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SAKTHI SUGARS LTD.

SAKTHI SUGARS LTD. Kriya… Vidya… Ghyan… Suba…. Analyst Meet Mumbai, April 12, 2006. Structure. Sakthi Sugars – At a Glance Sugar & Allied Business Sakthinagar Unit Sivaganga Unit Dhenkanal Unit Sakthi Soya Sakthi Auto Component Ltd. Operational Highlights Financial Highlights

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SAKTHI SUGARS LTD.

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  1. SAKTHI SUGARS LTD. Kriya… Vidya… Ghyan… Suba…

  2. Analyst Meet Mumbai, April 12, 2006

  3. Structure • Sakthi Sugars – At a Glance • Sugar & Allied Business • Sakthinagar Unit • Sivaganga Unit • Dhenkanal Unit • Sakthi Soya • Sakthi Auto Component Ltd. • Operational Highlights • Financial Highlights • Social Commitments • New Developments • Crystal Ball Gazing

  4. Sakthi Sugars – At a Glance

  5. Vision • To be one of the top 5 producers of Sugar in India • To be one of the top Auto component manufacturers in India • To be a leading producer of Alcohol and allied energy products • To have the best possible alternative power producers in the country • To maximize the trade in Raw sugar so as to maximize the earnings of the company

  6. Business Overview Snapshot • Fourth largest sugar company in India in terms of sugar produced • The largest distillery in Tamilnadu • One of the few fully integrated sugar complexes in the country • Among the first to handle raw sugar processing in the country • One of the lowest cost power projects in the country • Soya unit, one of the first to produce edible Protein • Auto component unit, sole supplier to Indian market

  7. Business Overview Infrastructure • 3 Sugar Units (Sakthinagar – Tamil Nadu, Sivaganga – Tamil Nadu, Dhenkanal – Orissa): Total crushing capacity 13,500 TCD • 2 Distillery Units (Sakthinagar, Dhenkanal): Total capacity of 120,000 litres per day • 2 Co-generation Units (Sakthinagar, Sivaganga): Total capacity 35 MW • 1 Soya Unit (Pollachi – Tamil Nadu): Total capacity 90,000 MT per annum • Auto Component Subsidiary – manufactures critical parts for the Auto industry

  8. Sugar – The Pecking Order *includes sales from other businesses & does not include Shree Ambika Sugars

  9. Sugar & Allied Businesses

  10. Sakthinagar Sugar Division • Capacity of 7,500 TCD • Situated in most favourable climatic zone in the country • Highest quantum of sugarcane crushing in a single unit in the country • Current year crushing target - 22 lakh MT • Capable of operating 365 days in a year • Revenue generation in FY06 to be about Rs. 390 crore

  11. Sakthinagar Distillery Division • Capacity of 90,000 litres per day • Operates 365 days per annum • Capable of producing 50,000 litres of Ethanol per day • Production expected to be at 3 crore litres in FY06 • Revenues expected to be around Rs. 62.4 crore

  12. Sakthinagar Co-generation Division • 32 MW generation capacity • Project cost of Rs. 2.1 crore per MW – lowest in the industry • Commissioned in November 2003 • Total power production per annum will be about 2,650 lakh units and the evacuation to the state grid per annum will be about 170 lakh units • Revenue generation of Rs. 53.7 crore expected

  13. Sivaganga Sugar Division • Capacity of 4,000 TCD; Capable of 360 days operation • Current year crushing will be about 6.5 lakh MT, in addition to 30,000 MT of raw sugar refining • Crushing will reach 10 lakh MT during the next year • Situated near the Tuticorin port, resulting in huge benefits on transport costs on imports and exports • Annual revenues from this unit is expected to be about Rs. 160 crore in FY06

  14. Sivaganga Co-generation Division • Incidental co-generation; Capacity 5.5 MW • Evacuation to the State Grid shall be 18 lakh units in FY06 • Revenue shall be Rs. 0.57 crore

  15. Dhenkanal Sugar Division • Capacity of 2,000 TCD; Operation throughout the year – 180 days of Sugarcane and 180 days based on raw sugar • Positioned in sugar deficient North-East region; Capable of processing 300 tons of Raw sugar daily • Proximity to Paradeep port gives tremendous advantage in terms of transports costs on Imports • Cane crushed during 2006 will be 2.0 lakh MT, Raw sugar refining will be 25,000 MT; Total revenues shall be Rs. 82 crore

  16. Dhenkanal Distillery Division • 30,000 litres per day capacity; Total production for FY06 will be 35 lakh litres • Revenue shall be Rs. 10 crore

  17. Raw Sugar – The Success Story • First company in India to process imported raw sugar • First company in the world to take-up refining of raw sugar in a plantation white sugar factory • All the units are capable of processing imported raw sugar • Better positioning of the units near port locations to take advantage on the arbitrage on the world sugar market

