MIRA INFORM REPORT
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Report Date : |
17.01.2007 |
IDENTIFICATION DETAILS
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Name : |
CHEMPLAST SANMAR LIMITED |
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Registered Office : |
No. 9, |
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Country: |
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Financials (as on): |
31.03.2006 |
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Date of Incorporation : |
29.09.1962 |
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CIN No.: [Company Identification No.] |
U24230TN1985PLC011637 |
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Com. Reg. No.: |
18-11637 |
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TAN No.: [Tax Deduction & Collection Account No.] |
CHEC00051C |
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PAN No.: [Permanent Account No.] |
AAACC3000F |
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Legal Form : |
Subject
is a Public Limited Liability company. The company’s shares are listed on the
Stock Exchanges. |
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Line of Business : |
Manufacturer
and Seller of Polyvinyl Chloride and other chemicals, fabricating PVC Pipes,
Fittings & Other Extrusions & Moulding, etc. |
RATING & COMMENTS
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MIRA’s Rating : |
Ca |
RATING
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STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is
considered normal. Capable to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
EUR 7000000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Exist |
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Comments : |
Financial
position is poor. Payments are slow and delayed. Directors are reported as
experienced, respectable and resourceful industrialist. Their trade relations
are fair. The
company can be considered for any business dealings on safe and secured trade
terms and conditions. |
LOCATIONS
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Registered Office : |
No. 9, |
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Tel. No.: |
91-44-28118300 / 28273333 /
28273334 / 28273335 / 28273336/ 28128500 |
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Fax No.: |
91-44-28111902 /
28269359/282777411 |
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E-Mail : |
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Website : |
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Main Office: |
6, VI Main, BDA Industrial Suburb, Near |
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Sales Office: |
Chemplast Sanmar Limited
Harsha Bhavan, II Floor, E Block, 302, III Floor, Ashoka Chambers, House No
5-9-22/1/1, Adarsh Nagar, 407, Swastik Chambers, EDC Installation, Behind SPIC Ammonia Plant, Cabot Sanmar Limited
Harsha Bhavan, 2nd Floor, Block ‘E’, 407-412,
57, 106, S.R.Complex, Opp CCMB, Hubsiguda, 407-412, Swastik Chambers, C31, Mohammadpur, Near 'Chitralaya', C12, Ambanagar Vanchiyoor 701, Alkapuri 238A, Shop No.28, 1st Floor, Rama Dhene Singh Shopping
Complex J13, 406-408, 4th Floor, Century
Sanmar Engineering
Corporation Limited
M – 2 (Third Floor), South Extension Part-II,
407, Swastik Chambers,
701, Alkapuri Arcade Tower B, 7th
406-408, 4th Floor, Century
302, III Floor, Ashoka Chambers, House
No.5-9-22/1/1 Adarsh Nagar,
3, Sangna Society, I Floor,
Ratnaveni Complex 48-9-18/29, 1st Floor, Dwaraka
Nagar I Lane,
39/2453,
J-13, |
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Corporate Office: |
Intec Polymers 407-412, Swastik Chambers, Sanmar Engineering Corporation Limited 147 Karapakkam Village, 89/1, |
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Regional Office : |
·
Harsha Bhavan,
2nd Floor, Block ‘E’, Tel.
91-11-23413112 Fax.
91-11-23418164 ·
407-412,
Swastik Chambers, Tel.
91-22-25973390 Fax.
91-22-25973395 |
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Plants : |
·
Plant II, Raman
Nagar >
PVC : Tel.
91-4298-231982 Fax.
91-4298-231986 >
Chlorochemicals
: Caustic soda, chlorine, chlorinated solvents, refrigerant gases and silicon
wafers ·
Krishnagiri
& Panruti, Tamilnadu >
Industrial
Alcohol ·
Vedaranyam,
Tamilnadu >
Industrial
Salt PVC
Plant II :
Karaikal Plant: Industrial Alcohol Plant II :
Caustic Chlor
Plant III : Karaikal Plant: Salt Works :
Metkem Silicon
Plant IV :
Mettron
Plant I :
Solvents
Plant III : Raman Nagar PO, Mettur Dam 636 403, |
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Branches : |
Located at :- ·
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Kolkata, ·
Mumbai, ·
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Other Office: |
Cabot Sanmar Limited
Raman
Nagar PO, Mettur Dam - 636 403,
Sanmar
Speciality Chemicals Limited
No.44,
Plot
Nos.: 16, 17, 31 & 32, SIDCO Pharmaceuticals Industrial Estate,
Research Centre 38,
Intec
Polymers
130/1,
Jayanthbhai Desai Marg, Village Dadra, Dadra Nagar
Sanmar
Engineering Corporation Limited
Asco
(
147,
BS&B
Safety Systems (
147,
Fisher
Sanmar Limited
147,
Flowserve
Sanmar Limited
147,
Sanmar
Engineering Services Limited
Survey
No. 38/2A,
Sanmar
Foundries Limited
87/1,
Sensortronics
Sanmar Limited
Survey No.38/2A,
Tyco
Sanmar Limited
88/1B,
Xomox
Sanmar Limited
89/2,
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DIRECTORS
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Name : |
Mr.
