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Last Updated : Jul 14, 2016 03:52 PM IST | Source: CNBC-TV18

Commodities biz to grow 30% in 2 years: Thirumalai Chemicals

Thirumalai Chemicals is debottlenecking its main commodity chemicals business, which is expected to grow about 25-30 percent in next 1.5-2 years, said the MD, R Parthasarathy, in an interview to CNBC-TV18.

Thirumalai Chemicals, a leading manufacturer of industrial and specialty chemicals, is debottlenecking its main commodity chemicals business, which is expected to grow about 25-30 percent in next 1.5-2 years, said the MD, R Parthasarathy, in an interview to CNBC-TV18.

Investment is also on the cards for the company after reaching to its ultimate capacity, he added.

Commodities contribute 75 percent to the company's total revenue and the rest is contributed its fine chemicals business.

"We are trying to shift that ratio to 60:40," said Parthasarathy.

Below is the verbatim transcript of R Parthasarathy's interview to Reema Tendulkar and Mangalam Maloo on CNBC-TV18.

Reema: Take us through what your current capacity utilisation is, how much will it improve and your capex plans if any.

A: We are debottlenecking our main commodity business that will grow about 25-30 percent over the next one and a half years to two years and we will be nearing ultimate capacity after which we may plan a further investment, but this will be at very low cost because it is just debottlenecking, rationalisation of the existing capacity.

In our food ingredients and fine chemicals, we just completed this month 30 percent capacity enhancement and that is a good high value business that we aim to grow further in the future because it is both exports originally and the last few years India facing. So we expect -- as I said about 25-30 percent already starting from the rest of this year in our food ingredients and fine chemicals and about 30 percent within a year, year and a half in our commodity chemicals in India.

Reema: What percentage of your business comes from commodities and what percentage from fine chemicals?

A: Presently it is about 75 percent plus on the commodity and 25 percent on the fine chemicals in value added products. We are trying to shift that so it is over the next three years it becomes 60:40.

Reema: Give us a sense of what FY17 will look like?

A: It is very difficult in our business to predict revenues because the overall prices have crashed though we are try to squeeze much better margins out of it, out of the situation, so it is a question of raw material prices and finished product prices, which moves in tandem. We don’t look at it and our main focus has been the margins, so gross margins and the operating costs and the net margins finally.

So I expect this year there to be somewhat increase in our revenues, a significant increase I hope in our volumes especially in the non-commodity and somewhat in the commodity, but on the revenue side I cannot predict, I am expecting that it will go up, but it depends on absolute prices and absolute prices are not very relevant in my business.

For full interview, watch accompanying video...

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First Published on Jul 14, 2016 02:32 pm
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