Kiri Industries Limited

(CIN:L24231GJ1998PLC034094)
INVESTOR PRESENTATION | NOVEMBER 2018
2
Executive Summary
PRODUCTS INDUSTRIES CATERED FINANCIAL HIGHLIGHTS*
Dyes Intermediates For Dyes intermediates TOTAL REVENUE
H-acid • Various INR 11,368 Mn
Vinyl Sulphone manufacturers of
Specialty Intermediates reactive dyes across 3 Year - CAGR
the globe. 4.41%

Dyes
Reactive dyes
OVERVIEW Acid Dyes EBITDA
For Dyes INR 1,826 Mn
• Kiri Industries Limited (KIL) is one of the largest manufacturers Direct Dyes • Textile
and exporters of a wide range of Dyes, Dyes Intermediates and Disperse Dyes manufacturers, 3 Year - CAGR
Basic Chemicals from India. including 20.67%
• KIL is an accredited and certified Key Business Partner with the manufacturers of
world’s top Dyestuff majors across Asia-Pacific, the EU and cotton fabrics, dress
America. Basic Chemicals material, papers,
carpets, bed sheets,
• It has sophisticated quality control practices and procedures, Sulphuric Acid etc. PAT
modern manufacturing facilities and ERP driven enterprise Oleum 65% and 23% • Leather INR 3,581 Mn
management that enabled KIL to offer internationally recognized Chloro Sulphonic Acid manufacturing, dying,
quality products and services. Thionyl Chloride finishing, etc. 3 Year - CAGR
• KIL is listed on both the BSE and NSE exchanges and has market 35.25%
capitalisation of approximately INR 15,770 Mn as on 30th
September, 2018. * Consolidated (FY18)
COMPANY OVERVIEW
4
Company Overview
• Based out of Gujarat since 1998, Kiri Industries Consolidated Revenue Break-up (INR Mn)
Limited (KIL), has emerged as one of the largest
manufacturers and exporters of a wide range of
Dyes, Dyes Intermediates and Basic Chemicals
from India. 4,517
3,681 4,722
4,117
• It is also considered amongst the fastest growing
3,377
companies in the Dyestuffs & Dyes Intermediates 7,353
6,746 6,473
space in the country. 3,544
5,211

• It provides products and services across the whole value chain in numerous industrial sectors
(apparel, hosiery, automotive, carpets, leather, paper, home upholstery, industrial fabrics, FY14 FY15 FY16 FY17 FY18
etc.) Domestic International
• In its 20 years of corporate journey, KIL has been focusing on providing products of high
quality standards, executing collaborations and strategic acquisition, implementing
environment aligned R&D, finding innovative solutions and all-encompassing customer care.
Revenue Break-up (H1-FY19)
Basic Chemicals
• All initiatives taken by KIL has enabled it to set its footprints in over 50 countries across 7 3%
continents.
• The Company has the sizeable manufacturing facility of Dyes Intermediates and Basic
chemicals at, Padra (Vadodara, Gujarat). Dyes
Dyes 43%
• To strengthen its competitive edge in dyes vertical, KIL formed a joint venture with Intermediates
Longsheng (China) and set up a manufacturing facility for dyes at Padra (Vadodara, Gujarat). 54%

• KIL has built a strong and differentiated business model with focus on Green Manufacturing
(ISO 9001 & 14001 certification).
5
Management Team
Pravin Kiri (Chairman)
• He is a science graduate from Gujarat University and started his career in the year 1966 by associating
himself with Jai Chemical Industry (Kharawala Group) as a partner and was responsible for all the
technical matters of the group.
• He has a wide interest and knowledge in the areas of synthesizing organic structures of Dyes and
Intermediates.
• He looks after the manufacturing activities and is focused on operational strategy, quality control and
research & development activities.
Manish Kiri (Managing Director) Keyur Bakshi (Independent Director)
• He has a Bachelors of Engineering • He is a practicing Company Secretary and holds degrees in Commerce and Law from Gujarat University.
(Electronics & Communication) from • He is a Fellow Member of the Institute of Company Secretaries of India and had served as the President
Gujarat University and a Master’s of Institute of Company Secretaries of India in the year 2008.
Degree in Business Management from • Actively involved in various assignments relating to Corporate Laws, Finance, amalgamations, mergers /
Wayne State University, USA. de-mergers, acquisitions and takeovers, corporate restructuring and planning.
• He envisions the company’s
operational strategies and its future
forays and expansions. He also designs
its marketing strategies and
commandeers their implementation. Mukesh Desai (Independent Director)
He oversees the overall sales and • He has an engineering background with more than 35 years of techno commercial management
exports, customer relationship experience in multi -product, multi location project installation and operation.
management and expansions, ensuring
a sustainable growth of the company.
• He was the force behind the Veena Padia (Independent Director)
Company’s JV (Lonsen Kiri Chemical • She has a Masters of Economics from M. S. University and has a vast leadership experience in providing
Industries Ltd.), and acquisition of strategic advisory expertise and directing development and implementation of widespread programmes
DyStar. and organisations through insights into livelihood, education, microfinance, gender, and health relating
• He was awarded ‘Outstanding to gender and marginalised and socially excluded communities.
Entrepreneur’ by Ahmedabad • She has worked with private-sector CSR divisions, government agencies and international donors and
Management Association in year 2011. NGOs such as World Bank, CARE, etc.
6
Key Milestones
Two-Star Export Achieved highest
House Entered into a
Commercial JV Agreement PAT since
Obtained with Well Filed inception
production
Environmental Prospering minority
of Singapore Court
Incorporat Clearance for Ltd. for oppression
backward Acquisition of DyStar delivered
ion of Kiri 2004 further expansion manufacturing suit against
1998 2006 integrated 2008 2010 assets of became 2015
Dyes and facility for
2013 Senda and 2018 milestone
project with DyStar profitable judgement in
Chemicals Conversion of Dyestuff DyStar in
respect to favour of KIL for
Pvt. Ltd manufacturing Singapore
Vinyl buyout of KIL’s
unit into a 100% Court
Sulphone Successfully Stake in DyStar
Export Oriented
Unit completed IPO by Senda

