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Indorama Polymers Pcl.

IRP
Q2, 2008 Analyst Presentation
August 19, 2008
The Stock Exchange of Thailand
Agenda
Agenda
Fundamentals
Financial Highlights
Projects in Progress
Focus Thailand
Outlook
DISCLAIMER: This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any
IRP Shares. Past performance is no guide to future performance and persons needing advice should consult an independent
financial adviser. For the convenience of the interested investors the management is presenting the financial data in US Dollar also.
However, the translation method does not confirm with GAAP and is based on the method developed by the management which will
be followed consistently in future.
Guiding philosophy
Guiding philosophy
VISION
To be one of the leading global producer with key focus on people and processes thus
making INDORAMA one of the most admired companies in the world
MISSION
Continuously upgrade quality of products and services through people involvement and
world class processes to attain customer delight thus becoming a preferred supplier and
institutionalise people learning as a key factor for business growth
VALUES
People First
We believe that people are our core
strength, be it our employees, suppliers,
customers, shareholders and stakeholders.
Their involvement and satisfaction are the
key drivers for our success and growth
Customer Delight
We believe we exist because of our
customers. We focus our activities to
achieve customer delight and loyalty for a
long lasting relationship
Social Responsibility
We believe in being responsible and caring
for the society and maintaining as well as
enhancing the environment around
Corporate Governance
We believe in transparency, accountability
and ethics. We aim to achieve highest
degree of governance in accordance with
the best practices
1
Group structure
Group structure
Indorama Polymers Public Company Limited
IRP
PET Polymers: 180,000 tpa
60% 99.9% 100%
*Petform (Thailand)
Limited
Preforms, Bottles and
Closures
**Asia Pet
(Thailand) Limited
Amorphous PET
180,000tpa
StarPet Inc., USA
PET Polymers
225,000 tpa
UAB Orion Global Pet, Lithuania
PET Polymers: 198,000 tpa
20% 60% 20%
Indorama
Synthetics (India)
Limited
Indorama Holdings
Limited
Indorama Ventures
Limited
Public
6.5% 26.5% 38.9% 28.1%
APL Group
^AlphaPet Inc.,
USA
PET Polymers
432,000 tpa
100% 100%
Indorama Polymers
Europe,
Lithuania
Indorama Polymers
Netherlands
PET Polymers
200,000 tpa
Indorama Polymers
UK
PET Polymers
155,000 tpa
100% 100%
* Joint venture with Serm Suk Pcl, execlusive bottler of Pepsi Co in Thailand, which holds 40%
** Expanded capacity on completion of expansion in September, 2008. Now 126,000 tpa
^ Greenfield project under construction to commence operations in Q2, 2009
2
43% CAGR in sales volume
43% CAGR in sales volume
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2004 2005 2006 2007 *2008
Europe
USA
Thailand
*Estimated for full year 2008
Regional sales focus, markets:
Thailand Domestic and exports to Australia, CIS, Middle East & Africa
USA Domestic
Europe - Domestic
3
Focus on competitiveness
Focus on competitiveness
State of the art
Economic size
Efficiency and improvements
Consistent quality
On time delivery
Product development
Raw material integration
Efficient supply-chain
Driven by
people
Technology
Suppliers Customers
4
USA
PET polymers
Lithuania
PET polymers
Thailand
PET polymers,
Preforms, Bottles,
Closures
Netherlands
PET polymers
UK
PET polymers
Geographical diversification to capture global demand and proximity to
customers and suppliers to lower logistics costs
Global presence...Regional reach
Global presence...Regional reach
5
Year 2008 projected demand 15 million tpa
Demand growth 6-7% per annum, resultant growth around 1 million tpa
High growth in water and other beverages applications.
Limited beer packed in PET bottles but growing in Europe, China and South
Korea
Potential of high replacement rate in cosmetics and pharmaceuticals, juices &
dairy products and fresh & frozen food
Source: Tecnon
Growing demand YoY
New applications driving
high demand growth
Use in daily necessity...demand on path of growth
Use in daily necessity...demand on path of growth
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
E
2
0
0
8
P
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6

