There is IPO by Inox Wind services which barely subscribed but shall give ~700 Cr to the company. This will help them to pay back Inox Wind who in turn should pay back Guj Flourochem. That is the hope. I hope the wind business does not land into any other problem, otherwise this return may be in question.
Also the both the stocks are under some significant selling over the last 3-5 days losing ~15%. There might be some technical factor to that. Any idea?
Regards,
Nikhil
Today on 5th Dec 2022, one of the promoter groups- Inox leasing & finance sold a stake of 1.64% with 18,00,000 quantities worth of INR 589.58 crores.
Inox leasingâs holding will come down from 54.89% to 53.25%, which we will see in the Dec-2022 shareholding pattern.
Maybe, they need money for CAPEX.
Was having a discussion on the same with a friend. Why will they sell there stake and not raise money through other means like ofs or qip or debt. Why to sell meaningful equity and that too without informing the exchanges of the deal. Isnt this some sort of corporate governance lapse wherein retail investors are kept in dark of such big deals. And in there concalls they aspire to be a big ethical cooperate house with huge ambitions.
disc: trimmed position at 3700
hold 5% of portfolio
will not add
The management has time and again in conf calls said they will get rid of corporate guarantees and debt at GFL and group level. The following are disclosures on exchanges:
Discl. on Aug. 30:
Discl. on 29th Nov.:
The above stake selling should ensure there are no more corporate guarantees for group entities from GFL.
Noida, December 7, 2022: Gujarat Fluorochemicals Ltd. (âGFLâ), a leading advanced materials company globally, has received Rs. 623 Crores from Inox Wind Ltd. (âIWLâ) today against advances that GFL had given to IWL for setting up the wind power capacity. The advances have been paid adjusting for the wind power capacity that Inox Wind will be commissioning for GFL. This money will be used to substantially reduce the debt at GFL as has been the stated vision of the Inox GFL Group to reduce the debt of all its operating entities
The promoters seem to be on some selling spree. Sold another 3L shares yesterday netting @100 Cr. Maybe building some war-chest.
Any idea who were the buyers in the earlier bulk deal of 18L shares?
Regards,
Nikhil
The board of directors of the Company (the âBoardâ) wishes to inform the shareholders (the âShareholdersâ) and potential investors of the Company that, based on the unaudited consolidated management accounts of the Group for the eleven months ended 30 November 2022, the Group has recorded an increase by more than 80% in its net profit attributable to owners of the Company for the eleven months ended 30 November 2022, as compared with that for the corresponding period in 2021.
Based on such information and after thorough consideration, the Board expects that the Group may record a significant increase in its net profit attributable to owners of the Company for the year ending 31 December 2022, as compared with that for the year ended 31 December 2021
17439418-3e44-4049-97ef-bd52832a5e33.pdf (65.8 KB)
Please go through the thread where significant competitive analysis is done by Ganesh. Please donât just post questions, post observations backed by data that would help the community and raise the standard of discussion overall. Multiple times in the conf. call the mgmt. has said that they donât compete with China (also clear from Chinese exports of PTFE and other FP).
SRF commencing capacity for PTFE commodity grade bear little to no impact on GFL which has over 50 grades of PTFE for specialized usage and specific clients. Look at the journey of GFL and that should give an indication of how much time SRF could take even if it were twice as efficient.
Once again superb work @ganeshrpl
I have not done a demand-analysis and looked into segmental revenues of GFL and SRF, but here are the broad stokes.
SRF is a major player in agri intermediate and ref gases space and GFL is establishing itself into high value fluoropolymers space. While thereâs a overlap in the space where the two play, but SRF looks like it wants to go where GFL is and going.
I understand that this is probably not the answer you were looking for, and I will try to throw some numbers in there to help us see a trend in margin realizations and volumes for both the companies.
Disc: Invested in both
3M to Exit PFAS Manufacturing by the End of 2025
Source: 1) 3M India Announcement and 2) Chemweek Article
On this PFAS topic, GFL had interesting announcements throughout 2022 where the co. has said to have exited PFAS based manufacturing in certain FPs and will exit for the rest eventually. Shows managementâs strategy for being ESG compliant and ensuring best practices are followed.
