Rallis India

Rallis India, a Tata Enterprise, is one of India’s leading agrochemical player with 13% share in domestic market. Company is engaged in manufacture, trading and export of pesticides, plant growth nutrients (PGN) & seeds and seeds chemicals in India and internationally. Rallis is known for its quality agrochemicals, branding, marketing expertise and its strong and comprehensive product portfolio catering to a wide variety of crops. Its biggest strength is connection with farmers. Company has excellent manufacturing capabilities and ability to develop new processes and formulations supported by capability to register new products. On institutional side, Rallis provides technical and bulk of various molecules to leading companies like Bayer, Syngenta, Excel, UPL, Gharda, Cheminova, Dhanuka, Nagarjuna and other Agrochemical manufacturer.ñ Shortage of area under cultivation, increasing population, higher demand from emerging markets, usage of land to produce biofuels and feeds for animals etc. has led to food shortage. To improve food output, there will be increased focus on improving crop nutrition as well as crop protection. Moreover as food prices continue to remain high, farmers will invest more in fertilisers and agrochemicals. Agrochem industry, which is ~ Rs.4,000 crore, has good scope to grow. Rallis has taken a number of initiatives for sizeable growth in domestic as well as export sales of agrochemicals and high margin seeds / PGN segments and is all set to take advantage of emerging opportunities in growing agrochem industry.ñ In line with its thrust on new product development, Rallis has introduced 3-4 new products every year since last 3-4 years. In FY08, company launched 5 new products including Takumi, Sedan, Ishaan, Royal and Tebuconazole which were well received. New products constituted 30% of FY 2008 turnover. Company has obtained registration for 5 new products, of which 4 has been commercialised. 3 dossiers have been submitted for registration. Several products are at various stages of development and improvement plans for exiting products are also underway to improve company’s competitiveness.

It has entered into strategic long term alliances with research based MNC agrochemical companies and Japanese companies like FMC, Nihon Nohyaku, DuPont, Syngenta, Makhteshim Chemical Works and Bayer India, Borax International for bringing in new molecules and new formulation technologies for commercialization in India. Going ahead Rallis will continue to focus on growing and building its existing alliances which will enable it to continuously enrich its product offering based on changing market needs and enhancing value of its service to customers.

Company has around 25-28% stake in Advinus Therapeutics Pvt. Limited, a TATA group company engaged in Pharma and Agro Chemicals R&D. Advinus will be undertaking business of Drug Discovery and Pharmaceutical Development Services. There are major products under development.ñ To de-risk its domestic business, Rallis is focusing on growing its international business and aims to invest in registrations, which will bring more scalability. In FY 08, Rallis broke new grounds and obtained a joint registration for one of its key product in the US market. In FY 2008 exports were Rs 160 crore (Rs 153 crore) which represents ~23% of Net Sales. In next 5 years, Rallis aims to increase exports to ~50% of sales. Further company is strengthening its international presence and establishing new capacities for contract manufacturing.ñ Company is planning to set up formulations unit in Jammu & Kashmir @ capex of Rs. 20-30 crore and agrochemical facility in Dahej. This is a big project where Rallis plans to manufacture pesticide intermediates. New facility at Dahej may also act as a contract manufacturer for overseas agrochemical makers as well as for manufacturing pharmaceutical ingredients.ñ Rallis is planning to enter household pest control market, estimated at Rs 1,600 crore, and is dominated by companies like Godrej Sara Lee, Reckitt Benckiser, SC Johnson and Jyothi Laboratories. Earlier, company use to market insecticides under “Tik20” brand. Now it has stopped selling Tik20 and Moosh Moosh, rodent controller in the market. However, it does contract manufacturing for leading house hold pest control companies and recently launched Termex (insecticide for white ants control), Sentry (for mosquito control) and Ralli Gell (for cockroaches) catering to government institutions. Company has posted fantastic results for FY 2008. Net sales increased by 7.6% to Rs. 692.15 crore. OPM% improved significantly to 11.5% (5.8%) driven by higher volumes of its key brands during the year along with continued focus on value creating processes. Higher Sales, improved margins coupled with lower interest cost of Rs.3.66 crore, led to 300.2% spurt in PBT (before extraordinary items) of Rs 63.79 crore. After accounting for higher exceptional income (net of accelerated depreciation) due to profit on sale of land of Rs. 82.38 crore (Rs.39.07 crore), PAT zoomed to Rs.125.19 crore.

