be about Rs.
and it is used as a substitute for natural leather. The
3,000 - 4,000 crore (USD 550 to 750 mn) for artificial
products are customized for various applications. It is
leather. Mayur Uniquoters is a leading company with a
available in a very wide price range depending on
capacity of 1.8 million meters and estimated revenue of
application, inputs that goes into it, order size etc.
USD 65 mn in FY 2013. There are other companies like
The Company intends to manufacture coated synthetic Rishabh Velveleen, Vasanti Textiles, Manish Vinyl.
materials like artificial leather by using the STERON®
Potential Customers
technology of BASF. Under the licensing agreement, the
royalty to be paid for coated material is €3 per sq. Automotive
meter. PURE will also pay a lump sum license fee of €
35,000 p.a. to BASF. This agreement is valid for 7 years
About STERON®
STERON® is a new patented transfer coating Fashion
technology. Leather coated with STERON® remains
permeable to air. Practically all natural and synthetic
surfaces can be created on a wide range of materials
with the same permanent color effects i.e. perfect
interpretations of leather surfaces with impressive look
and feel. Intricate designs and quick motif changes are
just as possible as visible and invisible branding. POTENTIAL BUSINESS ANALYSIS (USD mn)
STERON® offers a new dimension of design freedom,
coupled with ecological and economic advantages in
the production for materials used in the automotive
industry for car interior, fashion and accessories 650
industry, upholstery, and high end packaging industry.
10.5
Process of Transfer Coating
Potential Market
6.5
Potential Annual Order
Structuring Coating Laminating Steron®
(Structured (STERON ® (Carrier) Product Initial Minimum Annual
Mould) Coating) Order
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K E Y C L I E N T R E L AT I O N S H I P S
GRUPO ANTOLIN
About Grupo Antolin As per the agreement, Grupo Antolin will order a initial
quantity of 1,000 tons, resulting in a revenue of ~USD
Based in Burgos (Spain) is a full service supplier and
5.5 mn for PURE. PURE targets a potential business of
leading company in design, development and
USD 9-10 mn in near future.
manufacture of multi-technological solutions for
modular automobile interior parts. It focuses on 4 main
functions: Overhead, Door, Seat, Lighting. POTENTIAL BUSINESS ANALYSIS (USD mn)
It ranks 55th amongst the most important suppliers in
the automotive industry worldwide, and has more than Other Potential Clients
100 plants and 22 technical-commercial offices in 25
450
countries. Directly or indirectly, Grupo Antolin products
feature in practically every car in the world.
9.5
Business with PURE
Potential Market
PURE has entered into a 2-year business agreement 5.5
with Grupo Antolin to supply fabrics for headliners. Potential Near Term
PURE has accordingly decided to invest ~USD 750,00 in Business (Grupo)
Needle Punching Line.
Initial Order Value
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K E Y C L I E N T R E L AT I O N S H I P S
COACH, INC
About Coach
Coach, Inc. is a marketer of fine accessories and gifts for PURE also targets a potential business of over USD 2.4
women and men. Its product offerings include women’s mn from Coach India, in the near term.
and men’s bags, accessories, footwear, jewelry,
watches and fragrance. It sells its products through
~1,000 department and outlet stores (in US and over 20 POTENTIAL BUSINESS ANALYSIS (USD mn)
other countries), catalogs, and its website. It also runs
more than 830 retail and factory outlet stores in North Other Potential
America, Japan, and China. Its revenues for 2012 were (Fashion) Clients
over USD 4.7 billion. 650
Business with PURE
Coach will source breathable leather fabrics and 2.4
intermediate converted products using STERON® for its Potential Market
Bags, wallets. PURE plans to invest ~USD 2.5 mn in a 0.8
Coating Line with a capacity of 1,000,000 sq. meter p.a. Potential Near Term
PURE expects initial business of USD 0.8 mn from Coach Business (Coach India)
India with an order quantity of around 65,000 sq. meter
Initial Order Value
3M COMPANY (3M)
About 3M PURE estimates 3M will place product orders for 350
tons initially, resulting in a revenue of USD 1.8 mn for
Based in Minnesota in US, 3M is global innovation
PURE. PURE targets a potential annual order of USD 9.3
company that has operations in more than 70
mn from 3M India.
countries, with its products sold in nearly 200 countries.
It employs 88,000 people globally.
It produces over 55,000 products, including adhesives,
POTENTIAL BUSINESS ANALYSIS (USD mn)
abrasives, laminates, passive fire protection, dental
products, electronic circuits & electronic materials, Other Potential Clients
medical products, car care products (such as sun films, Corona Bus
polish, wax, car shampoo, exterior treatment, interior 90
and under chassis rust protection), and optical films.
9.3
Business with PURE
Potential Market
PURE has entered into a 4-year business agreement 2.8
with 3M India to supply various nonwoven products for Potential Near Term
automotive. PURE is investing ~USD 1.3 mn in new Business (3M)
Melt-blown (Staple Fiber insertion) Line for supply of
the products to 3M. Initial Order Value
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K E Y D I F F E R E N T I AT O R S
O P E R AT I O N A L A D VA N TA G E S & I N N O VAT I O N S
ISO – 9001
Over last 5 years, PURE has transformed from a small 2008
converting shop into a focused Non-woven Products Certified
company with approvals from key global names and a fully
integrated high-end manufacturing line in place. This Star Export Ashrae 52-2
provides PURE with significant operational advantage vis- House Status – American
à-vis competition. It usually takes a few years to develop (in process) Standard
markets and receive approvals from large MNC clients.