Successfully Completed
completed JV expansion of
Project. Intermediate
Started Project and
Started Successfully Changed Successfully
Started Backward KIL became
strategic completed the Name repaid
1999 export to 2005 Integration 2009 the largest VS 2017
backward 2007 installation of 2011 to ‘Kiri 2014 majority of
USA and project for manufacturer
integration basic chemical Industries restructured
Taiwan production in India
project plant and Ltd’ debts
of H Acid
started Restructured
commercial debts of the
production Company
7
Manufacturing Facilities
Unit I, Unit II & IV Unit V
Location: Ahmedabad, India. Location: Vadodara, India.
Products manufactured: Products manufactured:
• S. O. Dyes • Sulphuric acid
• Disperse Dyes • Oleum
• Chloro-sulphonic acid
along with 3.3 MW steam
Capacity Installed: based power plant
• Reactive Dyes : 36,000 MTPA
• Disperse Dyes: 8,000 MTPA Capacity Installed:
• Basic Chemicals : 500 TPD (182,500 MTPA)
 Sulphuric Acid – 280 TPD
 Oleum – 23 – 50 TPD
 Oleum – 65 – 70 TPD
 Chloro Sulphonic Acid – 100 TPD
KIL is a technology-driven emerging
Unit III Lonsen Kiri Plant JV with Longsheng (China)
global player as well as a premier
budding specialty chemicals player
Location: Vadodara, India. Location: Vadodara, India.
Products manufactured: Products manufactured:
• Intermediates - V. S. H. Acid and • Reactive Dyes
other specialties.
Capacity Installed:
Capacity Installed: • 50,000 MTPA
• Commodity Intermediates :
25,200 MTPA
 Vinyl Sulphone - 18,000 MTPA Note:
 H-Acid - 7,200 MTPA • A JV Company between Zhejiang Longsheng (China) (60%) and KIL (40%).
• Specialty Intermediates : 10,000 MTPA • Engaged in the activity of manufacturing and selling reactive dyes.
• Acetanilide – 12,000 MTPA
8
Manufacturing Process
Key Inputs Ice Napthalene Sulphur Sodium Nitrate Soda Ash Water Aniline Caustic Soda Chlorine

Sulphur & Bulk Chloro

Chemicals Para Nitro Sulphuric Oleum 65% Sodium Bi Thionyl
Beta-Nepthol Sulphonic Acetanilide MPD
Aniline Acid Oleum 23% Sulphate Chloride
Division Acid

Vinyl Sulphone Ester (Acetanilide Parabase) | Vinyl Sulphone Paracresidine Base | Vinyl Sulphone Ester of 2:5 Di Methoxy
Dyes
Aniline | Bronner’s Vinyl Sulphone | Ortho Anisidine Vinyl Sulphone | Sulpho Para Vinyl Sulphone | Sulfo Ortho Anisidine
Intermediates
Vinyl Sulphone | 4:4 Diamino Sulphanilide | 4:4 Diamino Di Phenyl Amine 2-Sulphonic Acid | Gamma Acid | H.Acid |
Division
B.D.S.A | Sulpho Tobias Acid (Sta) | K-Acid | MPDSA | MUA | 6 Chloro 2.4. DNA | DCPNA | PNA | MAA | AMA

Dyestuff
Division Reactive Dyes Acid Dyes Direct Dyes Disperse Dyes

Detergent / Pharma
End Use
Textiles Leather Paper / Fertilizer / Agro
Industry
chemicals
9
Geographical Presence
AHMEDABAD

THE NETHERLANDS VADODARA

CZECH REPUBLIC
UK
BELGIUM
SPAIN HUNGARY
ITALY KOREA
USA PORTUGAL TURKEY CHINA
PAKISTAN
TUNISIA SYRIA NEPAL
IRAN TAIWAN
BANGLADESH
INDIA
EGYPT HONG KONG

THAILAND
HONDURAS

ECUADOR COTE D'IVOIRE SRI LANKA

KENYA SINGAPORE
INDONESIA
DEMOCRATIC REPUBLIC OF CONGO
BRAZIL
PERU
ZIMBABWE
ARGENTINA
CHILE
SOUTH AFRICA MAURITIUS AUSTRALIA

Manufacturing Facilities

Exports
10
Awards and Accolades

Award for Export performance of Award for Direct Export Platinum Award for Trishul Award for Chemexcil Gold Award -
more than INR 6 Cr for Direct export of Self Manufactured Small Scale Sector - Small Scale Sector - 2006-07
of Self Manufactured Dye and Dye Dyes - 2000-01 2002-03 2005
Intermediaries - 1999-2000

