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According to the Challenge Forum, if digitized data available to mankind could be expressed physically, it would cover an area equivalent to The island of Mauritius in 1920 Madagascar in 1940 The Congo in 1960 The African continent in 1980 All the continents by 2000 The whole earth now And cover 1,700 planets every year by 2020!
LKD
Typical CD data, if straightened, would be 5 km long Sony certified MB as Green Partner for product envt with 95%, highest for any company worldwide The first company to produce 15 GB HD DVD-R Worlds 2nd largest optical storage devices manufacturer Top 12 global optical storage media brands source from MB Global Tech-collaborations with Imation & Mitsubishi In-house patented technology, among 4 Bluray makers World's 5th-largest manufacturer of MFDs Cost-effective international quality standards Only large Indian manufacturer of magnetic & optical media data storage products, 90% production exported
2007
Sales- Rs 19825 Mn Net Profit-Rs 1098 Mn Market Cap Rs 30000 Mn Over 4,500 employees 4 Plants Production capacity over 3.2 billion discs Revenue growth at a five-year CAGR of 42% Consistent financial growth Creditable, performance amid harsh environment Competition world over facing business upheavals
Origin
Founded- 1983, New Delhi, by Technocrat Deepak Puri Started as a Time Recorder unit Technical collaboration with Maruzen Corp, Japan & Moser Baer Sumiswald, Switzerland Bought out Swiss stake, diversified, but the name stuck 1986- Moser Baer entered the data storage field
Chronology
1983- Incorporation 1985- 2 crore investment in capacity of 600,000 floppy disks of 8.0"/5.25" disks 1987- 3.5" disks commences, IPO 1999-2003- CD-R, CD-RW, DVD-R 2003- World's single-largest optical media production facility in Noida commissioned Largest-ever Indian manufacturing deal with Imation, US Moserbaer PRO ' brand launched in the Indian market 2004- H-P 'Lightscribe' license to make optical media PE firm Warburg Pincus invests $149 million (Rs 675 cr) HP SAARC rights- DVD+R, DVD+RW, CD-R & CD-RW Contributing member of the Blu-Ray Disc Association
Diversification
Horology industry to Data storage 1987- 5.25" Floppy Diskettes 1993- 3.5" Micro Floppy Diskettes (MFD) 1999- Recordable Optical Media 150-million unit plant to make Recordable Compact Disks (CD-R) & Recordable Digital Versatile Disks (DVD-R) Optical media project strategy Create facility to match global standards in size, technology, quality, product flexibility & process integration Same strategy applied successfully in the diskette business
Globalisation
Global market - 0.5 mn in 1987 to 140 mn in 1995 Increasing global opportunities made global scale critical R&D capability drove global foray Liberalisation drove the need for globalization Focus on optical and magnetic data storage media Exclusive preserve of Japanese & Taiwanese players Key driver- opportunity to create a memory, second only to human brain using dyes, plastic & specialty chemicals No Indian manufacturer globally competitive then Indias image- country that only borrowed technology Created world-class tech & manufacturing processes to put India on the global map
Globalisation
Initial exports to Europe, 25-30% MS Antidumping investigations forced MB to diversify revenue streams from a growth & risk perspective 2005- Europe- 35%, Americas-30%, Asia-35% $ 10 mn German manufacturing facility to lucrative EU markets- 5% volume but 20% value ($ 500 mn globally) Entered Hi-value add , Hi-margin products but tough to service from offshore locations- a Japanese stronghold 2005- 85% exports, worlds 3rd largest CD maker (1520% MS), capacity 2.4 bn units, focus on DVD Top 2 Taiwanese firms- Ritek & CMC (70% MS) R&D JV worth $ 100 mn with Imation (US) Indian market- 25cr (99) to 600cr (05) to 3000cr (2010)
Became the second-largest manufacturer of CDs and DVDs within a decade of optical discs foray in 1999 There is no greater joy in life than dealing with hurdles that are thrown in front of you in your own business Cyclical nature of the industry Domination by East Asian firms We are the first company in the world to ship out recordable HD-DVDs (next generation optical discs)
Imation JV
Strategic JV with Imation Focus on customer service, long-term technology transfer & R&D Will dramatically improve MBs market share in US- the worlds largest and most lucrative market JV will effectively & efficiently target new high growth markets- Africa, Middle East & South America Substantially mitigates geographic risks Balanced regional mix of revenue streams
Blu-ray Disc
Moserbaer is a Contributing Member MB one of 4 global players The basic specifications for a next generation large capacity optical disc video recording format Enables recording, rewriting and play back of up to 27 GB of data on a single sided single layer 12cm CD/DVD size disc using a 405nm blue-violet laser
International Focus
Endeavored to create own space in international market A pioneer among globalizing Indian firms Carefully-planned and sustainable modellow costs, high margins, high profits, reinvestment & capacity growth Deep relationships with leading OEMs Associated with most global majors World leader in the development and manufacture One of India's leading technology companies Presence in over 82 countries Strong tie-ups with all major global technology brands 5-year CAGR of over 42 %
Products
Optical Storage Media- CD-R/ RW, Pre-recorded CD/DVD, DVD-R/RW, LightScribe enabled media Magnetic Data Storage Media- Compact Cassettes, Micro-Floppy Disks (MFD) and Digital Audio Tapes The optical disc business is a commodity business, but in the past few years we had managed to build up a brand in India, and we had managed to develop this really low-cost manufacturing process
Investors
Electra Partners invested in Moser Baer in 1999 Our shareholding has come down from 18% to 6% today, but we have made a nice profit on our initial investment But every time we have ever thought of divesting, we have always felt there will be a significant upside in the near future
Diversification/Expansion/Integration