Over next few years, PURE plans to evolve its product CERTIFICATIONS
/ AWARDS
matrix and diversity its customer base across industries. It
plans to move from a pure filtration products company to CRISIL SME
supply to automotive and hygiene industries and in the Rating : EU779-
long run, even to apparel and fashion players. Above Eurovent
Average for standards
The global nonwovens sector is extremely competitive 2011-12
and requires continuous innovation to survive. Companies Gold Trophy,
Entrepreneur
with superior R&D capabilities, market knowledge and -ship from
high-end technology that quickly offer high quality, novel PlastIndia
products are able to maintain their margins. PURE has Foundation
consistently demonstrated its innovation capabilities with
a capable management team and technological set up
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O R G A N I S AT I O N S T R U C T U R E
PURE has a staff strength of ~55 people. KA (COO) and average age of [---] and drives its product customization
PP (Director, Marketing & Product Development) report and product innovation. In line with its growth strategy,
directly into Mr. XXXX XXXX. Cumulative experience of PURE is planning to strengthen the Research &
management along with Dr. NV (Advisor) and Mr. CC Development (R&D), Quality Assurance, Project
(Strategic investor) is ~100 years. Management Finance & Accounts teams further.
PURE’s management team is relatively younger with
Mr. XXXXX
Human Resource
• Admin Officer: 1
Store Manager
Mr. XXXXX
Bus. Dev. Manager
(Needle-Punching) • Sales Coordinator: 1
Mr. XXXXX
Director(Products, Marketing)
Marketing Manager
(Gen. Products)
Purchase Manager
Mr. XXXXX
Company Secretary
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MANAGEMENT BIOS
KEY MANAGERIAL PERSONNEL
He has a Bachelors degree in Engineering in Polymer He is a highly experienced and qualified executive
Science from Maharashtra Institute of Technology, manager with over 3 decades of experience at various
University of Pune. He has over 13 years of rich work management levels in manufacturing Industry, of which
experience in marketing of filtration products at local over 20 years are spent in leadership roles
and international levels.. In 1998, XXXX joined German
company Reifenhauser, which is engaged in He has proven capabilities of turning around, non-
manufacturing of nonwoven filter products. XXXX, a profitable businesses. He has excellent management
first generation entrepreneur, started the business of skills and experience in identifying and eliminating the
manufacturing and promoting intermediate filter obstacles in organic growth by team building,
components used in air filtration and HVAC systems in leadership and excellence. His professional experience
2002 which later became PURE Filters. spans across marquee corporates like TELCO (now Tata
Motors), Alfa Laval India Ltd., Indo Schottle Auto Parts
It is XXXX’s vision, passion for polymer products and Pvt. Ltd. and Bran Engineering Private Ltd.
customer-oriented approach that has taken PURE to
new heights. He has been instrumental in forging new He holds a Bachelors degree in Mechanical Engineering
partnerships, bringing latest technologies for the from University of Nagpur, and has also completed
Company and building a global client pool. He drives the Management Development Program from IIM-
strategic decisions at PURE and steers the company in Ahmedabad. He also holds a Green Belt in Six Sigma
the capacity of Managing Director Lean Management from Crane University
He has a Bachelors degree in Engineering in Polymers Dr. AB is a world class professional in the field of fiber
from University of Pune. He also holds a Masters in sciences with over 35 years of experience in research.
Plastics Engineering from University of Massachusetts, He is a PhD. from University of Delaware in material
Lowell (UMass, Lowell), USA sciences, Master in Chemicals Engineering from
University of Delaware. He is a Graduate from UDCT,
He has 14 years of experience, including 6 years in USA Mumbai University. Currently he is an advisor and
in packaging, disposable medical devices, and specialty mentor to Aim and helps Aim in establishing and
applications such as insulation tapes for sub-sea oil developing new technologies. He has served various
drilling. He developed three products for sub-sea companies like Reliance, Du Pont and others in senior
application at various depths. Earlier, he also led the positions.
exports project team at Tata Auto Plastics Systems
Limited. He has handled projects for customers like
Ford – Germany, John Deere. Since 2008, he has been In addition, PURE receives continuous strategic
leading the Marketing & Product Development team at inputs from the founders and management I-
PURE. Ventures
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T EC H N I C A L T E X T I L ES &
N O N - WOV E N I N D U ST RY
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TECHNICAL TEXTILES: OVERVIEW
GLOBAL CONSUMPTION TRENDS
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TECHNICAL TEXTILES: OVERVIEW
INDIAN MARKET
India vs. World, the Need for Product Manufacturers India Growth Outlook and Needs of the Sector
In many developed countries (e.g. USA and Japan) The Indian Technical Textiles industry has grown to Rs.
technical textiles account for over 35% of the textile 63,000 crore (USD 11 billion) in 2011-12 from Rs.
industry’s output as against 19 % for China and 5 % for 41,000 crore (USD 8.2 billion) in 2007-08 at 11 %
India. growth p.a. 1. It is expected to grow so fast as to be
worth Rs. 1,58,000 crore (USD 29.3 billion) by 2017,
In India, owing to overall increase in income-levels and
with a projected growth rate of ~20%.
corresponding rise in living-standards, the domestic
consumption is growing. However, unlike the At the same time, India also has competitive advantage
conventional textile industry in India, the technical to be developed as an export oriented supply
textile industry is an import intensive industry. Though (production) base, with availability of low cost skilled
consumption is high, many products like sanitary labour.
napkins, diapers, wipes, protective clothing, webbings
for seat belts are imported to a very large extent. Regulatory Government Policy
Hence, the need for low-cost domestic manufacturing
of these consumer products is increasing exponentially. Government of India has allowed 100% Foreign direct
investment (FDI) in the textiles sector through the
Indian technical textile players are primarily active in automatic route.