First Award for Direct First Award for Direct Outstanding Certificate for The Next Industrial Safety
Export of Self Export of Self Entrepreneur Award - Fortune 500 Companies Award - 2018
Manufactured Dyes - Manufactured Dyes - 2011 - 2017
2008-09 2009-10
11
Key Strengths
• High entry barriers due to a stringent • The Company established a track record
process of acquiring new permissions. of long-term relationship with key global
• Heavy capital expenditure. names and the ability to pass on price
• Strict implementation of environmental increases.
and pollution norms.
Entry Barrier Competitive
Position • Their facility is versatile and has the
flexibility to produce Reactive Dyes,
acid / metal complex dyes and wool
• Ability to integrate and offer value reactive dyes.
added products. • By virtue of large scale facilities and
• One of the largest manufacturers of fully integrated operations from
Reactive Dyes, Dye Intermediates manufacturing of basic chemicals,
and Basic Chemicals with support of dye intermediaries and dyes, the
backward integration. Diversification Manufacturing
Facility Company derives benefits of
economies of scales and high
standards of quality control.

• The research and development • The Company has dedicated and

department broadly comprises various experienced promoters.
processes for developing new Research & Experienced • The Board consists of a healthy mix of
products and standardizing new Development Board promoters and independent directors
analytical methods. who ensure high levels of corporate
• It focuses especially on technologies governance.
that improve products and processes.
• The team continuously interacts with
consumers to obtain feedback on its
existing as well as new products to
complement its product development
activities.
BUSINESS OVERVIEW
13
Business and Product Mix
Revenue Break-up (FY14)
Thionyl
Chloro Chloride Basic Chemicals
Reactive
Sulphonic 1%
Dyes
Acid

Oleum Dyes
65% & Acid Dyes 43%
Intermediates
23% 56%
Basic Dyes
Chemicals
43%
3%
Sulphuric Direct
Acid Dyes Dyes Revenue Break-up (H1-FY19)
Intermediates
54% Basic Chemicals
3%
Other
Speciality Disperse
Intermedia Dyes Dyes
tes 43%
Vinyl Intermediates
H Acid 54%
Sulphone
14
Value Chain – Dye Stuff Manufacturing
Aniline Naphthalene In-house Acids and Usage of Raw Materials for Dyes
Intermediates such as VS H-Acid
B-Napthol MPD, etc. effluents & by-products Gamma Acid, K-Acid MUA, etc.

Result of Zero Waste Dyes

Inputs Intermediates
Manufacturing process

Dyestuffs

Black
Future Potential

Branded Dyestuffs and Colourants Yellow Red

15
Benefits of Zero Waste

• The Company’s focus on becoming a

Operating Zero Waste company has ensured
Efficiency Superior that Spent Acids are a source of
Entry Return Ratios
Barrier revenue (converted into
commercially viable products) and
not a source of expense (frees the
hassles of management and disposal
of the by-products).
Diversification Integration

• In an industry where non-

conformance leads to plant
shutdowns, Zero Waste convinces
buyers of the sustainability factor of
operations, resulting in supply
Meets Global
Better consistency.
Environment
Margins
Norms
16
Dyestuff – An Overview
Dyestuff are organic and inorganic substances which can absorb light as well as reflect some Total Revenue (INR Mn)
light to show colour. The dyestuff is also a water soluble substance. 3,809 3,808 3,749
Criteria for a Suitable Dyestuff 3,060
• Economical / Competitive 2,406
• Non-toxic
• Compatible to other dyes and chemicals
• High colour strength
• Better brightness
• Better fastness
• Good levelness on the materials FY14 FY15 FY16 FY17 FY18
• A dye is a coloured compound, normally used in soluble form, which is capable of being
fixed to a fabric/ application substrates. The dye must be ‘fast’ or chemically stable so that
the colour does not wash out with soap and water much or fade due to exposure to
sunlight, etc.
• Many types of dyes: Reactive dyes, Acid dyes, Direct dyes, Azoic dyes, Disperse dyes, Vat
dyes, Solvent dyes, Sulphur dyes, Cationic dyes, etc.
• Textile sector is a major consumer of Dyestuffs. Reactive Dyes, Vat Dyes and Azo Dyes are
mainly required for dyeing and printing of various fibres. Disperse Dyes are mainly
consumed for dyeing synthetic fibres. Acid Dyes are consumed in leather, silk, nylon and
woollen products.
• KIL caters to mainly Reactive dyes, Acid dyes and Direct dyes. It has just entered into
Disperse dyes.
17
Dyestuff Manufacturing Process
Diazotization
of Amine
+ HCl +
Sodium
Nitrite +
Water + Ice

Dissolving of
Coupling Coupling of
Component Diazo with Blending and
(Coupling Coupling Clarification Standardization Spray Drying fine Packing
Component + Components + standardization
Water + Ice + NaHCO3
Caustic Lye)

