From SRF concall:- Decides to enter FKM, PVDF, FEP
Fluorochemical business (ref gas+polymers)- strong traction of reg gas in domestic business.
Outlook for domestic demand of HFC’s in India and US remains strong. PTFE plant slightly delayed due to logistics issue.
PVDF, Fep, FKM space we are going to enter at 595 crore capex. In 24months project will be commissioned. Used in EV batteries, Solar back sheet, auto etc etc.
Announced 1900 crores of capex in chemical business in last 9 months. (Capex for new age fluoropolymers is 595 crore)
Capex comes on stream in 24 months for new age fluoropolymers and post that customer approvals will take time. Points to market vacuum the at exists. Possibly due to Demand outpacing the supply in New age fluoropolymers. Gives a more complete perspective with srf also announcing a smaller capacity in the space
Capacity will be at4500 tonnes per annum for new age fluoropolymers vs 18ktpa for Gfl post expansion.
Seems like a market where Gfl has taken the lead and western players are suffering from higher Rm costs or inability to completely fulfill the demand as capex takes 2-3 years to complete. Given GFL has set up a large R142 B plant, expansion will be much shorter in time- My thoughts
Srf capacity moreover will be with PFAS tech and GFL has already develop non pfas tech to manufacture.
Disc: Invested in Kama hold co and Gujarat fluoro.
Full concall notes:- posting if any references can be taken for GFL fluoropolymers business and ref gas realisations.
SRF Concall: Q3FY23 &9M Concall
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Technical textile and Packaging business witnessing a difficult environment. Chemical business is doing well.
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Rs 3.6 of dividend approved this Quarter. Similar dividend was announced last Quarter.
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Spechem delivered a record performance due to new products being introduced and ramp up of MPP4 at Dahej.
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High level of engagement with global innovators remains and pharma intermediate plant going low. Capex announced worth more than 1000+ crores in last 2 Q’s in this division.
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All projects will go live within 1 year in spechem.
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Fluorochemical business (ref gas+polymers)- strong traction of reg gas in domestic business.
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Outlook for domestic demand of HFC’s in India and US remains strong. PTFE plant slightly delayed due to logistics issue.
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PVDF, Fep, FKM space we are going to enter at 595 crore capex. In 24months project will be commissioned.
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Announced 1900 crores of capex in chemical business in last 9 months.
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New Timeline of commissioning for PTFE by the end of this FY or early in April it will be commissioned. In next 6 months it will be ramped up very swiftly.
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Supply outstrips demand in Packaging business. Going through headwinds.
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Overall capacity: 4500 tonnes or so will be total capacity of new age fluoropolymers. Technology will be using Fluorosurfactants.
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Majority of the margins has been led by the speciality chemicals space. There is a pricing benefit that has come in within spechem as contracts got renewed. Combination of all.
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Intent in chemical business is to go into higher value added products.
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Margin expansion might be sustained in chemical business. As of now looks in good shape.
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Next Quarter will be seasonally stronger for the chemical business.
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Will be fully integrated in Fluoropolymers. Customer acquisition: is probably still some way down the line. Once the product is in place only then you can talk about customer acquisition.
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Majority of chemical capex will commercialise in H1FY24 and H2FY24.
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Seeing strong traction in ref gases in domestic market in Q4 and Q1.
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Key customers in agro are global innovators.
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Speciality fluoropolymers: 25-28% IRR we are expecting. 4 year Payback. Asset turns to be 0.8-1.2x. This is a strategic investment. Will help to cater to larger fluorocarbon space.
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2800-3000 crore capex is what they are targeting going forward.
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