Roshan Packages Limited Company Overview

Transcription

1 Rshan Packages Limited Cmpany Overview

2 Upcming IPO: Rshan Packages Limited Transactin Overview Rshan Packages Limited ( RPL r the Cmpany ) is in the prcess f raising capital thrugh listing n Pakistan Stck Exchange ( PSX ). The Cmpany has applied at PSX and is expected t cmmence marketing fr its capital raising prcess pst apprval f PSX and the Securities and Exchange Cmmissin f Pakistan ( SECP ) The prceeds f the IPO wuld be used fr the fllwing purpses: T invest in a new paper mill under a jin-venture with a Chinese partner t manufacture and supply crrugated paper c. 45% f the prceeds utilizatin T mdernize and expand capacity f its existing crrugated and flexible manufacturing facilities c. 45% f the prceeds utilizatin T meet part f the increased wrking capital requirements c. 10% f the prceeds utilizatin PAGE 2

3 Cmpany Overview Backgrund Rshan Packages Limited is ne f the largest manufacturers and sellers f packaging slutins t exprters f fruits and als varius lcal and multinatinal crpratins. The Cmpany has tw principle prduct categries: Crrugated: the Cmpany prduces a wide variety f custmized cartns t package cnsumer gds, fruits, textiles, electrnic appliances, pizzas, etc. Flexible: the Cmpany prduces wrappers fr cnfectinary, biscuits, snacks, ice-creams, detergents, and labels fr PET bttles The Cmpany has tw principle manufacturing facilities ver 16 acres in Sundar Industrial Estate apprx. 40 kilmeters frm Lahre Rshan Packages surces its raw materials frm bth lcal and internatinal markets; it imprts c. 36% f its raw material requirements n which an imprt duty f 21% is applicable. An imprt duty f 20-25% wuld have been paid had the prduct manufactured by Rshan Packages were imprted Financial Snapsht Fiscal Year Ending June 30th PKR in millins Incme Statement Revenue 1,389 2,220 2,740 3,066 3,568 3,622 Grss Prfit EBITDA Prfit after Tax Balance Sheet Nn-Current Assets ,014 1,204 3,184 Current Assets ,462 1,651 1,951 Sharehlder s Equity ,019 1,288 Surplus n Revaluatin ,143 Nn-Current Liabilities ,087 Current Liabilities ,221 1,323 1,617 The Cmpany is part f the Rshan Grup, which als includes Urdu Digest: Pakistan s largest Urdu publicatin cvering science, literature, health, scial and plitical affairs Rshan Enterprises: Pakistan s leading exprter f fresh fruits and vegetables Cash Flw Statement Cash Flw frm Operatins (5) (176) Cash Flw frm Investments (151) (30) (215) (128) (54) (721) Cash Flw frm Financing (234) 696 PAGE 3

4 Prducts Crrugated Flexible Rshan Packages prduces custmized crrugated bxes fr cnsumer prducts, fruits, textiles, electrnic appliances, pizzas etc., flexible wrapping fr cnfectinary, biscuits, snacks, ice-creams, detergents, etc., and wrapping labels fr PET bttles PAGE 4

5 Tp Clients Rshan Packages has a histry f maintaining and develping lng-term prfessinal relatinships with its clients. Out f a ttal f ver 500, mre than 60 clients have been in business with the Cmpany cnsistently fr mre than five years, while its tp ten clients cntributed c. 65% t revenues in FY Client Prducts / Brands Crrugated Flexible Pepsi-Cla Internatinal Lays, Cheets, Kurkure, Wavy Lays, Cheets, Kurkure Ltte Klsn Slanty, Snacker Slanty, Snacker, Ptat Stick, Twich Cntinental Biscuits Tuc, Tiger, Prince Chclate, Ore, Candi, Gala Tuc, Tiger, Prince Chclate, Ore, Candi, Gala Unilever Pakistan Surf Excel, Vim, Liptn, Supreme Sunlight, Vim, Chc Bar, Feast, Jet Spt Chase Internatinal Mandarin - Crnet Fds - Unilever Pakistan Fds Knrr Ndles, May, Rafhan Custard, Crn Oil Ri, Chclate Sandwich, Lemn Sandwich, Sper Knrr Ndles Tapal Tea Tez Dum, Danadar, Green Tea Tez Dum, Tp Liner, Tea Liner Rshan Enterprises Mandarin, Mang, Vegetable - Prime Fruits Internatinal Mandarin - PAGE 5

6 The Packaging Industry Strng Market Share in the Organized Packaging Sectr Small t mid-scale cttage industries accunt fr 45% f the packaging market A few large players in the rganized sectr accunt fr 50% f the packaging market Imprts make up 5% f the ttal packaging market Rshan Packages has a leading market share amngst the prducers f crrugated bxes in the rganized sectr and is the secnd largest firm prviding flexible wrappings. Care Packages 5% Crrugated Nasir Packages 4% Merit Packages Limited 7% Flexible Al-Aziz Packages 7% Zahid Packages 8% Bulleh Shah (Packages Limited) 29% Dynamic Packages (Private) Limited 10% M&F Cmmercial 7% Saima Packages (Private) Limited 11% Packages Limited 54% Imtiaz 9% Packaging Slutin 9% Century Paper & Bard Mills 11% Rshan Packages 11% Rshan Packages Limited 18% Surce: Infrmatin prvided by the management f RPL based n their best estimates f the respective cmpanies verall prductin capacities PAGE 6