2
0
0
7
E


2
0
0
8
P

Sheets
Beer
Other
Beverages
Water
CSD
6
Regional markets engine of growth
Regional markets engine of growth
Source: Tecnon
7
Regional PET polymers Demand
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
E
2
0
0
8
P
2
0
0
9
P
2
0
1
0
P
'
0
0
0

t
p
a
Asia
Middle East
& Africa
Europe
South
America
North
America
Robust growth
Robust growth

Growing applications
Growing applications
Carbonated Soft Drinks
Sauces Beer, Liquor, Wine Iced Tea
Energy Drinks Sports Drinks Juices
Paints Food Toiletries & Cosmetics
Water
8
Milk
PET: Market dynamics
PET: Market dynamics
Demand growth has been relatively resilient to economic cycles
and inelastic to price increases
Preferred over other packaging material because of its superior
properties and ability to combine barrier technology
Recyclable
Competitiveness requires scale
Market driven pricing
Essential customer-suppliers relationships
Regional business more logistics intensive
Market size and technology improvements leading to larger
economies of scale
Rationalization of high cost capacity
Emphasis on cost competitiveness and required innovation in
product and process improvements
9
Source: Industry prices for Asian region
PET prices move in tandem with raw materials
PET prices move in tandem with raw materials
IRP blended
spreads,
US$ per Ton:
10
Lower net realization on
rising raw material costs
Asian PET Chain Margin Distribution
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
J
a
n
-
0
0
A
p
r
-
0
0
J
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-
0
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U
S
$

p
e
r

T
o
n
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
140
145
C
r
u
d
e
,

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S
$

p
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r

b
a
r
r
e
l
Naphtha pX PTA C2/MEG PET Crude
J
u
n
-
0
8
Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08
210 212 195 230 200 243
Crude price at new high resulting in
higher prices of Petrochemicals
including PET polymers
Changing competitive landscape
Changing competitive landscape
Top Ten Producers - 2007
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
M
&
G
E
a
s
t
m
a
n
I
n
v
i
s
t
a
F
a
r

E
a
s
t
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r
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S
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d
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a
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P
W
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F
a
n
g

X
i
a
n
g
E
q
u
i
p
o
l
y
m
e
r
s
'000 tpa
Top Ten Producers - 2009
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
M
&
G
I
R
P
I
n
v
i
s
t
a
L
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S
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d
a
F
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n
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Y
a
S
a
n

F
a
n
g

X
i
a
n
W
e
l
l
m
a
n
'000 tpa
Source: Industry data Source: Based on currently announced capacity changes
Industry leaders:
M&G, IRP, La Seda and Daks
11
Agenda
Agenda
Fundamentals
Financial Highlights
Projects in Progress
Focus Thailand
Outlook
Higher returns to shareholders
Higher returns to shareholders
Note: excluding gain on asset appraisal from assets acquired
Book Value per Share
3.99
5.11
0
1
2
3
4
5
6
31.12.07 30.06.08
Annualized Earning per Share
0.74
2.30
-
0.50
1.00
1.50
2.00
2.50
6M 2007 6M 2008
12
Note: Baht 0.92 per share excluding gain on asset appraisal from assets acquired
Annualised Return on Equity
21.09%
22.57%
18.00%
19.00%
20.00%
21.00%
22.00%
23.00%
6M 2007 6M 2008
Annualised Return on Capital
Employed
14.28%
14.50%
12.00%
13.00%
14.00%
15.00%
16.00%
6M 2007 6M 2008
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Q1' 06 Q2' 06 Q3' 06 Q4'06 Q1'07 Q2'07 Q3'07 Q4' 07 Q1, 08 Q2, 08
B
a
h
t