P. S. Jayaraman |
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Designation : |
Managing
Director |
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Name : |
Mr.
M. K. Kumar |
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Designation : |
Director
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Name : |
Mr.
C. H. Mahadevan |
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Designation : |
Director
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Name : |
Mr.
V. K. Parthasarathy |
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Designation : |
Director
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Name : |
Mr.
M.S. Sekhar |
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Designation : |
Director
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Name : |
Mr.
V. V. Subramanian |
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Designation : |
Director
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Name : |
Mr.
S V Money |
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Designation : |
Director |
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Name : |
Mr.
B Natraj |
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Designation : |
Director |
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Name : |
Mr.
M N Radhakrishnan |
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Designation : |
Director |
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Name : |
Mr.
P U Aravind |
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Designation : |
Company
Secretary |
KEY EXECUTIVES
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Name : |
Mr.
R. Sukumaran |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
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Names of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters Holdings |
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Indian Promoters |
35986458 |
75.00 |
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Foreign Promoters |
-- |
-- |
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Persons acting in
concert |
-- |
-- |
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Sub Total |
35986458 |
75.00 |
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Non- Promoters
Holdings |
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Institutional Inverstors |
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1] Mutual Fund and UTI |
10962 |
0.02 |
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2] Banks, Financial
Institutions, Insurance Companies |
5955826 |
12.42 |
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3] Foreign Institutional
Investors |
2260 |
-- |
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Sub Total |
5969048 |
12.44 |
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Others |
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1] Private Corporate Bodies
|
1189851 |
2.48 |
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2] Indian Public |
4767817 |
9.94 |
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3] NRIs/ OCBs |
62931 |
0.13 |
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4] Foreign Nationals |
5839 |
0.01 |
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Sub Total |
6026438 |
12.56 |
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GRAND TOTAL |
47981944 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer and Seller of
Polyvinyl Chloride and other chemicals, fabricating PVC Pipes, Fittings &
Other Extrusions & Moulding, etc. |
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Products with ITC Code: |
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PRODUCTION STATUS
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Particulars |
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Unit |
Installed Capacity |
Actual Production |
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Caustic
soda |
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MT |
79200 |
78985 |
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Chlorine |
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MT |
70080 |
70421 |
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Chloromethanes |
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MT |
22000 |
34731 |
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Trichloroethylene |
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MT |
5000 |
2982 |
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Polyvinyl chloride |
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MT |
60000 |
48889 |
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Refrigerant gases |
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MT |
2500 |
1279 |
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Hydrogen gas |
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MT |
1386 |
1823 |
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Silicon ingots (kgs.) |
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MT |
12000 |
27118 |
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Silicon wafers (‘000 nos.) |
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MT |
2000 |
1134 |
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Ethyl silicate |
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MT |
600 |
374 |
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Bromine |
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MT |
120 |
61 |
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Silicon tetrachloride |
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MT |
600 |
513 |
GENERAL INFORMATION
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No. of Employees : |
Around
2021 |
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Bankers : |
>
Indian Overseas
Bank, Chennai, Tamilnadu >
State Bank of >
Standard
Chartered Grindlays Bank, Chennai, Tamilnadu |
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Facilities : |
-- |
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Banking Relations : |
