MIRA
INFORM REPORT
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Report Date : |
04.09.2007 |
IDENTIFICATION DETAILS
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Name : |
CHEMPLAST SANMAR LIMITED |
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Formerly
Known As : |
CHEMICALS AND PLASTICS |
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Registered Office : |
No. 9, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
29.09.1962 |
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Com. Reg. No.: |
18-11637 |
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CIN No.: [Company
Identification No.] |
U24230TN1985PLC011637 |
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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 : |
Ba |
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RATING |
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 : |
USD 9800000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having satisfactory
track. Directors are reported as experience and respectable businessmen. Trade
relations are reported as fair. Business is active. Payments are usually
correct and as per commitments. The company can be considered normal for business dealings at usual
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 :- ·
·
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 / SHAREHOLDING PATTERN
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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 : |
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PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Caustic soda |
MT |
|
79200 |
78985 |
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Chlorine |
MT |
|
70080 |
70421 |
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Chloromethanes |
MT |
|
22000 |
34731 |
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Trichloroethylene |
MT |
|
5000 |
2982 |
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Polyvinyl chloride |
MT |
|
60000 |
48889 |
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Refrigerant gases |
MT |
|
2500 |
1279 |
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Hydrogen gas |
MT |
|
1386 |
1823 |
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Silicon ingots (kgs.) |
MT |
|
12000 |
27118 |
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Silicon wafers (‘000 nos.) |
MT |
|
2000 |
1134 |
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Ethyl silicate |
MT |
|
600 |
374 |
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Bromine |
MT |
|
120 |
61 |
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Silicon tetrachloride |
MT |
|
600 |
513 |
GENERAL INFORMATION
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No. of Employees : |
Around 2021 |
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Bankers : |
v Indian Overseas Bank, Chennai, Tamilnadu v
State Bank of v Standard Chartered Grindlays Bank, Chennai, Tamilnadu v Bank of America, Express Tower, Nariman Point, P O Box 10080, Mumbai – 400021 |
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Facilities : |
-- |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Price Waterhouse & Company Chartered Accountants |
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Address : |
Chennai, Tamilnadu |
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Memberships : |
Nil |
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Collaborators : |
Nil |
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Associates : |
˜ Chemplast Speciality Chemicals Limited ˜ Bangalore Genei Limited ˜ Sanmar Shipping Limited ˜ Sanmar Properties and Investments Limited ˜ Sanmar Holdings Limited ˜ Cabot Sanmar Limited ˜ Sanmar Engineering Corporation Limited ˜
Asco ( ˜
BS & B Safety Systems ( ˜ Fisher Sanmar Limited ˜ FMC Technologie Sanmar ˜ Sanmar Engineering Serives Limited ˜ 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: |
v Polygon Holdings Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
75000000 |
Equity Shares |
Rs.10/- |
Rs. 750.000 millions |
|
3500000 |
Preference Shares |
Rs.100/- |
Rs. 350.000 millions |
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GRAND TOTAL |
|
Rs.1100.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
47981944 |
Equity Shares |
Rs.10/- |
Rs. 479.819 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
479.800 |
479.800 |
479.819 |
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3] Reserves &
Surplus |
1980.100 |
1803.400 |
1436.200 |
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NETWORTH
|
2459.900 |
2283.200 |
1916.019 |
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LOAN FUNDS |
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1] Secured Loans |
