Ultramarine & Pigments

(Manojlion) #72

Hi @harshitgoel @vnktshb

I have been following this thread very recently

Few questions people

What is the market share of Ultramarine and Pigments?
Who are the main competition to this company?
Whether the surfactants and pigments are manufactured in the same company in Ranipet. If no, what is the capacity utilization of pigments company
Does not the have any specific moat.
Are the surfactants or pigments business dependent on Crude oil price

I understand that there is an increased demand for all chemical companies following the increased government regulations in China.Please go through this thread Change in Chemical Industry dynamics
Hence was going through few chemical companies and found this interesting given the high ROCE

Many thanks in advance

(Jatin Koradiya) #73

Good Judgement @harshitgoel on - the new 70 cr plant could add approx 70 to 80 % new capacity based on existing gross block :+1::+1:

However we still do not know the surfactant to pigment precise division. I guess it would be more towards surfactant based on their existing business.

Do anyone have any idea if china chemical ban has helped boost ultramarine with their margin? And if so should we factor any future margin deterioration based on it??

(Venkatesh) #74

The capex is for surfactant and not pigments, See excerpts from annual report, "Your company is setting up a greenfield surfactants project with an annual installed capacity of 30,000 Tonnes in Naidupeta, Andhra Pradesh. The estimated project capital outlay for the same is approximately ` 70 Crores. The Company will contribute one third of the planned capital outlay out of surplus funds and the balance by way of a term loan. We expect to commence commercial production by third quarter, 2019.

(Venkatesh) #75

Company has delivered consistent growth since FY14. Once new surfactant capacity comes online in third quarter, 2019 the growth should sustain.

Decent RoE and RoCE. The decrease in RoE and RoCE from FY18 onwards is because of restatement of holdings of Thirumalai Chemicals at market value.

Disclosure: Invested

(Vishal Agrawal) #76

Is the capacity coming in Q3 FY 19 or Calendar year 2019?

(Venkatesh) #77

The annual report says third quarter, 2019. So this could be 3QCY19 or 3QFY19. I guess safer to assume 3QCY19 which is next year September to December 2019 instead of 3QFY19 which would mean in the current quarter

(django) #78

I think it would be operational by Sep, 2019.

Please find below a snippet from Ultramarine: