India’s widening horizons – The role of vertical integration in responding to India’s energy needs Presented by Ahmed Buhari Founder President & CEO Coal & Oil Group 9 th March 2010 The need for Integration • Understanding of var iou s as pect of Ener gy • Manage volati li ty in Pr ices • Long T er m Fu el / Shippi ng secur it y • Cost Reduction • Risk Mitigation
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India’s widening horizons –The role of vertical integration in
responding to India’s energy needs
Presented by
Ahmed BuhariFounder President & CEO
Coal & Oil Group
9th March 2010
The need for Integration
• Understanding of various aspect of Energy
• Manage volatility in Prices
• Long Term Fuel / Shipping security
• Cost Reduction• Risk Mitigation
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Transport – Investment in Freight• Key component of Energy chain
• Saw rates higher than cost of Fuel…….2006-08
• Ability to design customized ships / barges / new generation trucks
• Invest in Floating cranes
• Reduce Freight risk
Coal Sourcing – An investor’s view• Has been a wild goose chase in Indonesia, South Africa, etc.,
• Many have invested in overseas mines but yet to receive coal
• Over the past decade few large mines opened, except M&A
• Investors are cautious about investments in Indonesia / RSA/
Mozambique due to new regulation, pricing policies, infrastructure etc.,
• Time to Mine vs Demand – a disconnect
• More stability through LT Contract
• Investment / and or LT Contracts are necessary for security of supply
• Buying stocks of companies i/o physical assets
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Attractive Investments
• Port development – eg., Karaikal, Gangavaram, Krishnapatnam, etc.
• Mines in Botswana, Mozambique, Indonesian (LRC), India
• Good time to buy ships
• Equity stake in Power companies with good sales mix + fuel security
C&O Group A Dubai/India Based US$ 500M Integrated Energy Company
Promoters Ahmed Buhari & family (Promoters of the US$ 7.0 Billion ETA -Ascon –Buharia Group,Dubai & Rostamani Group, Dubai
Activities Imported Coal Supplies to India (6m tons), Coal Mining, Shipping, Logistics, ShipOwning, Power Generation in India (1,200mw by 2012 in Tuticorin).
Customers Tata Power, Reliance Energy, Torrent Power, Calcutta Electric, GrasimGroup, Ambuja Cements, TNEB, TNPL, Apgenco, KPCL, GEB etc.
Suppliers Anglo American(UK), TOTAL(France), Kideco(Indo), Shenhua, Minmetals, China coal(China), BHP Billiton(UK), KOCH Carbon(USA), Morgan Stanley(UK), Griffin(Aus) etc.
Bankers SBI Assoc, IOB, HSBC, Standard Chartered, BNP Paribas, Societe Generale, MorganStanley, Corporation Bank, Bank of Baroda, Bank of India, UCO Bank, PNB etc.
Group ProfileGroup Profile
Buhar ia Family C&O Founder wi th Chai rman of Tata GroupBTG Signing with HPE
C&O with Chairman of Infosys
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Conclusion
• Forward / Backward integration is essential for
reducing risk & maximizing returns
• Time is ripe for investments in India for Power,Infrastructure, etc.,
Thank You !