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Apcotex Industries held its conference call on 9th February 2017 and was addressed by Adiraj Choksi, MD
Key Highlights
The company is currently facing strike at Taloja plant from 9th Jan'17 and the issue has yet not resolved. The management is trying to work out the solutions and is hopeful of the same very soon. The company so far has lost around Rs 12 crore of sales due to this strike in the month of Jan'17.
Capacity utilisation at Valia plant stood at around 90% and at Taloja plant utilization has suffered and stood at less than 60% in Dec'16 quarter, as issues with one of the largest customer of the company in Paper industry continue to remain. Management expects the issue to remain in Mar'17 quarter as well.
The competitive intensity continued to remain same in Dec'16 quarter.
Exports continue to do well and for 9 months ended Dec'16, exports volume grew by around 25% YoY. Middle East and South East Asia constitute around 75% of total exports for the company while rest from markets like US, EU and Australia. Management continue to expect strong export volumes going forward.
Latex volume also was up by around 50% for 9 months ended Dec'16.
While raw material prices were generally high on YoY basis, for the 9 months ended Dec'16, Butadiene was up by around 30% on YoY basis.
The company is already spending around Rs 30 crore of capex which will be largely to augment the power capacities and to increase the efficiency and will be less on capacity addition. The capex on capacity addition will be decided by end of FY'17.
There were some one off expenditure of around Rs 10-12 crore so far in 9 months ended Dec'16 due to the merger between Apcotex industries and Apcotex solutions, which got approval from the high court.
Going forward, while challenges continue to remain management is optimistic about the demand.
Management expects the things to improve gradually on QoQ basis going forward.
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