Gujarat Fluorochemicals: A hidden fluorine story

An overview of Fluoropolymer Industry

Fluoropolymers_Market_Data_Update_-Final_report-_May_2022.pdf|attachment (1.2 MB)


Summery of the above report

The fluoropolymer producers in Europe anticipate strong growth in the fluoropolymer market in the medium term (e.g., by 2025). The Allied Market Research “fluoropolymers market” report indicated that the global fluoropolymers market is expected to grow at a compound annual growth rate (CAGR) of 6.5% from 2020 to 2027.

Sales of fluoropolymers onto the EEA market generate a revenue of around €750 million per year, and sales onto the EU28 market generate €740 million per year. This is the sales value of sales of fluoropolymers in basic form; this is just the first stage of the value chain. The value of the final products made using fluoropolymers would be substantially greater.
The first sector breakdown (as in the 2016-2017 Fluoropolymer SEA study) breakdown, transport (15,500 tonnes worth €280 million) and chemical and power (11,000 tonnes worth €200 million) were by far the largest sectors in 2020. Compared to 2015, in terms of tonnages, most sectors remained stable (electronics, renewable energy) or experienced a decrease in volumes which was most pronounced for medical applications (-67%) and textiles and architecture (-50%). The only exception was “other sectors” (not elsewhere classified) which grew by about 50%. However, in terms of sales values, several sectors experienced significant growth, namely renewable energy (+300%), electronics (+40%) and “other sectors” (+100%).

Industry wise application of fluoropolymers:


  • Fuel lines and hoses
  • Hydraulic systems
  • O-rings, gaskets
  • Electronic systems
  • Coating for a variety of purposes (cables, wires, etc.)
  • Tapes, wires and cables
  • Satellites: Fluoropolymers can be used as a fuel for satellite propulsion systems (solid fuel instead of liquid fuel)
  • Exterior surface coatings


  • Turbocharger hoses

  • Multilayer fuel hoses

  • Hydraulic hoses

  • ABS break lines

  • O-rings used as seals in fuel containment systems and fuel injectors

  • Shaft seals and valve stem seals

  • Air intake manifold gaskets

  • Cylinder head gaskets

  • Automotive venting products

  • Lambda oxygen sensors in exhaust systems

  • Reliable Electronic systems

  • Wires and cables


  • Tanks, vessels, pipes, tubing, column packing, heat exchangers, pumps, filters, seals and/or the lining of these components
  • Power and data cable insulation
  • Coal burning and waste incinerator heat exchangers and desulfurization units
  • Battery binders
  • Chloralkali processes
  • Nuclear industry fluid handling, filtration and gas sampling


  • Semiconductor and photovoltaic cell manufacturing infrastructure: pipes, vessels, valves, pumps, spinners, filters, seals, fluid storage containers and wafer baskets
  • Printed Circuit Board and semiconductor part cushioning, packaging and release film
  • Wires and cables


  • Lining of valves, piping, tubing, filters, seals, gaskets and other standard fluid handling components
  • Lining of mixing vessels and tanks
  • Coating on processing belts
  • Labware
  • Medicine Packaging
  • Items that need sterilization


  • Surgically implantable medical devices such as vascular grafts
  • Heart patches
  • Catheters
  • Diaphragm pumps
  • Membranes for filtering and venting purposes
  • Fluoropolymers play an essential role in enabling medical imaging and analysis (via electronic chips and semiconductors in X-ray, MRI, CT scan and echography) as well as medical analysis (blood, tissue, urine analysis)
  • Sterile container filters, needle retrieval systems, Tracheosto, catheter guide wire for laparoscopy, valves, fittings, pumps, tubing and medicine inhaler canister coatings


  • Aerospace suits
  • Outdoor applications like awnings, umbrellas, furniture, boat covers and sails
  • Fabrics with fluoropolymer membranes are a key component for a composting solution for the treatment of organic waste (green waste, food waste, source separated organics, biosolids or Municipal Solid Waste – MSW)
  • Industrial filtration and gas sampling to prevent emissions in the chemical and power sectors
  • ePTFE sewing thread, fibers and weaving yarn are used in demanding environments and high-performance ropes


  • Architectural films. Films from fluoropolymers such as ETFE are used as parts of the roofs in stadia, domes and other structures
  • Fluoropolymer coated glass fabric roofs, and laminated coatings
  • PTFE Woven Fabric
  • Fluoropolymer-based paints
  • Bridge and offshore bearing pads. Made from fluoropolymers as they provide the lowest friction coefficient of all plastics
  • “Cool Roof” technology



  • Front sheets: protected by fluoropolymers, provide weather resistance, ultraviolet blocking, optical transparency, fire resistance
  • Back sheets: improve electrical insulation, protection from weathering and chemicals
  • Vents: fluoropolymers are used e.g. in junction boxes

Wind turbines:

  • Control centers for offshore windparks
  • Paints and coatings: long term protection against weathering to increase product life, extend maintenance cycles
  • Release film: support production of composite turbine blades esp. for offshore

Fuel Cells and flow batteries:

  • Ionomer exchange membranes offer an environmentally safe way to generate large amounts of hydrogen, without emitting CO₂.
  • Energy storage: used as a component e.g. binders which provide chemical, heat and oxidation resistance, and long-term storage of renewable energies and stationary energy storage


  • Non-stick coatings for cookware, ovenware and small electrical appliances

A similar report from US but published in 2020:

Socio-Economic-Assessment-of-the-US-Fluoropolymer-Industry-Executive-Summary.pdf (1.8 MB)



Incred equities finds all products will be banned in Europe and hence, sell rating. But isn’t GFLs product PFAS free. Or is there something a miss here?


More on the PFAS issue - How fluoropolymer makers are trying to hold on to their business

In February, the European Chemicals Agency published a proposal from five member countries to ban per- and polyfluoroalkyl substances (PFAS) containing at least one fully fluorinated carbon atom—an estimated 10,000 molecules in all, including popular fluoropolymers. Member states would vote on a ban in 2025; if it’s enacted, exceptions for fluorinated chemicals that cannot be replaced with alternative chemistries would expire in 7–12 years.

In the US, the Environmental Protection Agency is working on mandatory drinking-water limits on PFAS molecules.

McDonald’s, Starbucks, and Chick-fil-A are eliminating PFAS from food packaging. Investment firms, which see PFAS as a liability, have called on chemical makers to phase them out. And chemical companies face billions of dollars in liabilities related to PFAS contamination.

Pointing to increasingly stringent regulations as well as customer demand for alternatives, 3M, the maker of polytetrafluoroethylene (PTFE), polyvinylidene fluoride (PVDF), and other fluorinated polymers said it would walk away from the entire business—which generates annual sales of about $1.3 billion—by 2025.

Last year, for example, 3M signed an agreement with the Flemish government to start a $600 million remediation program at its site in Belgium.

