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Chemfab Alkalis Ltd.

BSE: 541269 | NSE: CHEMFAB |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE783X01023 | SECTOR: Chemicals

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Jan 17, 16:00
218.55 14.40 (7.05%)
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Jan 17, 15:57
218.85 14.85 (7.28%)
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Annual Report

For Year :
2019 2018

Chairman's Speech

Dear Shareowners,

It gives me great pleasure to present to you the Annual Report of your Company for Financial Year 2018-19. This year marks the entry of the company into a completely new line of business, Oriented PVC Pipes, with the commissioning of the new plant in Tada, Andhra Pradesh. Our Chlor-Alkali business overall has been stable and the company has firm plans at growing its capacities to take advantage of the growing market demand for Chlor-Alkali products.

International Caustic market

The sharp increase in the international Caustic prices was followed by a fall due to various Geopolitical issues which affected the Global demand. Prices are now recovering and consolidating. China’s environmental restrictions continue. Sustained demand pulls from the Alumina sectors continue to drive the demand and the growth.

Domestic Caustic market

Domestic prices moved in Tandem with the international prices. Market demand and growth has been fairly robust. The BIS Standard Implementation had forced the local alumina manufactures to buy more product from domestic suppliers which had positive effect on the Caustic Soda Lye (CSL) business. Caustic Soda being a major inorganic building block, its growth has moved in line with the growth of other segments. The Growth of both Caustic and Hydrochloric Acid (HCL) has been between 5- 6 % .

Foray into the PVC O segment

Last year I had mentioned on our entering into the Oriented PVC pipes business. PVC O segment. I am happy to inform that the Plant set up for the manufacture of the PVC O pipes, at Sri City, Tada, Andhra Pradesh, was commissioned during the year, and is now fully operational. The operations and initial results of this Plant are encouraging and I believe in the coming years, this would be one of our key focus area as this business has potential for growth. Further, during the year under review, your Company entered into a strategic exclusive marketing arrangement, with a Co-producer of PVC O Pipes, for marketing their products which will give us the competitive edge, for better market coverage and penetration.

Company’s performance

The Company has come out with a good performance during the year under review. Along with the PVC O plant coming into the stream, there has been an improvement in the overall performance during the year under review.

The numbers achieved, stand testimony to the sustained performance achieved by your Company during the year. Net Revenue from Operations rose by 7.56% from Rs. 179.61 Crore in FY 2017-18 (excluding excise duty of Rs 4.57 Crores) to Rs. 193.19 Crore in FY 2018-19. PBT before exceptional item also went up commensurately, posting a growth of 20.97% to increase from Rs. 39.78 Crore in FY 2017-18 to Rs. 48.12 Crore in FY 2018-19.

Exceptional Item :

During the year under review, the operations at the Ongole Plant were suspended, due to continuing negative cash generation. Your Company is pursing various options for running the unit profitably. Pending the final decision on the viability of the Unit, the Operation of the Ongole Plant remain suspended till further notice. A detailed Impairment evaluation was carried out, and an Impairment loss of Rs.1,963.25 Lakhs has been recognised towards the carrying value of the Property including the Plant & machinery. The same has been shown as an Exceptional item in the Statement of Profit & Loss for the year under review. This is a tough decision the company had to take for the long term benefit.

On the Horizon

I had mentioned in my last year message, on the setting up of a Desalination Plant. Some of the final approvals are expected shortly, after which the setting up of the Desalination Plant is expected to be completed during the forthcoming Financial year. Your Company is also trying to make use of the water from the Sewage Treatment Plant of the Puducherry Government. Both these measures will set the tone of the strong commitment of your Company towards preservation of the natural resources, and at the same time will help your Company to scale up the operations to 200 TPD.

Overall I am confident that the company is now well placed to achieve significant growth.

On behalf of all your Board of Directors, and also on my own behalf, I express my sincere gratitude to the Government of Puducherry, Government of Andhra Pradesh and all our Stake holders for their continued support. I also thank all the CCAL mates for their efforts, commitment and their contribution to the progress of your Company.

I also take this opportunity to thank all the Directors on the Board, for their valuable inputs.

I am confident that together, we shall continue to grow and create more value to all the stakeholders.

Place : Chennai Suresh Krishnamurthi Rao

Date : 07.05.2019 Chairman