TANFAC INDUSTRIES VIDEO - Q1 FY 18-19 - RESULTS REVIEW

TANFAC INDUSTRIES VIDEO

Q1 FY 18-19 RESULTS REVIEW

TANFAC Industries Ltd is a joint sector company promoted by Aditya Birla Group and Tamil Nadu Industrial Development Corporation (TIDCO).

It is spread over 60 acres in SIPCOT Industrial Estate, Cuddalore, 20 KM South of  Pondicherry, and 200 KM south of Chennai. It began commercial production in March 1985 and is amongst the leading producers of Hydrofluoric Acid and its derivatives.

PROMOTERS

Mr A.K. Agarwala, Non-Executive–Promoter-Director

Mr lalit Naik–Promoter

Mr R. Karthikeyan -–Promoter

PRESIDENT

Mr K. Sendhil Naathan

ANNUAL REPORT – 2017

MANAGEMENT DISCUSSION AND ANALYSIS

Global   fluoro-chemical   market   is   expected   to  reach  USD  27.6  billion  by  2022,  growing  at  a  CAGR  of  5.6%. 

Heating, ventilation, and air conditioning (HVAC) is the technology of indoor and vehicular environmental comfort. Its goal is to provide thermal comfort

Increase  in  installation  of  HVAC  systems  in  the  manufacturing & automotive sectors is expected to grow the demand for flouro-chemicals. Usage of fluorine in Pharma and Agro-chemicals is also showing increasing trend.

The  Company  operates  in  a  single  segment  i.e., fluoro-chemicals .

TANFAC PRODUCTS :

    Anhydrous Hydrofluoric Acid;       Potassium Fluoride

    Diluted Hydrofluoric Acid;            Potassium Bifluoride

    Aluminium Fluoirde;       Boron Trifluoride Complexes

    Sulphuric Acid;        Iso Butyl Acetophenone-IBAP

    Oleum;                   Peracetic Acid

Tanfac is an ISO 9001, 14001 and OHSAS 18001 certified company.

Technology

TANFAC derives a competitive edge from using World-Class technology including :

·       Tie-up with GLOBAL LEADER for Aluminium Fluoride manufacturing technology - with Davy Process Technology(Switzerland) for Know-How equipment

·       Tie-up with CHENCO (Germany) for manufacturing technology of Hydrofluoric Acid.

·       Sulphuric Acid and Oleum plants are designed and erected by Grasim Industries Ltd. ,which is one among the group companies.

Achievements

·       Largest producers of Anhydrous Hydrofluoric Acid and Aluminium Fluoride in India.

·       Market Leader in AlF3 and HF in Domestic market.

·       First Fluorine Chemical Company in India and Fifth in the world to get ISO 9002 certification in early 1994 and upgraded to ISO 9001:2000 revision in the year 2003.

·       First Fluorine Chemical Manufacturing Company in India to achieve ISO 14001:1996.

·       Implementing TPM (Total Productive Maintenance) with the help of JIPM(Japanese Institute of Production Management), Japan

·       Maintaining continuous and steady growth in terms of production capacity and sales.

TANFAC IND	Jun '18	Mar '18	Dec '17	Sep '17	Jun '17	YOY	QOQ
Net Sales	55.77	47.75	38.67	40.27	35.62	56.57	16.8
Raw Materials	24.16	25.05	20.24	22.4	17.78	35.88	-3.55
Net Profit	13.08	2.3	2.82	2.19	2.33	461.37	468.7
Equity	9.98	9.98	9.98	9.98	9.98	0	0
Basic EPS	13.12	1.92	2.87	2.24	2.33	463.09	583.33
Diluted EPS	13.12	1.92	2.87	2.24	2.33	463.09	583.33
MP	312
PE	5.95
FV	10
VOLUME	73000
PRICE TREND
06.09.18	1 week	2 week	1 month	3 month	6 month	9 month	1 year
Price	284.6	262.85	141.1	111.6	129.9	126.8	71
Gain / Loss percentage	9.65%	18.70	121.12	179.57	140.18	146.06	339.44

OPERATIONAL RISK:

(a)      Company’s  most  significant  exposure relates  to  US  Dollar,  since  the  key  raw  materials, fluorspar and Sulphur, are imported from  China.  High  dependence  on  China  is resulting  in  pressure  on margins

Mitigation:   The   Company   has   expanded vendor  base  of  Chinese  origin.  Also  developed   sources   from   other  countries  to  reduce  dependency  on  Chinese origin.

(b)    Non continuous operations of HF plant due to lower demand increases cost of production.

Mitigation:   To   retain   existing   customers   through competitive pricing. Expand market of  HF  in  Asia  Pacific  markets  and  increase  export  volumes.  Coordinate  with  domestic  players for healthy competition. Focus on PV grade and specialty fluorides.

(c)    Volatility in Sulphur Price/ stiff competition in Sulphuric Acid market/ shifting of Sulphuric Acid  demand  resulting  in  lower  capacity utilization  of  Sulphuric  Acid  Plant  coupled  with  higher  power  cost  lead  to  increase  in  cost  of  production  of  HF Acid,  Aluminium  fluoride and other connected products.

Mitigation:  Optimise  the  production,  based  on  power  requirement.  Continuously  work  on increasing the share of Sulphuric Acid to Non-lABSA market.

(d)     Power  cut/Unstable  power  by  TNEB causes  process  disturbances  and  increases  costs.

Mitigation: Maintaining high levels of captive power   generation   through   waste   heat   recovery from Sulphuric Acid Plants. Keeping alternate sources of power through hfO and DG sets in good operation condition.

EXPORTS:

Company   endeavours   continuously   to  increase   export   revenues   by   expanding   its   customer   base   in   new   countries.   Focus   on   increase in export sale volume of HF to existing customers  and  also  identifying  new  customers.  Company is optimistic about the outlook for exports in the coming years.

DOMESTIC MARKET: Company  is  optimistic  of  improvement  in domestic market also in coming days