Gujarat Ambuja Exports

My notes from AGM as follows:

• Expansion –
  • Malda to be commissioned in Q3 with full capacity of starch and derivatives. Capacity Utilization – 50-60% in the first 3-6 months and after that 80%.
  • Maize capacity to be increased to 6000 TPD making the company largest corn millers in Asia outside China
  • Sorbitol projects – 100 TPD Hubli and Sitarganj – to be commissioned in fourth quarter of this year. With this expansion, GAEL would become largest producer of sorbitol in Asia ex China (Total capacity – 500 TPD).
  • Construction of Wet Milling facility at Sitarganj started – will be commissioned in later part of next year (Total – 1900 TPD)
  • Fermentation industry – ethanol and alcohol – company to invest 1000 Cr in this segment. While it is difficult to quantify margins for ethanol plants, expected in the range of 10-12%. First plant to be commissioned 12 months from now and second plant in 15-16 months. We have just got the permission at Hubli and subsequently in Malda and Chalisgaon. We are trying to create flexibility in this segment by not being in ethanol (which has dependency on government mandates) but also in alcohol. We see there is lot of import on fermented products in India and these are not being manufactured in India – looking for import substitution.
  • Funding for expansion – currently, the plan is through internal accruals.
  • Expected revenue from expansions in two years – 1500 Cr
• Reason for reduction in margins for 1QFY23 – Corn prices rose in the first quarter, fuel prices were high. We have to be prepared for margins to be in the 12 to 20% range.
• Revamp our maize plants with Renewable Energy plants.
• Margins are more stable in the derivative products.
• HFCS – we are ready with the product line. Sugar industry – prices are on lower side. Derivatives we are producing from this plant is giving us higher margins. No restriction on usage of HFCS.
• Agro processing business – more focus on B2C business. No major investments. Expect this business to do well in the near term. With exports opening up in November as international prices are increasing in soya bean and Indian prices coming down. We plan to export soya bean meal this year. We expect this business to grow to 5000 Cr and with maize business slated to grow to 5000 Cr, we are aiming to touch 10000 Cr revenue by 2025.
• India is able to compete in international markets across RM to Finished product.
• Indian maize prices would be more or less in line with international markets.
• Shipping disturbances – no major disturbances now.
• Major countries we export to – SE Asia and Africa (total 75 countries).
• Value added products – 30-35% of the total maize top line (Installed capacity of derivatives – 40-45%).
• Storage capacity – 500,000 Tonnes.