4900.200 |
2291.400 |
2094.681 |
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2] Unsecured
Loans |
0.000 |
421.400 |
0.000 |
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TOTAL BORROWING
|
4900.200 |
2712.800 |
2094.681 |
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TOTAL
|
7360.100 |
4996.000 |
4010.700 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
5201.000 |
3908.100 |
3671.100 |
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Capital work-in-progress
|
2197.400 |
822.600 |
249.800 |
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INVESTMENT
|
16.500 |
0.300 |
0.300 |
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CURRENT ASSETS, LOANS &
ADVANCES
|
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Inventories
|
442.700
|
352.300
|
352.300
|
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Sundry Debtors
|
551.400
|
651.300
|
651.300
|
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Cash & Bank Balances
|
44.400
|
49.800
|
49.800
|
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Loans & Advances
|
979.200
|
696.100
|
696.100
|
Total Current Assets
|
2017.700
|
1984.200
|
1749.500
|
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Less :
CURRENT LIABILITIES & PROVISIONS
|
|
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Current Liabilities
|
1788.300
|
1392.600
|
1392.600
|
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Provisions
|
327.400
|
278.600
|
278.600
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Total Current Liabilities
|
2115.700
|
1723.400
|
1671.200
|
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Net Current Assets
|
[98.000]
|
260.800
|
78.300
|
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MISCELLANEOUS EXPENSES
|
43.200 |
4.200 |
11.200 |
|
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|
|
|
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TOTAL
|
7360.100 |
4996.000 |
4010.700 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
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Sales Turnover |
7022.700
|
6760.100
|
6030.400
|
|
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Other Income |
77.400
|
259.200
|
123.700
|
|
|
Stock Adjustments |
53.200
|
48.500
|
[15.500]
|
|
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Total Income |
7153.300 |
7067.800 |
6138.600 |
|
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|
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|
|
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Profit/(Loss) Before Tax |
321.900
|
460.200
|
306.000
|
|
|
Provision for Taxation |
90.000
|
93.100
|
49.200
|
|
|
Profit/(Loss) After Tax |
231.900
|
367.100
|
256.800
|
|
|
|
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Earnings in Foreign Currency : |
|
|
|
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Total Earnings |
184.198 |
NA |
173.013 |
|
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Imports : |
|
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|
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Total Imports |
NA |
NA |
465.799 |
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Expenditures : |
|
|
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Raw Materials |
1948.000
|
1974.100
|
1600.800
|
|
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Excise Duty |
905.300
|
895.900
|
798.200
|
|
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Power & Fuel Cost |
2035.900
|
1892.500
|
1531.800
|
|
|
Other Manufacturing Expenses |
432.500
|
438.600
|
498.300
|
|
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Employee Cost |
504.400
|
472.800
|
503.700
|
|
|
Selling and Administration
Expenses |
267.000
|
253.600
|
256.800
|
|
|
Miscellaneous Expenses |
173.900
|
147.600
|
127.600
|
|
|
Interest & Financial Charges
|
219.900
|
172.400
|
252.300
|
|
|
Depreciation |
344.500
|
360.100
|
263.100
|
|
Total Expenditure |
6831.400 |
6607.600 |
5832.600 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 (1st
Quarter) |
|
Sales Turnover |
|
|
1619.900 |
|
Other Income |
|
|
134.400 |
|
Total Income |
|
|
1754.300 |
|
Total Expenditure |
|
|
1419.100 |
|
Operating Profit |
|
|
335.200 |
|
Interest |
|
|
106.300 |
|
Gross Profit |
|
|
228.900 |
|
Depreciation |
|
|
97.000 |
|
Tax |
|
|
56.500 |
|
Reported PAT |
|
|
75.400 |
200706
Quarter 1 –
Expenditure Includes Consumption of Raw Materials Rs 1126.20
million (Increase)/Decrease in Stock Rs (5.50)million Staff Cost Rs 147.60
million Other Expenditure Rs 150.80 million Tax indicates Provision for
reversal Current Tax, Deferred Tax & Fringe Benefit Tax Status of Investor
Complaints for the quarter ended June 30, 2007 Complaints Pending at the
