**Finolex Industries **)- Brief overview
)- Business segments: PVC resin + PVC pipe
)- Revenue share 50 % each segment
)- 2.6 lakh MT capacity for PVC resins â backward integrated. PVC resin has many uses like in pipes, cables, door and window profiles.
)- Globally real estate market is the biggest driver for PVC resin market.
)- RIL is the market leader in PVC resin with 50 % plus market share, followed by FIL with 25 % market share
)- In FY09 India was net importer of PVC resin as the demand was in excess of 1.4 mn MT as compared to capacity of 1.1 mn MT. 0.4 mn tonne of imports in FY09. It increased considerably in FY10 (donât have the exact data)
)- In 2005 China used to import PVC resin. Then it added a lot of capacity. Japan and Korea PVC manufacturers suffered because of it.
)- Middle East has also added substantial capacity in PVC in last 5-6 years.
)- Operating margin of PVC business for FIL have been highly volatile because of crude price fluctuation.
)- Other PVC resin manufacturers â DCM Shriram, Chemplast, DCW
)- 1.6 lakh MT capacity for PVC pipes â Should have better margins because of backward integrations. Have not compared with other players. Most of other players are not backward integrated.
)- Largest integrated PVC pipe manufacturer in India
)- Suffered Rs 180 cr in derivative losses in FY09
)- On an average operating margin for PVC pipe business has been in single digit - 8 % ish though last year it was a bit higher.
)- Irrigation market is the major market for FIL â more than 70 % of pipe sales
)- Some estimates put more than 60 % of PVC pipe market under unorganized market
)- Hardly any entry barrier to setup new plant
)- Organzed market Competitors in PVC pipes: Jain Irrigation 28 % market share, FIL 18 %, Kriti Industries, Kisan Industries, Astral Poly 6 % each