09.03.2022
GFL is pleased to announce successful development in the use of a non-fluorinated polymerization aid in emulsion PTFE production process, substituting the use of fluorinated polymerization aid (PFAS).
Source: https://gfl.co.in/assets/pdf/Announcement-9th-March-2022.pdf
27.08.2022
GFL is pleased to announce a successful development in the production process of FKM (fluoroelastomers). Based on this development, GFL shall stop the use of fluorinated polymerization aids (PFAS) in the manufacture of FKM terpolymersâŚ
Source: https://www.gfl.co.in/assets/pdf/Announcement-on-NFPA-technology-FKM-27-Aug-2022.pdf
30.11.2022
GFL is pleased to announce another successful development in the use of non-fluorinated polymerization aid (NFPA) technology to manufacture PTFE Fine Powders and PFA
With this development, GFL will be able to produce its entire fluoropolymer portfolio (PTFE - all types, PVDF, FKM, PFA) without the use of fluorinated polymerization aids, which are PFAS chemicals and hence will be achieving the objective of Responsible Manufacturing of fluoropolymers.
Source: https://www.gfl.co.in/assets/pdf/GFL%20Announcement%2030.11.22_new.pdf
The promoters have pledged a part their stake. Can anyone help me understand if it is a negative step.
From what I have understood reading about GFL, this does not impact the business / cashflow in any sense.
Thanks
Gourab
Credit rating report for GFL. dated 29 dec 2022.
PFA
gfl credit rating 29 dec 22.pdf (1.8 MB)
Kureha Corp, Japan revises earnings forecast for fiscal year ending March 31, 2023
(FY2022)
segment forecast:
Selected excerpts from WSJ Article on 3M PFAS Liability claims (among others like earplugs)
Liability claims related to chemicals called perfluoroalkyl and polyfluoroalkyl substances, or PFAS, are still growing for 3M. Commonly called âforever chemicalsâ because they take a long time to break down in the environment, the chemicals have highly durable compounds that can resist heat and repel water, grease and stains.
About 20 years ago, 3M quit making two varieties of PFAS chemicals that are often linked to health concerns. Before 3M discontinued production of the two chemicals, it sold them to other companies for use in their products, potentially exposing 3M to litigation and cleanup expenses incurred by other companies, analysts have said.
While the company continued to make other varieties of PFAS chemicals that 3M has said are safe, the company said Dec. 20 that it would wind down its production of those chemicals by the end of 2025, citing increasing regulation and customersâ interest in alternatives.
3M estimated its current annual sales of PFAS chemicals at about $1.3 billion, or about 4% of total sales, according to analyst estimates. Nigel Coe, an analyst for Wolfe Research, said exiting the business would be relatively immaterial for 3M, but is a âreminder of long-tail PFAS remediation and compensation risks.â
Related reading:
Stricter federal guidelines on âforever chemicalsâ
More on PFAS liabilities here and here (mostly relate though to PFOA and PFOS discontinued in 2000 by 3M and 2015 by Dupont
3Mâs liability from PFAS litigation could reach nearly $30 billion by the end of the decade, according to Capstone. The group estimates that more than half of that could be paid to cover claims over firefighting foam.
DuPont has an agreement to share PFAS liability costs with Chemours Co. and Corteva Inc., two companies spun off from DuPontâs predecessor businesses during the past decade. The agreement is set to last until 2040 or up to $4 billion.
PFAS Legal Liability Exposures - What Manufacturers need to know
There are currently three tiers of manufacturers that experience PFAS risk.
The first tier includes those who actually fabricate PFAS chemicals. These manufacturers face the highest level of exposure to legal liability risks.Since 2005, DuPont has been a named defendant in over 6,100 lawsuits related to PFAS; some estimates show 3Mâs PFAS liabilities could reach as high as $30 billion, this Bloomberg PFAS lawsuits report details.
