Gujarat Fluorochem Concall Q3FY23
Net debt to Equity ratio has reduced to 0.21 times.
New age fluoropolymers to provide growth in the near term.
Structured business into 3 verticals:-
Bulk chemicals
Fluoropolymers
Fluorochemicals : includes ref has & spechem.
Expecting to see growth in Fluorochemicals. Volumes In fluoropolymers were impacted by holiday season in Us and Europe. Expecting growth in fluoropolymers in next few Quarters.
Lipsf6 approval cycle, expecting approvals in next 3 Quarters. Intend to expand battery chemical Pf to include other battery chemicals.
Looking at Capex of 2500 crore this FY and next FY. Expect upward revision in capex plans.
Received 623 crores from Inox winds. Advances have been paid adjusted for wind power capacity inox winds will commission for GFL.
On being PFAS Free:- small fluoridated molecule that tend to be Bio Accumualtive and it tends to get into water stream & Human Tissue. Fluoropolymers aren’t bio accumulative. In process of manufacturing, certain fluoridated surfactants are used.
GFL has developed technology to make Fluoropolymers without Fluoropolymerization aid. No challenge for us.
Insulated to commodity price variation to intermediate parts/chemicals due to backward integration.
On corporate Guarantees:- 2/3rd of advances given back. To remove all Guarantees by the end next Financial Year.
Ptfe and LIpf6 expansion:- plan in PTFe is to first get full capacity utilisation and only then go for debottlenecking or add more capacity.
Lipf6 is the starting point for us to get into battery chemicals. Eventually plan is to get into Electrolyte.
New capacities for fluoropolymers will be 1400-1500 tonnes per month. Currently at 12k tonnes per annum. In next couple of Quarters will be able to get the full benefits of capacity addition. Capacity goes up and down dependent about the grade we make. Eg:- in specialised grades, capacity utilisation can fall to 60-65%.
Asset turns in new age fluoropolymers will be anywhere between 1.5 to 2.0x. Capital expend here is 500 crores for current financial year.
When capacities are added, customers have to be qualified and only then utilisation inches up. There is a time lag as this isn’t like a commodity(caustic).
1500 Tonnes per month capacity will be fully utilised by FY24 in new age fluoropolymers. Capex for new age fluoropolymers is 500-550 crores out of total 1600 announced.
Power plant (20MW) will be live by Q1FY24. Will be cheaper than conventional energy like coal or gas.
Power cost savings will be around 40 crores per annum.
On PFA:- have adequate availability of TfE. Expanding capacities for PFA and developing grades for high purity Semiconductor application. There are different grades like high purity and ultra high purity. Will take about 3 Quarters to develop. Will move up the grades eventually.
Margins won’t get impacted overall inspite of Lipf6 prices falling. As we factored in lower prices while putting up the projects. For lithium procurement, will be having long term arrangement soon.
R142b doesn’t have any ref gas application. Only application is to be used as VDF.
For entire production of fluoropolymers will go PFAS free by the end of this calendar year. This technology is patented and proprietary to us. We are the first company to globally to announce this technology. Took 5 years to perfect this technology.
Developing PEM (proton exchange membrane) for both electrolyser and electrolyte. Will take 1 year.
Looking at 20-25% growth. Don’t give guidance as a policy.
Expect pricing of Ptfe to go up as players vacate the market.
Pvdf battery grade under advanced stages of approvals. Within 1-2 Quarters the business will start.
Grades of all fluoropolymers will be more than 100. Capex for new age fluoropolymers next FY will be lower than this year capex of 500-550 crores. Pvdf pricing has corrected in different segments. There is a grade to grade variation. For us, we haven’t seen a correction QoQ.
Only lithium carbonate we will be acquiring from outside.
Disc:- same as before.