Archean Chemical Industries held a conference call on 17 May 2024 to discuss the results for the quarter ended March 2024 and way forward. Mr. Ranjit Pendurthi – Managing Director, Mr. Raghunathan Rajagopalan – Chief Financial Officer and Mr. Rajeev Kumar – DGM Finance of the company addressed the call.

Highlights of the Concall

• Over the last few quarters, the Indian chemical industry at large as well as globally, has experienced some headwinds as China is still yet to come out of its economic challenges and to fully revise their domestic consumption, although which in turn has impacted the overall downstream industries.

• The company saw some stabilization and restoration of select products for few periods, but there have been other challenges on the ground with regards to some demand issues as well as some supply chain issues with regard to freight costs. And these have, on occasion, delayed the overall supplies, which in turn have impacted the business temporarily.

• Bromine contributed around 36% of the revenue from the product in Q4FY24, and Industrial Salt has contributed around 64%. For FY24 Bromine contributed around 33% and Industrial Salt is around 64%, and the balance 3% of the revenue came from SOP.

• 74% of the revenue in FY24 is from the export market, and the balance 26% was the domestic market.

• The company mentioned that overall demand from end-user market of bromine derivatives or bromine compounds continues to remain on stream, albeit a bit slower than expected, but stable.

• The price of bromine stood near above US$ 3 mark Throughout the FY24.

• The company has seen a steady demand of bromine from the domestic market, which all goes well for the demand scenario. It has also ramped up supply and the volume offtake from end-user industries like Agrochem and Pharma has started picking up gradually over the last few months.

• The company is gradually ramping up shipments in export market as well.

• The company has good demand visibility for bromine for the next financial year as well. As most of contracts are done on a long-term basis thereby giving stability and visibility as well.

• The company is confident to do better business from the bromine segment specifically and expect a healthy growth in FY'25.

• The company industrial salt volume was more than 4 million tonnes per year. However it did see some price moderation. The company continues to remain optimistic in the Salt segment and expect to sustain its growth momentum in FY'25.

• The company is seeing encouraging results on the trials in the labs for Sulphate of Potash by its technology partner in Europe, and expect it to contribute meaningfully in H2FY'25.

• Phase 1 of greenfield expansion at the bromine derivative plant at Jhagadia, GIDC has successfully commissioned in March 2024. This phase is dedicated to manufacturing bromine performance derivatives and clear brand fluids, which will enhance product offerings and market presence. The next phase of the same Phase I would be commissioned by the end of H1FY'25. This phase will focus on producing a high range of demand products. These products are essential for various industrial applications continuing to be on the bromine performance side, and the production will significantly boost both its capability and market reach.

• The company has acquired Oren Hydrocarbons Private Limited through its wholly owned subsidiary, Idealis Chemicals Private Limited and is waiting for the NCLT approval. The company remains optimistic about the potential of this project and its contribution to our portfolio.