>DCM SHRIRAM CONSOLIDATED LIMITED (HDFC SECURITIES)

Company Background
DCM Shriram Consolidated Ltd (DSCL) is an integrated business entity, with an extensive and growing presence across the entire Agrirural value chain and energy intensive Chloro-Vinyl industry. With over 30 years of experience in managing large scale process industries with sustained high level of performance, DSCL meets the needs of a wide range of customers from farmers to industrial users, from house builders to business owners. With a large base of captive power produced at a competitive cost, the company aims at maximizing value creation in its Chloro-Vinyl businesses. High-value and knowledge based business being incubated by DSCL
include Hariyali Kisaan Bazaar, Fenesta Building Systems and Hybrid Seeds.

DSCL has manufacturing facilities at Kota (Rajasthan), Bharuch (Gujarat), and Ajbapur, Rupapur, Hariawan and Loni (UP). Its hydrid seed operations are at Hyderabad (India), Vietnam, Philippines and Thailand. The company also has its windows fabrication units at Bhiwadi, Bangalore, Mumbai, Hyderabad and Chennai.

The promoters hold a 55.3% stake in the company, institution holding is 16.5%, foreign shareholders (10.6%) and the rest is held by the public and non-promoter corporation holdings. LIC of India, New India Assurance Co, Reliance Growth Fund, Sundaram BNP Paribas Select Midcap Fund hold 8.1%, 1.2%, 3.3% and 1.1% respectively.

Business Segments
Chloro-vinyl Business (Chemicals and plastics business form 23.3% of consolidated sales in FY09)

■ Chemicals: This comprises of Caustic Soda (Lye and flakes), Chlorine (Liquid and Gaseous) and associated chemicals including Hydrochloric acid, Stable Bleaching powder, Compressed Hydrogen and Sodium Hypochlorite. The company has two manufacturing facilities located at Kota (Rajasthan) and Bharuch (Gujarat) with full captive power. It has recently increased the capacity of its chloralkali manufacturing facility at Bharuch from 200 TPD to 440 TPD and also set up a 48 MW coal based power plant to generate economical power at Bharuch. The capacity at Kota is ~330 TPD and the total captive power capacity is 143 MW.

■ Plastics Business: PVC Resins & Compounds
This is highly integrated, covering manufacture of PVC resins and Calcium Carbide, PVC Compounds and UPVC Fenesta Windows (a consumer product). The company is able to capture value at each stage of the entire value chain. PVC Resin is fully integrated with captive production of acetylene, chlorine and coal based power, located at Kota. PVC Compounds of which the company is the largest manufacturer in the organised sector is backed by an innovative Polymer Application Development Centre (iPAC) at Gurgaon, India.

■ Cement: (3.6% of consolidated sales in FY09) DSCL processes the waste sludge produced during the manufacture of calcium carbide to make cement. The company has a cement capacity of 4 lakh TPA.

■ Fenesta Building Systems: DSCL, in technical collaboration with Spectus Window Systems, UK, launched Fenesta, a contemporary range of unplasticized poly vinyl chloride (UPVC) windows and doors. These windows and doors have consistent quality, elegant designs, superior thermal and sound insulation, complete technical support, and are backed by warranty. The company has now indigenised the process at its state-of-the-art extrusion facility at Kota. DSCL has set up fabrication shops in all the five major cities and marketing presence across 11 cities. The business is evolving and the product has received good response in the market.

Agri-Business
■ Urea (22.1% of consolidated sales in FY09): The company has the dual feed naphtha/LNG based urea plant with a capacity of 3.79 lakh TPA., located at its integrated manufacturing facility at Kota. It was operating on 100% LNG which has now been replaced by natural gas from the KG Basin.

■ Sugar (17% of consolidated sales in FY09): The company’s sugar business comprises of 4 facilities with a combined capacity of 33,000 TCD in Central U.P. and co-gen power capacity of 94.5 MW.

To see full report: DSCL