the clothtech, packtech and sporttech sectors and
limited to commodities. They have very little presence Additionally, Government has taken various initiatives
in high-tech, R&D intensive segments. These segments to promote the growth of this industry including
include downstream conversion industries, use of Technology Upgradation Fund Scheme (TUFS), Scheme
commodities to manufacture of value-added products. for Integrated Textile Park (SITP) and Integrated Skill
Development Scheme (ISDS). Further, Export Oriented
Units (EOUs) that are set-up in Special Economic Zones
Players in Domestic Market
(SEZs) can avail additional tax exemptions
Over years, a few large multinational companies like
A major support scheme has been the launching of the
Ahlstrom, Johnson & Johnson, Du Pont, Procter &
National Technology Mission for Technical Textiles by
Gamble, 3M, SKAPs, Kimberly Clark have set up their
the Honorable Prime Minister of India, to be
units in India. There are some domestic players like SRF,
implemented during the 11th5-year plan to promote the
Entremonde Polycoaters, Kusumgarh Corporates,
development of the technical textile industry base in
Garware Wall Ropes, Century Enka, Techfab India, on
India with a budget of USD 170 million.
the woven and knitted side. On the other hand,
Supreme Nonwovens, Obetee Textiles, Pacific Non In order to develop the nonwoven technical textiles
Woven, Vardhman, Unitex, Alpha Foam are large (NWTT) sector, Government has also allocated funds for
players on the nonwoven side. development of four Centers of Excellence(CoEs) in
Technical Textiles. The upcoming CoEs and those
Currently, this segment is highly unorganized , and the
established very recently, are for
size of units that manufacture ‘products’ varies to a
large extent. There is significant number of small scale 1. Non-wovens & Medical(Ichalkaranji, Maharashtra)
units manufacturing products. Although there are 2. Sports (Mumbai, Maharashtra)
various large players present, the production of certain 3. Composites (Ahmedabad, Gujarat)
goods is still concentrated in the small scale segment
4. Industrial Applications (Coimbatore, Tamil Nadu)
like canvas tarpaulin, carpet backing, woven sacks, soft
luggage, zip fasteners, stuffed toys, fabrication of
awnings, canopies and blinds etc.
Source: Ministry of Textiles, India and FICCI-Wazir Advisors-Ernst &
Young Knowledge joint paper
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NONWOVEN PRODUCTS
M A N U FA C T U R I N G P R O C E S S
Basic concept of making a nonwoven fabric is to convert in case of felt), with an adhesive, or by interlocking
fiber directly to high performance fabric without using them with serrated needles such that the inter‐fiber
conventional processes i.e. spinning, weaving, friction results in a strong fabric. Nonwovens can be
processing. Fabric is manufactured by putting small single use (disposable) products or durables.
fibers together in the form of a sheet and then binding
This diagram represents Supply chain of Non-wovens
them either through thermal bonding, mechanically (as
Carding Melt-Blown
Raw Materials (Filaments /
Films) SMS
Parallel Laid Cross Laid
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N O N W O V E N S M A N U FA C T U R I N G
M E LT - B L O W N P R O C E S S
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N O N W O V E N S M A N U FA C T U R I N G
NEEDLE-PUNCHED PROCESS
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N O N W O V E N S M A N U FA C T U R I N G
THERMO BONDING PROCESS
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NONWOVENS: OVERVIEW
GLOBAL & INDIAN TRENDS
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NONWOVENS: OVERVIEW
INDIAN TRENDS & KEY GROWTH DRIVERS
Nonwovens Consumption in India by Technology Few global nonwoven multinationals are present in
India. While Supreme Nonwovens, Obetee Textiles,
Growth Pacific Non Woven, Vardhman, Unitex, Alpha Foam are
Technology (Tonnes)
(07-12) large nonwovens players in India, Supreme group
Carded Thermal/Resin Bonded 10,540 5.9 dominates the production by domestic players with a
Needle-punched 38,000 10.5 turnover of ~USD 40 mn in FY 2010.
Spun-laid (incl. Spun-bond PP, In India, nonwovens are mainly manufactured through
23,200 15.9 Spun-Bonding. It has adequate (~50) manufacturers of
PE & Melt-Blown)
roll goods, but not of high quality, with predominantly
Spun-laced 9,300 High
Chinese, Korean, Taiwanese machinery.
Air-laid Pulp 4,100 High
Wet Laid/Other 507 10.5 Real Opportunity: Conversion in Products
Total 85,647 12.7
While there is an immediate need for the converting
sector in India, it is a highly capital intensive sector with
Following are products that use these technologies need for continuous innovation. The margins are
dependent upon novelty of the fabric and its quality,
Carded Thermal: Interlining, pre-moistened wipes and
which in turn is driven by the production line.
core materials used in baby diapers, adult incontinence
products The industry at present is reluctant to invest in high-end
machinery as the domestic market is not fully
Needle-punched : Automotive interior, carpeting,
established. In addition to continued knowledge of end-
roofing and geotextiles
customers’ usage pattern and market understanding,
Spun Laid: Absorbent hygiene, bedding, upholstered Know-how on converting roll -goods to finished
furnishings, agriculture and medical products is needed. This also includes knowledge on
chemical finishing and formulation developments.
Spun-laced: Medical, pre-moistened wipes and
coated/laminated substrate In the products segment, players need to have novelty
and high quality in their products. Further, owing to its
Air Laid: pulp wipes and absorbent cores in feminine
dependence on high-technology capital intensive
care products and adult incontinence products
assets, high operating efficiency, continuous innovation,
machinery upgrades are extremely critical for survival.
Manufacturing in India
Strong governmental support, a growing middle class PURE’s Positioning
and a large textile infrastructure already in place
For an Indian company to successfully foray in products,
provide India with a natural advantage as its nonwoven
options such as exporting to global B2B clients or
industry develops. The industry in India is growing in
supplying to Indian arms of global nonwoven companies
terms of both production and consumption. Yet apart
(B2B) could be explored. However, this requires a long
from the large MNCs, many foreign nonwoven
time and efforts for approval of products by the
producers have yet to establish themselves in India.
multinational clientele. This is where PURE is
A global company has to understand local culture, offer positioning itself. PURE’s products have been approved
long term commitment, investment for development of by clients like Grupo Antolin, 3M, KCC, BASF. This has
the local market through education and awareness built high entry barriers for competition to follow. This
campaigns and design products accordingly. builds a case for PURE to invest in high-end conversion
lines.