  18. Raw Sugar Processing Data

  19. Sakthi Soya

  20. Factfile • Started as an independent company – now a division • State-of-the-art plant located at Pollachi with a capacity of 300 TPD and 100 TPD edible oil refinery • Has Flash De-solventising System to manufacture high-protein soya flour and a Texturised Vegetable Protein (TVP) capacity of 20 TPD; also produces TVP or soya chunks for the retail market • Shortlisted for supply of food grade edible flour for World Food Programme of UN • Revenues of Rs. 35 crore expected in FY06

  21. Sakthi Auto Component Ltd.

  22. Snapshot • Established in 1983 (as a division of Sakthi Sugars) • Capacity of 2,000 tons of castings per month • Equipped with Flaskless vertical DISA moulding line and Special purpose dedicated Machining Lines • Has sophisticated facilities for R&D • CNC Machine Division has imported equipments for machining rough castings to exacting standards of dimensional castings • Single source supply for critical components to Maruti Udyog (17 years) and Hyundai

  23. OEM Vendor • Has proven track record in providing high value safety critical auto components to leading domestic and global OEMs • First vendor in Asia Pacific to obtain orders from Delphi North America • Further orders obtained from ACI (Renault), GM India, GM Korea and GM Thailand • 30% of turnover from exports, which is likely to grow by 50% per annum

  24. Product Line Steering Knuckles Brake Drums & Discs Exhaust Manifolds Brake Calipers Differential Case

  25. Revenue Mix

  26. Operational Highlights

  27. Operations – Cane Crushed, Sugar Produced & Recovery

  28. Financial Highlights

  29. Performance For Mar 06

  30. Performance (Contnd) • The cane crushing has more than tripled for the 9 months • The margins from Cogen plant has gone up many folds due to absence of fuel cost • The sugar realisation has steeply increased from 16350 per Mt for qtr Mar 05 to 17600 per mt for the Mar 06 qtr • The company had exported 26558 Mts during the qtr on a total sale of 103676 Mts • The realisation on exports was higher by Rs.1000 per Mts and the company will continue to export about 50% of its production in the next one year

  31. Segment-wise Turnover ( Rs Crores)

  32. Segment-wise EBIDTA ( Rs Crores)

  33. Shareholding Pattern

  34. New Opportunities

  35. Raw Sugar Processing • The sugar industry is in the process of decontrol • Sakthi is the first company to start raw sugar processing in India • Location of factories across ports at different sugar price zones gives edge to gain on sugar arbitrage

  36. Ethanol Blending • 5% Ethanol blending with petrol has been made compulsory with effect from 1st October 2003 in nine sugar producing States • Government exploring admixture with diesel • Will save substantial forex • Eco-friendly product : answer of the times • Will lower emission of green house gases – will take to Euro IV faster • To replace use of MTBE as an oxygenate in fuel • To increase demand for alcohol and thereby molasses

  37. Attractive Co-generation Incentives • Electricity Bill 2003 passed to open up power sector • Sugar industry can generate 4,000 MW surplus power by using bagasse as by-product • 10% power in India to come from renewable energy source • Power generation from bagasse comes under clean power • Soft loans to be provided from Sugar Development Fund to encourage co-generation at 4% interest • Power distributors in India have to buy a certain percentage of power from renewable energy source

  38. Social Commitment

  39. Responsibility to Society • The group has established and runs many colleges, polytechnics and schools. • The total number of students in such institutes are around 20,000 • Rural Hospitals are being maintained • The number of patients is around 700 per day • A leprosy eradication programme is run by the group

  40. Responsibility to Society • Many other institutes to deal with physically challenged and elders are being maintained. • The colleges run by the group are ranked amongst the best in the country • A de-addiction center is maintained

  41. Crystal Ball Gazing

  42. Expansion – Elixir for Growth • Rapid expansion on the anvil • Total Capital Expenditure of Rs. 240 crore is planned over the next 18 months • Expansion in sugar business – greenfield (3500 TCD) • Expansion of co-generation capacity by 85 MW

  43. Sugar • New plant with a capacity of 3,500 TCD planned • New unit to have a 25 MW co-generation plant • Capex estimated to be around Rs. 120 crore • Plant expected to be commissioned by March 2007 • Revenue generation in full year of production expected to be in the region of Rs. 200 crore

  44. Co-generation Sakthinagar • The company plans to increase the co-generation capacity by 25 MW taking the total capacity to about 60 MW • The investment expected is about Rs. 60 crore • The expected date of commissioning is June 2007 • The incremental revenues shall be about Rs. 40 crore Sivaganga • Propose to replace existing 5.5 MW incidental capacity with a full fledged 35 MW capacity co-generation unit • Capex expected about Rs. 80 crore • New co-generation unit expected to be commissioned by March 2007 • Additional revenue generation of around Rs. 40 crore expected

  45. Future Guidance • Cane crushing levels are likely to go up to 43 lakh MT by FY08 • Sugar revenues likely to grow by 20% by FY2008 • Power revenues likely to increase by 300% by FY08will triple by FY08 • Auto revenues are likely to grow by 200% by FY08 with the existing order book position

  46. THANK YOU Sarvam Sakthi Mayam

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