RPG Enterprises

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RPG Enterprises
Respond, Perform, Grow
7 Business Sectors, 20 companies, 60,000
employees, 4,00,000 shareholders
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RPG Enterprises Business Sectors
Companies
Business Sectors
Revenue FY 2009 Rs. 14,500 crs
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RPG Enterprises - Financials
( Rs. Crs )
As on 29th July, 2009
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HARRISONS MALAYALAM LIMITED
Investor Presentation August 2009
http//www.harrisonsmalayalam.com/
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CONTENTS

• PROFILE
• PRODUCTS
• TEA RUBBER PLANTATIONS
• TEA RUBBER SCENARIO
• OTHERS
• FINANCIALS
• ADVANTAGE HML OTHER INITIATIVES

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Business Profile

• History
• Oldest company in South India established in
  1844.
• Companys Indian Operation from Quilon in 1907.
• Acquired by RPG in 1988.
• Largest Employer in Kerala.
• Business Overview
• Manufacture of Tea Rubber spread over 58,000
  acres.
• Managing Plantations - 13 Tea 11 Rubber.
• Pineapple, Banana, Pepper, Cardamom Etc.
• Engineering Division, Tissue Culture, Consumer
  Marketing, Clearing Shipping.
• Products, Markets
• Tea - Orthodox, CTC, Organic, Packet, Flavored
  Tea bags.
• Rubber - Centrifuged, TSR, Sole Crepe, Latex
  Crepe.
• Markets - Domestic Export to Russia, Ukraine,
  Europe, Egypt, Sri Lanka, Pakistan, Turkey
  Middle East.

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Business Excellence

• Rubber plantation company in India
• Tea producer in South India.
• Producer of pineapple in India.
• Corporate nursery with over 4.50 lac plants
• Employer in Kerala after the State Government
• besides providing indirect employment to an equal
  number

LARGEST
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Business Excellence
Harrisons Malayalam Limited is the Winner of 7
Awards in the The Golden Leaf International Award
2009 organized by the Indian Tea Board and judged
by an International Jury of Tea Tasters.
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Products
TEA
Premium Tea Bags
Premium CTC Orthodox Teas
Premium Single Estate Teas
Organic Tea
Popular Tea
RUBBER
Pale Latex Crepes
ISNR
Cenex

• OTHER CROPS

Pineapple
Banana
Coffee
Cardamom
Pepper
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Plantations
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Tea Scenario
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Tea Producers
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TEA INDIAN SCENARIO
The Indian tea consumption demand is chugging
along at about 2.5 3 CAGR , which is a demand
growth of about 20-25 million kg of tea.
Consumption is increasing more than production
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TEA INDIAN SCENARIO

• Indias Tea auction is switching to Digital
  Trading to achieve higher volumes , ensure fairer
  prices and lower transaction costs.
• Demand is coming from countries like Pakistan,
  Iran, Iraq and Egypt.
• Area under production is likely to remain
  Stagnant as major tea producers are of the view
  that the increased production should come from
• -Higher yield per hectare
• -Improved techniques of production

Tea prices would firm up more since domestic
consumption was buoyant.
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Tea Price Rise

• Tea prices have increased in all the auction
  centers across the world in Jan-Jun 2009 over the
  same period last year.
• Indian teas fetched the worlds third largest
  price average (after Srilanka Kenya) .

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HML Production vs Avg. Realisation
Low production due to unfavourable Climatic
Condition .
The average price of tea increased by 48.29 to
Rs 94.79 per kg in Q1 FY10
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Tea Infilling/Replanting

• The existing tea bushes are about 80-90 years
  old.
• Originally about 6700 bushes were planted per
  hectare which was considered optimum at that
  time.
• Over the years the bushes have come down
  substantially which has resulted in decreased
  productivity.
• In the process of infilling new high yielding
  clones are being planted in the existing fields
  thereby increasing the population (to approx 9000
  bushes per hectare) which will contribute to
  increasing the productivity by more than 50.
• The benefits arise only after 4 years which is
  the optimal stage from when commercial harvest is
  possible.
• The projected expenditure for infilling is Rs. 1
  Crs per annum for the next 3 years.

Replanting being planned to increase Yield per
hectare
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Rubber
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Rubber Global Supply Crunch
Global consumption of natural rubber is projected
to increase at 3 to 5 per year up to 2015,
largely because of rising demand by China,
Europe, Russia and India.
(mln tonnes)
Consumption of natural rubber has surpassed
production , globally as well as in India
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Rubber Price
Ribbed Smoked Sheet (RSS- 4)
Indian Prices have managed to surpass
International Prices which augurs well for the
Domestic Rubber Industry.
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HML Production vs Avg.realisation
The average price of rubber was Rs. 117.28 per kg
against RSS IV average of about Rs. 97.49 per kg
in Q1 FY10. .
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Rubber Talk

• Rubber is a Product of synthesis and the yield
  per tree ranges from 4 to 5 kgs per year
  depending on the clones.
• Immature Phase
• 6 to 7 years
• Special efforts are on to reduce this period
• Mature Phase
• Present 28 years
• Proposed 24 years
• Rubber Board recommendation 20 to 24 years
• Tapping Interval
• Trees are tapped once in 3 days in the first 13
  years and once in 2 days during the balance
  period
• Tapping task
• After 13 years of Downward tapping Tree is tapped
  for 11 years Upward
• Downward tapping 400 trees per tapper per day
• Upward tapping 350 trees per tapper per day
• Tapping commences at 5.30 am and is comlpleted by
  8.30 to 9.00 am
• Latex is collected 3 hours after completion of
  tapping

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HMLS RUBBER SALE

• Rubber is largely sold in the domestic market via
  agents and dealers
• HML publishes daily prices on its website
  and based on that price transactions takes place.
  