In the domestic market, PURE plans to focus on the
durable nonwovens in the near term.
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B U S I N ES S ST R AT EGY
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B U S I N E S S S T R AT E G Y
Interlinings
Carpet
REVENUES
Backing
Automotive
Durables
Artificial PU Leather
Filters
Industrial
Healthcare
Personal care PURE’s Near Term focus
Wipes
PURE’s Long Term focus
TIME
In the near term, PURE will focus on the following Strategic Customer Tie-ups
industries.
Leveraging its existing client relations to develop new
• Automotive (Filtration, Insulation, Interiors). products for them, will be a priority for PURE.
• Filtration (Air & Liquid) PURE plans to align its focus to the customer-end of the
• Medical technology (Respiratory , Infection control) value chain. This results in more asset efficiency, higher
• Oil absorption, Vacuum cleaner, Interlinings (Full value addition and higher margins. In addition, it plans
products) to establish strategic, long-term tie-ups with both i.e.
global MNCs and large domestic buyers of Non-woven
• Products from the STERON® line
products in these sectors.
It is significant to note that, in addition to filtration,
enhancing focus on the automobile industry, the target Domestic Market Strategy
client list for PURE increases by over 10 times.
In the domestic market, the Company plans to
PURE may remain more export driven in the near term. concentrate on nonwoven durables in line with the
However, it targets to achieve a balanced revenue mix consumption trend in India.
in the long run.
The domestic market for disposable products is still
taking off and may see exponential growth after 5-7
years. Till that time, PURE plans to understand the local
market more closely, enhance its innovation capabilities
and build a foundation for entry in disposables at
appropriate time.
.
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B U S I N E S S S T R AT E G Y
Focus on Conversion & More Asset Productivity PURE’s perceived evolution in the Value Chain
PURE plans to focus on value-added, high quality,
specialty nonwoven products by using high-end
technology oriented conversion. It already has a Synthetic
macro-economic advantage of lower labour costs. It Hepa,
PBT MB,
plans to filter-out supply chain & operational Substrate coatings
inefficiencies.
Converting, trading, services
This business model is significantly different from for Fiberweb products
other Indian / Chinese players, whose margins are
based on higher scale or capacity utilization, Rolled & converted goods for HVAC,
sometimes, at the cost of quality. This will create more Sound absorption
scope for higher value addition and automatically lead
to improve return on assets. Commodity medias for vacuum bags,
oil absorbents and hygiene
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CAPEX PLAN
PURE has a near term capex plan to invest Rs. 39 crore plans to install.
(USD 7.2 mn) over 2 years i.e. FY 2013 - 2014. This
Key Milestones planned for FY 2014
includes capital expenditure towards construction of a
new consolidated facility (land and building), new BASF
STERON® Coating Line (Capacity of 1 million sq. meter Closure of financial year with
Q4 FY 2013 revenues of USD 3.5 million
p.a.), new Staple fiber insertion line (Capacity 1,000
tonnes p.a.), needle punch line (1,000 tonnes).
Purchase new land, Execution
Over 5 years from FY 2014 to FY 2019, it estimates a
of strategic partnership with
further capex of about Rs. 5 crore (USD 0.9 mn) p.a. Q1 FY 2014
Fiberweb Plc, Commissioning of
towards installing various converting lines and
Embossing line
upgrading them. Part of this capex will also go to
significantly augment PURE’s in-house testing facilities. Commissioning of Staple Fiber
PURE’s existing and planned converting lines Q2 FY 2014 Insertion line, BASF STERON ®
specifically include: Ultra Sonic Embossing machine, Line, Mini Pleat Converting Line
Non Woven Cutting Punching Machine For Car Parts,
Mini Pleating And Testing Machinery, Slitting &
Rewinding Ultrasonic, Thermal Bonded pocket Line, Commissioning of Needle-
Q3 FY 2014 Punch Line
Stretch Wrap Packaging Machine, Water Jet Cutting
Lines, Chemical Bonding Lines, Coating lines for
Aluminum and Acrylic coatings, Fluoride Coating and
Activated Carbon Lines Closure of financial year with
Q4 FY 2014
revenues of USD 8 million
Following charts represent the estimated capacity
utilization for some the key lines that the Company
1,000
2,000
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R E V E N U E V I S I B I L I T Y: O R D E R B O O K
Canada Western
Europe
USA
China
Middle East India
Thailand
Malaysia
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S W O T A N A LY S I S
In view of virgin Indian (consumption) market for approvals from large nonwoven MNCs. Its existing fully-
nonwoven products and reluctance of existing Indian integrated facilities and future capex is aligned to cater
manufacturers to enter into the high-end conversion to this clientele as well as offer more value-added
space, PURE has an advantageous position. It has products in near future. Further, it can also explore the
developed the export market for its products with domestic market for nonwoven durables.
