Hindusthan National Glass Industries Limited 1 HNG Brief

Hindusthan National Glass & Industries Limited 1

HNG – Brief Introduction • Incorporated in 1946, promoted by visionary entrepreneur late Shri C K Somany– Winner of International Phoenix award in 2013. • Market leader in Container Glass Industry with over 50% market share in India. • Caters to all end user segments- Liquor, Beer, Pharmaceuticals, Processed Foods, Cosmetics and Toiletries. • Pan India presence with 7 container glass plants and 1 Float glass plant. • Also had one container glass manufacturing unit in Germany. Taken over in 2011 and sold in 2016 after successful turnaround. • State of the art manufacturing facilities with Exports to USA and Europe. Rishikesh Bahadurgarh Neemrana Halol Rishra Sinnar • Plant operations started with 30 TPD furnace at Rishra West Bengal in 1952. Current installed capacity ~4300 TPD. • Acknowledged turnaround specialist in the Glass industry – Key strategy is to take over sick units and make them profitable. • Listed company since 1995 with group turnover of more than $ 400 Million. • ISO 9001: 2000 & FSCC 22000 certified Plant operation Naidupeta Pondicherry 2

The Growth Path Late C K Somany Sanjay Somany Chairman 2011 2012 -13 Acquisition of Agenda -Start up of 650 TPD furnace at Glass , AG Germany (# Nashik , MH. Sold in 16) 2011 -Start up of 650 TPD furnace at 2007 Naidupeta , AP Greenfield expansion Acquisition of Haryana Set up Brownfield expansion sheet Glass Plant 2007 Float Glass Neemrana , plant in 2005 Halol Acquisition of L&T’s Nashik plant Mukul Somany 2004 VC & MD 2002 Acquisition of Owens Brockway, (US MNC) 2002 Plants in India Expansion of 2001 capacity to 1, 100 TPD 1952 Company laid the foundation stone First plant at Rishra 30 TPD 2005 Late C K Somany – Founder & Chairman of HNGIL. Was CAPEXIL Chairman and President of AIGMF. Awarded as “Glass person of the year 2013” by Phoenix Committee. First Indian to receive this prestigious award. Sanjay Somany – 3 decades of experience in glass industry. Also the ex President of AIGMF. Mukul Somany – 25 years of glass industry experience. Was Chairman of CII – Eastern region and President of AIGMF. Currently National Council member of CII. 3

HNG : Growth Drivers End user segments expected to grow at ~10% over next 5 years Expansion of capacity – 2 new plants in Naidupeta & Sinner • Capacity well poised to accommodate demand growth • Equally distributed capacity PAN India basis Think Glass, Think HNG Demonstrated track record of inorganic growth through turnaround of sick units with highly skilled manpower 1. 2. 3. 4. Turnaround of Owens Brockway , Pondicherry and Rishikesh Successful closure of Pune unit of Owens Brockway Turnaround of Haryana Sheet Glass, Neemrana Turnaround of HNG Global GMBH , Germany Use of best-in-class Technology with Captive Design and Manufacturing capabilities • • State of the art GEIL facility – In house IS machine manufacturing AMCL – Engineering products like Root blowers, VRPM, Tyre Press etc. 4

HNG Competitive Landscape 1 2 Geographical spread Scale • • • Only HNG has the Pan India presence. Eastern India, there is no other player except HNG. AGI - 2 plants based in Hyderabad Piramal centered in Gujarat Canpack in Maharashtra • Increased its capacity in Western & Southern India through brownfield & greenfield expansions to cater to high demand markets. 3 Colour Spread • HNG Serves all three colour segments. • Competitors cater to limited colour options. Segment Spread • Only HNG serves to all end-use segments. • AGI doesn’t make cosmetic & vials. • Piramal focuses on Pharma, C&P. HNG AGI Piramal 4 Firozabad cluster Canpack 5