Coupling Diazotized Amine is The spray dried The liquid dye is

component is coupled with powder is then spray dried.
slurried in ice and component to the charged to the
water in reactor diazo reaction blender and
and it is dissolved vessel by stirring at standardized as
by adding Caustic suitable per the
Lye by constant temperatures and requirement of
stirring at suitable PH required for customers/
temperatures and efficient reactions. market.
PH required for
efficient reactions.
18
Reactive Dyes
• Reactive Dyes are the most versatile and popular class of Organic Dyes for importing
colour on cellulosic fibres.
• These are water soluble dyes which react to fibre, forming a direct chemical linkage with
the application materials, which is not easily broken and offers good wash fastness.
• Colours available: Red, Yellow, Black, Orange, Blue, Green, Violet, etc.
• Types of Dyes: Kiraol VS dyes, Kirazol KR/KX dyes, Kirazol S &W dyes, Kiractive ME dyes,
Kiractive ED dyes, Kiractive HE dyes, Kiractive CN dyes, Kiractive P dyes, etc.
• Features: Brilliant shades, ease of application, overall good fastness properties,
economical, etc.
• Applications in Textile Industries: The popularity of Reactive dyes with textile processors is
due to its versatility in application by various dyeing methods such as exhaust dyeing,
semi-continuous and continuous dyeing as well as various printing methods by direct
printing, resist printing, discharge printing and the newly- introduced inkjet printing.
• Properties :
• Found in power, liquid and print paste form which are water soluble.
• The dyes have very stable electron arrangement and can protect the degrading effect
of ultra-violet ray.
• Textile materials dyed with reactive dyes have very good wash fastness with superior
rating. Reactive dyes give brighter shades and have moderate rubbing fastness, etc.
• It requires less time and low temperature for dyeing and are comparably economical.
19
Other Dyes
Acid Dyes
• Acid dyes are the dyes which can be applied directly to the application materials from an
aqueous solution (without mordant).
• The Company has been working on developing Acid dyes since a decade. It has been
manufacturing this range of dyes for a long time.
• Colours Available: Red, Yellow, Orange, Blue, Green, Violet, Black, Brown, etc.
• Types of Dyes: Acid Black 210, Acid Black 194, Acid Blue 193, Acid green 104, Acid violet
90, Acid Red 357, Acid Red 362 and Acid Orange 142.
• Application on: Nylon, Silk, Wool, Leather, Blended Fibre, etc.
• Advantages: 1) Easy in application 2) Complete colour range with very good bright shades
3) Pre-metalized dyes have very good light fastness even in pale shades 4) Properties of
acid dyed silk is better than reactive dyed silk.
Direct Dyes
• Direct dye, also known as Substantive Dye, is a class of coloured, water-soluble
compound that has an affinity for fibre and is taken up directly, mostly it is sodium salt of
aromatic compounds.
• Direct dyes are usually economical, very easy to apply and with an easy application which
can yield bright colours.
• Advantages of Direct dyes:
• Direct dyes are easy to apply after proper training and they can be used in almost any
dye house equipment by exhaust or continuous. Direct dyes offer a predictable shade
build-up and good repeatability from lot to lot.
• Direct dyes are less affected by variations in liquor ratio than reactive dyes.
20
Dyes Intermediates
• Dyes intermediates are the main raw materials used for manufacturing dyestuffs. Total Revenue (INR Mn)
• The manufacturing chains of dyes and dyes intermediates can be traced back to 5,453
petroleum-based products. 4,708 4,736
4,325
• Naphtha and natural gases are used for the production of Benzene and Toluene, which are 3,160
subsequently used for manufacturing nitro-aromatics.
• Hence, the third forward stage of production, i.e., from nitro aromatics to a dyes
intermediates is part of the dyes and dyes intermediates sector. Examples of major dyes
intermediates are Vinyl Sulfone, Gamma Acid, H Acid, CPC, J Acid, α-Naphthyl Amine, etc.
• In order to ensure uninterrupted supply line of key raw materials and stability of pricing for FY14 FY15 FY16 FY17 FY18
its customers, KIL has established a fully integrated manufacturing base at its production
facilities.
• Approximately 60% of intermediates required for dye manufacturing are manufactured at
the Company’s manufacturing facilities.
• The commissioning of dyes intermediates facility has empowered KIL to:
• Manage cost of raw materials.
• Monitor the quality of key raw materials thus ensuring desired quality control of the
finished product.
• Manage fluctuations in prices of raw materials.
• Manage efficient production schedules.
• Meeting customers’ expectations.
21
Dyes Intermediates – H-Acid
H-Acid
• H-acid is one of the leading dyes intermediates in the world, used in the manufacture of black dyes.
• H-acid (8-amino- 1-hydroxynaphthalene-3,6-disulfonic acid), an important dye intermediate, is produced from Naphthalene by a combination of the
unit processes of sulphonation, nitration, reduction, hydrolysis and other processes. H-Acid is used in the manufacture of a large number of azo
dyes and pigments.
• The Company has a capacity of 7,200 MTPA and the current capacity utilization is 89%.

Manufacturing Process
INPUT Caustic Flakes
Nitric Acid Water Water Methanol
Naphthalene Steam
LSP Spent Acid
Suplhuric acid CI Powder
Water Glauber Salt Sulphuric Acid
Acetic Acid
Water Water
Oleum Soda Ash

Nitration Filtration Filtration Fusion Filtration Final

Sulphonation Neutralizer Reduction Evaporator Isolation Centrifuging Product

NOx Gypsum (73%) Iron Sludge Methenol Mother Mother

(scrubbing)-ETP (sludge) (70%) (rec) Liqour Liqour
SO2 Evaporation Evaporation
OUTPUT Co2 Steam Rec. Water + Crystalliser + Crystalliser
SBS
(450Kg) + Spray Dyer + Spray Dyer
22
Dyes Intermediates – Vinyl Sulphone
Vinyl Sulphone
• Vinyl Sulphone is an industrial chemical used as a key raw material for manufacturing reactive dyes, having application mainly in textiles.
It is manufactured from aniline.
• It has applications in manufacturing of Reactive dyes.
• The Company has a capacity of 18,000 MTPA and the current capacity utilization is 87%.

