Highlights of the Concall

India Glycols reported 8% fall in its revenues to Rs 250.06 crore for the quarter ended June 2008 compared to corresponding previous year period mainly on account of production losses given the planned shut down at Kashipur facility for 21 days to carry out a change in catalyst and the stabilisation of the facility. Net profit of the company fell 66% to Rs 12.13 crore.

The company generally changes catalyst in 15-18 months time which generally takes over 8-10 days. The recent planned shut down took 21 days of discontinued operation as de-bottlenecking was done to increase capacity by 20%.

Carbon-di-oxide plant of 80 tonne per day capacity at Kashipur has started commercial production in April'08. Another 80 tonne of carbon-dioxide plant is to start in August 2008 in Gorakhpur.

Shakumbari Sugar & Allied Industries crushing capacity expansion from 3200 TCD to 5500 TCD is expected to complete by October 2008. This is expected to rise to 10000 TCD by 2010-11 whereas the distillery’s capacity expansion to 240 KLPD from the present 40 KLPD for making ethanol from molasses /sugarcane juice is to complete by March 2009.

The increase in crushing capacity to 5500 TCD shall result in 25% captive production of molasses from the present 5%. This shall further increase to 40% of captive production as crushing capacity reaches to 10000 tonne.

India glycol’s diversification into the field of Herbal Extraction through 100% Export Oriented Unit (EOU) at Dehradun, Uttarakhand is expected to be complete by October 2008.

India Glycols is building 270000 sq ft of commercial space in Noida for which it is planning to lease nearly 200,000 sq ft and keep the remaining for its own corporate office, generating rental income of Rs 14-15 crore is expected to complete by December 2008.

The landed imported cost of ethanol is Rs 27-28 per kg while the domestic prices hovers around Rs 22-24 per kg.

Around 18% of the revenues came from exports.

The company is putting up two power plants with capacities of 20MW at Shakumbari Sugar mill and 22 MW at Kashipur and Gorakhpur. Shakumbari capacity is expected to commission by March 2009 while Kashipur and Gorakhpur capacities are expected to commission by January 2009. The company plans to sell around 10 MW of power and the rest being captive use.

The company is shifting its focus from commodity chemicals to speciality chemicals where margins are comparatively higher compared to MEG margins.

The current molasses prices are around Rs 450-475 per quintal. However the company’s average cost is lower by Rs 100 per quintal as the company buys the raw material at the start of sugar season at a lower cost. The company has enough storage capacity for molasses and alcohol.

Globally there has been a recent crunch in demand of MEG due to Olympics in China which the company feels is a temporary phenomenon while with regard to supplies 2-3 new capacities are coming in Middle East.

India Glycols has capex plan of Rs 242.3 crore for Shakumbari sugar plant to be completed by FY’11 while Rs 35 crore for Kashipur for catalyst change, Rs 75 crore for increasing capacities of MEG at Kashipur, Rs 25 crore for carbon dioxide plant, Rs 43.3 crore for Nutraceuticals, Rs 78.4 crore for real estate in Noida to be completed by FY’09 totaling Rs 499 crore.