Apcotex Industries held a conference call on 21 October 2022 to discuss the results for the quarter ended September'22 and way forward. Mr. Abhiraj Choksey- Managing Director, Mr. Anand V Kumashi- Company Secretary and Mr. Sachin Karwa – Chief Financial Officer of the company addressed the call.

Highlights of the Concall

• Revenue was lower compared to previous quarter mainly due to lower realizations. The company further expects lower realizations in Q3.

• The company continues to run at nearly 100% capacity utilization. Volume growth was around 5-6% compared to previous year quarter.

• Both projects in Valia and Taloja both for latex manufacturing is running on schedule and is expected to be completed in Q3FY23

• Gloves industry is going through a deep downturn in last few months mainly because a lot of inventory was created in 2020 and 2021 as lot of capacities were quickly added.

• The company had earlier aimed to ramp up the latex capacity in 3-6 months but given current market condition it now aims to ramp up in next one year. Current demand scenario is extremely muted. Obviously the pull from the market is much weaker than it was a few months ago.

• The company also expects margins to be lower than what it had expected for the new projects. But in the long run it still believes that this is a great business to be in. It's growing at double digits worldwide, across the world.

• Taloja project has swing capacities. The company now plans to focus on manufacturing some of its earlier products styrene butadiene latex because it believes in the next one year in the glove industry is going to go through a tough time.

• The 50000 tonne capacity in Valia would be for gloves and 10000 tonne in Taloja facility would be converted to Styrene butadiene latex

• Styrene butadiene latex market has been extremely strong whether it's in construction carpet, papers.

• Pre covid nitrile latex consumption was around 2 million tonne. Around 90-95% of that capacity is in south east asia.

• The company expects margins to be under pressure as it is sitting with high cost inventory while raw material prices are cooling off. Further freight rates have declined in last few months as a result of the company is facing increased competition from imports.