beginning of the quarter Nil Complaints Received during the quarter 03
Complaints disposed off during the quarter 03 Complaints unresolved at the end
of the quarter Nil Consumption of Raw Materials includes power and fuel and
stores consumed. EPS Refers to the relevant period only (Periods less than a
year not annualised) Other income includes compensation received from
Multilateral Fund for phase out of Carbon Tetra Chloride and
Chlorofluorocarbons under the Montreal Protocol for the quarter ended - June
30, 2007 - Rs 126.80 million and for the quarter ended June 30, 2006- Nil (for
year ended March 31, 2007 - 17.60 million) 1. These financial results were approved
by the Board of Directors at their meeting held on July 25, 2007. 2. The
statutory auditors have carried out a limited review of the Unaudited financial
statements for the quarter ended June 30, 2007. 3. The company is principally
engaged it a single business segment viz., Chemicals and operates in one
geographical segment as per Accounting Standard 17 on 'Segment Reporting'
issued by the Institute of Chartered Accountants of India. 4. The Company
entered the PVC products business by acquiring two PVC Pipes business
undertakings on September 07, 2006. The financial results consider this
acquisition and the operations of the PVC Pipes business undertakings from
September 7, 2006 and consequently the figures for previous periods are not
comparable with those for the quarter June 30, 2007. 5. The Board of Directors
have approved, subject to compliance with all related formalities, the company
raising equity resources on rights basis (share capital and premium) not
exceeding Rs. 2000 million. The company is in the process of filing draft offer
documents with SEBI. The Company has received an advance of Rs 600 million from
Sanmar Holdings Limited the Company's holding company towards their rights
entitlement. 6. Prior period figures have been regrouped, wherever necessary.
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
1.61 |
1.14 |
1.12 |
|
Long Term Debt
Equity Ratio |
1.42 |
1.06 |
0.97 |
|
Current Ratio |
0.85 |
1.00 |
0.96 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.95 |
1.08 |
1.05 |
|
Inventory |
15.07 |
16.06 |
14.15 |
|
Debtors |
13.06 |
11.50 |
9.44 |
|
Interest Cover
Ratio |
2.46 |
3.79 |
2.04 |
|
Operating Profit
Margin (%) |
12.62 |
14.57 |
12.89 |
|
Profit Before
Interest and Tax Margin (%) |
7.71 |
9.24 |
8.53 |
|
Cash Profit
Margin (%) |
8.21 |
10.76 |
8.01 |
|
Adjusted Net
Profit Margin (%) |
3.30 |
5.43 |
3.64 |
|
Return on Capital
Employed (%) |
8.80 |
13.90 |
12.85 |
|
Return on Net
Worth (%) |
9.78 |
17.48 |
12.06 |
STOCK PRICES
|
Face Value |
Rs.1/- |
|
High |
Rs.8.19/- |
|
Low |
Rs.7.20/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Chemplast Sanmar Limited (formerly known as Chemicals &
Plastics India (CPIL)), incorporated in 1962 was promoted as Urethanes India by
Chemplast, the flagship of the Sanmar group, Tamilnadu. 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, US. It manufactures caustic
soda, chlorine, chlorinated solvents, PVC, refrigerant gases and industrial
alcohol.
In 1991-92, the capacity of PVC was enhanced to 48,000 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 48,000 tpa to 60,000 tpa and that of
chloromethanes is being enhanced to 25,000 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
polyuerthane 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 & Investments Limited(SPIL) excluding its Investment and
Shipping business w.e.f. Nov 2, 2003. SPIL's Investment and Shipping division
would be demerged to Sanmar Holdings Limited effective from Nov 1, 2003. SPIL
sharehodlers get one equity share of Chemplast sanmar for every share in SPIL.
MANAGEMENT
DISCUSSIONS AND ANALYSIS:
The company once again competently managed the highly cyclical PVC and
Chlorochemical businesses and turned out a satisfactory performance.
The year under review was also a momentous one as several project initiatives
involving capital outlay of around Rs.1,000 crores were initiated, and this will
have a significant positive impact on the performance of the company in the
periods to come. The initiatives include conversion of the technology relating
to manufacture of Caustic Soda at Mettur Dam from Mercury cell to Membrane cell
well ahead of the time stipulated by the authorities; a coal based power
project to bring down the captive power generation cost; a Polysilicon project
based on in-house developed technology to enable continuous production of
Silicon Wafers at low cost; a Greenfield 2,00,000 TPA PVC project in Tamil
Nadu, and acquisition and expansion of a PVC pipes business etc.