3M’s rivals make a distinction between fluoropolymers, which they say are nontoxic and pose no health risk, and the fluorosurfactants used to make them. Some of those chemicals, such as perfluorooctanoic acid (PFOA), have been demonstrated to bioaccumulate and are detrimental to human health and the environment. The companies have ramped up R&D in nonfluorinated alternatives. And where they can’t find new surfactants, they aim to mitigate fluorosurfactant emissions.

The European proposal, if it stands unchanged, would spell the eventual end for common fluoropolymers like PTFE and PVDF. “They are absolutely in the scope of the current European definition of PFAS", says Amber Wellman, director of sustainability for Chemours. But regulators shouldn’t be targeting the fluoropolymers themselves, she says. “They’re inert. They’re high-molecular-weight polymers. They’re not mobile. They’re not bioavailable. They don’t bioaccumulate.”

Arkema, another fluoropolymer maker, said that fluoropolymers made without fluorosurfactants ought to be exempted from the proposed European regulations.

Mike Finelli, Solvay’s chief North American officer, acknowledges that some PFAS molecules have issues with persistence and bioaccumulation. “That’s the fluorosurfactants, and they’re problematic,” he says. “So our approach and our motivation is, let’s fix the problem. Let’s get out of these surfactants to make sure that the polymers, which are safe and sustainable, will be around for a long time, because they bring tremendous value to the world.”

Officials at fluoropolymer companies are quick to point out clean energy and high-tech sectors that couldn’t manage without the polymers. “Fluoropolymers are the key membrane that splits H2O into H and O,” Finelli says. “That’s how you make green hydrogen. And in a fuel cell, that same fluoropolymer recombines the hydrogen with oxygen to generate electricity.”

Perfluoroalkyloxy alkane (PFA) copolymer tubes and fittings that semiconductor fabricators use to carry aggressive and high-purity fluids like hydrofluoric acid. “You need the chemical inertness, and you need the purity for these semiconductor chips

Fluoropolymer makers have been able to find nonfluorinated surfactants to produce polyvinylidene fluoride (PVDF), but a substitute for the more heavily fluorinated polytetrafluoroethylene (PTFE) has proved more elusive.

Ever since fluoropolymers were introduced, in the middle of the 20th century, making many of them has required using fluorosurfactants. These processing aids are critical to the emulsion polymerization process, in which a polymer is built in water from fluorinated monomers.

"The surfactant stabilizes the growing emulsion particle during polymerization, so you don’t get agglomeration or coagulation,” explains Scott Gaboury, chief science officer at the fluorochemical consulting firm Cogmium. When the polymerization is done, the surfactant is washed out of the polymer mixture, but some residual surfactant remains. Fluorosurfactants have minimal impact on the polymer’s final properties.

The fluoropolymer industry has changed the fluorosurfactants it uses as polymerization aids before. In the 2000s, the long-chain surfactant PFOA, which has been linked to detrimental effects on human health, was turning up near DuPont’s (now Chemours’s) plant near Parkersburg, West Virginia.

In 2006, the EPA launched the PFOA Stewardship Program, which aimed to eliminate the compound by 2015. The major fluoropolymer makers that signed onto the initiative replaced PFOA with shorter-chain alternatives that were thought to be less bioaccumulative because they are more water soluble. For example, 3M switched to ADONA, an ammonium salt of 4,8-dioxa-3H-perfluorononanoic acid. DuPont completed a transition to its GenX technology, which is based on hexafluoropropylene oxide dimer acid, in 2013.

But some of these replacements have now been detected in the environment, and a regulatory and consumer backlash has been mounted against PFAS. Fluoropolymer makers are taking the next step and trying to get out of fluorosurfactants altogether.

The task is trickier than merely swapping one fluorinated surfactant for another, Gaboury says. “It’s relatively easy to make the emulsion polymer with a nonfluorinated surfactant,” he says. “It’s difficult to make products with a nonfluorinated surfactant that have the same performance profile at the very end.” Gaboury explains that when chemists change to a nonfluorinated surfactant, they usually change other ingredients as well, such as the initiator and the transfer agent. “You have a little bit different profile of reactor materials, and ultimately there’s a little bit different residual profile in the product.” That can cause performance problems, he says.

*Chemours’s Wellman adds that the new surfactants are typically hydrocarbon-based. But the hydrogen-carbon bond isn’t as strong as the fluorine-carbon bond. “The presence of that hydrogen results in side reactions that you don’t want when you’re making a fluoropolymer,” she says. “That creates residuals that you also don’t want.” *

Solvay, for instance, wants to phase out fluorosurfactants by 2026. In 2019, it quadrupled R&D spending on nonfluorinated polymerization technology and now has over 100 scientists dedicated to the effort. “You’re talking about replacing a chemistry that’s been around for 60, 70, 80 years." The company has racked up some successes. In June 2021, it stopped using fluorosurfactants to produce PVDF at its plant in West Deptford, New Jersey. Finelli says the main breakthrough was modifying the process conditions in the reactor. Solvay won’t disclose which molecule replaced the fluorinated surfactant, but he says it is a nonfluorinated material that has been used “widely in many industries for many, many decades.” The PVDF that Solvay made using the modified process had to be tested with clients. “At almost every customer, we had success,” Finelli says, adding that a few customers had to make some processing changes to use the modified polymer.

Although Solvay is one of the world’s largest PVDF producers, the plant in New Jersey was the only one it had to convert. Finelli says that about 90% of the company’s PVDF output uses a suspension process that doesn’t require fluorinated surfactants. Products made using that process tend to go into higher-end applications, such as batteries. For example, the $850 million plant that Solvay plans to build in Georgia with the fluorine supplier Orbia will use the suspension process. Emulsion PVDF tends to go into applications like coatings.

Another success for Solvay was sunsetting the fluorinated surfactants used to make its Tecnoflon HS FKM fluoroelastomers, found in applications such as gaskets and seals. The company aims to convert its Aquivion lines, used in fuel cell and electrolysis membranes, by 2026.

Arkema, one of Solvay’s chief PVDF rivals, uses no fluorosurfactants in the US and plans to phase them out globally by the end of 2024. Gaboury, a former scientist with the company, says Arkema is “an early example of a company looking at a nonfluorinated alternative.” It introduced Kynar 500 FSF, a line of PVDF polymers made with nonfluorinated surfactants, in 2008, when most of the industry was just beginning to convert from one fluorosurfactant to another.

Much of Chemours’s Viton FKM fluoroelastomer line has been made without fluorosurfactants for about 20 years, Hulsebosch says. The firm still used the processing aids for some grades with a more sophisticated polymer architecture, but last year it managed to switch these polymers as well. Hulsebosch says the trick was selecting the right hydrocarbon surfactant and running the polymerization to minimize the number of unintended fluorinated by-products generated.

*But finding fluorosurfactant replacements is harder for some fluoropolymers than it is for others. * For example, Hulsebosch says, PTFE is made with a highly reactive monomer, tetrafluoroethylene, that creates many unintended fluorinated by-products. He says *Chemours hasn’t found fluorosurfactant alternatives for PTFE or for similar polymers such as fluorinated ethylene propylene and PFA copolymers that don’t result in such by-products. Solvay has encountered similar problems, according to Finelli. “The higher the molecular weight, the higher the fluorine content, the harder the challenge,” he says. “That’s why, when we looked at our portfolio, we had a road map for almost everything but PTFE and high-fluorine PFA—these polymers in our mind would have taken too long.” So, Solvay will stop producing them by midyear. Finelli says the company is a “tiny player” in PTFE, representing less than 2% of the world’s production capacity. *

*Some firms are claiming success with the problematic polymers. India’s Gujarat Fluorochemicals announced in November 2022 that it has developed a nonfluorinated polymerization aid for its PTFE and PFA products. It will revamp production of these polymers later this year. Gujarat says that with this development, it will be able to make its entire product line without fluorosurfactants. *

*For Chemours’s Teflon PTFE and other product lines for which the firm hasn’t found an alternative surfactant, it has favored a strategy of abating the fluorosurfactant emissions and thermally destroying the rest. “A nonfluorinated surfactant is not the ultimate solution,” Wellman says. *

*Solvay has a similar policy for one of its product lines. The company has not found an alternative surfactant for its Tecnoflon PFR polymer, so it is making it in a clean room environment and sequestering aqueous emissions from the process. *

But even with surfactant switching and abatement, fluoropolymer makers may be looking at a market in retreat over the long run.

*When manufacturers of consumer products can replace fluorinated materials, they will, rather than face potential bans or public backlash, says Bhushan Deshpande, vice president of technology at Techmer PM, which engineers custom formulations of plastics. “There is some desire not to have fluorine, to not have to worry about questions like this,” he says. *

*For decades, fluoroelastomers were blended into linear low-density polyethylene at concentrations of hundreds of parts per million. The elastomer lubricates the hot plastic as it runs through a film extruder, preventing melt fracture, which can give film an unsightly “shark skin” appearance. In January, Techmer launched HiTerra T5, a nonfluorinated lubricant; the firm says the chemistry is proprietary. *

Fluoropolymer makers say they are anticipating this kind of substitution. *Solvay itself has exited markets where fluoropolymers aren’t essential. For example, “you don’t need fluoromaterials for cosmetics,” Finelli says. “They bring value, but there’s other things.” *

*But in markets where fluoropolymers can’t be replaced, such as the green energy applications touted as contributing to a low-carbon future, Solvay wants to ensure as small an environmental footprint as possible. “Fluoropolymers are part of the solution,” Finelli says, “and we want to make sure they are around for a long time.”

3M 2022 Annual Report

With respect to legal matters, we are focused on addressing Combat Arms and PFAS litigation by defending ourselves in court or negotiating resolutions as appropriate. Last year, we also announced we will exit all PFAS manufacturing and work to eliminate PFAS in our products by the end of 2025. While PFAS can be safely made and used, our decision is based on careful consideration of the external landscape, including regulatory trends and changing stakeholder expectations. We have already reduced our use of PFAS through ongoing research and development, and will continue to innovate new solutions for customers.

As previously reported, governments in the United States and internationally have increasingly been regulating a broad group of perfluoroalkyl and polyfluoroalkyl substances produced by the Company, collectively known as “PFAS.” 3M has noticed several global regulatory trends related to PFAS, including declining emission standards and limits set as to the presence of certain compounds in various media, and the inclusion of a broadening group of PFAS. Developments in these and other global regulatory trends may require additional actions by 3M, including investigation, remediation, and compliance, or may result in additional litigation and enforcement action costs.

As previously reported, governments in the United States and internationally have increasingly been regulating a broad group of perfluoroalkyl and polyfluoroalkyl substances produced by the Company, collectively known as “PFAS.” 3M has noticed several global regulatory trends related to PFAS, including declining emission standards and limits set as to the presence of certain compounds in various media, and the inclusion of a broadening group of PFAS. Developments in these and other global regulatory trends may require additional actions by 3M, including investigation, remediation, and compliance, or may result in additional litigation and enforcement action costs.

My take: The PFAS free IP that GFL has developed is a potential multi billion dollar opportunity for the co, given that just 3M is leaving $1.3 Billion on the table for grabs. Whether or not others exit this business is anybody’s guess. Compared to GFL’s 2023 total revenue of $0.7 Billion, one can imagine the kind of opportunity we are looking at.

Disc: Invested


Kureha Corp came out with results this week. Also with forecast for Fy 23

FY2022_Results.pdf (1.3 MB)


  • From the U.S. to Europe and beyond, authorities are developing legislative and regulatory approaches to limit exposure to, and adverse health and environmental effects from, PFAS. Currently, many of the proposals include fluoropolymers in their definition of PFAS, likely because some manufacturers use and emit fluorinated surfactants in the polymerization of their fluoropolymers. Regulators and scientists believe that the use of fluorosurfactants in the manufacture of fluoropolymers is a considerable source of PFAS pollution in the environment.

  • Several manufacturers can already produce majority of their fluoropolymers without fluorinated polymerization aids and are voluntarily committed to completely stop using fluorosurfactants in their manufacturing processes.

  • Fluoropolymers produced without fluorosurfactants pose no risk to the environment and therefore should be exempted from the coming PFAS restrictions.

  • Fluoropolymers are crucial to, and irreplaceable in semiconductors, lithium-ion batteries and hydrogen fuel cells for electric vehicles, renewable energy, transportation, medical equipment, chemical process industry, food processing, water filtration systems, data transmission and electronics, and so on.

  • It is therefore crucial to develop technologies to produce these substances safely, as several manufacturers made it possible, and for the regulatory environment to recognize the difference between fluoropolymers made without the use and emission of fluorinated surfactants on the one hand and PFAS of concern on the other.

My current understanding based on this LinkedIn post and the ones posted on this page previously.

  • Fluorosurfactants are at the root of PFAS pollution.
  • Fluoropolymers made without Fluorosurfactants are safe, at least in the eyes of Fluoropolymer manufacturers. Yet to come across a regulator who’s stated Fluorosurfactant free Fluoropolymers are safe.
  • As things stand today, Fluoropolymers are irreplaceable. Hard to imagine a world without semiconductors, lithium-ion batteries and hydrogen fuel cells for electric vehicles, renewable energy, transportation, medical equipment, water filtration systems, data transmission, electronics, and so on.
  • Regulators are still in the process of recognizing the difference between fluoropolymers made without fluorinated surfactants and with fluorinated surfactants.
  • Fluoropolymer manufacturers are likely to lobby hard with regulators because their multi billion dollar businesses depend on this regulation. 3M’s 2022 revenue was $34 Billion and the decision to exit PFAS was relatively easy because less than 4% of their revenue came from this space. On the other hand, companies’ whose entire businesses depend on this one regulation are likely to fight tooth and nail over this pie.

Solvay June 2023 Call Highlights

As I said before, the best is ahead of us. While it isn’t the main topic of the day, it would be remiss of me not to say a few words on the current trading environment. Like most of the companies in our industry, we are seeing sharper volume declines across the majority of our businesses signaling that there is no end in sight yet to the destocking we’ve been seeing for the past few months.

