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Chemfab Alkalis Ltd.

BSE: 541269 Sector: Industrials
NSE: CHEMFAB ISIN Code: INE783X01023
BSE 00:00 | 29 May 120.00 -0.50
(-0.41%)
OPEN

120.00

HIGH

120.00

LOW

120.00

NSE 00:00 | 29 May 123.45 -0.35
(-0.28%)
OPEN

118.10

HIGH

126.45

LOW

118.10

OPEN 120.00
PREVIOUS CLOSE 120.50
VOLUME 50
52-Week high 221.00
52-Week low 90.05
P/E 5.62
Mkt Cap.(Rs cr) 167
Buy Price 118.00
Buy Qty 10.00
Sell Price 128.75
Sell Qty 5.00
OPEN 120.00
CLOSE 120.50
VOLUME 50
52-Week high 221.00
52-Week low 90.05
P/E 5.62
Mkt Cap.(Rs cr) 167
Buy Price 118.00
Buy Qty 10.00
Sell Price 128.75
Sell Qty 5.00

Chemfab Alkalis Ltd. (CHEMFAB) - Chairman Speech

Company chairman speech

Dear Shareowners

It gives me great pleasure to present to you the Annual Report of your Company forFinancial Year 2018-19. This year marks the entry of the company into a completely newline of business Oriented PVC Pipes with the commissioning of the new plant in TadaAndhra Pradesh. Our Chlor-Alkali business overall has been stable and the company has firmplans at growing its capacities to take advantage of the growing market demand forChlor-Alkali products.

International Caustic market

The sharp increase in the international Caustic prices was followed by a fall due tovarious Geopolitical issues which affected the Global demand. Prices are now recoveringand consolidating. China's environmental restrictions continue. Sustained demand pullsfrom the Alumina sectors continue to drive the demand and the growth.

Domestic Caustic market

Domestic prices moved in Tandem with the international prices. Market demand and growthhas been fairly robust. The BIS Standard Implementation had forced the local aluminamanufactures to buy more product from domestic suppliers which had positive effect on theCaustic Soda Lye (CSL) business. Caustic Soda being a major inorganic building block itsgrowth has moved in line with the growth of other segments. The Growth of both Caustic andHydrochloric Acid (HCL) has been between 5- 6 % .

Foray into the PVC O segment

Last year I had mentioned on our entering into the Oriented PVC pipes business. PVC Osegment. I am happy to inform that the Plant set up for the manufacture of the PVC Opipes at Sri City Tada Andhra Pradesh was commissioned during the year and is nowfully operational. The operations and initial results of this Plant are encouraging and Ibelieve in the coming years this would be one of our key focus area as this business haspotential for growth. Further during the year under review your Company entered into astrategic exclusive marketing arrangement with a Co–producer of PVC O Pipes formarketing their products which will give us the competitive edge for better marketcoverage and penetration.

Company's performance

The Company has come out with a good performance during the year under review. Alongwith the PVC O plant coming into the stream there has been an improvement in the overallperformance during the year under review.

The numbers achieved stand testimony to the sustained performance achieved by yourCompany during the year. Net Revenue from Operations rose by 7.56% from Rs. 179.61 Crorein FY 2017-18 (excluding excise duty of Rs 4.57 Crores) to Rs. 193.19 Crore in FY 2018-19.PBT before exceptional item also went up commensurately posting a growth of 20.97% toincrease from Rs. 39.78 Crore in FY 2017-18 to Rs. 48.12 Crore in FY 2018-19.

Exceptional Item :

During the year under review the operations at the Ongole Plant were suspended due tocontinuing negative cash generation. Your Company is pursing various options for runningthe unit profitably. Pending the final decision on the viability of the Unit theOperation of the Ongole Plant remain suspended till further notice. A detailed Impairmentevaluation was carried out and an Impairment loss of Rs.1963.25 Lakhs has beenrecognised towards the carrying value of the Property including the Plant & machinery.The same has been shown as an Exceptional item in the Statement of Profit & Loss forthe year under review. This is a tough decision the company had to take for the long termbenefit.

On the Horizon

I had mentioned in my last year message on the setting up of a Desalination Plant.Some of the final approvals are expected shortly after which the setting up of theDesalination Plant is expected to be completed during the forthcoming Financial year. YourCompany is also trying to make use of the water from the Sewage Treatment Plant of thePuducherry Government. Both these measures will set the tone of the strong commitment ofyour Company towards preservation of the natural resources and at the same time will helpyour Company to scale up the operations to 200 TPD.

Overall I am confident that the company is now well placed to achieve significantgrowth.

On behalf of all your Board of Directors and also on my own behalf I express mysincere gratitude to the Government of Puducherry Government of Andhra Pradesh and allour Stake holders for their continued support. I also thank all the CCAL mates for theirefforts commitment and their contribution to the progress of your Company.

I also take this opportunity to thank all the Directors on the Board for theirvaluable inputs.

I am confident that together we shall continue to grow and create more value to allthe stakeholders.

Place : Chennai Suresh Krishnamurthi Rao
Date : 07.05.2019 Chairman