STRENGTHS WEAKNESSES
• Fully Integrated facilities with fabric • Funding constraints for setting-up and
manufacturing and converting capacity, upgrading high-end product lines, R&D
complete control over value-chain initiatives and marketing: High cost of funding
• High entry barriers with manufacturing vis-à-vis multinational players
technology, high-end set up in place and • High customer concentration foreseen as
products approved by top global names Grupo Antolin & 3M may account for a large
• Balanced mix: Global & domestic clientele percentage of total revenue
• In-house R&D set up, capable team to drive • Limited access to continued knowledge of the
innovation. Proven innovation capability, as global market (necessary for innovation)
required in the sector • Management bandwidth could be limited in
• Top management has cumulative work view of high operating efficiencies, continuous
experience of over 100 years innovation required to survive in this sector
• Strong profitability, as reflected by operating
margins
OPPORTUNITIES THREATS
• Commoditized nature of Indian Non-Woven • Competition from domestic and large
Technical Textile(NWTT) sector with little international (including Chinese) corporate
presence of domestic players in conversion with deep pocket, who can enter into the
segment (high-tech, R&D intensive) space by acquiring technology: This can
• Value added nonwoven products for large negatively impact capacity utilization and
global clients: PURE can utilize the low margins
manpower cost arbitrage available to an Indian • Impact from price fluctuations in prices of raw
manufacturing base materials
• Tapping the SMS Composites (hygiene) • Scale up Risk: Possible lapses in product quality
segment which is a fast growing in India / continuous innovation leading to lower
• Capitalize on the first mover advantage as utilization of high-end lines
there is no local player to deliver high quality
SMS products
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F I N A N C I A L A N A LYS I S
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HISTORICAL FINANCIALS
HIGHLIGHTS OF THE P&L ACCOUNT
COMMENTARY
Revenue EBITDA
Revenue CAGR of PFPL is ~24% over past two years. However, the company managed to cut the drop in
Company achieved an impressive 43.1% revenue EBITDA margin. It only declined by 2.5% from 27.5% in
growth in FY12. Company also added increased list of its FY11 to 25% in FY12, due to lower operating expenses
esteemed clients during the year, leading to reducing
client concentration which is one of the focus areas for PAT
the company. Company net margin has reduced in line with the gross
margin reduction. As the company is currently under
Gross Profit growth mode, depreciation & interest expenses are
The company’s gross profit margin declined from 41.1% relatively higher and as a result a drag on the net
in FY11 to 33.1% primarily due to change in the product margins.
mix.
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HISTORICAL FINANCIALS
HIGHLIGHTS OF THE BALANCE SHEET
COMMENTARY
Share Capital
The company’s nominal share capital increased by
USD135,000 in FY12 due to fund infusion, resulting in
an increase in securities premium & overall net worth.
Also as a result of this, there is a sharp drop in the RoE
% for FY12. The RoE reduced from 33.3% in FY11 to
16.3% in FY12. Also the debt to equity ratio dipped to
1.5x in FY12 from 2.0x in FY11.
Loan Funds
As the company is an expansionary phase, it has levered
its balance sheet to meet part of the planned capex.
Also company has borrowed funds to meet its long
term working capital requirements.
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FINANCIAL PROJECTIONS
PROFIT & LOSS TRENDS
8.0
2.7 3.0
1.7 1.9
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
0.0 0%
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
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FINANCIAL PROJECTIONS
PROFIT & LOSS TRENDS
0.0 0%
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
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FINANCIAL PROJECTIONS
B A L A N C E S H E E T & R AT I O S T R E N D S
2.0
1.7
1.5
1.1
0.8
0.6
0.4
0.3 0.2
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
41.0%
33.3%
27.5%
24.0%
21.7%
19.7%
16.2% 16.3% 17.6%
12.7%
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
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A N N E X U R ES
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1: GLOSSARY OF TERMS
LIST OF ACRONYMS USED
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2: HISTORICAL P&L ACCOUNT
D E TA I L E D
USD Million
Particulars FY10 FY11 FY12
Net Revenue [A] 1.72 1.86 2.67
Raw Material & Consumable 0.72 0.77 1.38
Power & Fuel 0.08 0.09 0.07
Other Manufacturing Cost 0.21 0.23 0.33
Total Manufacturing Expenses [B] 1.01 1.10 1.78
Gross Profit [C = A – B] 0.71 0.76 0.88
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3: HISTORICAL BALANCE SHEET
D E TA I L E D
USD Million
Particulars FY10 FY11 FY12
Share Capital 0.05 0.05 0.19
Reserves & Surplus 0.55 0.87 1.49
Shareholders Funds 0.60 0.93 1.68
Term Loan 0.56 0.49 0.99
