Dec 02, 2022 04:01 PM
Specialty chemical company Chemplast Sanmar announced Q2FY23 results:
Commenting on the results, Mr. Ramkumar Shankar, Managing Director, said, “The unique situation that the PVC industry is experiencing continued through this quarter. Our business continued to face headwinds in Q2 FY’23 as well due to the zero-COVID policies in China, rising energy costs due to the Russia-Ukraine war and overall inflationary pressures. Chinese shutdowns related to zero-COVID policies led to inventory build up in China and continuous dumping into India, though some reduction has been witnessed in the last couple of months. With our strong balance sheet and portfolio of products, we have been able to fare reasonably well in this extremely tough situation. We closed the first half of the fiscal with a flat top-line and a double digit EBITDA margin of 11%. Falling prices of finished goods coupled with increase in energy costs have resulted in reduction of margins.
We believe that both Paste PVC and Suspension PVC prices are nearing the bottom and with lower feedstock price, we expect to see an upturn from Q4-FY’23 onwards.
Based on current trends, Custom Manufacturing business is expected to grow at ~30% in FY'23. Recently, we have signed a Letter of Intent with a global innovator to supply an advanced intermediate for a recently launched active ingredient. To cater to the additional volumes of Custom Manufacturing business, we plan to increase the capacity in Phase 1 itself and fast track the expansion. We expect to achieve significant growth in this segment in the coming years.
Caustic Soda prices continue to remain healthy.
Demand for Chloromethanes is also steady. There have been a few capacity additions recently which could have a temporary impact on prices. However, we expect the prices to recover once the market absorbs the additional quantities.
Hydrogen peroxide demand increased on the back of improved demand from paper industry; the outlook remains positive with rising prices due to the tightness in the natural gas availability impacting supply in the region.
Energy costs continue to remain high, with coal and natural gas prices on an upward trend.
Both our capex projects are on track and slated to meet expected timelines.”
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Chemplast Sanmar Ltd (formerly known as Chemicals & Plastics India (CPIL)), incorporated in 1985 was promoted as Urethanes India by Chemplast, the flagship of the Sanmar Group, Tamil Nadu. It became a fully-owned subsidiary of Chemplast in 1991 when the name was changed to the present one. The Company is a leading speciality chemicals manufacturer with focus on speciality paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors. It is the largest manufacturer of speciality paste PVC resin In addition, it is the third largest manufacturer of caustic soda and largest manufacturer of hydrogen peroxide in South India and one of the oldest manufacturers of Chloromethanes in India. The company set up a 2500 TPA Thermoplastic Polyurethane Plant in Tamil Nadu in technical collaboration with BF Goodrich Company, US. It manufactures caustic soda, chlorine, chlorinated solvents, PVC, refrigerant gases and industrial alcohol. In 1991-92, the capacity of PVC was enhanced to 48,000 TPA, making it the third largest manufacturer of PVC resin in the country. The company formed Peroxides India in collaboration with Atochem, US, for a wide variety of polymerisation initiators; and Drechem Speciality Chemicals, in technical collaboration with Dragoco, Germany, to manufacture aromatic chemicals. The PVC capacity is being enhanced from 48,000 TPA to 60,000 TPA and that of chloromethanes is being enhanced to 25,000 TPA. In 1995-96, Metkem Silicon, a subsidiary of the company manufacturing poly and mono crystalline silicon was merged with the holding company. During the same period, the thermoplastics polyuerthane division of the company was spun-off into a joint venture with Bayer, Germany. It also has entered into a joint venture with Cabot Corporation, US, for the manufacture of fumed silica as a springboard. The company is in advanced stage of discussing raw material tie-ups for its proposed shore-based PVC project. As a measure of conservation of power, the company is replacing shell and tube acid cooler and condensers with plate heat exchangers in the Chlor-alkali process. The company has taken on hand a backward integration captive project for setting up an oxychlorination with the capital outlay of over Rs 60 crores. This will help the company to improve captive feedstock (EDC) capacity, leading to lower dependence on imported feedstock. During 2000-01, the company brought on stream an oxychlorination plant which would increase captive production of EDC and reduce dependence on imports and also significantly reduce the environmental impact of its operations. Subject to necessary approvals the company planned to amalgamate Sanmar Properties & Investments Ltd(SPIL) excluding its Investment and Shipping business w.e.f. Nov 2, 2003. SPIL`s Investment and Shipping division would be demerged to Sanmar Holdings Ltd effective from Nov 1, 2003. SPIL Sharehodlers get one Equity Share of Chemplast Sanmar for every share in SPIL.
9 Cathedral Road, , Chennai, Tamil Nadu, 600086
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|AGM Date (Month)||:||Sep|
|Face Value Equity Shares||:||5|
|Market Lot Equity Shares||:||1|
|Book Closure Date (Month)||:|