Business Case Presentation

04/12/23

SpinWell Corp. LtdPlates and Coil Division

OPERATION GROWTH

Contents

33

22

11 Global ScenarioGlobal Scenario

Way Forward to GrowthWay Forward to Growth

Impact on SpinWell CorpImpact on SpinWell Corp

66

55

44 Options SuggestedOptions Suggested

77

RecommendationRecommendation

Score CardScore Card

Addressing ChallengesAddressing Challenges

Global Scenario

China – Capacity

Idling

Asia Demand Plunging

Europe Economic

Crises

Volatile Foreign

Exchange

Middle East Crises

Increasing Cost of

Raw Material

VAT specialism

US Loan Defaults

India Growth

Rate Going South

Global Issues

Impact on Spinwell

Low Cost Pipes In India dumped

by China

Strong Domestic Competition

Demand from ShippingGoing Down

Reducing MarginsRising Cost of Raw Material

Anjar Facility operating on 26% Capacity

SpinWell Financials

6110

356

6906

809

6532

525

5753

410

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

2008-09 2009-10 2010-11 Dec-13

SalesPBT

Pro

ject

ed

Growth Way Forward

Vertical

Integration

Strategic &

Operational

ObjectivesInnovation

Consultant

Advise

Three

Options

Option 1 : T3 Profiling Technology

• Innovation in Carbon Steel Flat Product

• Demands on product properties and Cost Pressure

• Process of Tailored Tubes – T3 Profiling Technology

• Light weight steel tubes

Option 1 : T3 Profiling Technology

BENEFITS

Lighter and 20% Cheaper

Technology Enhancement

Safety

Lower Emission

Increased Safety

Hybrid Cars in Europe shall be benifitted as Automobile Components can be manufactured from SCL product

Automobiles can be lighter and 20% cheaper using this technology

CO2

Option 1 : T3 Profiling Technology

Weak Indian Hybrid Market

Recession in Auto Ind

Long time to enter in Auto Majors

Strong European Market for Hybrids

German Auto major tie-up

Emission Reduction Technology

Steel Mann Corp working on similar technology

Continuous price pressure in Auto

High Capital Investment

WS

T O

Dependence on growth of Shipping industry reducing

Operating Margin higher %

Exapansion of Product Portfolio as per Strategic Objective

Option 1 : T3 Profiling Technology

• Cost Rs 6000 / MT

• Price Rs 7200 / MT

• Gross Margin up from current 12% to 20%

• Expected additional 33% Sales

• Expected additional operating profit of 18 Cr

• Capital Investment Required is 250 Cr (Refitment)

Option 2 : Construction (Sustainable Steel Technology)

People, Planet and Profit

Higher share of Govt Spending

Target 0

Low Wastage, Hight Flexibility, Off-site Mfd, High Speed, Aesthetic Appeal

Zero Carbon Building – A Reality

34% of Govt Spending instead of 17%

Strategic Objective of Diversification in Construction of Building using Sustainable Steel Technology

Sustainable Social, Environmental and Economic Benifits

Triple the Bottom Line

Option 2 : Construction (Sustainable Steel Technology)

Margins not expected to improve

Application in All mix of buildings

Higher share in spending from Govt

Stake acquisition can take time

WS

T O

No competition for next 2-3 years

Diversification

Zero Carbon Strategy

Option 2 : Construction (Sustainable Steel Technology)

• Additional Projected Sales:Rs. 93.5 Cr (Gov Contracts)

• Cost Rs 7,800 / MT

• Price Rs 12,000 / MT

• Gross Margin down from current 65% to 60%

• Sales expected to double

• Capital Investment Required is 225 Cr (Expansion)

Option 3 : Vertical Integration – Stake in PetroTech

• Acquire 50% stake in PetroTech

• PetroTech CMS (Construction Management Software)

• Value to asset owners, operators & contractors

• Status of pipeline using Geo-referencing

• Managing complex projects to quality, safety, schedule

and environment

Option 3 : Vertical Integration – Stake in PetroTech

Entry into non core business

Manage more no. of projects

Usage in Indo-Pak-Iran gas pipeline

WS

TO

R&D on tracking solution

Integration with spinwell R&D software for pipe laying

End to end solution - EPC

More business for Piping Division

Competitors can buy the CMS software

It’s a startup company

Option 3 : Vertical Integration – Stake in PetroTech

• Lease fee per annum per project 75 Lacs

• Cost of design per project 50 Lacs

• Projected Revenue 18.49 Cr (9 .2 Cr)

• Projected Margin 28%

• Topline addition to Piping Business 89.6 Cr

• Bottomline addition to Piping business 9.8 Cr

• Cost of 50% Stake 23 Cr

• ROI 1.5 Years

Recommendation

• Select Option - 3 – Acquiring 50 % stake in PetroTech

• End to End Piping Solution Company – Plates, Pipes, Laying

• Broaden the clientele of Oil and Gas through sales of software

• Entry to non Oil and Gas Sector

• Expand operations to pipe laying – Acquire Turnkey

Management Expertise

• Alignment with strategic objective of pipe laying leveraging on

software operations

• Use access to government and end to end solution capability to

bag India-Pakistan-Iran gas pipeline project as turn key

contractor.

Recommendation

• Select Option - 3 – Acquiring 50 % stake in PetroTech

• Become market leader in Piping Turnkey Project Market

• Expand turnkey contractor portfolio to other infrastructure sector

• Further expand operations into Power, Steel and Other similar

sectors requiring Turnkey Services.

• Accomplish the strategic objective of generating Rs. 12000 by

year 2020.

• Increase in capacity utilisation of Anjar pipe manufacturing

facility by 17% (total 80%) which will help the facility sustain.

• Payback period of 1.5 years

Top 3 Criteria

• Getting into Turn key / EPC Business and achieve strategic

objective of Rs. 12000 Cr turnover

• Tap Australian and Middle East pipe laying business by

offering one stop solution after having experience in

domestic projects.

• Higher returns on capital investment.

Score Card

Option-1 Option-2 Option-3

EPC Business 0 5 8

Internationalization 5 6 6

ROI 1 4 10

Addressing Challenges

• Build strong team with focus on EPC competency

• Build particularly cost, time and performance risk

management capability through processes

• Provide only Petrotech’s software to competitors and retain

the tracking software portion developed by Spinwell R&D

• Get experienced business leaders from sister divisions to

manage this company

Questions

Questions