Punj Lloyd (PLL)

PLL is the 2nd largest Engineering and Construction (E&C) company in India providing integrated design, engineering, procurement, construction and project management services for energy and infrastructure sector projects with operations spread across many regions in Middle East, Caspian, Asia Pacific, Africa and South Asia. Its services include laying pipelines, building roads, construction of refineries & tankages, power plants and other infrastructure facilities. PLL is aggressively expanding its business offerings and spreading its reach in newer markets thru inorganic and organic route. Further a vibrant domestic infrastructure, ongoing global energy capes and rising industrial capex poise for higher growth.

In FY 2007, PLL acquired 100% stake in Sembawang Engineering & Construction (SEC) - Singapore, to scale up its global presence as well as expertise in upstream oil & gas, airports, jetties, MRT / LRT and tunneling amongst others, in infrastructure domain, pre-qualifying PLL for larger and more complex project bids. Simon Carves (SC) is 100% subsidiary of SEC specializing in design, engineering and construction of manufacturing plants for Pharma, Petrochemicals downstream products and Industrial chemicals such as Sulphuric Acid, etc.

PLL has also entered into joint ventures with Saudi Arabia (for on shore & off shore projects), Germany (developing innovative insulation solutions) and with Swissport International (for foraying into aviation sector in India), all of which will further enhance its scale and competitive position globally.

Company has acquired 22.23% stake in Pipavav Shipyard. As PLL also works as EPC contractor in exploration & production of oil & gas area, it would gain access to facilities at Pipavav Shipyard for fabrication of vessels for petrochemicals and refineries. Growth in shipyard industry is expected to be over 30% p.a. in next few years. To finance this acquisition, company has placed 2.96 crore shares at Rs 275/- each with private equity funds aggregating Rs 814 crore. Post placement, equity capital has increased to Rs 58.18 crore (Rs 52.25 crore).

It has also signed MOU with Ramprastha group for development of large real estate projects in National Capital Region, where it can leverage Sembawang’s expertise in master planning, design and construction of residential complexes & townships and use advanced integrated pre-cast systems for faster project execution.

In FY 2008, Punj Lloyd Upstream (PLUL) was incorporated for providing on-shore integrated drilling services to exploration & production companies in domestic oil & gas sector. Drilling requirements under NELP coupled with high crude oil prices have resulted in substantial increase in requirements of Integrated Drilling Services (IDS). The new subsidiary will address huge demand : supply gap with deployment of two onshore drillings rigs by early 2008 and fleet shall be periodically increased for PLUL to become a significant player in IDS space.© Punj has acquired 74% stake in UK firm Technodyne International, a specialist engineering, design and consultancy company specializing in large scale cryogenic and high pressure tanks. With projects executed across the world, Technodyne carries out basic design & detailed engineering for complete steel and steel plus concrete tanks including associated piping, instrumentation and electrical systems. Technodyne also has track record in designing of test rigs. Acquired capabilities enable Punj Group to provide end-to-end solutions for complete delivery of complex cryogenic, high pressure LNG, LPG, ethylene, ammonia and other similar storage tanks, significant growth area in Oil & Gas sector. The capabilities will also be leveraged for design of refinery and petrochemical projects.For FY 2008, consolidated turnover was Rs 7,753 crore (+ 51.2%). OPM% expanded to 8.26% (7.3%). Consequently, PAT shot up by 82% to Rs 358.42 crore. Going ahead outlook continues to be strong driven by robust order book at Rs 19,596 crore as on May 30, 2008 and group’s strong presence in key geographies especially Asia and Middle East.