Satisfactory
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Auditors : |
Price Waterhouse &
Company Chartered Accountants Chennai,
Tamilnadu |
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Associates : |
˜
Chemplast
Speciality Chemicals Limtied ˜
Bangalore Genei
Limited ˜
Sanmar Shipping
Limited ˜
Sanmar
Properties and Investments Limited ˜
Sanmar Holdings
Limited ˜
Cabot Sanmar
Limited ˜
Sanmar
Engineering Corporation Limtied ˜
Asco ( ˜
BS & B
Safety Systems ( ˜
Fisher Sanmar
Limtied ˜
FMC Technologie
Sanmar ˜
Sanmar
Engineering Serives Limtied ˜
Sanmar
Foundries Limited ˜
Sanmar Weighing
Systems Limited ˜
Sensortronics
Sanmar Limited ˜
Tyco Sanmar
Limited ˜
Xomox Sanmar
Limited ˜
AMP Sanmar
Assurance Company Limited ˜
Atofina
Peroxides India Limited ˜
Cathedral
Corporate Finance ˜
Cathedral
Properties (Alpha) Limited ˜
Dragoco India
Limited ˜
Indchem
Software Technologies Limited ˜
Kalamkriya
Limited ˜
Epsilon
Properties Limited ˜
Fisher-Xomox
Sanmar Limited ˜
Flowserve
Sanmar Limited ˜
FMC
Technologies Sanmar Limited ˜
Pluto
Consolidations Limited ˜
Sanmar Alloy
Castings Limited ˜
Sanmar
Electronics Corporation Limited ˜
Sanmar
Micropack Limited ˜
Sanmar
Industrial Filters Limited ˜
Sanmar
Securities Trading Limited ˜
Sanmar Shipping
Limited ˜
Sanmar
Speciality Chemicals Limited ˜
Fortis
Investments (Beta) Limited ˜
Bay View
Properties Limited ˜
Sanmar Group
Corporate Finance ˜
Sanmar Realty
Limited |
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Subsidiaries : |
>
Polygon
Holdings Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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75000000 |
Equity Shares |
Rs.10/- |
Rs. 750.000
millions |
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3500000 |
Preference Shares |
Rs.100/- |
Rs. 350.000
millions |
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GRAND TOTAL |
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Rs.1100.000 millions |
Issued, Subscribed
& Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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47981944 |
Equity Shares |
Rs.10/- |
Rs. 479.819 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
479.800 |
479.819 |
684.800 |
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3] Reserves & Surplus |
1803.400 |
1436.200 |
1183.900 |
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NETWORTH
|
2283.200 |
1916.019 |
1868.700 |
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LOAN FUNDS |
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1] Secured Loans |
2291.400 |
2094.681 |
1781.200 |
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2] Unsecured Loans |
421.400 |
0.000 |
362.700 |
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TOTAL
BORROWING
|
2712.800 |
2094.681 |
2143.900 |
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TOTAL
|
4996.000 |
4010.700 |
4012.600 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
3908.100 |
3671.100 |
3524.300 |
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Capital work-in-progress
|
822.600 |
249.800 |
89.300 |
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INVESTMENT
|
0.300 |
0.300 |
43.400 |
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CURRENT ASSETS, LOANS & ADVANCES
|
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Inventories
|
489.400
|
352.300
|
500.300 |
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Sundry Debtors
|
524.000
|
651.300
|
626.200 |
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Cash & Bank Balances
|
53.300
|
49.800
|
44.500 |
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Loans & Advances
|
917.500
|
696.100
|
542.200 |
Total Current Assets
|
1984.200
|
1749.500
|
1713.200 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
|
1452.400
|
1392.600
|
1099.500 |
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Provisions
|
271.000
|
278.600
|
267.900 |
Total Current Liabilities
|
1723.400
|
1671.200
|
1367.400 |
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Net Current
Assets
|
260.800
|
78.300
|
345.800 |
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MISCELLANEOUS EXPENSES
|
4.200 |
11.200 |
9.800 |
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TOTAL
|
4996.000 |
4010.700 |
4012.600 |
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PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
7043.400 |
6138.500 |
5840.500 |
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Profit/(Loss) Before Tax
|
460.200 |
306.000 |
82.300 |
Provision for Taxation
|
|
49.200 |
36.000 |
Profit/(Loss) After Tax
|
367.100 |
256.800 |
46.300 |
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Export Value
|
NA |
173.013 |
236.941 |
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Import Value
|
NA |
465.799 |
921.356 |
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Total Expenditure
|
6058.400 |
5832.500 |
5758.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
1.14 |
1.12 |
1.39 |
|
Long
Term Debt Equity Ratio |
1.06 |
0.97 |
1.08 |
|
Current
Ratio |
1.00 |
0.96 |
0.87 |
|
TURNOVER
RATIOS |
|
|
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|
Fixed
Assets |
1.08 |
1.05 |
1.06 |
|
Inventory
|
16.06 |
14.15 |
12.66 |
|
Debtors |
11.50 |
9.44 |
9.19 |
|
Interest
Cover Ratio |
3.79 |
2.04 |
1.23 |
|
Operating
Profit Margin (%) |
14.57 |
12.89 |
13.41 |
|
Profit
Before Interest and Tax Margin (%) |
9.24 |
8.53 |
7.70 |
|
Cash
Profit Margin (%) |
10.76 |
8.01 |
6.51 |
|
Adjusted
Net Profit Margin (%) |
5.43 |
3.64 |
0.81 |
|
Return
on Capital Employed (%) |
13.90 |
12.85 |
11.46 |
|
Return
on Net Worth (%) |
17.48 |
12.06 |
1.78 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject
was incorporated on 29th September, 1962 at Chennai in Tamilnadu
having Company Registration Number 4893 under the name & style of CHEMICALS
& PLASTICS INDIA LIMITED. The company merged with URETHANS (INDIA) LIMITED
w.e.f. 1st October, 1991 and the name was changed to CHEMPLAST
SANMAR LIMITED.