'
0
0
0
EBITDA Net profit (Baht)
Reports record EBITDA and Net profit
Reports record EBITDA and Net profit
13
Geographical sales distribution
6M, 2008 6M, 2007
Note: ROW is Rest of World
Europe, acquisition results in higher sales volume in Europe
ROW, higher export sales volume from Thailand mainly to Australia
43%
2%
10%
45%
Europe USA ROW Thailand
31%
11%
7%
51%
Europe USA ROW Thailand
14
Financial Performance: Consolidated
Financial Performance: Consolidated
15
Record high revenues and earnings
High growth in earnings despite Rotterdam plant being shutdown for
regular maintenance for 3 weeks
(Baht million)
Q2' 2007 Q2' 2008 6M 2007 6M 2008
124,641 220,988 APET - Production Quantity (Tons) 221,122 363,651
77% 64%
5,994 12,085 Total revenues 11,697 19,215
102% 64%
563 768 EBITDA 988 1,259
36% 27%
302 429 Net profits 509 1,588
42% 212%
0.87 1.24 Annualised Earning Per Share 0.74 2.30
42% 212%
Financial Performance: Consolidated
Financial Performance: Consolidated
16
(US$ million)
Q2, 2007 Q2, 2008 6M, 2007 6M, 2008
124,641 220,988 Production Quantity (Tons) 221,122 363,651
173 374 Total Revenue 333 593
117% 78%
16 25 EBITDA 27 40
58% 44%
10 13 Net Profit 16 49
35% 210%
2.84 3.84 Annualized EPS (Cents) 2.28 7.16
35% 210%
34.69 32.33 Average Exchange Rate US$ 1 = Baht 35.15 32.38
46.73 50.51 Average Exchange Rate Euro 1 = Baht 46.68 49.51
* Gain on fair value of assets over acquisition cost under TAS 43. The assets acquired on 31st March
2008 therefore gain has been added on retrospective basis in 6 months, 2008 statement of income.
Gain on fair value of assets Baht 930 million
Gain on fair value of assets Baht 930 million
(Baht million)
Q1 2008 Q2 2008 6M 2008
Net Profit for the period (in Million Baht) 229 429 658
*Other Income 930 - 930
Reported Net profit 1,159 429 1,588
Annualized Earning per Share (in Baht)* 2.30
17
TAS 43: Business Combination
Property, plant and equipment
Intangible assets
Total
Acquired
2,810
-
2,810
Fair value
addition
526
427
953
Recognized
3,336
427
3,763
Increase in value of assets 953
Less: Depreciation & amortization 23
Other Income 930
Baht 930 million recorded as Other Income in the Statement of Income and
has formed part of Unappropriated retained earnings in the Balance Sheet.
Future impact additional depreciation and amortization of around Baht 88
million per annum.
(Baht million)
18
Enhancing shareholders equity
Enhancing shareholders equity
(in Baht million)
19
Balance Sheet as on 31-Dec-07 30-Jun-08
Total Current Assets 7,600 12,509
Total Assets 17,768 28,242
Total Current Liabilities 6,994 12,234
Total Liabilities 12,248 21,176
Net Interest bearing Debt 5,722 9,709
Issued and paid-up Capital 1,382 1,382
Total Shareholders Equity 5,520 7,066
Current Ratio 1.09 1.02
Total Liabilities to Equity 2.22 3.00
Net Debt to Equity 1.04 1.37
Book Value per Share 3.99 5.11
Consolidated free cash flow before
Consolidated free cash flow before
capex
capex
Baht 1,097 million
Baht 1,097 million
(in Baht million)
*Others includes interest expenses and taxes paid
20
6M 2007 6M 2008
Net Profit 510 1,588
Cashflow before change in working capital 915 1,234
Change in working capital (326) (137)
Free cashflow before capex 589 1,097
Capex (648) (5,314)
Free cashflow after capex (59) (4,217)
Proceeds from capital increase - -
Repayment of loans (471) (412)
Additional loans 1,328 5,433
Dividends paid (235) (348)
Others (216) (117)
Cashflow from financing 407 4,556
Net Cashflow 348 339
Cash beginning 631 979
Cash closing 979 1,318
Agenda
Agenda
Fundamentals
Financial Highlights
Projects in Progress
Focus Thailand
Outlook
Asia Pet (Thailand): Capacity expansion
Amorphous PET capacity expansion from 126,000 tpa to 180,000 tpa
Increase capacity of Amorphous PET Polymers by 54,000 tpa at existing site
Capacity increase for captive consumption in production of PET polymers
BOI promotion privileges for corporate tax and custom duty benefits
Plant & equipment installed and under commissioning
Approved capital expenditure of Baht 550 million, completed capex of Baht 503 million
Capex to be funded from Baht 550 million in long term loans, loan drawdown of Baht
150 million upto June 30, 2008
Start-up of commercial operations by September 10, 2008
21
AlphaPet: Greenfield project in USA
AlphaPet Inc. was incorporated in September, 2007 as a 100% owned subsidiary
of IRP and IRP has injected US$ 18.8 million (Baht 627 million) in form of equity
To build a greenfield project with a capacity of 432,000 tons per annum of both
Amorphous PET and PET polymers in Decatur, Alabama state, USA
Capacity increase in line with demand growth in the North American market
Plant co-located with PTA plant of BP Chemicals Inc., to enable piped supply of PTA
for savings in logistics cost and assured supply of PTA under a long term agreement
Site work in progress and plant & equipment arriving at site for installation
Total capital expenditure of US$ 154.0 million, completed capex of US$ 36.7 million
Capex to be funded from US$ 110 million from approved long term loans as project
finance, drawdown upto June 30, 2008 of US$ 12.2 million, and US$ 44 million from
IRP as equity
Start-up of commercial operations in Q2, 2009
22
Aerial view of construction and installation
23
Agenda
Agenda
Fundamentals
Financial Highlights
Projects in Progress
Focus Thailand
Outlook
Thailand Market
Thailand Market
Market growing at 12-15% with higher domestic consumption of beverages and
increasing tourist arrivals
Replacing glass in growth volume of CSD and availability in small packs of 330 ml
Bottled water among the higher growth segment with 25-30% volume growth and
available in bottle sizes from 0.5 litres to 5.0 litres
Expanding applications in iced teas, juices, sauces and sheets for food packaging
Sheets applications for food packaging results in indirect exports
Four producers of PET polymers in Thailand, IRP has the largest marketshare
Demand for PET polymers
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
E
2
0
0
9
P
Source: Industry and IRP estimates
24
IRP and Asia Pet operations
IRP and Asia Pet operations
Amorphous PET Production and Sales
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
105,000
110,000
115,000
120,000
125,000
2003A 2004A 2005A 2006A 2007A
T
o
n
s
Production Sales
Asia Pet commence production in May, 2003
Profitable operations from inception
Operating at above 100% utilization
Major sales to IRP
Expanding capacity to 180,000 tpa in
September 2008 to balance capacity for
PET polymers
Availability of PTA & MEG in Thailand
BOI privileges for tax exemption for 8 years
IRP commence production in Nov., 1995
Profitable operations from inception
Build market and increased capacity
Captive consumption of 10-12% in Petform
operations
40-45% domestic sales and balance exports
to Regional, Australia and Middle East
markets
BOI promotion privileges for tax exemption
for 8 years for expanded capacity
PET polymers Production and Sales (Tons)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
105,000
110,000
115,000
120,000
2003A 2004A 2005A 2006A 2007A
T
o
n
s
Production Sales
25
Plant shutdown
for maintenance
Petform
Petform
: 32% CAGR in Sales
: 32% CAGR in Sales
Production Volume
0.0
40.0
80.0
120.0
160.0
200.0
240.0
280.0
320.0
360.0
400.0
440.0
2003 2004 2005 2006 2007
M
i
l
l
i
o
n