The second tier of manufactures with exposure to PFAS liabilities includes companies that used PFAS chemicals to treat the products they produce, typically for water-, stain- or fireproofing.
The third tier encompasses companies that have supply chain exposures. These companies are likely assembling products out of components that have been treated with PFAS but donât use the chemicals themselves.
Summary: Prima Facie, looks like most litigation are to do with legacy discontinued use of PFOS and PFOA class of PFAS products, and other products using PFAS chemicals (flourinated ploymerization aids). GFL consistent course of action of announcements since early 2022 of having developed completely new processes (PFAS free) by now for its entire Fluoropolymer portfolio (PTFE all types, PVDF, FKM, PFA) as summarised nicely by @spatel above, shows commendable strategic intent and ability to deliver on critical business/technology/legal challenges, without taking foot-off-the-pedal?
New Fluoropolymer month on month export growth bit slowed. I dont think its anything new. Happened in August as well. Realization per kg seems to be stable
Decent show PTFE
Here are some of my notes on LiPF6. The intent was to understand the LiPF6 landscape, cost, margins, ROCE,
TOP Manufactures in Lithium Hexafluorophosphate (LiPF6) Market are: -
Notes:
In a Li-ion battery electrolyte, LiPF6 offers high energy densities and considerable power densities. (from)
For instance, in 2017, Japan based mostly Morita Chemical proclaimed its planning to build LiPF6 factory with 7500t/a in China. Also, in 2019, Hopax proclaimed its production of electrolyte solutions for lithium ion batteries progressing to strengthen its presence in battery electrolytes trade together with LiPF6
Great source for some price movements on latest pricing: https://www.chemanalyst.com/Pricing-data/lithium-hexafluorophosphate-1268
Production capacity of leading electrolyte manufacturers in Kiloton:
The worldâs largest electrolyte and lithium hexafluoro-phosphate (LiPF6) producer. Tinci is the largest electrolyte producer in China with c.30% electrolyte market share in China as of 9M20, based on shipment amount
Products: Electrolyte, electrolyte salts (LiPF6 & LiFSI), additives (VC & DTD), FePo4.
a. The entry barriers to manufacturing electrolytes are therefore not in the production itself, but in the sourcing of raw materials. We see the ability to source raw materials as Tinciâs core competitiveness and the reason it has secured the top spot in global electrolyte market share, given its vertically integrated business model. To put this into perspective, Tinci is also the largest LiPF6 producer in the world with capacity of 12ktpa by end-2020 and production of 7.8ktpa in 2020 as per our forecast, as well as construction in progress for solvent and additives capacity
One of the essential materials for this lithium-ion secondary battery is the electrolyte âlithium hexafluorophosphate (LiPF 6 )â. Kanto Denka Kogyo will continue to contribute to society as a manufacturer of lithium hexafluorophosphate (production began in 1997) with world-class quality and supply capabilities.
Do-Fluoride will supply no less than 56,050 tonnes of LiPF6 to BYD from January 2022 to December 2025. (link, 17th Nov 2021) BYD signed another purchase agreement with Do-Fluoride in July (2021) for no less than 6,460t of LiPF6.
Do-Fluoride has developed a technology to produce LiPF6 using industrial- grade lithium carbonate, anhydrous hydrogen fluoride and phosphorus trichloride as feedstocks. It unveiled a plan in July to build a new production facility with 100,000 t/yr of capacity for LiPF6 in Jiaozuo city in central Chinaâs Henan province. The project will be developed in three phases and start production by the end of 2025.
Have been getting some persistent requests for a comprehensive update on Gujarat Fluorochem.
My colleagues are diligently working on getting the Stock Story published soon. Itâs probably one of the most complex businesses to put through âcrisplyâ - like we try to do in VP style. So please bear with us for a few more days.
