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