INPUT Manufacturing Process

Acetanilide SBS Slurry
Chloro Sulphonic SBS
Acid Caustic Iye Ethylene Oxide
Water Wash Water Sulphuric Acid
Thinoyl Chloride (48%) Spent Acid

Centrifuge & Final

Sulphonation Drowning Reduction Ethoxylation Drying Esterification
Washing Product

HCL(1st) Mother Liquor

S.B.S. Slurry(1st) Spent Acid Acetic Acid
Evaporation
HCL(2nd)
S.B.S. Slurry(2nd) Amonium /
OUTPUT Sodium
Sulphate
23
Basic Chemicals
• As part of strategic backward integration, the Company has set up Basic Chemical facility Total Revenue (INR Mn)
to manufacture:
• Sulphuric Acid 260 256
• Oleum 206
• Chloro Sulphonic Acid
157
• Thionyl Chloride
• All these products are made in one integrated plant and uses Sulphur as the basic raw 70
material.
• KIL produces basic chemicals for its own consumption and also for sale in the domestic
market. FY14 FY15 FY16 FY17 FY18
• Along with the facility, KIL has put in a 3.5 MW captive power plant which can run from
the steam generated by the facility itself.
• The electricity generated will be sufficient, not only to run basic chemical plant, but also
to contribute power requirement of dyes intermediates plant.
• Application Industries: Chemicals, Pharmaceuticals, Fertilizers, Automobile batteries,
Paper bleaching, Sugar bleaching, Water treatment, Sulfonation agents, Cellulose fibers,
Steel manufacturing, Coloring agents, Regeneration of ion exchange resins, etc.
24
Future Outlook – Foray Into Disperse Dyes
Disperse dye:
• Disperse dyes are synthetic organic dyes and is a kind of organic substance which is free of
ionizing group. They are less soluble in water and are used for dyeing synthetic textile
materials. Disperse dyes are mainly used for dyeing polyester yarn or fabric.
• For dyeing polyester fibres, in practical terms, only disperse dyes are suitable, which makes
these kind of dyes the highest consuming product range globally.
• Through their hydrophobic properties, these dyes are capable of penetrating into similar
hydrophobic polyester fibres.
• This class of dyes have extremely poor solubility in water; for this reason, dispersing agent
is added to the dyebath to maintain dispersion stability, especially in the case of high
temperature dyeings.

Advantages:
• Fastness to wet treatment - In terms of providing satisfactory wash fastness on polyester,
dye selection has become far more critical than it had ever been, because of the more
demanding wash fastness tests employed currently as well as the widespread use of after
treatments. Nearly all disperse dyes give very good to excellent results.
• Fastness to dry heat - Sublimation or dry heat, fastness is an important property of
disperse-dyed polyester because of the use of heat treatments in the finishing of the fabric;
disperse dyes must be small, non-ionic molecules of low molecular weight.
• Fastness to light - Dispersed dyes do not fade away when left exposed to sunlight for
prolonged periods.
• Hydrophobic fibres - Disperse dyes can be applied to a whole range of chemically diverse,
hydrophobic manmade fibres, which include acetate, acrylic, modacrylic, nylon, polyester
and polyurethane fibres.
DYSTAR
26
About Dystar
Total Revenue (USD Mn)

1,016
KIL acquired Dystar in 2010, along with Zhenjiang 938 898 871 859
Longsheng holding 37.57% presently 822

• The DyStar Group is a leading dyestuff and chemical manufacturer and solution provider,
offering a broad portfolio of colorants, specialty chemicals, and services to customers
across the globe.
• With a heritage of more than a century in product development and innovation for the
textile industry, DyStar also caters to multiple sectors including paints, coatings, paper
and packaging industries. Its expansion into food and beverages and personal care sectors CY13 CY14 CY15 CY16 CY17 9M-CY18
reinforces the company’s position as a specialty chemical manufacturer.
• DyStar’s global presence offers customers reliable access to experts from offices,
competence centres, agencies and production plants spanning over 50 countries.
• DyStar has 16 manufacturing plants with a combined production capacity of 176,000 TPA.
It is a market leader in global dyes market with a market share of over ~21%.
• It has expertise in dyes, dyes solutions, leather solutions, performance chemicals, and
custom manufacturing of special dyes/ pigments.
27
History
COLORATION
SPECIALIST
FOUNDATION
JOINT
VENTURE OF: ACQUISITION:
Bayer AG and Emerald
Hoechst AG Performance
(Textile dyes, ACQUISITION: FOUNDATION: Materials
SOLUTION Ind. Color Solutions ACQUISITION: Sustainable Specialities
SUSTAINABILITY
LEADER PROVIDER Mitsubishi) International Texaniab Textile Solutions Group

1995 2000 2002 2004

- 2007 2010 2012 2013 2016
2006

DyStar was founded in 1995 as a JOINT VENTURE LAUNCH: ACQUISITION ACQUISITION:

joint venture between Hoechst AG OF: Bayer AG, econfidence BY KIL Lenmar
Hoechst AG, program Chemicals
and Bayer Textile Dyes. In 2000, the BASF AG (Textile (Business and
textile dyes business from BASF was ACQUISITION:
dyes, Ind. Yorkshire Assets)
integrated. In 2010, DyStar Group ICI/Zeneca dyes Americas, Rotta
was acquired by Kiri Industries and Mitsui Group and
Limited (KIL). Boehme Group
28
Value Creation in Dystar
Successfully turning around the operations of DyStar
• The turn-around plan was successfully executed by replacing high cost German manufacturing base with low cost
manufacturing in India, China and Indonesia, etc.