A
new Registration Number was obtained by the company after the change of name.
The new Company Registration Number is 11637.
Subject
was formerly known as Chemicals & Plastics India Limited and was promoted
by Urethanes India by Chemplast, the flagship company of the Sanmar Group.
It
became a fully owned subsidiary of Chemplast in 1991 when the name was changed
to the present one.
The
company set up a 2500 tpa thermoplastic polyurethane plant in Tamilnadu in
technical collaboration with BF Goodrich Company,
In
1991-92, the capacity of PVC was enhanced to 48000 tpa making it the third
largest manufacturer of PVC resin in the country. The company formed Peroxides India in
collaboration with
The
PVC capacity is being enhanced from 48000 tpa to 60000 tpa and that of
chloromethanes is being enhanced to 25000 tpa.
In 1995-96, Metkem Silicon, a subsidiary of the company manufacturing
poly and mono crystalline silicon was merged with the holding company. During the same period, the thermoplastics
polyurethane division of the company was spun off into a joint venture with Bayer,
The
company is in advanced stage of discussing raw material tie-ups for its
proposed shore-based PVC project. As a measure
of conservation of power, the company is replacing shell and tube acid cooler
and condensers with plate heat exchangers in the chlor-alkali process.
The
company has taken on hand a backward integration captive project for setting up
an oxychlorination with the capital outlay of over Rs. 600 millions. This will help the company to improve captive
feedstock (EDC) capacity, leading to lower dependence on imported feedstock.
During
2000-01, the company brought on stream an oxychlorination plant which would
increase captive production of EDC and reduce dependence on imports and also
significantly reduce the environmental impact of its operations.
Subject
to necessary approvals the company planned to amalgamate Sanmar Properties and
Investments (SPIL) excluding its investment and shipping business w.e.f.
November 2, 2003. SPIL’s investment and shipping division would be demerged to
Sanmar Holdings Limited effective from November 1, 2003. SPIL shareholders get
one equity share of company for every share in SPIL.
Chloromethane
production had registered an all time high at 32851 MT during the year 2001.
The
project to set up a 150000 TPA PVC plant in a
The
company is engaged in manufacture and sale of poly vinyl chloride (PVC) and
chlorochemicals. While all its
manufacturing facilities are located at Mettur Dam near
The
company originally had an installed capacity of 6,000 tpa of PVC that was
expanded to 60000 tpa. The company has may records to its credit like one of
the largest manufacturers of polycrystalline silicone and among the top two
largest manufacturer of chloromethanes. Over the years, the company diversified
into areas like manufactures of Chloromethanes, refrigerant gases along with
backward integration. The company made a major diversification decision by
getting into shipping business in 1994 to protect itself from the cyclical
chlorochemicals business.
The
company is in advanced stage of discussing raw material tie-ups for its
proposed share-based PVC project. Project implementation would start once these
arrangements are in place.
