A LEADING PRODUCER OF NATURAL SODA ASH OCI Resources LP 1
Transcription
A LEADING PRODUCER OF NATURAL SODA ASH OCI Resources LP 1
A LEADING PRODUCER OF NATURAL SODA ASH OCI RESOURCES LP OCI Resources LP | INVESTOR PRESENTATION | MAY 2014 1 OCI Wyoming Overview One of the largest and lowest cost producers of natural soda ash in the world, utilizing low-cost material Trona Situated in World’s Most Abundant Trona Reserves United States represents the vast majority of the world’s Trona reserves 66+ years of reserves Green River Basin, WY 2013 Revenue: $442 mn 2013 International sales 56%, domestic sales 44% 2013 EBITDA: $104 mn Tata 120km FMC Solvay 70km Source: U.S. Geological Survey. OCI Resources LP 4 Essential Raw Material Soda ash is refined from mined Trona and is an essential raw material used in the production of glass, chemicals, and detergents. Trona Soda Ash End Markets Trona Sodium Carbonate Glass Sodium Sesquicarbonate (2Na2CO3•NaHCO3•2H2O) (Soda Ash) (Na2CO3) Silica (SiO2) + sodium oxide (Na2O) from soda ash + lime (CaO) Chemicals Detergents OCI Resources LP 7 Attractive Industry Structure Limited Natural Capacity Globally Well-Structured Industry (Production Method, by Percentage of Volume) (North America Soda Ash Market Share by Capacity) Other Synthetic 5% Searles 10% Alcali 2% OCI 19% Natural 25% Hou 25% Tata 20% Total North American Capacity: 14 mn ST Total Global Capacity: 73.5 mn ST FMC 30% Synthetic Production Capacity Solvay 45% Solvay 19% Source: IHS OCI Resources LP 8 Lowest Cost Soda Ash Production US soda ash producers using Trona have significant cost advantages from lower energy costs and raw material price exposures. U.S. Trona Solvay Hou Mining and refining Trona Synthetic production Synthetic production Raw Materials Trona Salt (brine), Limestone, Ammonia Salt (brine), Ammonia, Carbon Dioxide Energy Usage ~1/3 energy cost Energy Intensive Energy Intensive Deca (able to process into soda ash) Calcium Chloride (waste product) Ammonium chloride (co-product) Process By-Products 1/3~1/2 cost of competing processes(1) Relative Soda Ash Production Costs(1) 2.9x 2.7x 2.6x China Solvay China Hou 1.0x U.S. Trona (Natural Gas) European Solvay Source: IHS (1) Cost to produce 1 metric ton of soda ash as a multiple of Trona based production. OCI Resources LP 9 Significant Reserve Life Reserve Life Summary LOWER BED UPPER BED Ore Layout Summary Upper Bed 800ft Lower Bed 1,100ft Reserve Life Calculation (Hollberg) 8ft. @ minimum 85% Grade Basis Recoverable Reserves 263 mn ST Projected Annual Consumption 4 mn ST = Implied Mine Life 66 Years Source: Hollberg Professional Group Note: Assumes 2013 mining rate of 4.0mn ST per year OCI Resources LP 10 Trona Beds Closest to the Surface Beds 24 & 25 (closest to surface) are the key for lower manufacturing costs as lower halite impurities and shallow beds are conducive to efficient mining. Schematic Section – Green River Basin OCI Resources LP 11 Unique Pond Network Lowers Ore to Ash Ratio Wider pond surface area and a unique pond network facilitate the minimization of soda ash lost in processing Trona. Advantageous Facility Layout Ponds enable OCI to recover soda ash via deca rehydration otherwise lost in processing Trona Technological innovation enables OCI to be more cost efficient Ore to Ash Ratio(1) 1.80 1.74 1.61 1.60 1.59 1.56 2008 2009 2010 2011 2012 2013 (1) Amount of short tons of Trona ore required to produce one short ton of soda ash/liquor OCI Resources LP 12 Most Efficient Soda Ash Producer in Green River Basin OCI has the highest soda ash production per employee. We believe we have the most efficient soda ash production facility in the Green River Basin. Production Per Employee (x10 ST, 2013) 575 547 Peer 1 468 Peer 3 Peer 2 422 Source: State of Wyoming Mining Report, Wyoming Department of Environmental Quality, Annual Report State Inspector of Mines of Wyoming. OCI Resources LP 13 Strong Safety Record and Environmental Responsibility Consistent safety recognition to date is a testament to our commitment. Long Tradition of Excellence in Safety • 2009, 2010 and 2011 IMA-NA / MSHA Top Safety Achievement Award (National) • 2008, 2009, 2010, 2011 and 2012 WY State Mine Inspector’s Top Safety Excellence Award • Trona