• KIL is entitled to profit shares of INR 826 Mn, INR 1,976 Mn, INR 1,700 Mn and INR 1,561 Mn over the 4 fiscals
from FY14 to FY17.

Likely favourable judgement securing the receivables at a fair market value

• Although DyStar made substantial profits, KIL was neither paid dividend nor was allowed to get benefits to the
operations of DyStar. KIL suffered because of the severe minority operations conducted by Longsheng along with
DyStar’s management. Hence, KIL initiated legal proceedings against Longsheng Sub Senda and Dystar in the
Singapore High Court. Later on, the suit was transferred to Singapore International Commercial Court (SICC). A trial
proceeding was completed in March 2018 and the judgement was announced on 3rd July, 2018.

• As per the Court judgement, Senda has to buyout KIL stake at fair market value.

• If KIL’s shares in DyStar is bought out then the valuation would probably be as per the profit earning capacity of
the business. On this basis, KIL would receive substantially higher amount at a fair market value to be decided
under the direction of the Honourable Court.
INDUSTRY OVERVIEW
30
The Colourant Industry
• Global colourants market is estimated to reach ~USD 38.4 Bn by the end of 2021, a
growth of ~5% CAGR during 2016-21, on the back of strong growth in high-value Colourants Industry
products. (~USD 4.1 Bn)

• From the current market size of ~USD 4.1 Bn (2016), the Indian colourants' industry is
expected to grow to USD 8.4 Bn by the end of 2021 (CAGR of 14.9%) on the back of: Dyes
Dyestuffs Pigments
(1) Strong growth in key end-user industries. Intermediates
(25%) (28%)
(2) Tightening of environment norms and increasing operating cost in China. (47%)
(3) Rising demand for finished products from India.
(4) Shift from generic/ commodity to high value specialty/ eco-friendly colourants.
(5) A switch from small and unorganised players to large integrated players. Major Types: Major Types:
Reactive Vinyl Sulphone
• The Colourant industry in India is highly fragmented, with ~900 manufacturers, and the Disperse H-Acid
top five players accounting for less than 30% of the industry’s production. Direct J-Acid
Azo K-Acid
• 15-20 are large and medium-sized organised units and the rest are small and Other: (Vat/ Gamma Acid
unorganised. Sulphur/ Acid/ FC-Acid
• Large players dominate the value-added segment, middle level players serve as Basic/ Mordant/ R-Sal
suppliers to MNCs and smaller players who largely cater to the domestic Cationic (binding Meta Ureido
market. agent)/ Optical Beta Naphthol
Brightener Agent
• ~80% of colourant manufacturing units are located in Gujarat and Maharashtra, due to
– OBA)
the dominance of the textile industry, availability of raw materials in these regions and
proximity to ports.

Source: FICCI, Ministry of chemicals & fertilizers, Systematix Institutional Research, Industry Reports, Company Annual Reports, Gujarat Dyestuff Manufacturers’ Association, Bloomberg
31
Indian Dyestuff Industry
Dyestuff Industry: India – DS Industry size (USD Bn)
• Dyestuff (DS) accounts for ~25% (USD 1.03 Bn) of the total colourants industry in India.
• It is expected to maintain a higher double digit growth and reach ~USD 2.45 Bn by the 2.45
end of 2021 on the back of:
(1) Strong growth in the key end-user industries (textile, leather, paper, etc.).
(2) Tightening of environment norms in China.
(3) An increase in the demand for finished products from India. 1.03
(4) Forward integration by Indian DI manufacturers into DS to tap the large exports 0.37
opportunity.

Reactive dyes gain market share : 2009 2016 2021

• The share of reactive DS production in India increased from 43% in FY09 to 55% in FY16,
as users are shifting from highly toxic Azo dyes to reactive and disperse dyes (Azo dyes
are banned in most European countries).

(Lakh TPA) FY09 FY16 CAGR % Share in FY09 % Share in FY16

Reactive 0.44 1.06 13.4% 43% 55%
Disperse 0.23 0.44 9.4% 23% 22%
Direct 0.11 0.21 9.6% 11% 11%
Azo 0.13 0.10 -4.2% 13% 5%
Other 0.11 0.14 4.1% 11% 7%
DS Production: (TPA) 1.02 1.94 9.6% 100% 100%

Source: FICCI, Ministry of chemicals & fertilizers, Systematix Institutional Research, Industry Reports, Company Annual Reports, Gujarat Dyestuff Manufacturers’ Association, Bloomberg
32
Indian Dyes Intermediates Industry
Dyes Intermediates Industry: DI market in India (USD Bn)
• In terms of value, DI accounts for 47% (~USD 1.9 Bn) of the total colourant industry in 3.6
India and posted a CAGR of 16.8% from 2009 to 2016.
• Over 70% of the DI industry in India is organised due to the clients’ preference for fully
compliant suppliers and higher cost of ETPs (20-30% of the project cost and 40-50% of 1.9
land occupation).
• Going forward, it is expected that India’s DI capacity is to be used captively to produce DS 0.7
by large integrated manufacturers, while standalone DI manufacturers will focus on the
exports and domestic market.
2009 2016 2021