Meanwhile just to clarify/put some nerves at rest:
We see no significant change in the business trajectory for Gujarat Fluorochem in the near to medium term, than has been outlined in great detail by @Anant @spatel @ganeshrpl @rupeshtatiya and many others in this excellent deep dive thread
If anything, Industry Tailwinds continue to be strong and Gujarat Fluorochem Competitive Position has only got better/stronger every 6 months (as we unearthed more about its accomplishments); check out the exemplary handling of PFAS issues earlier compiled beautifully by @spatel
Refrigerant Gases data points - our research shows Refrigerant Gases revenue contribution ~330 Cr in FY22 (similar to FY21), and ~600 Cr on TTM basis. R125 Sales contributed ~100 Cr and ~150 Cr in Q1 and Q2 FY23 respectively. We should come to know about Q3 FY23 contributions shortly, when results are announced. Please refer new Refrigerant Gases table (at end of post) - for a better grip on why R125 Sales/Pricing are unlikely to get significantly impacted in any hurry.
LiPF6 vs LiFSI data points - Newly introduced Tesla 4860 batteries and CATL Kirin batteries are featured by fast charge battery cells. In term of conductivity and solubility, two key indexes for fast charge, LiFSI enjoys an advantage over LiPF6. Thus, the increasing demand for new type batteries will advance the development of LiFSI.
LiFSI has a lower crystallization point, which makes it less susceptible to crystallization at low temperatures, thus avoiding the risk of a sudden drop in electrolyte conductivity and ensuring that the battery can work properly at low temperatures. Therefore, compared with LiPF6, LiFSI can significantly improve the service life of new energy batteries, improve the range and charge-discharge power of new energy vehicles in summer and winter, and improve the safety of new energy vehicles under extreme conditions. LiFSI is expected to become the next generation of mainstream lithium salt.
At present, LiFSI is mainly used as LiPF6 additive. The results show that the electrolyte with a special ratio of LiFSI and LiPF6 has better low temperature discharge and high temperature performance retention, longer cycle life, higher discharge rate performance and higher safety performance. Compared with the existing LiPF6 solute electrolyte, the battery with LiFSI added to the electrolyte can improve its service life, summer or winter range, charge and discharge power, and overall safety. Currently, the addition proportion of LiFSI in the mainstream formula is 2-10%. With the high nickelization and high pressure of power batteries, the proportion of LiFSI is expected to increase. Read more here
By our reckoning though, to get to becoming a LiFSI vendor to Battery customers, one needs to go through the LiPF6 vendor approval route first. LiFSI use sure is increasing from high-end battery applications (Tesla 4860 and CATL Kirin batteries), but LiPF6 isnât going away; may remain initially mixed-use applications in power batteries, and also serve differentiated battery segments independently. Read more here
Tinci Materials is in a global leading position to supply LiFSI with a 20,000 TPA capacity in 2022. According to its plan, the capacity of LiFSI is expected to reach 150,000 TPA by the end of 2025 [Source: Credit Suisse Report 3 Jan, 2023]
Following excerpt from Earnings Call July, 2022 is informative.
Not only LiFSI but company is working on evaluating several other additives
The R-125 Concern
From 1st Janâ24, US & Other developed countries will see phase down of 30% in GWP consumption. R-125 has higher GWP (3170) vs R-32 (677); and US may shift some of its demand to R-32, and other gases from R-125 while producing higher HFCs with lower GWP quote. This may reduce demand for R-125, and cause prices to fall.
The American Innovation & Manufacturing Act (AIM) was passed in late December 2020 and mirrors the international Kigali HFC phase down schedule and established a cap on the quantity of HFCs that can be produced or imported in the US.
Two popular examples of refrigerants developed in the last 30 years or so that are used in the HVAC industry are R-410A and R-407C. These two refrigerants are often used for similar applications, but are blended refrigerant combinations. R32 by itself is considered more flammable, hence blends are the preferred route
Note:
Read more, here
HFC Regulations Factsheet
HFC Regulatory Updates and Resources (Includes statewise for US)
Interesting to keep track/ask in Concalls - whether Gujarat Fluorochem aspires to follow the Tinci product (backward integration) Timeline below. Note Additives like LiFSI, VC, DTD
Disc: Invested
PS: Domain Experts/Others Invested/Tracking closely - please double-check on data points and ALERT in case of any inadvertent errors (complied in quick time)
