project presentation 311013

PROJECT BALAJI

A CASE FOR SECOND MANUFACTURING FACILITY IN

INDIA

Indian Dairy – An Overview World’s largest and fastest growing markets for milk &

milk products. India accounts for 17 % of Global Milk production

India Milk production : 131 Mn Tons annualized (2012) 180 Mn Tons annualized by 2020 – (Source : National Dairy Plan)

Average annual growth rate : 3 - 4%

Milk distribution 43% of the milk is for self consumption 37% goes to small unorganized sector 10% goes to Co-ops and Government 10% private sector like SDDL

Source: NDDB (National Dairy Development Board) 2

Processed Cheese - Customer Wise Volume

3

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

In-stalled Ca-pac-ity Cheddar

3837 3837 3837 3837 3837 3837 3837 3837 3837 3837 3837

To-tal Pro-jected Vol-ume

4537 5026 5745.6 6344.16

6947.076

7549.992

8205.41359321417

8917.92745852663

9692.52205888049

10534.6229234578

11450.1310348716

Bri-tan-nia

3600 4000 4600 5100 5600 6100 6644.64285714286

7237.91454081633

7884.15691053207

8588.09949182958

9354.89408931437

Others

937 1026 1145.6 1244.16

1347.076

1449.992

1560.77073607131

1680.0129177103

1808.36514834841

1946.52343162822

2095.23694555724

1,000

3,000

5,000

7,000

9,000

11,000

13,000

Vo

lum

e i

n M

T

Mozzarella Cheese - Customer Wise Volume

4

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

In-stalled Capac-ity Mozz

3837 3837 3837 3837 3837 3837 3837 3837 3837 3837 3837

Total Pro-jected Vol-ume

4723 5596 6762.4 8213.44

9959.384

11705.328

13820.057452

9978

16386.802502

9794

19508.007963

9427

23309.805111

7643

27947.527281

9912

Domi-nos

2034 2712 3666 4885 6376 7867 9706.6638958

5947

11976.525230

3523

14777.183812

2933

18232.764280

3185

22496.417282

5072

Pizza Hut

1445 1590 1749 1924 2116 2308 2517.4215500

9452

2745.8454336

5697

2994.9958699

8123

3266.7535292

6119

3563.1697285

1362

Others 1244 1294 1347.4 1404.44

1467.384

1530.328

1595.9720070

4383

1664.4318389

7014

1735.8282816

6826

1810.2873021

8459

1887.9402709

7034

2,500

7,500

12,500

17,500

22,500

27,500

Vo

lum

es

in

MT

Schreiber Dynamix Dairies, Ltd.

Baramati Plant

5

Status of Baramati Plant

6

• 1 Mn Liters per Day : Present Milk Handling Capacity

• Aug 2014 : Target of Commercial Production From New Dryer

• 1.6 Mn Liters per Day : Post Expansion Milk Handling Capacity

• 435 Mn Lbs per Annum : Manufacturing Capacity

• Upto 1,480 Partners: Currently Deployed including 740 contractual partners

• 110 Customers : Currently Being Served

Challenges in Baramati

Milk : Demand exceeds supply

Space for Expansion : 9,693 Sq. Mtr Ground space available

(Against permitted limit of 50 % Ground Coverage, 40 % already covered)

7

Challenges in Baramati Utilities

Water Availability - A major constraint, highly dependent on Monsoon

Maximum utilization of Utilities already achieved

Manpower 50 % Manpower comprises of Contract Labor - upto 740 partners

per day Availability of contractual partners - A major challenge To manage a plant with more than 1,000 partners during some

periods is almost impossible. Social risk is jeopardizing the future of Schreiber Dynamix

8

Data : Jan 2012 till Aug 2013 (Avg. daily milk processing)

Milk Recep-tion

Pre-process SMP Dairy Whitener

Cheese UHT Casein -

0.05

0.10

0.15

0.20

0.25

0.30

0%

20%

40%

60%

80%

100%

120% 0

.27

0.2

5

0.0

9

0.0

3

0.0

5

0.0

2

0.0

8

0.2

0

0.2

0

0.0

9

0.0

2 0.0

5

0.0

2

0.0

2

75% 81%

104%

85%

97%

92%

22%

As Is Capacity Actual Utilization % Utilization

Sections

Raw

Mil

k (M

Gal

)