% of Global DI Volume % of Total DI Volume

ROW
13%
India Other
17% Di
40% VS & H
China acid
70% 60%

Source: FICCI, Ministry of chemicals & fertilizers, Systematix Institutional Research, Industry Reports, Company Annual Reports, Gujarat Dyestuff Manufacturers’ Association, Bloomberg
33
Industry Overview
Indian Colourant Industry Global Colourant Industry Indian Colourant Industry
Share Globally
8.4
38.4
30.1 21.90%
4.1 23.8
13.50%
2 8.40%

2011 2016 2021 2011 2016 2021 2011 2016 2021

RoE and RoCE India's Colourant Domestic-Export Mix India – Reactive DS

Reactive DS (production tpa)
DS DI Pigment Reactive (% of total DS) (RHS)

28% 29% 55%

31%
Export
44% 47% 42% 46% Domestic 43%
54%
25% 25% 29% 0.44 1.06

2009 2016 2021 2009 2016

Source: FICCI, Ministry of chemicals & fertilizers, Systematix Institutional Research, Industry Reports, Company Annual Reports, Gujarat Dyestuff Manufacturers’ Association, Bloomberg
34
India’s Competitive Advantage
China Factors: Average of top 7 Chinese DS Players
• In China, apart from the ETP hurdle, there is:
(1) Reduction in refund of VAT from 17% to about 13% on DI Asset T.O. (x) OPM (RHS) ROCE (RHS)
(2) Cancellation in power subsidy (a major cost, 6-9% of revenue) 0.83
(3) Non refund of VAT on DS export out of China causing imposition of export duty on 0.71
dyestuffs 0.48
(4) Increasing labour cost (~USD 300 p.m compared to ~USD150 p.m in India)

2014-present
(Industry is shifting to other Asian countries; India is well placed to grab the opportunity)
2009 2014 2016

Intervention of Chinese government (due to environmental issues): Growth for top 7 Chinese players Revenue (INR Cr)
• ETPs for adequate environment compliances became compulsory in China, which
increased capital + operating costs.
• Chinese unit margins and ROIs are declining due to increasing costs. 54,547
50,137
• India gains market share.

19,724

• A similar trend is expected in China and Chinese DS manufacturers are expected to start
importing DI (raw material for DS) from India.
2009 2014 2016
Source: FICCI, Ministry of chemicals & fertilizers, Systematix Institutional Research, Industry Reports, Company Annual Reports, Gujarat Dyestuff Manufacturers’ Association, Bloomberg
STRATEGIC OVERVIEW
36
The Way Forward

Focus on Focus on
Focus on
setting up establishing Focus on Free
expanding the Set up Inorganic and Focus on
manufacturing joint ventures with Cash Flow
existing manufacturing organic growth strengthening
facility of leading MNCs for Generation and
Disperse dyes facilities of through product mix
Commodity setting up high
and its Specialty merger and to improve
chemicals manufacturing sustainable RoE
intermediate Intermediates acquisition margins
under ‘Make In facilities in or and RoCE
facilities
India’ Initiative outside India
FINANCIAL OVERVIEW
38
Standalone Income Statement
PARTICULARS (INR Mn) FY14 FY15 FY16 FY17* FY18* H1-FY19*

Total Income** 5,839 7,826 8,967 10,355 9,046 5,241

Total Expenses 5,219 7,116 8,064 9,059 7,712 4,325
EBITDA 620 710 903 1,296 1,334 916
EBITDA Margin 10.62% 9.07% 10.07% 12.52% 14.75% 17.48%
Depreciation 335 202 204 222 250 126
Finance Cost 773 844 672 80 17 21
Exceptional Items 288 - (47) - -
PBT (776) (336) 74 994 1,067 769
Tax (2) 32 (17) 51 42 9
Profit After Tax (774) (368) 91 943 1,025 760
PAT Margin (13.26)% (4.70)% 1.01% 9.11% 11.33% 14.50%
Other Comprehensive Income - - - (1) 1 -
Total Comprehensive Income (774) (368) 91 942 1,026 760
Diluted EPS (INR per share) (28.92) (12.92) 2.87 25.82 22.33 14.66

** Includes other income *As per IND-As

39
Standalone Balance sheet (IND-As)
PARTICULARS (INR Mn) FY17 FY18 H1-FY19 PARTICULARS (INR Mn) FY17 FY18 H1-FY19
Equity 3,941 5,109 5,868 Non-Current Assets 5,289 5,424 5,778
Equity Share Capital 278 302 313 a) Property, Plant and Equipment 3,048 3,485 3,419
Other Equity 3,663 4,807 5,555 b) Other Intangible assets 1 1 1
c) Capital Work In Progress 360 321 596
Non Current Liabilities 1,963 1,890 1,760 d) Investment in Subsidiary/Associate 1,650 1,460 1,460
a) Financial Liabilities 1,579 1,432 1,293 e) Financial Assets
b) Provisions 90 122 122 (i) Investments 2 1 1
c) Deferred Tax Liabilities (Net) 294 336 345 (ii) Other financial assets 62 64 79
d) Other Non-Current Liabilities - - f) Other Assets 166 92 222