7 The Packaging Industry (Cnt.) End Market Dminated by Fruit and FMCG Packaging prducts in Pakistan are mstly cnsumed by the Fast Mving Cnsumer Gds ( FMCG ) and Fruit sectrs Rshan Packages drives c. 94% f its sales in FY 2016 frm thse tw sectrs Industry Sales by End Market Rshan Packages Sales by End Market (FY 2016) Others 6% Textiles 5% Hme Appliances 5% Others 24% Tbacc 8% Dairy 10% Fruit 14% FMCG 34% Fruit 28% FMCG 66% Surce: Infrmatin prvided by the management f RPL based n their best market estimates PAGE 7

8 Strng Grwth in Fast Mving Cnsumer Gds Grwth in the Fast Mving Cnsumer Gds ( FMCG ) sectr is driven by: Increase in the Pakistani middle class Strng grwth in Pakistani Grss Dmestic Prduct ( GDP ) Larger increase in verall cnsumer spending in Pakistan 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% Pakistan Grss Dmestic Prduct (% Grwth) ,000 5,000 4,000 3,000 2,000 1, Glbal Middle Class (Millins f Peple) , , F 2030 F Surce: McKinsey & Cmpany Research Ttal Cnsumer Spending in Pakistan and Annual Grwth (PKR billins) Nrth America Eurpe Central and Suth America Asia-Pacific Sub-Saharan Africa Middle East & Nrth Africa % 13% 12% 11% 1.0% F F 2018F F 10% Surce: Wrld Bank Surce: Statista, The Statistics Prtal PAGE 8

9 Shrtage f Excess Capacity Affecting Revenue Grwth Rshan Packages has been facing capacity shrtage that has affected its ability t grw sales The Cmpany has decided t underg expansin t increase capacity, diversify its prduct fferings and increase peratinal efficiency It increased capacity in Flexible divisin during last quarter FY 2016 and will rll ut remaining expansins in FY 2017 and 2018 Achieved 27% YY revenue grwth in first quarter FY 2017 Revenues and Plant Capacities Utilized 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, % 75% 50% 25% Revenue CAGR : 41% : 23% F 2018 F 2019 F Revenue Capacity (Crrugatin) Capacity (Flexible) 0% Nte: the Cmpany increased capacity in its Flexible plant during 4Q16, and thus its capacity utilizatin fr FY 2016 isn t indicative f prductin ver the year PAGE 9

10 Expansin f Crrugated Plant Rshan Packages has invested in an state-f-the-art crrugatr frm BHS Crrugated, a wrld-class German-based manufacturer f crrugatrs and crrugated rlls with ver 50 years f experience The machinery has already arrived at Rshan Packages pant and will be erected and cmmissined in phases during FY 2017 and FY 2018 The crrugated plant s prductin capacity will increase frm 30,000 metric tns t 60,000 metric tns during third quarter f FY 2017 and will subsequently increase t 90,000 metric tns during first quarter f FY 2018 The expansin will cst c. PKR 940 millin, ut f which Rshan Packages has already invested c. PKR 360 millin. Part f the prceeds frm the equity raising shall be used fr this purpse PAGE 10

11 Expansin f Flexible Plant Rshan Packages has invested in the fllwing wrld-leading manufacturers f printing machinery: Extrusin machine frm WindMller & Hlscher, Germany Rtgravure printing machine WindMller & Hlscher, Germany Wax cating machine frm Utec, Germany The extrusin machine and the rtgravure printing machine were installed during furth quarter f FY 2016 and have increased the flexible plant s prductin capacity frm 3,600 metric tns t 10,800 metric tns The wax cating machine will be installed during FY 2017 and will subsequently increase prductin capacity t 12,240 metric tns The expansin will cst c. PKR 1,350 millin, ut f which Rshan Packages has already invested c. PKR 905 millin. Part f the prceeds frm the equity raising will g twards this purpse PAGE 11

12 Rshan Sun Ta Paper Mills (Private) Limited Rshan Packages has initiated backward integratin by establishing a subsidiary Rshan Sun Ta Paper Mill t supply crrugated paper The paper mill is a jint-venture with Shangdng Yngtai Paper Mill, a Chinese manufacturer f crrugated paper Shangdng Yngtai has paper prducing capacity f 120,000 metric tns and is in prcess f increasing capacity t 600,000 metric tns; it recrded revenues f PKR 4.4 billin (RMB 281 millin) in FY 2015 Shangdng Yngtai is part f the Shangdng Yulng Real Estate Grup, a diversified cnglmerate with interests in real estate, cnstructin, water and pwer, cncrete, recreatin, and trade. Rshan Sun Ta will have a capacity f 137,000 metric tns and is expected t be peratinal by FY 2019 Rshan Sun Ta is expected t prvide c. 30% f its prduce t Rshan Packages and the rest t the market in FY 2019 The paper mill is expected t cst c. PKR 4 billin, with 60% expected t be financed thrugh debt and 40% thrugh equity Rshan Packages will wn 60% f the equity share while Shangdng Yngati will retain the remaining 40% f the equity share Shangdng Yngtai has subscribed its prtin f the equity at an 83.33% premium PAGE 12

13 Rshan Sun Ta Paper Mills (Private) Limited (Cnt.) The paper mill will prvide the fllwing benefits: Ease shrtage f high quality crrugated paper available t Rshan Packages Cater t the rising demand f crrugated paper in the dmestic market The paper and bard industry in Pakistan has been declining due t large presence f cttage industries, whse prducts are f lw and incnsistent quality Mst crprate and exprt-riented cmpanies in Pakistan have therefre increasingly turned twards imprting paper Rshan Sun Ta can ffer inexpensive and high quality substitute fr imprted paper, which std at c. 600,000 metric tns in FY ,000 1,000 Dmestic Manufacture and Imprt f Paper and Bard (Tns in Thusands) Dmestic Manufacture Imprt Surce: The Pakistan Business Cuncil PAGE 13