Uti

liza

ito

n (

%)

SMP Produced in both Dryers to meet market demand

9

Challenges in Baramati – Optimum Capacity Utilization

All Product lines fully utilized except Casein

Customer demands are increasing – Unable to cater growing demands of Cheese (Cheddar & Mozz)

Set up strategic alliance with SDDL – Nutricia (Danone) for a Greenfield project

Customers like Britannia, Pizza Hut, Dominos and many more want us to decentralize operation to meet any contingency & Optimize logistic costs

Opportunity offered by decentralization

- Plant in South India

10


- Plant in South India• Consistent availability of Milk. Milk availability within radius

of 150 kms – 3.1 Mio liters per day Andhra Pradesh : 1.10 Mio liters per day

Tamil Nadu : 0.94 Mio liters per day

Karnataka : 1.10 Mio liters per day

36 acres land acquired & Legal clearance obtained for Industrial construction

11


- Plant in South India Water availability

Water source - Ground Water Water Survey Conducted Good potential zone for ground water availability

Manpower Available Needs to train on Technical Skills & GMP

Other Utilities Built as per need

12

Schreiber Dynamix: Project Balaji

13

Plant Location

Existing PlantBaramati, State

Maharashtra

Proposed PlantKuppam, State

Andhra PradeshPopulation : 7 Mio in

100 KM radius

Delhi

590 Miles

14

Plant Location

TELANGANA STATE

Newly Separated Out From Andhra

Pradesh

KUPPAMAndhra Pradesh

15

Proposal Establish Second Manufacturing Facility in Kuppam in

Andhra Pradesh – Growth Opportunity for Schreiber Dynamix

Products proposed :

Cheddar & Mozzarella for Britannia, Dominos & Pizza Hut Infant Formulation (IF) & Follow On (FO) for Nutricia

(Danone) Milk Powder

16

Assumptions Milk Cost will be

At actual with Danone and Cheddar cheese.Fix for Skim Milk powder and Mozz Cheese

Local Manpower will be trained to improve skills

Required quantity of Biomass Briquettes will be available

Separate AR will be made for Bulk Coolers

17

Daily Raw Milk Requirement (Without Danone)

Year

18

FY17 FY18 FY19 FY20 FY21 FY22 FY23

Cheese - Cheddar + Mozzarella

0.2 0.225 0.24645 0.29295 0.38595 0.38595 0.38595

0.03

0.08

0.13

0.18

0.23

0.28

0.33

0.38

0.43

Mio

Ltr

s

Year Wise Production – Cheese (Without Danone)

Year

19

YOY Growth 9.5% 18.9% 31.7% 31.7% 31.7%


Cheese - Cheddar + Moz-zarella

6210 6986.25 7652.2725 9096.0975 11983.7475

11983.7475

11983.7475

1000

3000

5000

7000

9000

11000

13000

15000

17000

19000M

T /

Year

Tentative Cost Estimates (Without Danone)

Exchange Rate : 1USD = INR 60

20

Sr. Description Mio INR Mio USD1 Land development & Civil Cost 655 11.102 Processing Equipment 1,296 21.973 Utilities 925 15.684 Laboratory Equipment 48 0.815 Finished Goods + Engineering Stores 114 1.936 Engineering charges & Statutory approvals 25 0.42

7 Startup Expenses 15 0.258 Contingencies 62 1.049 Travelling & Administrative expenses 46 0.78 Total Tentative Expenditure 3,186 54.00

Saving Calculations ( Without Danone)

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Total Volume (Mio lbs /year)

- - - 23.54 26.39 29.31 34.35 43.63 43.63 43.63

Average VI (USD /year) - - - 0.31 0.31 0.31 0.31 0.31 0.31 0.31

Net Savings (Mio USD / Year)

- - - 7.21 8.09 8.95 10.54 13.58 13.58 13.58

Estimated Investment (Mio USD)

- - - 54.00 54.00 54.00 54.00 54.00 54.00 54.00

ROI % - - - 13% 15% 17% 20% 25% 25% 25%

Spending Plan (Mio USD)