The company has also taken a pioneering step to Install an effluent treatment
process that would enable the plants at Mettur Dam to achieve the status of
'Zero Discharge' of liquid effluents. This project will be the first of its
kind in the country. This initiative would help the company to stay well ahead
of all statutory requirements across regions and bring its environment
management standards to better than global levels.
PVC Business:
The company's integrated facility at Mettur Dam has a capacity to produce
64,000 TPA of PVC. The company also manufactures Ethylene Dichloride (EDC), the
feedstock for the manufacture of PVC. The company is the only producer of four
major PVC grades, that gives the flexibility to change product mix to maximize
contribution.
Suspension Resin:
Suspension resin consumption in
The company's PVC Suspension resin production was affected during the second
half of the year by non-availability of Denatured Spirit (DNS) which is the raw
material used for making captive EDC. This, coupled with unaffordable EDC price
in the international market, forced the company to curtail Suspension resin production
to 800% of capacity.
Paste Resin:
Paste resin consumption is estimated at 60,000 MT and this segment registered a
nominal 5% growth. Leather cloth used by automobile sector and footwear sector
contributed mainly to the growth. The industry is affected by cheap import of
leather cloth which is the main inhibitor for growth. Tie company's Paste resin
continues to enjoy preference amongst customers and is in good demand.
BSR market is estimated at 5,500 MT.
Copolymer Resin:
The demand for Copolymer resins, mainly from inks and adhesives sector,
remained modest. Here again, the company is the only producer of Copolymer
resins in
PVC Pipes:
In pursuit of its forward integration strategy, the company re-entered the PVC
products business by acquiring two PVC pipes manufacturing units in Tamil Nadu
in September '06. These units, with operating facilities near Chennai, have
come with an established brand name 'TRUBORE', for its products. The
integration of the operations of these units into the company was carried out
smoothly. Since the acquisition of the business in September '06, the
production and sales of PVC pipes have grown steadily. The consumption of PVC
pipes for borewells and casings is showing good growth. The company is now
implementing projects to expand the capacity of PVC pipes from 22,000 TPA to
36,000 TPA at the present location at an investment of Rs.14 crores and this
will be commissioned by July '07. Further, a project to produce PVC fittings is
also under implementation at the same location. To further increase volumes in
the PVC pipes business, the company is finalizing plans for setting up a
Review
of Operations:
The PVC production during the year 2006-07 was 50,674 MT. The performance of
the division was satisfactory due to better realisations and appropriate
feedstock management.
The investments made in acquiring the Karaikal Chloralkali facility has proved
to be highly beneficial. Here, the company's Caustic Soda operations at 150 TPD
along with captive generation of 12.0 MW of power (including 3.5 MW added
during the year) with natural gas as a feedstock has stabilized. The company
could meet its entire chlorine requirement at low cost for manufacture of EDC.
As stated earlier, the EDC manufacture in this location with imported ethylene
and captive chlorine will be a low cost feedstock source for the PVC business
and ensure continuous availability of the product.
Chlorochemicals
Business:
The company is operating a highly integrated Chlorochemicals
business at Mettur Dam where it produces Caustic soda, Chloromethane products, Silicon
Wafers and Refrigerant gases (CFC and HCFC). Power and salt required in the
Caustic soda facility is available from captive source. Chlorine produced in
the Chloralkali plant is fully converted into Chloromethane products.
Caustic Chlor:
International Caustic soda prices recovered dramatically during early part of
the year essentially driven by supply side constraints. Hurricane Katrina
devastated
The year also witnessed addition of almost 2.5 lac tons of capacity in
Solvents:
Domestic demand for Chloromethane Solvents continued to grow with strong
performance in the pharmaceutical industry. However, towards the latter part of
the year, with capacity additions in Europe and
Methanol is the raw material used in manufacture of Solvents. Methanol prices,
after ruling reasonably steady in the range of USD 300 per MT till end August
'06, flared up from September '06 onwards spurred both by strong growth in
demand and supply side constraints. Prices reached an unprecedented level of
USD 510 per MT. This adversely affected the margins on Chloromethane sales.