The company
continued to maintain its all-round good performance during the year under
review. Sales and other income increased by 14% over the previous year. The
Profit before tax for the year at Rs.460.2 Millions inclusive of Montreal
Protocol compensation receipts of Rs.184.0 Millions registered a healthy growth
of 50% over the previous year. The performance of the company could have been
substantially better but for the increase in the fuel cost due to steep
increase in oil prices which had a negative impact of Rs.350.000 Millions on
the profits for the year. The company has drawn up plans to address this issue.
With a view to conserving resources to meet the capital expenditure programmes
of the company, the Directors do not recommend payment of dividend on equity
shares for the year 2005-06.
MANAGEMENT DISCUSSION AND ANALYSIS:
The year under reference was a representative year demonstrating the cyclical
nature of the businesses the company is engaged in.
The uptrend seen in the realizations for the products manufactured such as Poly
Vinyl Chloride (PVC), Caustic Soda and Chloromethanes witnessed a reversal of
trends in the second half of the year. With escalating feedstock prices, the
margins came under pressure during this period. The focus laid by the
management in recent years on strengthening the backward integration strategy,
the acquisition of the Caustic soda facility at Karaikal which made available
low cost chlorine for operations, and the continuous investments being made to
bring in more flexibility in feedstock management, are all steps in the right
direction to manage efficiently the cyclical nature of the business. Several
investment proposals, discussed elsewhere in this report, are now under
implementation and these initiatives will further strengthen the fundamentals
of the company.
PVC Business:
The company has an integrated facility at Mettur Dam to produce 64,000 TPA of
PVC. Ethylene Di-chloride (EDC), the feedstock required to manufacture PVC is
also produced in this location.
The company continues to be the only manufacturer with capability to produce
four major PVC product groups. This has given it the flexibility to quickly
change its product mix based on comparative contribution.
Suspension Resin:
Demand for Suspension resin in the country peaked to nearly 11.5 lac tons in
the year 2005-06, registering a high growth of 25% over the previous year.
During this year, the country imported nearly 2.50 lac tons of Suspension
resin. The main driver for PVC demand continues to come from the Pipes &
Fittings sector where nearly 70% of Suspension PVC is consumed in the country.
Implementation of several irrigation, water supply and sewerage schemes by
various Governments, and the boom in the housing, construction and infrastructure
sectors will continue to drive Pipes and PVC demand in the coming years.
Paste Resin:
Demand for Paste resin (a speciality resin) in
The country's BSR demand continues to be around 6000 MT per year. The company
continues to be the sole manufacturer of BSR in
Copolymer Resin:
Growth in demand for Copolymer resins in the major sectors - inks and adhesives
- continues to remain modest. The company is the only manufacturer of Copolymer
resin in
Raw Materials and Intermediates:
EDC is the key intermediate to produce PVC. Though the company has an EDC
production facility at Mettur Dam to meet its entire requirement to produce
PVC, actual production of EDC depends on the price/cost of raw materials i.e.,
Denatured Spirit (DNS) and Chlorine. While the cost of chlorine has been
minimised with the enhanced captive production at the Karaikal facility, the
cost of DNS depends upon the vicissitudes of the sugar industry, which
determines availability of molasses for alcohol production, demand of alcohol
from the potable sector and the Gasohol programme of the Government of India.
These factors have posed a question mark on the availability of DNS to the
industrial sector on a sustained basis at affordable prices. Also, the
international price of DNS has increased to high levels making imports
prohibitive. To find a long-term solution to this problem and ensure
availability of EDC at an appropriate cost, the company, as informed, is
setting up an 84,000 TPA EDC production facility at Karaikal to produce EDC
from imported ethylene, using the chlorine available at this location. Towards
this end, Ethylene storage and Marine Terminal facilities are under
construction. The project to be completed by end of 2006 will make available
about 84,000 tonnes of EDC at a low cost for the PVC production at Mettur Dam.
The balance requirement of EDC of around 25,000 TPA will be met from the
Oxychlorination facility operating at Mettur Dam, for which the required DNS
will come from the company's Industrial Alcohol plant.
As regards the Caustic soda facility at Karaikal, a shore based location in the
Union Territory of Pondicherry acquired in August '03, the company has taken
several initiatives. The capacity of Caustic soda was ramped up to 100 TPD last
year and has been further expanded to 150 TPD in March '06. Power is the predominant
raw material in the manufacture of Caustic soda, and the company has installed
an 8.5 MW power plant with natural gas as fuel. The captive power source
through natural gas is being further augmented. Thus, Chlorine is made
available at this location for captive consumption at an attractive low
cost.