4.00 30.00 20.00 - - - - - - -

21

Daily Raw Milk Requirement (With Danone)

Year

22


Total Milk 0.2 0.225 0.53550293812300

7

0.54697836637941

2

0.55145392228934

6

0.58496933418314

0.62526595003902

1

Danone IF,FO, Others & SMP (In-cluding Proteinex base)

NaN NaN 0.11448293812300

7

0.13764836637941

2

0.16550392228934

6

0.19901933418314

0.23931595003902

1

SMP NaN NaN 0.17457 0.11638 0 0 0

Cheese - Cheddar + Mozz.

0.2 0.225 0.24645 0.29295 0.38595 0.38595 0.38595

0.05

0.15

0.25

0.35

0.45

0.55

0.65

Mn

Ltr

s

Year Wise Production – Cheese, Danone & SMP

Year

23

SMP production stop due to increase in

production for Danone


Danone IF,FO, Others & SMP (In-cluding Proteinex base)

NaN NaN 9233.08802718783

11104.5305195902

13356.6557504489

16066.7087149768

19326.7239230924

SMP NaN NaN 4792.03283937824

3194.68855958549

0 0 0

Cheese - Cheddar + Mozz.

6210 6986.25 7652.2725 9096.0975 11983.7475

11983.7475

11983.7475

2500

7500

12500

17500

22500

MT

/ Y

ear

Additional Tentative Cost Estimates (for Danone)

Sr. Description Mn INR Mn USD1 Land development & Civil Cost 144 2.162 Processing Equipment 1,421 23.243 Utilities 275 4.214 Laboratory Equipment 15 0.245 Finished Goods Stores 59 0.966 Engineering charges & Statutory approvals 13 0.217 Startup Expenses 15 0.258 Travelling & Administrative expenses 7 0.129 Contingencies 46 0.77 Total Tentative Expenditure 1,995 32.16 *

Exchange Rate : 1USD = INR 60

24* Will be adjusted after meeting with Danone

Saving Calculations (With Danone)

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Total Volume (Mio lbs /year)

- - - 23.54 26.39 63.17 67.62 71.82 78.93 87.48

Average VI (USD /year) - - - 0.31 0.31 0.34 0.35 0.38 0.38 0.38

Net Savings (Mio USD / Year)

- - - 7.21 8.09 21.52 23.84 27.13 29.93 33.29

Estimated Investment (Mio USD)

- - - 54.00 54.00 86.16 86.16 86.16 86.16 86.16

ROI % - - - 13% 15% 25% 28% 31% 35% 39%

Spending plan (Mio USD)

4.00 30.00 20.00 20.00 12.00 - - - - -

25

Sr. Product Production lbs /day

VI (INR /lbs)

VI (USD /lbs)

Total VI / day (Mio USD)

1 Cheddar Cheese 19,841 22.68 0.378 0.0075

2 Mozzarella Cheese 19,841 27.22 0.454 0.0090

3 Non Hygroscopic Whey Powder 19,841 11.34 0.189 0.0038

4 FAT 8,708 4.54 0.076 0.0007

Total VI per day 0.0209

Total days of operation per year 345

Total VI per annum 7.21

Total investment in Mio INR 54

ROI 13%

Product wise VI and ROI Calculation (Without Danone)

26

First Full Year Of Saving - FY17

Product wise VI and ROI Calculation (With Danone)

Sr. Product Production lbs /day

VI (INR /lbs)

VI (USD /lbs)

Total VI / day (Mio USD)

1 Cheddar Cheese 24,449 22.68 0.378 0.0092

2 Mozzarella Cheese 24,449 27.22 0.454 0.0111

3 Demineralized Whey Protein (DWP 28%) 7,275 25.40 0.423 0.0031

4 FAT 39,021 4.54 0.076 0.0030

5 Danone IF, FO and OTHERS 58,995 27.22 0.454 0.0268

6 SMP 30,622 18.14 0.302 0.0093

Total VI per day 0.0624

Total days of operation per year 345

Total VI per annum 21.52

Total investment in Mio INR 86

ROI 25%

27First Full Year Of Saving - FY19

Project Highlights – Without Danone

Establish 2nd Manufacturing Facility in Kuppam, Andhra Pradesh

Total Investments : USD 54 Mio

Estimated VI per annum : USD 7.21 Mio

ROI (*) : 13.36 %

Products proposed : Cheddar & Mozz Cheese

SMP & Whey Powder

(*) First Full Year Of Saving - FY17

Project Highlights – With Danone

Augment Infrastructure to cater for Nutricia (Danone)