Some reversal was witnessed by end March '07 with a new 1 million TPA Methanol
facility getting commissioned in
The company is phasing out the production of Carbon Tetrachloride (CTC) for
non-feedstock application in line with Montreal Protocol arrangement. Necessary
audit on compliance of phase out was satisfactorily completed. However, disbursal
of compensation payment of Rs.127 Millions due from Multilateral Fund during
the year was delayed and is expected to be received during the first quarter of
current year.
Mettron:
CFC production is in line with phase out schedule agreed under Montreal
Protocol. The company's Clean Development Mechanism (Carbon Credit) Project for
incinerating the by-product HFC-23 got registered with United Nations Framework
Convention for Climate Change (UNFCCC) in February '07. It would now enable the
company to trade on Certified Emission Reductions (CERs).
Metkern:
The international photovoltaic market is still suffering the effects of
scarcity of raw material Polysilicon. Despite this, the company has been
successful in operating this division at full capacity. The company also
succeeded in improved productivity by reducing the thickness of wafers, thereby
helping to achieve record high production of 13.40 lac wafers.
The severe scarcity in the international market resulted in wafer prices rising
to all time high levels, enabling the company to achieve good results. With the
situation expected to ease on both Polysilicon availability and prices on the
photovoltaic value chain, wafer prices are expected to soften at a slow pace in
the coming periods.
The company's project to manufacture 30 TPA Polysilicon at its facility at
Mettur at an investment of Rs.200 Millions is progressing as per schedule. The
company is implementing this project on the basis of its own technology with a
more energy efficient process. The success of this project would enable the
company to go in for a worldscale Polysilicon project, the maiden one in the
country.
Risks and concerns:
i) Presently, the company is generating 40 MW power at Mettur Dam using Low
Sulphur Heavy Stock (LSHS) as the fuel. LSHS being a Crude oil derivative, its
price is always on the increasing trend. This has directly affected the captive
generation cost for the company.
Considering the ever-increasing cost of fuel oil based power generation, the
company has taken on hand implementation of a coal based power project to cater
to the total power requirement of the company. This project under
implementation at Mettur Dam under LSTK basis, is expected to be commissioned
by February '08. Once implemented, the power cost will come down significantly
thereby resulting in reduction in cost of production of the products
manufactured by the company.
ii) Pursuant to the Montreal Protocol arrangement, the production and sale of
CFC and CTC have started decreasing. The last year of manufacture of CFC is the
year 2009 and for CTC, the year 2010.
Review of operations:
Chlorochemicals business was operated at 100% capacity during the year.
Chloromethane products enjoyed good market on the back of increased demand from
the pharma sector. However, pursuant to steep increase in the Methanol prices,
margins came under pressure. The operations of the Silicon Wafer business and
Refrigerant gas business were satisfactory.
PROJECTS:
Karaikal:
The project to produce 50 TPD of Caustic soda flaker was commissioned during
the year at Karaikal.
The work on 84,000 TPA EDC Plant and Ethylene storage facilities has been
completed. The Marine Terminal Facility is slated for commissioning by end June
'07.
Mettur:
The project to convert the manufacturing process of Caustic soda at Mettur Dam
from mercury to membrane Cell, an environment friendly initiative, is in an
advanced stage of implementation: 'Though not statutorily warranted, the
company has taken the initiative well ahead of time and this will re-establish
The Sanmar Group's philosophy of 'Care for Environment'.
To make this conversion project viable, the captive power cost which has gone
up quite significantly due to increase in fuel price, has to be brought down.
The company has taken on hand a project to convert the LSHS based power
generation to coal based power generation. Both the conversion projects when
completed would contribute to improve the bottomline significantly.
As stated earlier, the implementation of Polysilicon project is progressing as
per schedule. On completion, this will reaffirm the company's faith in backward
integration strategy.