• HML rubber sales at a premium to tyre grade
  rubber, generally the buyers are sacttered and
  are large in numbers.
• However some of the big corporate buyers include
  Hindustan latex (for medical purpose), Radhu
  Product (for rubber thread), Indus Medicare (for
  medical purpose) , Harpex (for cycle tyre) etc.
• The export of rubber is limited to only 4-6 of
  the produce. India is a net importer of Rubber.

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Rubber Replanting

• The life of a rubber plant is approximately 35
  years.
• Why Replanting ????
• Old rubber plants need to be phased out with new
  clones when their economic yield drops.
• We have Lower productivity because of old
  low-yielding plants and the current tapping cycle
  is 28 years.
• To boost up productivity, accelerated replanting
  with new generation clones has been planned,
  which will reduce the tapping cycle to an optimum
  24 years thereby increasing the output per tree.
• The projected expenditure for replanting for the
  next 3 years is about Rs. 8 Crs per year.

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Others
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Tissue Culture

• Harrisons Malayalam, has its Plant Tissue Culture
  Unit at Hosur about 40 kms from Bangalore,
  India's Garden city.
• Largest corporate nursery with over 4.50 lac
  plants
• Largest corporate collection of Budwood germplasm
  of Rubber
• This state of the art tissue culture lab has its
  attention focused on quality and delivers a
  quantity of Four Million plants per annum to its
  customers.
• Harrisons has carved a niche for itself in this
  segment by its successful propagation of rare and
  superior plants and has been exporting to the
  world market since 1992.

Products Syngonium Philodendron Banana Spath
yphyllum Cordyline Ficus Yucca Calathea
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Financials
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Revenue Break-up
FY 09 Total Income Rs. 291 Cr Previous year Rs.
205 Cr
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Robust Growth since FY04
(in Rs. Crs)
As on March 31,2009
HML Revenue Growth is at a CAGR of 19
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Q1 FY10 Performance
(in Rs. Crs)
During the quarter, there was an extended dry
spell experienced in South India Steep increase
in the wage rates also led to an increase in
operating costs
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ADVANTAGE OTHER INITITIATIVES

• ADVANTAGE HML
• GROWTH INITIATIVES
• TEA TOURISM
• CORPORATE SOCIAL RESPONSIBILITIES

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Growth Initiatives

• Expansion Plan
• Modernize all Tea Rubber factories with State
  of - the art technology.
• Convert CTC Factories to Dual manufacture.
• Implement ERP with real time connectivity to
  remote location for better operational
  efficiency.
• Set up distribution network in India Abroad.
• Business Plan
• Top Line to grow by increasing manufacture of Tea
  Rubber from bought Leaf bought Latex
  operation.
• Increase profitability by improving
  productivity, Plant capacity utilization
  proper commodity price discovery.
• Optimum Land utilization through scientific
  infilling replanting in Tea Rubber.
• Exploring possibilities for tea tourism.

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TEA TOURISM
Kerala has emerged as the most acclaimed tourist
destination of the country in the recent Past
with foreign tourists crossing 3.67 Lakhs mark in
2006.
PLACES TO VISIT Mattupetty (13 km from Munnar)
Situated at a height of 1700 Mts famous for its
highly specialized dairy farm..Over 100 varieties
of high yielding cattle are reared here. The
Mattupetty lake and dam , just a short distance
from the farm,is a beautiful picnic
spot. Pothamedu (6 km from Munnar) offers an
excellent view of the tea, coffee and cardamom
plantations in Munnar. ideal for trekking and
long mountain walks. Nyayamakad (10 km from
Munnar) Land of breathtaking Waterfalls cascading
down a hill from a height of about 1600 meter
Wallardie Moongalaar Tea Garden Located just 18
km from Thekkady which is one of India's most
fascinating natural wildlife sanctuaries, where
you can watch wildlife at close range.
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Corporate Social Responsibility

• An equal Opportunity employer with 7700 men and
  8800 women workforce
• Winner of FICCI awards thrice for corporate
  initiatives in family welfare as a result of its
  Comprehensive Labour Welfare Scheme aimed at
  improving the quality of life of the employees
  and their dependents.
• Pioneer in corporate social responsibility in
  Kerala with initiatives such as Rakshita a
  centre for development of children and adults
  with multiple disabilities
• Providing free medical aid for underprivileged in
  Rural Kerala.
• The only company in this sector to bag the Kerala
  State Pollution control award for its factory on
  more than one occasion emphasizing the
  responsibility and initiative taken by the
  company in preserving the natural resources for
  future generation.