Working Capital Loan 0.31 0.47 0.53
Unsecured Loans 0.66 0.91 0.63
Loan Funds 1.54 1.87 2.15
Deferred Tax Liability 0.06 0.11 0.13
Total Liabilities 2.19 2.90 3.96
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4: FINANCIAL PROJECTIONS
D E TA I L E D P & L S TAT E M E N T
Sales 1.86 2.67 2.99 8.04 15.50 17.53 20.16 22.98 25.73
Net Revenue 1.86 2.67 2.99 8.04 15.50 17.53 20.16 22.98 25.73
Growth 8% 43% 12% 169% 93% 13% 15% 14% 12%
Cost of Sales
Raw Matrial (Incl. wastage) 0.77 1.38 1.56 4.22 8.26 9.33 10.79 12.36 13.93
Increase in Stock - - -
Materials Consumed (A) 0.77 1.38 1.56 4.22 8.26 9.33 10.79 12.36 13.93
Power & Fuel 0.09 0.07 0.09 0.31 0.57 0.65 0.77 0.90 1.03
Labour Cost (Manpower) 0.14 0.25 0.29 0.35 0.42 0.50
Packaging Cost 0.06 0.12 0.14 0.18 0.23 0.28
Other Manufacturing Cost 0.23 0.33 0.38 0.64 1.32 1.58 1.91 2.30 2.70
Total Direct Expenses (B) 0.32 0.40 0.47 1.16 2.26 2.66 3.22 3.85 4.52
Cost of Goods Sold (A+B) 1.10 1.78 2.03 5.38 10.52 11.98 14.00 16.21 18.44
Gross Profit 0.76 0.88 0.96 2.66 4.97 5.54 6.15 6.76 7.29
Margin 41.1% 33.1% 32.3% 33.1% 32.1% 31.6% 30.5% 29.4% 28.3%
Personal Expense 0.12 0.12 0.13 0.36 0.41 0.47 0.54 0.62 0.72
Administrative Expenses 0.14 0.10 0.10 0.30 0.35 0.39 0.42 0.46 0.50
Total Operating Expenses 0.25 0.22 0.23 0.65 0.76 0.86 0.97 1.08 1.21
EBITDA 0.51 0.67 0.74 2.00 4.21 4.68 5.19 5.68 6.08
Margin 27.5% 25.0% 24.7% 24.9% 27.2% 26.7% 25.7% 24.7% 23.6%
Depreciation 0.09 0.23 0.26 0.52 0.84 0.93 1.02 1.11 1.21
EBIT (Operating Profit) 0.42 0.44 0.48 1.48 3.37 3.75 4.17 4.57 4.87
Margin 23% 17% 16% 18% 22% 21% 21% 20% 19%
Interest Expense 0.12 0.17 0.16 0.28 0.59 0.56 0.47 0.39 0.35
Interest Income (0.04) (0.06) -
Profit Before Tax 0.34 0.34 0.32 1.20 2.78 3.20 3.70 4.17 4.52
Margin 18% 13% 11% 15% 18% 18% 18% 18% 18%
Income Tax (Current Tax /MAT) 0.03 0.06 0.08 0.24 0.56 0.64 0.74 0.83 0.90
Profit After Tax 0.31 0.27 0.24 0.96 2.23 2.56 2.96 3.34 3.61
Margin 17% 10.2% 8.2% 11.9% 14.4% 14.6% 14.7% 14.5% 14.0%
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4: FINANCIAL PROJECTIONS
D E TA I L E D B A L A N C E S H E E T
Shareholders' Funds
Share capital 0.05 0.19 0.19 3.19 3.19 3.19 3.19 3.19 3.19
Reserves & surplus 0.87 1.49 1.74 2.69 4.92 7.48 10.44 13.78 17.39
Shareholders Funds 0.93 1.68 1.92 5.88 8.11 10.67 13.63 16.96 20.58
Loan Funds
Term loan 0.49 0.99 1.98 4.08 3.11 2.15 1.20 0.85 0.85
Working capital loan 0.47 0.53 0.56 1.23 2.35 2.66 3.06 3.50 3.92
Unsecured Loans 0.91 0.63 0.49 0.35 0.35 0.35 0.35 0.35 0.35
Loan Funds 1.87 2.15 3.03 5.66 5.81 5.16 4.61 4.70 5.12
Deferred tax liability 0.10 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13
TOTAL SOURCES OF FUNDS 2.90 3.96 5.08 11.67 14.05 15.95 18.36 21.79 25.83
APPLICATIONS OF FUNDS
Fixed assets
Gross block 1.90 3.31 4.18 11.53 12.45 13.38 14.30 15.23 16.16
Less: Accumulated depreciation 0.17 0.39 0.65 1.17 2.01 2.94 3.96 5.08 6.29
Net block 1.73 2.91 3.53 10.35 10.44 10.43 10.34 10.15 9.87
Capital WIP - - - - - - -
Investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net current assets 1.17 1.04 1.55 1.32 3.61 5.52 8.02 11.64 15.96
TOTAL APPLICATIONS OF FUNDS 2.90 3.96 5.08 11.67 14.05 15.95 18.36 21.79 25.83
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4: FINANCIAL PROJECTIONS
D E TA I L E D C A S H F L O W S TAT E M E N T
CASH FROM OPERATING ACTIVITIES 0.51 1.48 2.24 3.66 3.93 4.27 4.59
CASH FLOW FROM INVESTING ACTIVITIES (0.88) (7.34) (0.93) (0.93) (0.93) (0.93) (0.93)
CASH FLOW FROM FINANCING ACTIVITIES 0.69 5.69 (0.08) (1.22) (1.02) (0.92) (0.27)
NET CASH GENERATED 0.32 (0.18) 1.23 1.51 1.98 2.43 3.39
OPENING CASH BALANCE 0.13 0.45 0.27 1.51 3.01 4.99 7.43
CLOSING CASH BALANCE 0.45 0.27 1.51 3.01 4.99 7.43 10.82
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5: COMPETITIVE LANDSCAPE
NON WOVENS INCLUDING NEEDLE PUNCHED
SUPREME GROUP
• Founded in 1987, it is the largest and most • Their production of Synthetic Floor Covering was~
diversified nonwovens group in India. It operates 520,000 sq. meter in 2010
through group companies, Supreme Non Woven • Client base is mainly dominated by automobile
Industries Private Limited (SNIPL) (Erstwhile Bhilad giants like Maruti Suzuki, Toyota Motors, Tata
Textile Industries Pvt Ltd (BTI)) and Supreme Treaves Motors, Hyundai, General Motors, Mahindra. FY
Private Limited (STPL). The group is promoted by 2010 revenues were estimated to be USD 2.4 mn
Mr. Mohan Kavrie, who is a 1st generation
entrepreneur and a technocrat (B. Tech from IIT,
Mumbai an M.S. from USA) OBEETEE TEXTILES
• STPL is a Joint Venture of Supreme Group (51%) with • Established in 1998, it is focused on Non Woven
Establissement Treves SA, France (49%). It is a Fabrics and Technical Textiles. It has capacity to
leading Automotive Tier-1 supplier of interior trims produce more than 25 million square meters of non
and NVH solutions. STPL is focusing on innovative woven textile products p.a.
uses of reclaimed and recycled materials to develop
• It manufactures floor coverings, automotive felts,
eco-friendly and cost-effective components.
industrial filters and geo textiles.