In line with The Sanmar Group's philosophy of reaching Zero discharge of liquid
effluents, the company is now implementing a project to set up an advanced
Reverse Osmosis plant, evaporator and crystalliser to recover and re-use water
from the effluents. The project, the first of its kind in
Cuddalore:
As reported earlier, the company is implementing a Greenfield PVC project at
Cuddalore. Though the project was initially designed for a capacity of 170,000
TPA of Suspension PVC at a cost of around Rs.450 crores, as a result of
detailed studies conducted during the engineering phase, it has been realized
that the plant capacity can be increased by an additional 30,000 TPA at a
marginal increase in capital cost of Rs.70 crores. With this, the plant being
set up at Cuddalore will have an installed capacity of 200,000 TPA at an
investment of around Rs.520 crores. On the raw material front, the acquisition
of Trust Chemical Industries (TCI) located at
All the projects explained above involves a total capital outlay of around
Rs.1,000 crores to be funded by mix of debt and equity. For this purpose, the
company has tied the necessary loans from Financial Institutions and
Banks.
The Board of Directors have approved, subject to compliance with all related
formalities, the company raising equity resources on rights basis (share
capital and premium) of a sum not exceeding Rs.200 crores. The company is in
the process of filing draft offer documents with SEBI.
1.
CONSERVATION OF ENERGY:
a. Measures taken:
The company continues to accord high priority to conservation of energy.
Details of some of the measures undertaken during the year to optimise energy
conservation are:
1. In PVC plant an old chiller plant with a capacity 400 TR with a
reciprocating compressor has been replaced with a new chiller of 500 TR. This
has resulted in a saving of 12.66 lacs units of power per year.
2. In PVC plant the steam operated Vapour absorption chiller was replaced with
energy efficient 345 TR screw compressor chiller system operated by power. The
savings in steam is 12000 TPA though the power consumption goes up only
marginally.
3. In monomer section a vapour feed exchanger for dewatering distillation column
has been installed and by utilizing the vapour heat the temperature of the feed
Ethylene Dichloride to the feed tray has been improved. This has resulted in a
steam saving of 1500 TPA.
4. Introduction of Slide-stop at the suction valve in the two freon
refrigeration compressors in the monomer section and oxy chlorination plant has
resulted in a power savings of 2.56 lac Kwh per year.
5. By modifying the steam path in the dryer section in the PVC plant, there is
a reduction in steam consumption by 2000 TPA.
6. In the Methylene Chloride polishing
b. Additional investment proposals:
1. The company has embarked on conversion of the Caustic Soda plant at Mettur
from Mercury based technology to Membrane based technology. Post conversion of
technology there will be savings in power consumption in Caustic soda
plant.
c. Impact of measures taken under (a) above: Substitution/ Savings in Reduction
in cost of energy production consumption Per Annum (Rs. Lacs) 1. Reduction in
energy consumption by Power 12.66 lac 56replacing the Chiller in Monomer
section Kwh 2. Reduction in steam consumption by 5200 Mkcal per 65replacing the
vapour absorption chiller day with screw compressor chilling system (Net
savings) 3. Reduction in steam consumption by Steam 1500 MT 18installing vapour
feed exchanger in EDC section 4. Reduction in energy consumption by Power 2.56
lac 11introduction of slide-stop at suction Kwh valve for the refrigeration
system in Monomer section 5. Reduction in steam consumption by Steam 2000 MT
24carrying out modifications in the steam path in resin dryers 6. Reduction in
steam consumption by Steam 1400 MT 17changing the feed to distillation column
for Methylene Chloride from tray feed to reflux drum
Year
of import** 2006-07 2006-07
Has technology been The project for manufacture The project for fully absorbed
of PVC based on the above conversion of technology is under Caustic soda plant
implementation from Mercury based technology to Membrane based technology is
under implementation
If not fully absorbed, The technology will be fully The technology areas where
this has absorbed upon commissioning will be fully not taken place, of the
plant. absorbed upon reasons therefore and commissioning of future plans of
action the plant
(** Year of entering into technology agreements).