Additional Investments : USD 32.16 Mio

Total Investments : USD 86.16 Mio

(USD 54 Mio + USD 32.16 Mio)

Estimated VI per annum : USD 21.52 Mio

ROI (*) : 25 %

Products proposed : Infant Formulation (IF) & Follow On (FO)

for Nutricia (Danone)

(*) First Full Year Of Saving - FY19

Water Recovery Projects

31 Oct 13

Project in Brief Availability of water for plant operations has become challenge. SDDL present water requirement is 3,058 M³/day. During 2013 Summer, we had average shortfall of 757 M³/day. Additional water of 1,500 M³/day needed post Nestle dryer in operation. This may lead to average shortfall of 2,257 M³/day if similar drought

situation repeats. We can treat COW water coming out from new Evaporator of Nestle

Dryer project & can purify COW water about 450 M³/day. There is a separate AR for water recycling proposing to generate 900

M³/day of water from existing evaporators, CIP flushing and WTP backwash.

Still there will be shortfall of 907 M³/day.

Cow Water Treatment Plant New Evaporator

COW Water Treatment ProjectSummary

Installation of Cow Water Treatment Plant with following parameters:1) Installation of Filtration unit to process 24.4 KLPH evaporator

Condensate (COW) Water from new evaporator.2) Treatment plant output 21.9KLPH at 90% recovery rate.3) The plant will be designed to operate for 20hrs/day.4) The treated permeate will be used to replace Raw/soft water in

process CIP and secondary applications.

• Estimated Investment – USD 735,356• Expected Savings – USD 99,522• Expected ROI – 13.5%

COW Water Treatment ProjectInvestment

Sr. DescriptionAmount

(USD)

1.RO Polishing Unit, Skid Mounted with MCC and Control Unit, Feed Rate 24.4KLPH, RO Permeate Rate 21.9KLPH, Recovery Rate 90%

414,206

2.Buffer Tank (20KL), Pump, PHE, UV System with 2 lamps (Hitech), Activated Carbon Filter (Ion Exchange), etc. 184,909

3. Utility Piping, Valves upto Battery Limits 20,600 4. Electrical cables and switchgears for Power Supply and Lighting 10,800 5. Fabrication of platforms, supporting structures and monorails 10,800 6. Chemical storage and dosing system 10,800 7. Maintenance Spares for 1 year 50,000 8. Civil construction with metal sheet roof including drainage 22,941 9. Civil foundations for equipment installation 10,300

Total Investment for COW Water AR 735,356

COW Water Treatment ProjectSavings Calculations

Sr. Description Unit Treated COW Water Quantity

Average Tanker Water Charges

Total Savings

M³/day M³/Year USD/M³ USD/Year

1Reduction in Tanker Water with COW Water Treatment

M³/ year 438.98 151,448 1.27 192,603

2Less Plant Operating Cost

USD/ Year

438.98 151,448 (82,608)

3Less Plant Operations Manpower Cost

USD/ Year

4 Partners /

day (10,473)

Total Water Reduction M³/year

151,448 Net Savings --> 99,522

Estimated ROI: 13.5%

Water Recycling Project(COW water – Existing Evaporator, CIP Rinse/Flushing and WTP Back Wash)

Water Recycling ProjectSummary

Install Water Treatment/Purification Plant with following parameters:1) Installation of water purification plant for existing evaporator

COW water, CIP final rinse/flushing & WTP back wash water. 2) Approx. 1,150 m3/day water will be treated and output capacity

would be 900 m3/day with recovery rate 78.3%.3) The plant will be designed to operate for 19hrs/day.4) The treated permeate water quality will be as potable BIS

standard 10500 and this will blend in reservoir tank

• Estimated Investment – USD 936,960• Expected Savings – USD 217,466• Expected ROI – 23.2%