Our Strength ~State of art Manufacturing Facilities No. of Furnace Capacity (TPD) Colour IS/AIS Printing Machines Lines Other in house facilities Rishikesh 2 440 Flint , Amber & Green 6 3 Bahadurgarh 3 860 Flint , Amber & Green 16 4 • • 132 KV substation Foundry & mould workshop Neemrana 1 230 Flint , Amber & Green 3 • Maintained in good conditions so as to restart when required Rishra 3 860 Flint , Amber & Green 14 3 Nasik 2 980 Flint , Amber & Green 10 4 • 132 KV Substation Naidupeta 1 650 Flint 6 3 Puducherry 1 330 Flint , Amber & Green 4 • • 132 KV Substation Sand Beneficiation & Pet coke Pulveriser Sand Beneficiation plant Foundry & Mould workshop HNG 13 4350 59 17 q On site printing facility at Bahadurgarh, Rishikesh, Nasik , Rishra & Naidupeta q Open Access power, Sand beneficiation & Pet coke pulverizers facilities at most of the plants. q Furnaces equipped to run all 3 types of fuel – solid (pet coke), liquid (Furnace Oil) & gaseous (LNG) q Long term Soda Ash purchase contract with Ansac & other global players. 6

HNG : Technology partners Batch house Furnace distributors and Fore hearths Hot end equipment Cold end equipment Utilities 7

State of art Manufacturing Facilities Batch House Furnace Cold End Inspection Forehearth & Distributors Packaging 8

HNG : Equipped to supply to global customers What Technology gives Advanced mould manufacturing Homogeneous batch feed to the furnace IS machines fully equipped with B & B, P & B and NNPB Flexibility in furnace firing for any colour conversion Automatic inspection machines q Reliability , Repeatability and Reproducibility in making glass bottles. q NNPB & Advanced B&B process produce light weight glass bottles with increased strength. q Bottle of any size ( 3 ml - 3200 ml ) & colour can be manufactured as per customer need. q Controlled conditions with minimum manual intervention gives contamination free glass bottles. HNG with its pan Indian presence & state of the art plants is the only company in India which can fully cater to the MNC customers HNG supplies to all the global players in liquor, beer, food, soft drinks & pharma segments to fulfil their requirements 9

HNG : Segment & Customers Segment wise sales LIQUOR 2% 1% 4% 6% BEER 9% FOOD 54% SOFT DRINKS 25% PHARMA Liquor Beer Food & Dairy Pharma Soft Drink Household Toiletries Vial 10

Accreditations & Awards over the years • Best Indian Company in the Glass & Ceramics category by Dun & Bradstreet in 2009 & 2010. • Business Today Ranking 227 (Out of 500 top listed corporates, in October’ 12). • HNG Nasik got CII award for water & energy conservation in 2010. • HNG Neemrana was awarded for CSR by Govt. of Rajasthan in 2012. • HNG BGH won National Energy Conservation Award for the year 2011 -12. • CAPEXIL award for export performance in last 5 years. • Certifications : ISO 9001: 2008 and also accredited with HACCP. • Certifications FSSC 22000. 11

Committed to Environment , Health & Safety q Safety • The company has witnessed 5 million safe working hours without lost time accidents. • To ensure safety , HNG ensures • Plant safety committee. • 100 % workforce to use PPEs. • Proper Lock out Tag out (LOTO) practices. • Extensive awareness of trip hazards. • Strict Compliance to Air , Water , Sound & Waste management systems. • ISO 14000 & OHSAS 18001 certified plants. At 50% recycled glass in manufacturing : Removes 2. 2 million MT of CO 2 emissions = 400, 000 cars off the road each year q Increase in cullet usage Recycling glass decreases amount of raw materials used, lessens demand for energy, cuts CO 2 emissions, extends furnace life HNG uses more than 35% cullet in its Indian plants & plans to increase to 50% by 2016 , which will reduce carbon footprint by 22%. HNG Germany uses close to 50% cullet & usage will go upwards in coming years. q LCA • The 1 st ever LCA study on container glass in India recommends light weighting of bottles. • Through NNPB/ABB technology , HNG has already lowered weight of bottles by 15– 20% resulting in Lower primary energy requirement , Reduction in carbon footprint & Lowering of toxicity – both for ecology & human beings. • The study also clearly shows that Glass is by far the most ecofriendly packaging material & with 75% recyclability of glass , the toxicity potential gets further reduced by almost 40% 12