Risks and concerns:
a) The Government of
Year Month Import Duty %
PVC EDC Spread
%
2002 March 30 15 152003 March 25 15 102004 January 20 15 52004 September 15 10
52005 March 10 5 52006 March 5 2 3
b) Imported DNS prices have increased to unviable levels. The company is now
forced to depend on domestic DNS at least till commissioning of the EDC
facility at Karaikal.
c) High cost of power mainly due to increase in LSHS cost, which follows the
trend of International crude oil prices is putting pressure on margins.
Review of operations:
PVC production
during the year 2005-06 was 60,177 MT. During the beginning of the year, PVC
production was moderated by availability of EDC. However, with the imported
parcels of EDC landing from June '05, PVC production volume was maintained to
the capacity. In line with the international price of Suspension PVC, domestic
prices started falling substantially from October '05. Such a drop in selling
price and increase in feedstock cost affected the margins during the
year.
As stated earlier, the PVC Division was benefited by the low cost chlorine from
Karaikal facility and the timely import of DNS and EDC, but for which the
operations of the Division would have been severely affected.
As per web Details
About Group
The Sanmar Group, with its corporate headquarters at
Chennai, the capital city of
These businesses are grouped and managed in industry
segmentFINANCE:
The company has established a good track record with the bankers
and financial institutions, thereby enjoying their confidence fully. The
increase in interest cost in recent period is a matter of concern, however with
good standing of the company with the lenders, the company is confident of
securing loans at optimum costs.
With a view to enhance liquidity of company's shares on the stock exchanges and
facilitate easier accessibility to the company's equity shares by small investors,
during the year, the company carried out a stock split by sub-dividing each
equity share of Rs.10 of the company into 10 equity shares of Re.] each.
as follows:
> Shipping
In addition to significant or majority holdings in all
these businesses, the group has also made major investments in life insurance
and cement manufacture.
Professionally managed
In the course of its well planned professionalisation
initiatives over the years, the group has successfully separated ownership and
management by establishing a broad-based, empowered Group Corporate Board
comprising eminent persons from varied backgrounds. The GCB oversees all Sanmar
businesses, but is involved only on a strategic level, with the management of
the businesses fully delegated to professional managing directors and run by
over 600 highly qualified managers.
Group Strengths
The Sanmar Group has over three decades of experience
in running and managing a large industrial organisation with multiple
businesses. It is renowned for its exceptional management skills covering
diverse and complex businesses, strong and conservative financial practices,
and its ability to source, assimilate and apply complex technologies in
different fields.
Some of the group’s major strengths are: Its leading
edge HR practices and reputation as a preferred employer; its high level of IT
integration, with SAP ERP in place in all the businesses; and its successful
relations with the government, based on professional merit and integrity.
A history of consistent
profit making
The group entered into its first international joint
venture back in the 1960s when it started Chemicals and Plastics India Limited
to manufacture PVC resins in joint venture with B F Goodrich of the
Today, it has a turnover of around Rs.10 billion and a
presence in some 25 businesses, with 25 manufacturing units spread over 10
locations in
Characterised by strong and conservative financial
practices, it has a track record of steady growth and consistent profitmaking
over the last three decades, enjoying an excellent reputation in the financial
markets. The group is known for its high ethical standards and healthy respect
for intellectual property rights.
At Chemplast Sanmar Limited, the flagship company of
the Sanmar Group, integration - forward and backward - is the key.
The company has two main businesses – PVC and
Chlorochemicals. The basic feedstock for its PVC plant, ethylene and chlorine,
come from its industrial alcohol plant at Panruti and its own chloralkali
facilities.
The Chlorochemicals Division of Chemplast, itself the
result of backward integration by the group, manufactures a wide range of
products using a highly integrated manufacturing process. These downstream
products are either chlorine derivatives or chlorine users in the production
process. The feedstock for the refrigerant gases is supplied by the solvents
division.
The salt needed for chlorine manufacture is supplied
by Chemplast's own salt fields at Vedaranyam. The process being capital
intensive, Chemplast is fully equipped to generate sufficient captive power to
meet its entire requirements, thus making it one of the most integrated
chemical plants in the country with a closed manufacturing loop.
Between the two main businesses, Chemplast's product
range falls into five distinct groups — PVC Resins, Caustic Soda/ Chlorine,
Chlorinated Solvents, Refrigerant Gases and Silicon Wafers.
