Sharing notes from the AGM
Industries served
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End industry split: Automotive safety air bag (38%), automotive non-safety (15%), silica master batch (32%), consumer industrial segment (remaining)
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Provide chemical for air bag rubbers
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Silica master batch – gives scratch resistance property
One of the key raw material is butadiene polymers
Capacity utilization and history
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Currently operating at <50% utilization. Focus in not on volume growth, focus is improving bottom line and gross margin
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Replacement cost of current capacity is not very high, key strength is technology
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Had to stop anti foam product business in 2019 due to global of Dow and Dupont. This product was given to Dow. It used to contribute 40% to sales at 40-45% EBITDA margins. This product line is no longer in any Dupont portfolio
Cash usage
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5-6% on fixed deposits, no answer given to give back excess cash
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Have a global treasury policy, cannot invest in debt or liquid mutual funds
What is the vision for next 3-5 years?
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Over next 5-years, hope to drive export growth from Daman plant
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Expand silicon based products, exports from Daman, qualify new products
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Target 16-18% margins in FY24 and 8-10% organic growth
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Longer term focus is towards growing Multibase’s business in India, move more safety based products to India
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Want to improve supply and variable cost in Daman factory. Their current raw material supply base is largely in Europe which makes their Indian entity unviable. They are looking to establish more raw material supply base within India, and then expand business of Multibase as then it will be of higher strategic importance to Dupont
Related party
- Other 2 Indian Dupont entities: Electronics & water protection business. Product mix is completely different
Customer concentration
- Distributors handle end market, that’s why top customer contribution looks high
Miscellaneous
- Trading sale margins were adjusted in Q4FY23 which resulted in higher margins. Will keep fixed margins for traded products
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