#Summary
1) Utilization at Nitrile Latex Plan at 50% in one month, the year avg is about 30% capacity, for the quarter 40-45%
2) There is demand for the product, but the realization are not worth it thus the plant utilization remains at low level. (MGMT doesn’t want to pursue low margin volume)
3) Synthetic Latex ; Taloja, expansion has gone well. Utilization there for the month was 65%; for the year it was 45%.
4) Nitrile Butadiene Rubber: plant are running at full capacity and also has seen significant imports. The margins still remain a challenge due to dumping from China.
5) If the mgmt does not see things changing in Nitrile Latex space, they will decide to move the capacity into production of other material.
6) The cost for swtching will not be significant. In the range of $1-$2 Mn Dollar.
7) Net Debt is around 70 crores – working capital + debt – cash with investments around 14 crore
8) In Nitrile Latex, destocking is still going at the user level.
9) Current Revenue Distribution : Latex- 66% and Rubber – 34% – From the previous revenue break up a few year ago of 50:50, the company now has higher revenue coming from latex.
10) Apcobuild: Still a small Portion and still good growth; growth around 18-20%. Still Insignificant in terms of contribution to revenue. The strategy is to go deeper in the same state, Gujurat, Nagpur, Maharashtra, Rajasthan
11) The space is very competitive, but also misunderstood. We are only focusing on polymers and products we are strong at like tile water proofing.
Overall, the situation in Nitrile Latex still remains dire with no relief in near term. The company has done good in term of increasing their volume in such a scenario. If the Demand Supply mismatch tapers down in the coming quarters, the realization should be much better.
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