The manufacturing facilities are located at Mettur in
Tamil Nadu and Karaikal in Pondichery.
The Sanmar Group, with its corporate headquarters
at Chennai, the capital city of
The group has significant or majority holdings in
all its businesses.
These businesses are grouped and managed in
industry segments as follows:
In addition, the group has
also made major investments in cement manufacture.
Professionally
managed
Sanmar’s businesses are
professionally managed, thanks to the group’s ability to attract, motivate and
retain high calibre staff. Ownership and management have been separated through
a series of top level initiatives, including the formation of a broadbased,
empowered Group Corporate Board, which oversees all businesses, including
strategies and policies. The businesses are managed by professional managing
directors, with highly qualified managers working under them.
Group
Strengths
The Sanmar Group has over
three decades of experience in running and managing a large industrial
organisation with multiple businesses.
The group’s innate
strengths include:
An ability to
source, assimilate and apply complex technologies in different fields.
Leading edge HR
practices and a reputation as a preferred employer
A high level of IT
integration with an SAP ERP platform across businesses
A global outlook
highlighted by successful JVs with world leaders, and a high level of cross
border trade
Blazing
a trail
The group entered into its
first international joint venture back in the 1960s when it started Chemicals
and Plastics India Limited to manufacture PVC resins in joint venture with B F
Goodrich of the
Today, it has a turnover of
over Rs.13 billion and a presence in some 25 businesses, with manufacturing
units spread over numerous locations in
Characterised by strong and
conservative financial practices, it has a track record of steady growth and
consistent profitmaking over the last three decades, enjoying an excellent
reputation in the financial markets. The group is known for its high ethical
standards and healthy respect for intellectual property rights.
Where integration is the
key
At Chemplast Sanmar
Limited, the flagship company of the Sanmar Group, integration - forward and
backward - is the key.
The company has two main
businesses – PVC and Chlorochemicals. The synthesis that underlies the polymer
chemistry of PVC manufacture is also reflective of the company’s approach to
business. The basic feedstock for its PVC plant, ethylene and chlorine, come
from its industrial alcohol plant at Panruti and its own chloralkali facilities
at Mettur and Karaikal.
The Chlorochemicals Division of Chemplast, itself the result of backward
integration by the group, manufactures a wide range of products using a highly
integrated manufacturing process. These downstream products are either chlorine
derivatives or chlorine users in the production process.
The salt needed for
chlorine manufacture is supplied by Chemplast’s own salt fields at Vedaranyam.
The electrolysis process of
manufacturing chlorine, is power-intensive, but Chemplast is fully equipped to
generate sufficient captive power to meet its entire requirements.
All this makes Chemplast
one of the most integrated chemical plants in the country with a closed
manufacturing loop.
Between the two main
businesses, Chemplast's product range falls into five distinct groups — PVC
Resins, Caustic Soda/ Chlorine, Chlorinated Solvents, Refrigerant Gases and
Silicon Wafers.
The manufacturing facilities are located at Mettur and Panruti in Tamil
Nadu and Karaikal in Pondichery.
CMT REPORT [Corruption, Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts,
1] INFORMATION ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial Crime :
Charges or conviction registered
against subject: None
5] Records on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal Records
No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation with Government :
No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.
9] Compensation Package :
Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.34 |
|
|
1 |
Rs.87.61 |
|
Euro |
1 |
Rs.57.61 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP
CAPITAL |
1~10 |
2 |
|
OPERATING
SCALE |
1~10 |
2 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
2 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
2 |
|
--LEVERAGE |
1~10 |
2 |
|
--RESERVES |
1~10 |
2 |
|
--CREDIT
LINES |
1~10 |
2 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT
POINTS |
|
|
|
--BANK
CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER
ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT
POINTS |
|
|
|
--SOLE
DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT
ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER
MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
22 |
This score serves as a reference to assess SC’s credit risk and to set
the amount of credit to be extended. It is calculated from a composite of
weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial condition (40%) Ownership background (20%) Payment record (10%)
Credit history (10%) Market trend (10%) Operational size
(10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses
an extremely sound financial base with the strongest capability for timely
payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial
& operational base are regarded healthy. General unfavourable factors
will not cause fatal effect. Satisfactory capability for payment of interest
and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable
& favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse
factors are apparent. Repayment of interest and principal sums in default or
expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute
credit risk exists. Caution needed to be exercised |
Credit not recommended |