RESEARCH AND DEVELOPMENT
(R&D):
The company's R&D laboratory is engaged in carrying out process/product
improvement programmes In particular, the areas of focus have been on import
substitution, optimising the utilisation of available resources, evolving
alternative and more economic processes for the existing range of products and
environment conservation.
Electricity for caustic soda is for electrolysis. LSHS
denotes the LSHS equivalent of steam consumption.
Persons constituting group as defined in the Monopolies and Restrictive Trade
Pract ces Act, 1969 include the following:
1) Mr. N. Sankar and relatives 2) Mr. N. Kumar and relatives 3) Mr. Vijay
Sankar and relatives 4) NS Family Investments Private Limited 5) NS Family
Consolidations Private Limited 6) SHL Research Foundation 7) SHL Securities
(Alpha) Limited 8) Sanmar Holdings Limited 9) Chemplast Sanmar Aromatics
Limited 10) Sanmar Group International Limited 11) Kalamkriya Limited 12)
Indchem Communications Limited 13) SHL Trading Limited 14) SHL Property
Holdings Limited 15) SHL Investment Services Limited 16) Strategic Properties
Private Limited 17) N. Sankar Properties and Holdings Private Limited 18)
Sanmar Realty Private Limited 19) Bay View Properties Private Limited 20)
Hillcrest Investments (Alpha) Private Limited 21) Kelambakkam Properties
Private Limited 22) Stargate Investments Private Limited 23) Chandra Sankar
Investment Holdings Private Limited 24) Madhurika Sankar Investment Holdings
Private Limited 25) Greenvalley Investments (Alpha) Private Limited 26) Vijay
Sankar Investment Holdings Private Limited 27) Poes Garden Properties Private
Limited 28) N. Kumar Investment Holdings Private Limited 29) Madhura Kumar
Properties Private Limited 30) Cubbon Road Properties Private Limited 31) Apex
NK Software Solutions Limited 32) Jumbo Properties Private Limited 33) Jumbo
Properties (Alpha) Private Limited 34) Fords Properties Private Limi'ed 35)
Indchem Software Technologies Limited 36) Indchem Software Technologies (India)
Limited 37) SiIkRoute Indchem Limited 38) Chemplast Sanmar Limited 39) Sanmar
Shipping Limited 40) Sanmar Speciality Chemicals Limited 41) Cabot Sanmar
Limited 42) Sanmar Engineering Corporation Limited 43) B SEC Services Limited
44) Asco (India) Limited 45) BS&B Safety Systems (India) Limited 46) Fisher
Sanmar Limited 47) Flowserve Sanmar Limited 48) Sanmar Engineering Services
Limited 49) Sanmar Foundries Limited 50) Sanmar Industrial Filters Limned 51)
Vishay Sanmar Limited 52) Tyco Sanmar Limited 53) Xomox Sanmar Limited 54)
BlueChips Limited, Isle of Man 55) Sanmar Overseas Investments AG, Switzerland
56) Cav-Nile AG, Geneva, Switzerland 57) Sanmar Group Germany, GmbH, Germany
58) Eisenwerke Erla Beteiligungsgesellschaft mbH, Germany 59) Schubert &
Salzer Eisenwerk Erla GmbH, Germany 60) Pharaoh International Limited, Cayman
Islands 61) Pharaoh Egyptian Holdings Limited, Cayman Islands 62) Pharaoh
Consolidations Limited, Cayman Islands 63) Trust Chemical Industries LLC, Egypt
64) Sanmar Group Corporate Finance 65) Cathedral Corporate Finance
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:
PVC/ Chlorochemicals
Speciality Chemicals
Shipping
Engineering
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:
PVC/ Chlorochemicals
Speciality Chemicals
Shipping
Engineering
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.40.91 |
|
|
1 |
Rs.82.57 |
|
Euro |
1 |
Rs.55.72 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|