HNG : Figures at a glance Volume (‘ 000 MT) 1200 1961 1850 1893 2227 2422 2609 0 927 FY 16 896 FY 17 933 FY 18 3190 3500 2000 1089 FY 19 1169 1241 FY 20 FY 21 000 MT 1275 1365 1388 1500 1000 FY 22 Highlights 3000 2500 800 400 2765 3046 FY 23 FY 24 Value (Rs. Cr. ) SALES 1600 q Capacity Utilization improvement going forward . q Strong push towards New market development q GST implementation will benefit Organized segment. 500 q NSR to increase in by 6 -8% in 2018. 0 q High import price fuels domestic supply. q EBIDTA expected to improve every year. Rs Cr. 800 25% 18% 14% 15% 19% 16% 21% 20% 16% 17% EBIDTA 16% 13% 400 8% 0 29 37 33 19% 67 66 68 97 204 214 282 262 298 10% 11% 10% 12% 13% 14% 16% 15% 9% 214 266 184 168 265 149 175 573 586 321 373 20% 437 10% 5% 0% FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 13

Global Glass Packaging Market q The global production of glass containers in 2015 was almost 50. 63 MMT and is estimated to reach 65. 42 MMT by 2022, at a CAGR of 3. 73%, while in terms of revenue, the market was worth $51. 76 billion in 2015 and is projected to reach $70. 86 billion in 2022, at a compound annual growth rate of 4. 59%. q In 2016, with a market share of over 36%, EMEA (Europe, Middle East and Africa) emerged as the market leader in the global RGP market, followed by APAC (Asia Pacific) with over 34% and the Americas with close to 30%. 1. EMEA - The market is driven by the high consumption of alcoholic beverages in the region. Most European brewers are focusing on innovative glass packaging so that the product becomes more appealing to consumers. The market is expected to grow at 3. 3% CAGR till 2020. ( source : ceramicindustry. com) 2. APAC - The major revenue contributors to this market are China and India. Rising disposable income, changing lifestyles, and westernization are some of the factors driving the alcoholic beverage packaging market in APAC. The increasing demand for spirits in this region is one of the major factors for the growth of the alcoholic beverage market. 3. Americas - The retail glass packaging market in the Americas will grow at a steady rate during the forecast period. One of the major reasons for the growth of the market in this region is the launch of innovative products by vendors in the market. Also, the growing number of breweries, wineries and distilleries in the Americas is driving the growth of the market. The market is expected to grow at 3% CAGR till 2020. ( source : businesswire. com) 14

Indian Container Glass Industry –Demand , Supply Scenario Surplus capacity & lower demand led to lower capacity utilisation 000 MT per annum 4000 3500 82% 88% 87% 88% 100% 82% 74% 3000 75% 71% 69% 74% 2500 80% 60% 2000 40% 1500 1000 20% 500 0 0% FY 08 FY 09 FY 10 FY 11 Supply (‘ 000 Mt) FY 12 FY 13 Demand ( '000 Mt ) FY 14 FY 15 FY 16 FY 17 Demand Supply Ratio ü Till FY 12, supply to demand was Matching. ü Capacity addition by all key players between 2010 – 12 & sluggish demand have lead to low capacity utilization thereafter. (source : KPMG, BDB) 15

Indian Container Glass Industry – Demand Scenario 10% CAGR 1% CAGR 9% CAGR 4000 3625 3240 3500 2915 2600 3000 MT per annum 2500 2000 1580 1725 1912 2055 2199 2164 FY 12 FY 13 2205 2240 2260 2410 1500 1000 500 0 FY 08 FY 09 FY 10 FY 11 Liquor Beer FY 14 Beverages FY 15 Food FY 16 Pharma FY 17 FY 18 FY 19 FY 20 FY 21 Others Demand is again expected to rise due to steady economy & growing consumption by end users. (source : KPMG, BDB) 16