U
n
i
t
s
Preform Production Closure Production Bottle Production
Commence preforms production in year 1998
Added closures in 2000 and bottles in 2006
Added PET bottles in year 2007
32% CAGR for preforms production
39% CAGR for closures production
Major sales to Serm Suk, exclusive bottler of
PEPSI products and Crystal water in Thailand
Profitable operations from inception
Higher operating margins
Captive consumption for PET polymers
Understanding of customers business
Expansions funded from internal accruals
and long term loans, net debt-equity 0.54
BOI promotion privileges for corporate tax
exemption
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2003 2004 2005 2006 2007
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
32.0%
Earnings per Share Book Value per Share ROE
26
Agenda
Agenda
Fundamentals
Financial Highlights
Projects in Progress
Focus Thailand
Outlook
-
30,000
60,000
90,000
120,000
150,000
180,000
210,000
240,000
270,000
Q1 Q2 Q3 Q4
T
o
n
s
2007 2008
Expanded capacity
available
for full quarter
Volume growth from
acquisition completed
in Europe
Year 2008, 70% volume growth
Year 2008, 70% volume growth
Committed volume growth upto year 2010...
Volume growth from
Amorphous PET capacity
increase in Thailand
27
Spread * Quantity = Profits
Spread * Quantity = Profits
PET Polymers:
Q2, 2008, higher available capacity of
958,000 tpa on completion of acquisition
in Europe
Year 2009, start-up of greenfield plant
in North America
Downstream operations in Thailand:
Growing volumes in line with major
customers growth plans
Planned expansions to add new
machines to increase capacity of
Preforms, Bottles and Closures
28
IRP Group PET polymers Capacity (tpa)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2003 2005 2007 2009P
Europe
USA
Asia
Preforms, Bottles and Closures Capacity
(million units)
0
300
600
900
1,200
1,500
1,800
2005 2006 2007 2008P
Closures
Bottles
Preforms
193%
145%
Future growth
Future growth