The good news is that our gross margins are holding up well. You will remember that we indicated the decline in EBITDA in Q2 sequentially of around 5% to 10%. And based on what we see today in this environment, we expect it to be much closer to the 10 than the 5, indeed. Looking beyond the second quarter, visibility remains limited beyond the next 3 months, and there are no signs of any recovery at this stage.

The Materials segment includes the highly valued, high-margin specialty polymers and composites businesses that supply unique materials that are critical to customers, yet comprise a small overall cost to them. This segment also includes our growth platforms for batteries, green hydrogen, biotech and thermoplastic composites. As you know very well, it’s an industry leader focused on bringing new solutions to customers that address critical performance needs, allowing our customers to become more sustainable.

As you know very well, our Materials segment is a highly attractive business serving automotive, aerospace, electronics and health care markets. It’s a high barrier to entry business, delivering industry-leading margins greater than 30%. And it is an innovation machine. It has 1,000 patent families in the segment, with more than 205 in the past 2 years alone. And with many exciting opportunities in front of us, it’s positioned to continue to deliver well above market growth.

Dongyue Profit warning

Dongyue Group Sees Significant Decrease In Net Profit Attributable For Six Months

Dongyue group ltd sees significant decrease in its net profit attributable to owners of company for six months.Decrease in group’s profit due to significant decrease in average market prices of some of group’s major products.Recorded significant decrease by approximately 83% in net profit attributable for five months ended 31 may.


Gujarat Fluorochemicals Ltd. proposed expansion by increasing the existing production quantum and addition of new products. Most of it look like adjustment and reclassification of capacities probably to make real capacities a little obscure but what stands out is Lithium Ferrous Phosphate-LiFePo4 (LFP).

Lithium Ferrous Phosphate-LiFePo4 (LFP) Product 0 500 500 MT/Month

The lithium iron phosphate battery (LiFePO 4 battery ) or LFP battery (lithium ferrophosphate ) is a type of lithium-ion battery using lithium iron phosphate (LiFePO4) as the cathode material.

With electrolyte (LiPF6), binders and now Cathode LFP it looks like GFL is getting into complete set of Li-ion batteries.

It will be interesting to further dig into this and establish complexity, competitive positioning, pricing etc.


One more interesting thing that I wanted to point out from the EC is FFKM. I see it first time

Fluoro Elastomers (FKM)/ FFKM Product 300 435 735 MT/Month: FFKM, or perfluoroelastomer, contains higher amounts of fluorine than standard FKM, and features higher temperature ratings, up to approximately 325°C. FFKM also has improved chemical resistance, with nearly universal chemical compatibility. This combination of high-performance capabilities makes FFKM seals the premium choice for the most challenging applications. FFKM is used in o-rings and seals in environments with high temperatures and/or harsh chemicals in the aerospace, semiconductor, energy, pharmaceutical and industrial industries. Both FKM/FFKM have significant applications in semicon:

Kalrez from DuPont and Solvay are the only backward integrated players and some other player like Parker and PPE (who make seals and other equipment also make it). Until recently a lot of articles came around significant shortage of FFKM in semicon fabs.

If one goes through Kalrez FFKM docs it seems that FFKM will also have a large no. of application specific grades.

Going by the management commentary there could be one or two quarters of soft results due to ref gases and other global headwinds but as more and more advanced and specialized polymers like FKM/FFKM/PFA and battery chemicals start coming up one could see significant ramp up happening.

Polyvinylidene fluoride PVDF/FKM/PFA
2022-23 Value (Lac Rs) Kgs Per KG Real
April 3675.03 171.43 21.44
May 4940.77 211.8 23.33
June 5914.85 269.61 21.94
July 7512.63 319.63 23.50
August 6339.56 259.58 24.42
September 7426.67 306.84 24.20
October 8930.55 362.42 24.64
November 9118.21 377.51 24.15
December 9108.18 400.38 22.75
January 7486.88 313.98 23.85
February 6872.81 311.72 22.05
March 7994.67 352.73 22.67
April 6891.26 297.51 23.16
May 6055.27 282.39 21.44

The Fluoropolymers growth seems to be softening. yoy the growth is still visible. And not much change in realization - Export Data. DGFT website


Some recent developments:
a) EU to drop ban of hazardous chemicals after industry pressure | PFAS | The Guardian : Leaked documents show that as little as 1% of products containing hazardous substances could be prohibited. This should takeaway any risk of blanket PFAS ban and also ensure Europe doesn’t go back to stone ages.

b) US to investigate imports of Chinese "custom" blends - Cooling Post : The coalition says it has seen a “staggering” increase in the volume of R410B imports originating in China or blended in Turkey from Chinese components. unfinished” blends of R32 and R125 from China were circumventing the antidumping order. Other circumventions found included HFC blends using Chinese components being blended in India and imports of a patented blend being re-blended in the US after importation.


Scuttlebutt 1: Battery Chemicals Domain Consultant, July 2023
Scuttlebutt 2: Fluoropolymers Domain Consultant, July 2023


Happy to bring to you some excellent industry scuttlebutts conducted by VP Collaborators in GFCL allied space to understand more of whats happening in the respective industries and the source for confidence/optimism/even aggression in what some us thought (I strongly belonged to that Camp) had commoditisation risks.

Hope you enjoy this and it helps us to get better-informed to ask more probing questions of the next domain expert and/or industry professional, and company managements.

Call out to VP Community Members who are/have friends from these 2 industries.
Help us get better at this job by meeting 5-6 domain experts sequentially (learning and using what we learnt with the next expert) :slight_smile:


Arkema results


Chemour - press release

Chemour results

sales softening. But looks like marginal decrease and seems likely to continue


investor presentation of Solvay



Management on PFAS

I’m really pleased we reached a settlement with the New Jersey Department of Environmental Protection on PFAS. This marks an important milestone in derisking our operations and follows the successful innovation of non-fluorosurfactants polymers in New Jersey, which was the first step in our journey to become fluorosurfactants free.

Management on Specialty Polymers (PVDF, PFA)

Sales up 7% in the second quarter to EUR 1.1 billion. Once again, 9% high prices were the real driving force behind this growth, more than offsetting a pretty small reduction in volumes for the segment of around 2%. Specialty Polymers delivered sales increase of 4.7%, driven by higher prices, whereas volumes were down 4%. The continued positive pricing momentum in Specialty Polymers demonstrates both the investments in our capability that we’ve been making, for example, to the value pricing, and more importantly, it demonstrates the fact that our customers appreciate the differentiated technologies that help to make them sustainable at a lower total cost of ownership, and we’re sharing that value creation – value pricing. Specialty Polymers volumes were up in electronics specifically in semiconductors and in industrial applications, but this was offset by continued destocking in EV batteries and that impacted PVDF volumes.