• It provides offers products (including carpets,
insulation (noise & heat), door linings for automobile USD Mn Mar ’10 Mar ‘11 Mar ‘12
and industrial filters, garment interlining, geo- Sales 10.50 13.39 N/A
textiles. The Group’s revenues for FY 2010 were EBITDA 2.72 3.28 N/A
estimated to be USD 40 mn EBIT 1.76 2.17 N/A
EBIT Margin 16.80% 16.20% N/A
BAJAJ NON WOVENS Net Profit/(Loss) 0.33 0.54 N/A
Net Margin 3.20% 4.00% N/A
• Bajaj Carpet Industries Ltd a closely held public
limited company formed in the year 1985. It
manufactures various carpets including nonwoven,
UNIPRODUCTS INDIA LTD (UNITEX)
machine tufted, machine tufted graphic loop pile,
printing loop pile, printed cut pile, wall to wall, etc. • Is a leader in the Indian carpets market and is a
favored supplier of most domestic carpet retailers.
• In 1994, it installed a Tufting unit which was only 2nd
Tufting unit in India to cater to the growing demand • Mr. Ashwan Kapoor (MD), started the production of
from corporates, hotels and multinational crowded carpets in 1986 and later forayed into
companies. The company is located close to the chemical connection coverings. Innovation and
northern automobile manufacturing hub. technological advancements in the manufacturing
techniques have given it a leadership position. Its
• Its major OEM customers include Maruti Suzuki,
products includes carpet tiles, cut pile carpets,
Tata Motors, Hindustan Motors, Hyundai Motors
modular carpets, loop pile carpets, molded carpets
and trimmings, automotive carpets.
HITKARI HITECH FIBRES LTD • Revenues in FY 2009 estimated to be USD 22 mn
• Founded in the year 1985. Their products include • Apart from carpet dealers, client in automotive
Leading manufacturer and supplier of automotive industry include Maruti Suzuki, Honda, Fiat,
carpets, insulation felts to major automobile Renault, Nissan, Tata Motors, Mahindra, Ford,
manufacturers as well as nonwoven fabrics such as Toyota, Ashok Leyland.
blankets, carpets, upholstery, floor coverings, etc.
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5: COMPETITIVE LANDSCAPE
A R T I F I C I A L L E AT H E R ( B A S F S T E R O N ® L I N E )
MAYUR UNIQUOTERS
• It is a listed company, incorporated in 1994, • In the FY 2012, its synthetic leather segment
manufactures artificial leather (PVC Vinyl). It has a revenue was USD 11.6 mn as compared to USD 12.1
market cap of USD 84 mn. Its products are mainly mn in the previous year. The segment EBIT was USD
used in automotive, footwear’s, garments, luggage, 0.6 mn in FY 2012 vs. USD 0.7 mn in FY 2011.
sports goods, upholstery.
• The company possesses fully equipped physical,
FENOPLAST LTD
chemical and product development laboratories
capable of testing nearly all the properties of • It is a public listed company (Market Cap USD 2.4
artificial leather for different segments and mn) incorporated in 1975 and is mainly engaged in
applications. The company’s existing capacity is 1.90 the manufacturing of PVC leather cloth and PVC
million linear meters p.m. It plans a capex of ~USD 9 Films. It has 2 transfer coating lines from Stork
mn, to increase its capacity to 2.50 million linear (Holland) and RCM (Italy), for manufacturing coated
meters p.m. by FY 2014. PVC leather. It also has a calendar line imported
from Batten field Extrusiontechnik (Germany), for
• Mr. Suresh Kumar Poddar, Managing Director, is
manufacturing PVC Films. Nearly 30 % of its volumes
widely recognized for his pioneering triumph in the
produced are exported to ~28 countries.
synthetic leather industry India.
• It is an approved supplier for automobile majors like
• Mayur’s clients include names like Ford, Chrysler,
Suzuki India, Hyundai Motors, Mahindra &
Suzuki India, Honda Motorcycles & Scooters, Bata,
Mahindra, Daimler Benz, Toyota Motors and also
Liberty, Paragon etc. It is also on verge of adding
other clients like Bata, Titan Industries, Pfizer, Merck
global auto majors like BMW & Mercedes and
General Motors • Historical Financials:
• Historical Financials: USD Mn Mar ’10 Mar ‘11 Mar ‘12
USD Mn Mar ‘10 Mar ‘11 Mar ’12 Sales 26.69 32.65 36.35
Sales 30.59 46.19 59.11 Operating Profit 2.70 2.67 3.28
Operating profit 4.94 7.43 9.87 Operating Margin 10.10% 10.00% 12.30%
Operating Margin 16.20% 16.10% 16.70% EBIT 2.50 2.57 2.94
EBIT 4.65 7.11 9.48 Net Profit / (Loss) 0.41 0.46 0.50
Net Profit / (Loss) 2.72 4.46 6.19 Net Margin 1.50% 1.70% 1.90%
Net Margin 8.90% 9.70% 10.50%
JASCH INDUSTRIES
• It is a listed company, incorporated in 1985, and has
division that manufactures PU/PVC coated fabric /
synthetic leather products (Market cap USD 2.6 mn).
• Almost 75% of its products are used mostly by the
footwear industry. Their client list includes names
like Bata, Liberty, Reebok, Lakhani and Nike. The
company is also making effort to increase its product
usage in industries such as automobiles and general
purpose upholstery, sports goods and garments.