Water Recycling ProjectInvestment

Sr. Description Amount (USD)

1. Water treatment Plant 60m3/hr 465,747

2. RZ-163-12- Inline Hydro Optic Disinfection 76,235 3. CIP Kit & Accessories 6,072 4. Flow Meter 4" Size or Flow Switch 10,794 5. Aseptic Sampling Valve 2,699 6. Ballast Thermo Control Cabinet 8,096 7. Utility Piping, Valves upto Battery Limits 147,273 8. Electrical cables, switchgears for Power Supply & Lighting 19,636 9. Fabrication of platforms, supporting structures and monorails 39,273

10. Chemical storage and dosing system 29,455 11. Spare 1KW UV Lamp 1,598 12. Start-up & Training 10,300 13. Civil construction and foundations for equipment installation 49,091 14. Equilization Tank 300 KL 70,691

Total Investment for Water Recycling AR 936,960

Sr. Description Unit Quantity of Treated Water

Average Raw water cost

(MIDC+Tanker)

Total Savings

M³/Year USD/M³ USD/Year

1 Water avialable for reuse M³/ year 273,600 1.08 294,178

2Less:- Plant Operating Manpower Cost

USD/ Year

-

3Less:- Plant Operating Cost (Utilities/Chemical/Maint)

USD/ Year

273,600 0.40 (109,440)

4

Benefit:- WWTP treatment cost reduction. Considering stoppage of 1 stream of 500M³/day, times 300 days/year

USD/ Year

150,000 0.22 32,727

Total Water Reduction M³/ year 273,600 Net Savings --> 217,466

Water Recycling ProjectSavings Calculations

Dryer Revampingfor

Baby Food Products

31 Oct 13

SCOPE STATEMENT

SDDL DANONE

Civil work for Wet Blending set up & its CIP station. Wet Blending Set up all Equipment.

Utility lines from battery limit for wet blending set up. CIP station for Wet blending equipment.

Pipe lines for Product / Milk transfer to & fro from wet blending set up.

Electrical panel, PLC Control for wet blending set up.

Puf paneling for Isolation of Mineral Dryer from other facilities.

Provision for Interfacing of the New PLC with existing PLC.

Dryer Concentrate Vat replacement with Hygienic design & CIP system for the same.

Veg Oil unloading facility.

Fluidized bed flex plate replacement.

Fines Recovery system modification.

Crack Test to be carried out for Dryer.

Ventilation system for all floors at Dryer. Filtration level - G4, F7, H10

HVAC for Powder packing. Humidity control will be provided. Filtration - G4, F7, H10Sealing machine for sealing two liners & Nitrogen flushing provision. (New machine).

SCOPE STATEMENT

SDDL DANONE

Balance tank replacement at Evaporator with Hygienic design.

Main Air Supply fan Filtration system modification to take atmospheric air only. Filtration G4, F7, H10

Epoxy coating for floor at Dryer. Vendor suggested Brit Proofings.

Separate entry for Lactose Dryer.

Wet Cleaning Automation.

Cold Fluid bed Dehumidifier replacement and relocation. Provision of Dehumidifier for Root Blower. Relocation of dehumidifier on terrace.

Gravity feed Metal Detector before packing. Sensitivity : SS 1.2 mm

Relocation of Filtration system of Fluid bed blowers.

Isolation of Wet area (HPP & Concentrate vats) in Dryer with separate entry. (GA in slide no.9)

Tentative Execution Schedule

Activity Period Week 1 Week 2 Week 3 Week 4 Week 5

Construct walls with PIR sandwich panels 4 Weeks

Epoxy coating of Floors & Structure 1 Week

Fines Return & Fluid bed revamping 2 Weeks

Dryer Wet section Revamping 2 Weeks

Ventilation system for Dryer & Packing 3 Weeks

Balance Tank replacement at Evaporator 2 weeks

Air Intake Filtration system modification 2 weeks

Wet Cleaning Automation 4 Weeks

• Wet Blending set up installation is Offline activity & not considered here.• Activities those require total Dryer shutdown are only considered.• Crack Test will be done separately & thus not considered.