Now I invite you to take note of the fact that our PVDF business is diversified as we serve many markets, including EV batteries, of course, but as well as oil and gas, electronics, construction, health care. The fact is that not a single market dominates in terms of sales. Also, PVDF volumes other than EV batteries, of course, have shown resilience in the first half. When you consider the total PVDF view as we look at it, I can also confirm to you that we maintain the contribution margin percentage in batteries whilst we have grown our contribution margin percentage in the non-battery markets.

Management on Guidance

First, let me start by confirming our full year guidance. As a reminder, following our strong start to the year, you may remember, we raised our EBITDA guidance last quarter to be in the range of plus 2%, which would reflect the recovery in volumes to minus 5%, which would reflect volumes remaining stable. We had, in fact, a strong end to June, yet July sales were soft and demand remains volatile. So our order books for the remainder of quarter 3 indicate that demand will not recover in the quarter. If volume recovery doesn’t materialize, then the second half will likely be consistent with the current full year official consensus. The same focus and discipline that sustained our performance in the first half will persist in the second half. Staying close to our customers, ensuring we drive the right pricing for our offerings and maintaining cost and cash discipline internally. We may not be able to control demand, but you have seen what our teams can achieve even in challenging markets. These are the factors that give us confidence to reconfirm our full year guidance.

Analyst on Guidance

The first question was more a confirmation because I was a bit confused, on your point about the trajectory of volumes, you said June improved or was stronger at the end and then July weekend and then you said you are expecting or you’re not expecting a recovery in Q3. When you say you’re not expecting a recovery in Q3, are you implying that volumes in Q3 will be similar to Q2? Or are you actually saying because July probably was weaker, you are actually expecting Q3 to be weaker in terms of volumes versus Q2? And I think my core of the question is, today, we see a big step down in in consensus in Q3 versus Q4 – sorry, Q3 versus Q2. And I guess that just keeps this concern alive, right? which is we are seeing a step-by-step normalization at Solvay in terms of pricing. So I’m just curious how you’re thinking about that step down from Q2 into Q3 based on consensus, which clearly seems quite steep

Management on Guidance

What I was trying to say, I guess, is that demand is volatile. June was a very strong month, right? I mean, you remember, I even guided you guys on quarter 2 sequentially versus quarter 1. And I told you at that time, and I’m looking at my team [ as ] minus 5, minus 10, right, somewhere in my road shows, and we ended up minus 6. So – and the quarter, the June month really finished very well, but then July is probably one of the lowest months we’ve seen in terms of sales since 2021. And the order book so far remains very soft, right? And that’s what our peers, most of our customers, they have been telling you, right? So frankly, I’m extremely comfortable with the guidance we have given you earlier and we confirmed today. I don’t have a crystal ball. If the volume starts to recover, right, I mean, we still have a scenario where we can reach the higher end of our range. But if the volumes remain stable, , I’m talking stable versus as they were in quarter 1 and quarter 2 because we had the same decline year-on-year in the volume. I think it was minus 12% and minus 13%, right? So then we will be at the lower end of minus 5%. So that’s was the guidance implies a reduction in the second half versus the first half. And again, demand is still volatile. And I look at it with prudence and cautions but also with great confidence, right?

Management on Destocking

To give you an idea about destocking, 2 main areas Wim, EV batteries in China was impacted. Obviously, there was a big destocking in China, which impacts the specialty polymer sales. But frankly, you’ve seen this as well, material did really well, including specialty polymer. sales of polymers and other auto applications were stable, and we grew volumes actually in areas like industrial markets and electronics, for example.

Analyst on specialty polymer pricing

in Specialty Polymers, only a clarification. Is it right that sequentially, prices in Specialty Polymers were still up?

Management on specialty polymer pricing

On specialty polymer pricing. We had strong – the strong pricing was maintained. And sequentially, quarter 2 prices are slightly above quarter 1. So they have been practicing their value pricing. And where they couldn’t like in some EV batteries, right, the contribution margin well maintained. So really glad that specialty polymer strong pricing was maintained.


Analyst on Fluoropolymers

First question on APM. Could you maybe drill down into what areas you’re seeing the demand weakness in the second half? And then separately, could you just update us on how you’re seeing demand specifically developed for Nafion and your semicon PFA currently?

Management on Fluoropolymers

Remember, we’ve always described 2023 as a transition year for APM. What do we mean by that? We’re really ramping up our ability to our capacity in our Performance Solutions space to serve both clean energy and advanced electronics markets. And so in terms of where we’re seeing weakness, it’s in our Advanced Materials business, think of that as either broad industrial or in some specific segments like land cables, which are tied to construction, we’re seeing some weakness there as well. So I’d say, generally speaking, the weakness we’re seeing is in our Advanced Materials business.

On our Performance Solutions business, we remain sold out. And so what we’re witnessing is our growth rate here this year is really capped by how much capacity we can liberate. So as we look at the second half, we expect Advanced Materials to be weaker from a volume perspective. And obviously, there’s only so much you can do in the second half to relieve capacity. And that’s just the timing it takes to implement capital projects or, in some cases, to get permits to expand at some facilities.

So the team is really hard at work in doing everything possible to maximize throughput in our Performance Solutions area, but there’s just practical limits in what we can achieve in the second half, while we’re seeing a weakening of the Advanced Materials, which today is the larger portion of the total revenue of that business.

No, the only other thing I’d add is that, obviously, if you look at APM, like as a business, regionally, our exposure to Asia Pacific is high, right? It’s 35%, 40% of the overall business. And so as we think about that and the kind of the lack of a strong recovery in China and whatever kind of spread that has to the rest of Asia that’s certainly impacting the business.

The only other thing I’d remind folks on the call is that Q3 of 2022 is going to be a tough comp, right, for Q3 of 2023. So as we look ahead, we do expect a drop off there on a year-over-year basis in addition to something that’s going to happen sequentially in terms of both top line and bottom line.

Analyst on Refrigerants

And then if we could turn to refrigerants, can you just update us on your latest thinking with the step-down, particularly in North America with HFO? What do you think that does to pull forward volumes the rest of this year? And then can we still grow those volumes into next year with the step-down? And what are we seeing on supporting HFC pricing as we’re moving into that step-down for HFC?

Management on Refrigerants

But generally speaking, as we look at the second half, we think – we believe that the step-down is beneficial to our second half. Clearly, remember that this business has a seasonally weaker especially going into Q4. So bear that in mind as well. And obviously, we’ve had a very robust first half on OEM bill rates. The question is, does that continue in the second half? And with weaker construction, that’s also a moderating impact.

So listen, I think it’s beneficial to TSS with a step-down in terms of folks wanting to make sure they’ve utilized their quota. Clearly, with end demand being more modest in a somewhat weaker economy in the second half, that could have an offsetting impact. But net-net, we factored that into our guide.

I’ll just build on that comment and just remind folks on the call that the AIM step-down coming is 30%, and the F-Gas step-down coming in Europe is 20%. So that’s obviously a 2024 dynamic that we’re going to face into. And I know that Joe and his entire team are ready to serve the market to make sure that our OEM equipment customers get all of the products that they need to build out their fleet and to deliver that next generation of HFO hardware and to make sure that our distribution partners on the refill side are well taken care of through that coming transition.