India - Macro Fundamentals are Strong Container Glass % Usage in End user Segment Pharma, 12% [CATEGORY NAME], [VALUE] Per-Capita Consumption of IMFL (Litres / per Annum / Person) 110 120 Beer, 15% 60 Liquor, 50% 35 40 20 4 4. 8 Turkey 5. 5 9 CHINA Thailand BRAZIL China USA 27. 5 Germany 1000 50. 5 France 89 South Korea Source: EIU Rising Disposable Income ( $/Capita) v v v 1170 923 587 v 500 63. 9 v 0 2005 Source: EIU 2010 US POLAND GERMANY Source: Beeronomics 2120 1500 CHINA RUSSIA AUSTRALIA 2500 Consumption of Container glass 2000 ( Kg/Capita ) 2 INDIA Source: Anand Rathi Research Brazil 37 40 0 INDIA 1. 8 78 60 0 India 100 80 70 80 Per-Capita Consumption of Beer 110 (Litres / per Annum / Person) 100 95 100 Food, 13% 120 2011 2016 v Alco-Bev contributes 65% of Glass demand. Alco-Bev segment Per capita Consumption is very low compared to other countries. Increasing urbanisation, high disposable income and changing social ethos will boost growth opportunity end user segment. Increased awareness of public about health & hygiene aspects-Glass-Eco-friendly. Per capita glass consumption very low - Provide good upside potential possibility. Reverse Migration in Pharma has began. 17

India – Alcobev market growing Problems faced q States like Bihar imposed restriction on sale of liquor. q The sector has been excluded from GST, forcing companies to continue to deal with a web of central & state agencies. q Shifting regulations on sale near highways has hit the industry hard. Worst days behind 19 Mn new consumers enter the legal drinking age every year. 1 Billion consumers by 2027. 55 % consumption of alcohol increase between 1992 & 2012. “The worst is behind us. We think this is a good time for ABD to focus on premium businesses and overseas expansion, ” says ABD executive director Jeetendra Hemdev. 7. 5 % CAGR growth rate for Beer market for next 5 years. 48 % of global Whiskey market in India. “To limit the negative impact of these regulations, players are looking at various strategies, including new product development, premiumisation and cost control. ” Says Vignesh B, consulting analyst at Euromonitor International (source : ET) From Rs. 1, 47, 500 Cr. in 2016, the Indian Alcohol market expected to increase to Rs. 1, 75, 400 Cr. by 2021 18

India – Glass bottle market growing Segment 2016 – 20 Expected CAGR Positives IMFL & CL 9% State Governments are using regulations on use of glass bottles for packing so that the revenue leakage is plugged ( like Tamil Nadu, Maharastra) Beer 10% Beer manufacturers are using ~70% reused glass bottles F & B 17% End users opined that glass bottles / jars provide good aesthetic looks and longer shelf life to product Market for glass bottles ( ‘ 000 MT) 3624 67 56 114 316 R G CA 0% 1 414 2258 Pharma 15% Government of India has proposed to ban use of Plastic and PET bottles in oral formulation 61 42 103 157 189 Soft drinks 2% Due to shifting to PET bottles, growth of glass bottles is declining. 436 Cosmetics 6% Adoption of latest trends from western culture led to creating demand for high quality and premium class products in India. 702 1954 1270 Other glass bottle manufacturers are also expanding 1. 2. 3. Haldyn – Rs. 30 Cr. expansion in FY 16 to increase its capacity from 320 to 390 TPD. Vitrum – Planning for capacity expansion in FY 17 -18. Sunrise – Increased capacity from 220 to 360 TPD. (source : BDB Market Research Report 2016) FY 2016 IMFL & CL Soft Drinks Beer Cosmetics FY 2021 F & B Others 19 Pharma

INDIA - Import – Export Data for Glass Bottles Import 1. Total import annually ~ 31, 000 MT 2. Sri Lanka and China contributes to ~77 % of total imports by weight and ~50 % of total imports by value 3. ~ 98% of total imports from Sri Lanka were liquor bottles 4. Glass containers having capacity of < 51 ml contributes to > 70% of total imports from China. 5. High transportation time & freight cost make glass bottle import highly unviable & uneconomic. Export 1. Total export from India ~ 2, 85, 000 MT 2. Major exporting countries – USA & African countries. q Currently new glass bottle rate is ~ Rs. 29, 000/MT in USA & Rs. 38, 000/MT in Europe making import uneconomic & export lucrative for Indian glass industry. q More export will lead to increased revenue & full capacity utilisation. (source : BDB Market Research Report 2016) 20

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