Cost EstimateActivity Estimated

Investment (INR)Estimated Investment (USD)

Isolation of Dryer from other production area. 16,443,482 274,058

Crack Test of Dryer 1,444,065 24,068

Air Supply Fan modifications and Provision of Hepa filteration for all Fans / Blowers 12,734,630 212,244

Evaporator Balance tank replacement with Hygenic Design 405,875 6,765

Cyclone Modification 29,499,893 491,665

Vacuum cleaners 1,500,000 25,000

Gravity Feed Metal Detector & auto sampler for powder packing 5,561,620 92,694

Laboratory Equipments * 4,100,000 68,333

Air Ventilation System for Dryer and Powder Packing 14,390,229 239,837

Wet Cleaning Automation 16,961,866 282,698

Civil Building & utilities provision for Wet Blending set up 23,080,158 384,669

Engineering & Project Management 1,500,000 25,000

Nitrogen Plant Capacity Upgrade 4,000,000 66,667

Repairs after Crack test 5,000,000 83,333

Electrical cable rerouting at Dryer due to civil modification 2,000,000 33,333

Crane Charges and Labor Charges 2,500,000 41,667

Insurance 100,000 1,667

Contingencies (10%) 13,614,682 226,911

Estimated Investment 154,836,500 2,580,608

Danone Investment for Wet Blending set up 46,922,500 782,042

Estimated Investment (with Danone) 201,759,000 3,362,650

Euro 1 = INR 85, USD 1 = INR 60

EQ Audit Compliance

Euro 1 = INR 85, USD 1 = INR 60

EQ Audit Compliance SDDL Recommendation

Activity Estimated Investment (INR)

Estimated Investment (USD)

Estimated Investment (INR)

Estimated Investment (USD)

Roof Replacement (2,900 Square meter)

2,651,228 44,187 1,325,614 22,094

CIP Kitchen for Dryer and Independent CIP arragement for Fluidized bed

20,000,000 333,333 20,000,000 333,333

Removable Thermal Insulation Panels

15,107,149 251,786 -

-

New Filler 31,058,438 517,641 -

-

Flexible connections to replace boots and flanged connections

4,209,132 70,152 4,209,132 70,152

Contingencies (10%) 7,302,595 121,710 2,553,475 42,558

Estimated Investment 80,328,542 1,338,809 28,088,221 468,137

Cheese Expansionat Baramati

31 Oct 13

Project in Brief

Existing Cheese capacity - 630 MT / Month. (Mozzarella 460 MT & Cheddar 170 MT).

Proposed Cheese capacity - 950 MT / Month. (Mozzarella 650 MT & Cheddar 300 MT).

Existing Cheese manufacturing set up will be used for Cheddar production.

New set up will be installed on adjacent terrace and will be used for Mozzarella production.

Old Cheese manufacturing Equipments will be purchased from Tine Dairy, Norway without EPCG benefit.

Volume Projections

FY 13 FY 14 FY 15 FY 16 FY 17

MT/ year

Mozzarella 4,720 5,600 6,760 8,210 9,960

Cheddar 2,950 3,270 3,730 4,120 4,520

Total 7,670 8,860 10,500 12,340 14,470

Current Plant Capacity 7,560 7,560 7,560 7,560 7,560

Proposed Plant Additional Capacity 3,840 3,840 3,840

Proposed Capacity After expansion 11,400 11,400 11,400

Additional Volume 2,940 3,840 3,840

SMP Production with additional Milk capacity generated due to on line milk standardization (Kg / month)

73,000 73,000 73,000

SMP VI USD / Kg 0.33 0.33 0.33

Cheese VI USD / Kg 0.37 0.37 0.37

Additional Differential VI Generated per year for Cheese (USD)

1,078,000 1,408,000 1,408,000

Additional VI Generated per year for SMP (USD)

292,000 292,000 292,000

ROI 35.2% 43.6% 43.6%

USD 1 = INR 60, Euro 1 = INR 85

Commercials

Estimated Investment : USD 3.89 Mio

Estimated Savings : USD 1.37 Mio

Estimated ROI : 35.15%

Questions ?

project presentation 311013

Investor Relations