Just to be sure, as we think about the guidance for the full – the revised guidance for the full year, we haven’t really baked in a material amount of pull forward, right? So we’re not envisioning a scenario sitting here today where you get a material amount of pull forward in either the third or the fourth quarter. Obviously, the things that are going to drive that, right, through the summer and into the fall are going to be how hot is it? How much of an inventory depletion do we see down the channel? And of course, what is the strength of the overall economy? That give folks the confidence to say, hey, I’m going to pull ahead some volume into '24. So listen, I mean, with this business continues to perform very well and obviously, with the coming '24 step-down, as you all know, we’ll be ready to serve the refrigerant markets that need the product.

Obviously, the step-down in quota drives further adoption of HFO technology. We’re hard at work at our Corpus Christi site to drive the 40% expansion there, which we expect to have completed by the end of next year.

Analyst on Refrigerants

On the TSS business. So kind of a look at like the cooling degree data and that type of thing, would actually say 2Q despite all the press about the hottest day in the world and all that kind of stuff, it was actually kind of a light start to the air conditioning season. But it looks like the 3Q has really ramped up aggressively. Do you feel that pull? Like is it something that – I hesitate to say it’s spot because that almost implies it’s a commodity, but like do you feel that pull when it gets hotter? And I guess, how should we think about how that plays out if the current trends continue throughout the rest of this year?

Management on Refrigerants

Yes. So , as you alluded to, we had a relatively cool first part of the summer, which delayed the start of the season. And obviously, with the more recent warm weather, we will see higher utilization rates or higher consumption of refrigerants as folks need to service their equipment to deal with the current weather patterns we’re seeing, especially here in the U.S. and Europe. And so our view has always been that any pull ahead related to the step-down would come later in the year, dependent on how much quota folks had used throughout the year.

A lot of the refrigerant products – what’s really great about our TSS business is that a significant portion of it is a replacement or a service business. And so there’s not a lot of transparency in terms of where distributors are in terms of consumption of inventory. And so we – yes, it creates demand when you have hot days like we’re seeing recently. But there’s also quite a bit of inventory in the system held by distributors. And there’s typically not a lot of line of sight as to where that inventory level is and whether folks will need to consume more to use up their quota.

So as we reflected on the second half, we believe there will be some pull ahead as it relates to the step-down. Folks will want to make sure they’ve used their quota. But a lot depends on utilization through the end of the year, especially through the cooling season this summer, and we’ll just kind of have to watch it as we go.

Analyst on Refrigerants

Okay. Perfect. And I also wanted to ask a little bit about illegal refrigerant imports. There have been some articles and some mentions by the American HFC Coalition about a high amount of R-401B refrigerant coming to the U.S. from China. And I don’t believe it was an issue for your second quarter results, but is it something that you’re concerned about in the second half of the year?

Management on Refrigerants

Yes. As we think about illegal imports, we learned a lot of lessons out of Europe, right? So as we were launching HFO technology in Europe on the stationary side, specifically, we learned a lot of lessons from the illegal imports that came across from Eastern Europe and Southern Europe and changed the quota dynamic in that market. So we took a lot of those learnings around inventory management, border control checks and working with authorities and layered that into our approach to the U.S. market and worked a lot with EPA and a number – Homeland Security and a number of other agencies in order to make sure that as AIM was getting stood up. We had some of the right enforcement mechanisms in place, and we created some awareness right around the issue. So obviously, we need to remain vigilant on illegal imports. It’s not something we’re ever going to take our eyes off of.

To your question specifically about 410B, we wouldn’t necessarily view that as an illegal import issue, but more of a composition of product issue and the importation of that being used to kind of to skirt other regulations around the import of 410A. So our teams are all over this. Joe and his entire team, they work hand-in-hand with federal, state and local authorities here in the U.S. to ensure that there isn’t a problem going forward. So we’ll keep an eye on it. But for now, we remain confident that the law can be well enforced here in the U.S.

Analyst on PFAS

First question is just around the PFAS potential settlement. We’ve all seen a number of state AGs have kind of stood up against the 3M settlement. Would you expect something similar for your settlement where there would be people that prominent that would try to either alter it or kill it? And if not, can yours go forward do you think with the judge if the 3M’s doesn’t?

Management on PFAS

No, listen, we saw the news of the AG opposition to 3M settlement. Obviously, when you’re dealing with something this complex and this far-reaching, I think we would certainly expect folks to have an opinion, right, on how they think the – what they think the outcome should be. Sitting here today, we can’t predict whether or not similar objections would be raised against our settlement or not. But I think that what we do have confidence in is that the settlement that we entered into based on what the plaintiffs have asked is a very good settlement. And I think that, that opinion has been reinforced by the court, right, that they believe that this is a good settlement. So we’re going to continue to do what’s asked of us by the court, certainly, and work through the process first through preliminary approval and then ultimately, right through final approval at the end.


Management on Advanced Material

This performance was achieved in difficult macroeconomic conditions marked by low visibility and weak demand, including continued destocking. This quarter was nearly all over the place with nevertheless a few exceptions like automotive, energy and batteries. In particular, destocking of the battery in China continued in the early part of the quarter, but seems to have come to an end and volumes finally turn positive on the quarter. All in all, while group volumes were lower year-on-year, our pricing remains firm for the most part in the context of general inflation, even if raw material declined. Excluding the expected normalization of PVDF and upstream acrylics I’ve mentioned before, we already had the opportunity to comment in the past quarters.

In Advanced Materials, we had the reversal of the PVDF overrunning, but we benefited from high value-added new business developments as well as resilience in high performance polymers in the U.S. and to a certain extent also in Europe.

Analyst on Refrigerants

but just first question on the topic on fluorogases. I know we’ve not talked about it for a while, but just looking at some of the anecdotal data, et cetera, it seems that prices are very high this year or going up strongly this year on the back of the planned reduction in quotas both in the U.S. and Europe, I think it’s in 2024. I mean in the past, we’ve seen this dynamic where the prices go up into the cuts – into quotas and then they fall post the initial buying wave. Is this something similar we should be expecting this cycle? Or is there a different pattern you think, because of maybe changes in the market structure, et cetera? And is this something a material driver to Arkema’s earnings in intermediates this year? That would be the first question. And the second question was just around – you mentioned certain seasonality, and that seasonality – typically, even for second quarter, you tend to see a softer – sorry, third quarter – softer third quarter versus Q2 just because of seasonality. Is that something you expect? Or because of the project contribution and fixed cost savings we should be not expecting that seasonal decline in Q3 versus Q2?