based process produces less CO2 emissions than synthetic production processes Environmentally Responsible • Technology for Tailings Management • Zero discharge for waste water from operations Safety Statistics for Wyoming Soda Ash Producers (For Year Ended December 31, 2013) 180 109 75 48 13 8 Peer 3 12 6 Peer 2 Citations 9 0 6 2 Peer 1 Recordable Injuries Lost Work Day Injuries Source: Mine Safety and Health Administration. OCI Resources LP 14 Stable End-Markets with Broad Geographic Exposure U.S. Soda Ash Domestic / Export Split Global Soda Ash Consumption by End Market (By Percentage of Volume) (By Volume) Glass Products Flat 26% Other 19% Domestic 43% Metals & Mining 6% Total Global Demand: 59 mn ST Export 57% Chemicals 9% Container 20% Soaps & Detergents 14% Other 6% Global market demand expected to grow at ~5% from 2012 – 2017E Source: IHS OCI Resources LP 15 Low-Cost Position Allows U.S. Producers to Serve Global Markets Demand is mature in North America, so industry growth is coming from international markets, particularly Latin America. Historical U.S. Soda Ash Domestic / Export Split (By Percentage of Volume) 49% 45% 53% 49% 43% 52% 58% 56% 54% 51% 42% 47% 51% 57% 46% 48% 55% 44% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports Domestic Source: IHS, U.S. Geological Survey. OCI Resources LP 16 Stable Customer Relationships Approximately 70% of OCI’s domestic sales were made to customers with which OCI has had relationships in excess of 10 years. Sales Breakdown by Revenue Majority export sales via ANSAC ($ in millions) $462.6 $442.1 $421.9 Domestic Customers Most domestic customer contracts range from 1-3 years Domestic contracts are typically renewed upon expiration 10+ year relationship with 70% of domestic customers $363.1 44% $157.8 52% $218.6 57% $263.2 56% $247.1 Export Customers Majority of export sales sold through American Natural Soda Ash Corp. (ANSAC) 43% 56% $205.3 2010 48% $203.3 2011 Domestic $199.4 44% 2012 Export $195.1 2013 Incremental increases in production volume have been exported due to growing international demand OCI Resources LP – International sales, marketing and logistics for OCI and two other leading U.S. producers – Conducive to stability and growth of U.S. producers – Leverages economies of scale (logistics) – Operates under an exemption from the antitrust laws allowing it to be the exclusive export outlet 17 Organic and Acquisition Growth Opportunities OCI will capitalize on organic expansion & make accretive acquisitions to drive growth. Capitalize on organic expansion opportunities Emerging Market Growth Debottlenecking (Tailings Strategy, Equipment upgrades) Deca Enhancements Efficiency Enhancements Pursue accretive acquisitions Industrial Minerals / Inorganic Chemical Assets Logistics Assets Assets currently existing or to be developed at OCI OCI Resources LP 18 First Quarter 2014 Financial Highlights OCI Resources LP $ Millions (except Per Unit and Volume Amounts) 1Q14 1Q13 Net Sales 116.2 108.2 Net Income 21.6 14.9 Adjusted EBITDA 28.2 24.4 Distributable Cash 13.1 - Net Income per Unit 0.52 - Net Debt (Cash) 119.6 11.7 Volumes Sold – ST 655.2 625.7 Ore to Ash Ratio 1.54 1.60 Capital Expenditures 1.4 2.1 Coverage Ratio since IPO 1.27 19 OCI Wyoming’s Investment Highlights 1 Lowest Cost Soda Ash Production 2 Significant Reserve Life 3 Operational Advantages 4 Strong Safety Record and Environmental Responsibility 5 Stable Customer Relationships 6 Organic and Acquisition Growth Opportunities 7 Strong Management Team OCI Resources LP 20 Appendix Safe Harbor Statement • This presentation may contain “forward-looking statements.” All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. Caution should be taken not to place undue reliance on any such forward-looking statements because actual results may differ materially from the results suggested by these statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and present expectations or projections. These risks and uncertainties include, but are not limited to, those described in the Risk Factors section of OCIR’s 10-K dated March 14, 2014, and those described from time-to-time in our periodic and other reports filed with the Securities and Exchange Commission. OCI Resources LP 35