Current Liabilities 1,844 1,639 1,894 Current Assets 2,459 3,214 3,744
a) Financial Liabilities a) Inventories 403 568 781
(i) Borrowings 145 131 206 b) Financial Assets
(ii) Trade Payables 1,457 1,152 1,092 (i) Investments 32 222 160
(iii) Other Financial Liabilities 97 232 348 (ii) Trade Receivables 1,404 1,750 1,727
b) Other Current liabilities 135 110 231 (iii) Cash and Cash Equivalents 36 56 170
c) Provisions 10 14 17 (iv) Bank balances other than above 10 10 10
d) Current Tax Liabilities (Net) - - (v) Loans 47 120 146
(vi) Other financial assets 165 102 129
c) Current Tax Assets (Net) 95 106 126
d) Other Current Assets 267 280 495
GRAND TOTAL - EQUITIES & LIABILITES 7,748 8,638 9,522 GRAND TOTAL – ASSETS 7,748 8,638 9,522
40
Consolidated Income Statement
PARTICULARS (INR Mn) FY14 FY15 FY16 FY17* FY18* H1-FY19*

Total Income** 6,921 9,328 10,427 12,007 11,368 7,072

Total Expenses 6,186 8,313 9,173 10,393 9,542 5,659
EBITDA 735 1,015 1,254 1,614 1,826 1,413
EBITDA Margin 10.62% 10.88% 12.03% 13.44% 16.06% 19.98%
Depreciation 366 284 269 291 341 170
Finance Cost 802 863 738 91 35 26
Exceptional Items 288 - (48) - -
Share of profit from Associates 826 1,976 1,700 1,561 2,313 940
PBT 105 1,844 1,995 2,793 3,763 2,157
Tax 6 29 38 137 183 172
Profit After Tax 99 1,815 1,957 2,656 3,580 1,985
PAT Margin 1.43% 19.46% 18.77% 22.12% 31.49% 28.07%
Other Comprehensive Income - - - - 1
Total Comprehensive Income 99 1,815 1,957 2,656 3,581 1,985
Diluted EPS (INR per share) 3.7 63.63 61.88 72.84 77.93 38.29

** Includes other income *As per IND-As

41
Consolidated Balance sheet (IND-As)
PARTICULARS (INR Mn) FY17 FY18 H1-FY19 PARTICULARS (INR Mn) FY17 FY18 H1-FY19
Equity 10,324 14,047 16,018 Non-Current Assets 11,615 14,156 15,391
Equity Share Capital 278 302 313 a) Property, Plant and Equipment 3,668 4,033 3,934
Other Equity 10,046 13,745 15,705 b) Other Intangible assets 96 85 77
c) Capital Work In Progress 360 321 596
d) Investment in
Non Current Liabilities 2,025 1,945 1,813 7,163 9,477 10,416
Subsidiary/Associate
a) Financial Liabilities e) Financial Assets
(i) Borrowings 1,579 1,432 1,293 (i) Investments 2 1 1
b) Provisions 96 128 128 (ii) Other financial assets 71 74 89
c) Deferred Tax Liabilities (Net) 350 385 392 f) Other Assets 255 165 278
d) Other Non-Current Liabilities - -
Current Assets 3,115 4,123 5,092
Current Liabilities 2,381 2,287 2,652 a) Inventories 825 1,191 1,332
a) Financial Liabilities b) Financial Assets
(i) Borrowings 235 157 190 (i) Trade Receivables 1,475 2,093 2,381
(ii) Trade Payables 1,840 1,681 1,631 (ii) Cash and Cash Equivalents 122 125 324
(iii) Bank balances other than
(iii) Other Financial Liabilities 113 249 416 34 32 38
above
b) Other Current liabilities 141 114 232 (iv) Loans 45 118 145
c) Provisions 10 14 18 (v) Other financial assets 177 91 112
d) Current Tax Liablities (Net) 42 72 166 c) Current Tax Assets (Net) 95 106 126
d) Other Current Assets 342 367 634
GRAND TOTAL - EQUITIES & LIABILITES 14,730 18,279 20,483 GRAND TOTAL – ASSETS 14,730 18,279 20,483
42
Consolidated Financial Highlights
Total Revenue (INR Mn) EBITDA (INR Mn) & EBITDA Margins (%) PAT (INR Mn) & PAT Margins (%)*
1,826 3,580
12,007 1,614
11,368 1,254 2,656 31.49%
16.06% 1,957
13.44% 22.12%
10,427 12.03%
18.77%

FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18

RoE and RoCE Net Debt : Equity Net Worth (INR Mn)
14,047
ROE (%) ROCE (%) 0.41
31% 10,324
26% 25%
6,354
0.16
11% 11% 9% 0.1

FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18

* Inclusive of Share of profits from Associates

43
Capital Markets
Share Price Data as on 30th September, 2018
100% Kiri industries Ltd. Sensex

50%

0%
Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

Price Data (30th September, 2018) INR Shareholding Pattern as on 30th Sept, 2018

Face Value 10.00

Market Price 503.15 Public
38% Promoters
52 Week H/L 684.00/ 351.95 45%

Market Cap (Mn) 15,770.7

Equity Shares Outstanding (Mn) 31.34
DII FII/Banks
1 Year Avg Trading Volume (‘000) 438.72 4% 13%
44
Disclaimer
Kiri Industries Limited Disclaimer:
The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time.
There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of
new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any
omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or
Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact
us directly for any questions or clarifications at our end. This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business
plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking
by reason of context, the words ‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward looking statements. Actual results,
performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number
of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social
conditions in India. It is cautioned that the foregoing list is not exhaustive This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for
any investment decision

Valorem Advisors Disclaimer:

Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable,
but Valorem Advisors and the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of
the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from,
this Presentation is expressly excluded. Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.

For further details, please feel free to contact our Investor Relations Representatives:
Mr. Anuj Sonpal
Valorem Advisors
Tel: +91-22-4903-9500
Email: kiri@valoremadvisors.com
THANK YOU