Note: Market Cap based on trading data as on February 25, 2013
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5: COMPETITIVE LANDSCAPE
A R T I F I C I A L L E AT H E R ( B A S F S T E R O N ® L I N E )
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5: COMPETITIVE LANDSCAPE
S M S H Y G I E N E , M E LT B L O W N & S P U N B O N D
ALPHA FOAM INDIA papers are used in a many day-to-day products, such
as filters, wipes, flooring, labels, and tapes. Based
• It was incorporated in 1991 and manufactures non- upon its unique fiber expertise and innovative
wovens, spun-bond, spun-lace and SMS products. It approach, the company has a strong market position
is involved in plastic products ranging from PU, in several business areas in which it operates. Main
automobile sheets, plastic sheets, vacuum form geographic markets in terms of net sales are Europe
parts, PE foam and its products. It has developed a (62%), North America (23%), Asia Pacific (7%), South
unique, first-of-its-kind process to make PE foam by America (6%) and the rest of the world (2%).
using carbon dioxide instead of LPG as the blowing
agent. The foam made by this process is of a • Its products find applications in industries such as
superior quality compared to other Indian products. Building & Utilities, Food & Retail, Household &
Consumer, Medical & Healthcare, etc.
• The company is led by Mr. Rajiv Rankav (MD), who
has vast experience of 20 years and has held very
senior positions in the leading Automobile and
FIBERWEB INDIA
Chemical industries.
• Established in 1985, as PVD Plast Mould Industries
Ltd. Its manufacturing activities include mono layer
KT INTERNATIONAL and multiplayer films, garbage bags, carrier bags.
• Established in 1995, it manufactures products like The Company has also established its flagship unit
tarpaulins and has diversified into PP/PE spun bond for Spun Bond Nonwoven Fabrics, being the first of
nonwoven, PP woven sacks / sheets, woven PP its kind in India. It has three manufacturing units
fabric, burlaps, FIBC, PE extruded nets, etc. They including two 100% EOUs.
have introduced PP needle punched geotextiles • Products include
made on state-of-the-art FEHRER Line from
Germany with 6 meters width. Also recently the • Hygiene usage: Cover stock for baby diapers,
company has introduced a new line for making PET sanitary products
Spun-bond Continuous Filament Needle-punch • Agriculture: crop covers, ground covers
Nonwoven on the latest ORV Line from Italy having a
maximum width of 5.6 meters. • Medical: Made-ups, bed linen
• Its current capacity is ~14,000 tons of Fibers and • Others: Filtration media, industrial work clothing,
~6,000 tons geotextiles p.a. head covers, disposable table wipes and mats
• Its products include geotextiles, ground covers, • It has been pioneer of spun bond non-woven fabric
nonwovens, crop protection fabric, weed control production in India. Market Cap is USD 1.67 mn.
fabric, micropure products and adult diapers. They
sell geotextiles in USA, UK, Europe and India. USD Mn Mar ‘10 Mar ‘11 Mar ‘12
Sales 5.59 8.33 8.15
Operating Profit 0.44 0.52 0.54
AHLSTROM FIBERCOMPOSITES INDIA PVT LTD Operating Margin 8.00% 6.30% 6.70%
• Finland based Ahlstrom is one of the world´s leading EBIT 0.11 0.22 0.46
producers of nonwovens. In India, it has its Net Profit/(Loss) 0.07 0.24 0.46
manufacturing facility in Mundra, Kutch (Gujarat) Net Margin 1.40% 2.90% 5.60%
and sales office in Delhi. Its nonwovens and specialty
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6 : P R O D U C T I O N C A PA C I T Y C H A R T
EXISTING MACHINES
Production Capacity
Sr. No. Asset No. of M/C
Per Hour Per Month Unit of Material
1 Melt-blown Line 1 150 90,000 Kg
2 Needle-punching Line 1 50 30,000 Kg
3 Chemical Bonding Line 1 50 30,000 Kg
4 Water filter Line 1 10 6,000 Kg
5 Welded Roll Line 1 25 15,000 Kg
6 Pleating + Lamination 2 40 24,000 Kg
7 Scatter Coating Line 1 50 30,000 Kg
8 Exact Machine 1 17 10,200 Kg
9 Aglo Machine 1 17 10,200 Kg
10 Shredder Machine 1 17 10,200 Kg
NEW MACHINES
Production Capacity
Sr. No. Asset No. of M/C
Per Hour Per Month Unit of Material
1 PU Coating For Textiles 1 120 72,000 SQM
2 Spun-Bond Line 1 500 300,000 KGS
3 Staple Fiber Insertion Line 1 120 72,000 KGS
4 Needle Punch Line 1 250 150,000 KGS
5 Ultra Sonic Embossing 1 60 36,000 KGS
Non Woven Cutting Punching Machine For
6 1 10 6,000 KGS
Car Parts
7 Mini Pleating And Testing Machine 1 20 12,000 KGS
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7: THE SPUNBOND OPTION
THE SPUNBOND PROCESS
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7: THE SPUNBOND OPTION
P U R E ’ S S T R AT E G Y F O R S P U N B O N D
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7: THE SPUN-BOND OPTION
F I N A N C I A L I M PA C T
The absolute profitability is higher in case of running • Average estimated EBITDA margins are 0.3% lower
the business with Spunbond line. However, there is a than 25.5% under the without Spunbond option
slight drop in margins in the Spunbond option,
• Average estimated PAT margins are 0.5% lower than
14% under the without Spunbond option
PROJECTED REVENUES (USD mn)
With Spun-bond
35.8
32.0
28.1 Without Spun-bond
24.4
18.7
25.7
23.0
8.0 20.2
15.5 17.5
8.0
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
4.6
5.7 6.1
5.2
2.0 4.7
4.2
2.0
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
2.3 3.6
3.3
3.0
1.0 2.6
2.2
1.0
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
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7: THE SPUN-BOND OPTION
F I N A N C I A L I M PA C T
While the Spunbond option has slightly higher leverage, The Return on Capital Employed (RoCE) and Return on
the impact is minimal in the long run. Equity (RoE) improve by around 2% in case of including
the Spunbond option
1.2
1.1
With Spun-bond
0.8
1.1 Without Spun-bond
0.5
0.8
0.4
0.3
0.6
0.4
0.3 0.2
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
15.6% 15.2%
13.8% 14.5%
13.3%
8.5%
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
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