Core optical discs business to solar energy & home entertainment In leveraging existing competencies, MB diversified into another high growth segment Photo Voltaics (PV) If we can leverage our manufacturing strength in a business we think about it. Solar was obvious because it involves layers of a substrate just like optical discs $130 million investment in state-of-the-art photovoltaic (PV) cell plant at Greater Noida Each of the machines has to come on 6 jumbo jets. Just the leg of the machine is the size of our conference room The PV energy market will be worth $1 trillion in 15 years & we do not want to be a bit player. I firmly believe we can take a 10% market share and be one of the top 2-3 players in this market worldwide
Diversification/Expansion/Integration
Moser Baer Photo Voltaic (MBPV), wholly-owned subsidiary Production in Greater Noida by April 2008 Initial capacity 40MW, rapidly scale up to 80MW Also invested in crystalline silicon wafers & concentration solar energy Only global company with manufacturing & expertise in all 3 methods to generate energy from solar power Without any significant breakthroughs in technology, the cost of generating solar power from PV panels will drop 40% just through manufacturing efficiencies. Such a steep decline, will make solar energy from thin film PV cells on par with or maybe even slightly cheaper than thermal energy Aggressive entry by manufacturing solar cells & modules Initial project cost Rs 260 crore (60 mn)
Promotion
Uncompromising adherence to Class 100 clean-room conditions, climate control, superior machinery, the finest raw materials Spirit of zero error manufacturing 100 people work 24 hours a day on process design 2% annual revenues on R&D, value engineering, product quality, yields & lowering production cost Positioned globally as one of the largest data storage media producers with stringent quality standards
Diversification/Expansion/Integration
India still uses a lot less power than the global average. We can be a global leader in solar power Per capita electricity consumption in India in 2006 was 631 kiloWatt hours (KWhr). In Canada, worlds highest per capita power consumer, a whopping 17,179 KWhr International Energy Agency GOI- Per capita power consumption 1000 KWhr by 2012 India has to build renewable energy and solar energy as alternatives to conventional energy needs Difficult to double power production through conventional methods in the next 48 months Emerging technologies & price reduction in solar energy products could significantly expand this market MB may just pull it off
Product scope
CDR / RW- Global demand 12 billion units in 2007, growth in Asian, Latin, American & Middle East markets. Global supply consolidates through capacity conversions, demand-supply balance equilibrium, pricing firm DVD / RW- Shifting consumer preferences, increasing drive penetration & improving price-value proposition led to 68% growth & 6.2 billion units, 2007 would be 9 billion units @ 43% growth, prices may reduce due to economies, healthy margins retained
Home entertainment
Short term Acquire copyright/exclusive license of 40% mainstream films ever produced across all languages Establish strong pan-India distribution reach. Selectively acquire new content, scale up business. Medium term Clear leadership / dominance Selectively enter content creation, launch other content type through established channel. Evaluate alternate distribution platform Long term Leader in creation and distribution of quality content spanning entire entertainment & infotainment segments
PV Global scene
Energy security- key global concern Increasing dependence on renewable energy sources PV has most viable technology & potential to bridge gap EU implementing PV technology High Global PV demand for energy and systems The global PV industry 2006, @ 40%
PV business
Short term- Rapidly scale up crystalline silicon capacities, efficient sourcing strategy for raw material. New technologies, key people to scale up Achieve best in class cost benchmarks on efficiency & yields. Medium term- Rapidly scale up different technology verticals. Emerge as one of the worlds largest & most efficient Increase integration across the value chain upto BOS. Long term- Emerge as leading, multi technology, integrated & efficient, global PV manufacturer
Challenges
Having made the products, distribution was an issue We had mostly dealt with industrial clients. Distribution was an interesting challenge. We aim to reach 100,000 distribution points across the country. We want to target panwallahs and street vendors as well as big retail.
And in the process, touch every town where there is a movie loving family
Success Drivers
R&D focused, rich research pool of personnel Market driving, global alliances facilitate product & process development & innovation Hi-tech manufacturing excellence & low cost leadership Synergy between Indian and EU operations Product customisation0 meeting diverse client requirement Tie-ups with 11 out of 12 largest global OEM Successful CRM- not lost a single OEM customer till date Deep understanding of business cycles & markets led to productive investments, high returns & a competitive edge Comprehensive IT enabled integrated logistics & SCM system reduced shipment lead time by 20% & delayed shipments to < 0.1% of total despatches
Emerging scenario
Global optical media industry recovery due to continuing capacity consolidation, consumer demand growth & softening of input costs MB consolidated position as second largest global manufacturer of optical storage media Global blank optical media products demand- 19 billion units in 2006 @ 15% driven by 68% growth in DVDR/RW format demand & shipments of next gen HD DVD & Bluray Blue laser optical pick up heads & drives that read/write both HD DVD and Blu-ray formats will drive future growth impetus
Future
To become a dominant player across multiple verticals & across the value chain in solar energy Leverage mass manufacturing & thin-film coating capabilities in new growth businesses To dominate global storage media industry across all application classes and geographies New businesses will contribute Rs 560-640 crore to the top line in 2008.
Future
I have the view from the sky, he knows the nitty-gritty of things Puri Sr You know, I would like to think of myself as a manager and not a promoter. I have to constantly do things to prove that I am not here because of who I am, but because I am good. As a shareholder I would be insane to sit here if someone else could give me a better return Puri Jr Decentralisation is a key challenge as the need for less hands-on control rises Now planning to sell small pen drives If you think about it, crystalline silicon solar cells are semiconductors too. So never say never