BRIC countries
BRIC countries
Market with 3 billion population and
low per capita consumption of PET,
Larger force than G-6 with high
GDP growth rate 6-8%
Higher disposable income
Favorable demographics, younger
population and population growth
rate in positive above 1%
Increasing urbanization
Investments in organized retail
Attracting foreign investment
PET, potential demand size (million tpa)
0
2
4
6
8
10
12
14
16
Today 2 kilos 3 kilos 4 kilos 5 kilos
@ Global
Average
Potential
IRP has limited presence in BRICs through exports sales and
would look at future growth prospects and investment opportunities
GDP in US$ billions
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2005 2007E 2010P 2015P 2020P 2040P
BRICs
G6
Source: Goldman Sachs
29
Business outlook : Industry
Business outlook : Industry
PET polymers robust demand and high growth in water application and
new applications in juices, iced teas and healthcare
Use in daily necessity, demand growth has been resilient to economic cycles
Higher utilization rates with demand growth and no major capacity
expansions
Expected rationalization of old capacity in North America and Europe
to take effect in second half of 2008
Paraxylene and MEG large capacity additions over next 2 years will result in
oversupply situation, lower cost pressure from key raw materials
30
Business outlook : Company
Business outlook : Company
IRP, Prepared and Enthusiastic
2008 year of consolidation, strategic initiatives taken in year 2007 to be
implemented for completion
Growth momentum to continue, track record of revenue and earnings growth
Higher production volume,
Year 2008 around 820,000 tons
Year 2009 around 1,200,000 tons
Reported consistent spreads, absorbed energy and petrochemical cost push
Easing of crude price in Q3, 2008, to reduce cost pressure
31
THANK YOU
THANK YOU
Visit our website in English and Thai
Visit our website in English and Thai
www.indoramapolymers.com
www.indoramapolymers.com

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