Management on Refrigerants

So on the first one, the answer is rather easy. In the old time, our profitability was really shared between Asia, Europe and the U.S. U.S. has already been very stable. Europe was, I would say, rather stable with a low performance, but with no quota implemented, except with 1 year where we have disturbance because the regulation was not applied, but it’s not the case anymore because it took some time for the European Commission really to make sure that this regulation was implemented, but now it’s done. And Asia was a big contributor. Today, different. So I would say the – most of the large – very large majority of the contribution is between U.S. first, then Europe. In Europe now, the quota scheme is respected. And we don’t have the disturbance we had in the past, and in the U.S., it’s stable like it was. Now when you say that we seem to have a sort of elevation of prices and profitability for [ all ] this year versus last year, it’s not the case now. So we have a rather stability in fluorogas, while – maybe a little bit better than the last year, while we decrease in intermediates on the Chinese companies as we mentioned. So our feeling, and it’s a strong feeling, we believe that fluorogas in the coming years will be rather stable. And the mechanisms are different now than they were in the past. And the Asian part, which was really a relative one is quite small now. So we have a far more stable positioning. With regard to seasonality, I will not comment really quarter-by-quarter. But what I say on the semester, and I say – I think I said that last time, is that the second semester normally is a little bit softer in seasonality than the first one. If you make the math and if you look at – several years have passed for Arkema. This year, it’s a bit different because we have still momentum – Even if it’s already a little bit below in new project contribution. This contribution will be there. These are good elements. And I would say even if today we have no visibility, even if we have not – if we remain quite cautious, maybe end of the year a little bit incremental, less of destocking, it can make a difference also. So if you take these 4 elements, it’s not a pure rationale. There are still uncertainties. But all in all, it makes, I would say, a seasonality not exactly the one we had in the past. Okay?

Analyst on PVDF

Firstly, on PVDF., could you give us some indication of what sort of volume growth do you see in the second half versus first half, and then into '24 based on sort of your customer feedback? It seems like volumes have stabilized. So – and then Chinese prices have, on a reference level, also stabilized. So do you expect price stability in your portfolio as well for H2 and into 2024? That’s my first question.

Management on PVDF

On the first one, we already have good volume growth between Q1 and Q2, significant. So it depends if you compare us to H1 or H2 to the trend of Q2. I would say, in terms of volume we plan to have the H2 more in the order of magnitude of the Q2, which is more comparable. While, as I mentioned, the Q1 in volume was more difficult. So then in '24 versus '23, just because we had the weakness at the start of the year, will continue to grow. And as you know, we have invested also both in France and in China for, let’s say – to make the story short, midyear. One is a bit before midyear. The other part is more a bit after midyear. So which means all in all we’ll get more capacity overall in '24 than in '23. So because of that, because the market – we have a lot of – the business, as you know, in battery – but not only in battery normally, '24 should be above in volume compared to '23 and even compared to the second part of '23.In terms of pricing, we see for the Chinese pricing it’s clear that we were the big leader in the first part of the year, even we continue to see decrease in Q2. I agree with you, normally, we should be more or less stable. But again, wait and see, but everything is factored in our guidance anyway


Management on Performance Chemicals FKM, PFA, PTFE, ETFE, PEM

Next is Chemicals. In essential chemicals, the market is expected to recover gradually as the economy recovers. However, not a dramatic recovery. In Performance Chemicals, the semiconductor and smartphone markets are slowing down. And the demand for fluorochemical-related products is expected to reach a standstill. However, the product demand for transportation equipment sector is expected to increase.

As for Performance Chemicals, we have been affected by the semiconductor and smartphone markets up to this year, but starting next year for Essential Chemicals. The gradual recovery in China and U.S. markets are expected, and with that, we expect the gradual recovery. As for Performance Chemicals, in addition to the market recovery, the capacity expansion is to contribute to the improved profit.

Analyst on PFAS

Would like to move on to the next question about PFAS regulation. What will be the impact on AGC business? So within PFAS, especially carbon PFOS and PFOA has come under a lot of scrutiny. So the carbon of 6 or over 9, so it has actually been expanded to these sort of fluorochemicals as well. So perhaps with lower the carbon number may come under the scrutiny of the regulation. So within AGC’s groups, what will be impacted going forward? What are the potentials of – so Miyaji san, please?

Management on PFAS

So in terms of PFAS, PFAS. So we have projected the slide already. As many of you are aware. So PFAS, P-F-A-S that is, this is really a name for the entire group for the polyfluoro chemical substance. So about 15,000 different substances come under this group – or 12,000 rather. And what has been under a major scrutiny right now. And of course, there’s been a lot of report domestically. So PFAS for the inflammatory agent. And so this is under the regulation for PFAS. And of course, we have seen some litigation in the U.S. as well.So for this particular usage, P-F-O-S, PFOS, we have no track record whatsoever in terms of production and sales. And therefore, our exposure is none as far as PFOS is concerned. Now for PFOA, again, this is another regulated substance. So it is a water repellent agent, as one of the representative example. So we have seen some different generations. So historically, regulations become more stringent application of this – we have actually withdrawn completely from this. So that’s where we stand right now. So we do not perceive any major risk related to this PFAS regulation.What we are focusing is on the right-hand side, more on the resin focused products. So they are not absorbed into human bodies, extremely safe in terms of its nature. So in pharmaceuticals and agrochemicals, they are completely regulated by the regulation. The safety has been confirmed. So our focus is more on the right, and that’s where we are growing.So PFAS was in this grand scheme of regulation. We may have been categorized as part of the operator was in it. However, in terms of our business focus, we are very much focused on more of a safe and highly regulated material. So we do not perceive a large risk, as far as our business is concerned.

Analyst on PFAS

Next question, again, is related to PFAS. Overseas, the litigation on the products are being made are reported is AGC not affected?

Management on PFAS

Well, again, using this slide, the biggest issue today is PFOS products. Many litigations, lawsuits, especially the fire extinguishing [ firms ]. The litigations in the U.S. tend to try to cover a wide area, because we use chlorine – there are so many companies that are being sued, and we – sometimes our name is included on the list. But actually, we have yet to receive any of the lawsuit notification. So it’s not a risk right now. And of course, we are consulting with the lawyers for appropriate response, and that will continue. Of course, in Japan, no litigation

Analyst on Margins in Chemicals

Thank you. Next question. In Chemicals, second half operating profit plan, JPY 9.2 billion increase is projected over the first half. Could you divide them between essential chemicals and performance chemicals?

Management on Margins in Chemicals

Yes, this relates to what was explained earlier. In essential chemicals, at least given the current situation, we are not expecting a big recovery. And that is the basis of our projection. So that projected increase is largely in the area of Performance Chemicals. Performance Chemicals by nature are more focused on the second half, including increase in shipments, and the increase in sales and profit are always expected in the second half. So right now, with the recovery in the automotive, we expect a growth in Performance Chemicals.


Management on Fluorinated Solutions

Fluorinated Solutions had another strong quarter with second quarter revenues of $263 million, up 18% year-over-year. These results were primarily driven by favorable pricing across the product portfolio, as well as higher volumes. Second quarter EBITDA was $116 million, an increase of $30 million year-over-year, with an EBITDA margin of 44.2%, an increase of approximately 560 basis points. This was largely due to the strong pricing that more than offset unfavorable foreign exchange impacts and spending on growth investments.

And finally, in Fluorinated Solutions, demand and pricing are expected to be generally stable in line with normal seasonal patterns for the rest of the year. We continue to see increasing interest in our next-generation refrigerant gases and momentum in the conversion to medical propellants with lower global warming potential. Our projects to manufacture lithium-ion battery materials in the United States are on track.

On Koura’s performance and its margins. And the Fluorinated Solutions business, as many of you know, is very well positioned in the fluorine chain with the unique access to fluorine that we have with our mine in Mexico. And as I’ve talked about this many times in previous earnings calls, as the decade continues, demand for fluorine, particularly in new applications, will continue to grow and supply will remain constrained. So, our long-term view is, the fluorine chain is favorably positioned to benefit over the long term, both in existing applications and in new applications.

Now, in existing applications, particularly the refrigerant gas business, where much of our participation is in regulated markets, where there are F-gas quotas, and these quotas decline over time, and as volumes decline, prices go up. And I talked about this at the Investor Update call, where eventually you would expect the pricing of current generation refrigerants with the quota to converge with the declining prices of the next-generation refrigerants. So, that is what has contributed to strength in Koura’s earnings across the board, in all of the segments we participate in.

Now of course, the cooling season is getting over. And so, as I had indicated – as we had indicated in the press release, going forward, it will be normal seasonal patterns in Q3 and Q4. And over the next couple of years, we will continue to see the transition from the current generation refrigerants to the next-generation refrigerants. And then, eventually in 2026, when our new assets for battery materials are in place, that’s when you will see some contribution from the energy materials business to Koura.

Analyst on PVDF

I actually have a follow-up on your strategic CapEx and some of the projects that you just mentioned. So, the first one has to do with PVDF. It seems to be that there’s a lot of things happening in the EV space, on-shoring trends, Inflation Reduction Act, so things are unfolding, well, rather quickly. And you mentioned that this project is on track. So, I was hoping to hear, if you can just elaborate a little bit more as to where is this project at this stage? How is it evolving? Whether you could be perhaps thinking of a different timeline, given the quick turnaround in the space and the very big opportunity for the EV space, and how PVDF is important for that?

Management on PVDF and LiPF6

Look, first and foremost, you don’t make long-term commitments based on short-term high frequency information or short-term considerations. It may affect – it may fine-tune timing of your projects or some tweaks to your projects, but you don’t typically make long-term commitments based on short-term information. Now, speaking of energy materials, and here, we have a very significant effort in both PVDF and LiPF6. And let me remind everyone, PVDF, we are doing this as a joint venture with the Belgian company, Solvay, and this has been structured as a 51/49 JV.

Solvay is the world leader in PVDF for batteries. This will be the first plant in the United States catering to the EV industry. And Solvay is the beneficiary of the DOE grant for this project as well, and it will partially benefit the JV. We had signed a MOU with Solvay back in November, and now we’re in the final stages of finalizing the definitive agreement, but the engineering is going on in parallel. This project is expected to come online sometime in 2026, potentially in the second half of '26. Timing varies depending on how soon you can build these plants, but that’s when it’s beginning – it’s expected to start contributing.

The second project, which is equally important, and this is 100% owned by Orbia, is in LiPF6, which is another key battery additive, which is used in the electrolyte. And for this, we have secured a license from the Japanese leader, Kanto Denka. That’s done. That’s finalized. And the technology exchange is going on, even as we speak. The engineering work has begun. And the timeline for this project is also sometime in the middle to the end of 2026. And for this project, we have received a $100 million grant from the Department of Energy.

Now, both of these are incredibly high-value projects. And as I’ve indicated earlier, in terms of the returns, the returns are in the range of 2x to 3x EBITDA multiple on these projects. And you can imagine, you can do the math on the amount of battery capacity that is needed over the course of the decade, and that we might have to exponentially grow this capacity over the following years. So, this is going to be – these 2 projects are going to be very important to Orbia’s growth going forward.


Gujarat Fluorochem: Q1FY24| Recovery in H2?

There can be some errors as notes were taken while listening to the call.

-Q1 Rev was down by 9% YOY, console EBITDA at 329 crores- down by 24% YOY. EBITDA Margins at 29%, consolidated PAT at 201 crores.

-FP biz- prices are stable and vols have corrected marginally. Q2 will be similar to Q1 and expect normalisation from Q3 & Q4.

-Ref gases will do well in H2.

-Might be a little bit delay in fluoropolymers capacity utilisation. Remain positive. PVDF grades have been made and tested at Lab scale. Received positive feedback, approval process taking time- as the product needs to be tested in the battery. Expect to get the approval in next 1-2 Quarters.

-In PFA- some is going in Semi conductor application. There are different purity levels and grades. Supplying in basic level to one of the leading manufacturers, step by step going into higher grades. Into process of getting approvals for higher grades.

-Expecting blended realisations to go up in PTFE and New age fluoropolymers. Expect ref gases to improve from Q3 or Q4 onwards.

-PFAS regulation is more towards molecule which have mobility, which are bio accumulative. Fluoropoylmers as a set of compounds are very long chain. Not seeing FP to be part of any restrictions. There won’t be any problem in the product.

-FFKM applications are very specialised in space and semi conductors. High end materials for extreme application.

-In talks with Indian players for Electrolyte and salt supplies.

-R32: at this moment holding on with the plan of 10ktpa plant. Not going ahead with the plant looking at the global situation.

-PVDF solar will come online in Q2FY24. As requirement comes up- we will keep adding capacities. Plan to achieve 1900 tonnes per month- some of it may spill next year when it comes to current capex’s.

-Expect R125 to pick up in H2.

-In some fluoropolymers destocking is happening. For PVDF- there is slowdown in China due to which there is excess supply in the world. It’s a short term phenomenon, seeing it pick up again going forward.

-Capex plan may spill over to next FY as well. Entire 1500 may not happen this year.

-Premature to share the economics of battery chemicals- plan to get into various battery chemicals and even going into electrolytes.

-By Q1FY25- capacity will get fully utilised for fluoropolymers. Volumes are constrained by approval from the end customers. PTFE debottlnecking- have the TFE in place. As the market turns around- in position to capture that.

-Not seeing pricing pressure on the higher end grades in NEW FP. More to do with volumes as there is an element of destocking that is happening. Hope whole thing gets sorted by H2 of this FY.

-Most of our grades in FP are in the higher end grades.

-Expect approval to be in place by FY25 for Fluoropolymers. Capacity ramp up further takes time- time frame is 1-1.5 years.

-As we get approvals for 8 applications, we will commission the wind mills. By Q2 we will get the approvals, benefit will 20-25 crores of power cost savings.

-Expect margins to be in the range of 28-30%.

Disc: no recommendation to buy or sell.


Does anyone have more details on this?


This is a May report


Demo website of their EV business -: GFCL & EV - Homepage

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