Q2 23/24

Nov 8, 2023

Quarterly report

Ladies and gentlemen, good day, and welcome to Alkyl Amines Chemicals Limited Q2 and H1 FY24 conference call hosted by Ambit Capital. As a reminder, all participant lines will be in listen only mode, and there will be an option for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jaiveer Shekhawat from Ambit Capital. Thank you, and over to you, sir. Thank you, Nirav. Good afternoon, everyone. On behalf of Ambit Capital, I welcome you all to Alkyl Amines Q2 FY24 and H1 FY24 earnings conference call. From the management side, we have with us Mr. Kirat Patel, Executive Director; Mr. Kanchan Shinde, Chief Financial Officer; Mr. Udipt Agarwal, Chief Commercial Officer; Mrs. Chintamani Thatte, General Manager, Legal and Company Secretary. Without further ado, I would request Kirit sir to start with his opening remarks. Post which, we can open the floor for question and answer. Thank you, and over to you, sir. Thank you. Welcome everybody to the half-yearly investor call for Alkyl Amines, and thank you for the interest. Let me just take a few minutes to give you an overall of the half year that has just concluded in 30th September, and then we will take the questions. As you can see this half year, especially the second quarter, has been a little difficult for us in terms of margins. This is largely due to some amount of domestic competition and a large amount of competition from across the border from China in two or three specific products. However, we have some silver lining on the cloud where we have volumes which have gone up by over 15% across various products. Our market share in the most products has, if not remains very increased. The domestic market seems to be doing all right. Yes, there is some pain faced in the agrochemical sector and to some extent pharma. Of course, as you all know that Europe and America are going through a little more difficult time than earlier. So is China. Against this background, our results, which though disappointing and are to be taken with a little bit of concern that, okay, we have done all right. Let me then, I think with this overall background, open the lines for specific questions on any aspect of the company. Can you open the lines? Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The first question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Yeah, good afternoon. Sir, I have two, three questions. The first is specifically on ethylamine. If we see four, five years back, ethanol cost used to be around INR 28 to INR 30, and now if we see they have been consistently moving up and have been hovering around those 50, 55 levels. Just wanted to understand, over these years with this increase in the raw material cost, whether we have been successful in passing on those raw material cost increases to the customers or industry dynamics have changed in a way that the industry is loaded with higher capacities and probably demand is not able to catch up to the levels of capacity additions which we have seen over last one or two years. Okay. There are two aspects to this question, Nirav. One is about the price of alcohol. You are right that it has moved from around INR 30 to around INR 55 over the last two and a half, three years. We predict that this price is likely to remain for us at least going forward for the next year or so around this level or maybe slightly higher. Yeah. Obviously, this has put a little pressure on our margins because we have not been able to pass on all of these cost hikes into the market. In terms of the structure of the competition, well, as you know, we have two players domestically and the rest are from the Chinese or the Europeans active in the market. Over the last year or so, over the last six months, we have not seen much activity for imports because our competitor had increased his capacity and has been able to push out the imports to some extent. However, we have managed to retain our market share in this product, albeit with some sacrifice in margins. Going forward, given that now the capacities are more or less balancing out between the domestic players, and we have extra capacity coming on because of the new plant, which we have just commissioned in October, the ethylamines plant, which has just been commissioned, which we have added capacity, and will give us some headroom in terms of growth in the future. We expect to continue to progress in ethylamines steadily. It is fortunate that most of this product goes into the pharma industry, and pharma is a very steady growth industry. Even if you take a slightly longer term, one or two years, they are not that gung ho, but more or less, they keep growing. We are very confident that the ethylamines market is going to improve over a period of time. Got it. Sir, just to add here, if you can just walk us through in terms of the domestic capacity as well as the domestic demand currently. What I could make up from your remarks is that probably with the industry demand and supply getting balancing out, probably at some point of time, again, we could be back at those per kg margins, which we would have been able to clock before 2 and a half, 3 years. This is not a structural problem in the industry where the new normal is the margins in between those which we have achieved before 2 and a half, 3 years and what we are currently getting on. If you can just help us understand that. Yeah. I think, looking at the scenario going forward, it can only improve because there is no new capacity coming on and the market is growing. As you know, slowly the market will grow. We have already invested, and we do not need to spend any more money for capacity increases. The benefit will always flow to us. Yes, the margins, whether they will come back to those 2 and a half year ago margins over the next 6 months or 1 year, I am unable to predict, but certainly it will come back at some point in time. Got it. In terms of the industry capacities and demand, if you can just help us. The demand has been growing. I think in the region of about 25,000 to 30,000 is the domestic demand. Both our competitors and us are both exporting to some extent. Okay. The domestic demand keeps growing at about 5%-7% every year. Between the two of us, I think we have about 70% market share, and they would probably have about 25%, and 5% is imports. Something in that region. Okay. Our capacity with this new plant is close to now 30,000, 35,000 tons and probably competitor would also be at around 15,000, 20,000 tons. Is it the right numbers with which we are working on or am I missing something in between, sir? Well, I think you're right that our target, the plant which we have set up is 100 tons per day, as we have announced earlier, which would come to 30,000, 35,000 per annum. However, in the initial phases, we don't intend to run it at full 100 tons per day. We intend to run it at a slightly lower capacity, optimally, and do a swing campaign to keep up with the market. Yes, the capacity of our competitor is nameplate, I think about 15,000. But I think its practical capacity may be about 10,000. We have these homologues, mono, di, tri, and they always have an issue. So our estimate is that it could be in the region of about 10,000 to 12,000. Got it. My second question is on the cost part. If we see last two years, we have been continuously seeing increase in the power cost. Last year we were at INR 220 crores, year before that we were at INR 180 crores. With one of our major product, acetonitrile, we have seen the prices falling, which we also mentioned in our last call also that prices have been lower and most of the players have not been able to optimally make profits at this sort of realization. Just wanted to understand from you what is the situation currently on the power side? What initiatives we are taking care to reduce our power cost in absolute amount as well as on a per kg basis? Apart from this, are there any cost initiatives which we are currently undergoing, any specific areas in terms of either process innovation or in terms of reducing our variable cost, which could help to some extent negate the per kg margins which we have been suffering on the product side? Okay. This question on the power cost, when you give those numbers, it included what we call power, water, and fuel. Yeah. Because they are all clubbed together. Power forms about 20% of that amount. The major part of that is fuel, which is coal. Yeah. The coal is the main component which goes up and down. Fortunately, in the last 6 months or so, it has remained reasonably steady. It has come down from the peaks of whatever it was, 15,000, 16,000 a ton, down to about 11,000 a ton. To that extent, we have benefited a bit. In terms of power, we have, in both Dahej and Kurkumbh, just commissioned turbines which run on extracted steam, and that would save us some money. Plus, we have solar power being put into the plant from both in Dahej, wheeled into the plant, both in Dahej and in Kurkumbh. Kurkumbh, we have expanded our solar capacities offsite, of course, and in Dahej, we are just about commissioning a solar facility which should get commissioned in the next 15 days or so. On both those accounts, we hope our power costs will drop as we go down in the next 3-6 months. Coal, of course, it's a question mark. It tends to track crude oil, and predicting where coal will be tomorrow is a bit difficult. But it has remained steady for some time, so I think we are better off than Of course, it's not the old days of INR 5,000 and INR 6,000 a ton, but whatever. It's the new normal. It's probably INR 10,000 to INR 11,000 a ton. Correct. Sir, any other cost initiatives which we are currently- Yes. The new boiler, which we have just commissioned in September for running the entire plant, is technologically better than the old boiler. We expect to see some marginal improvement in efficiencies there, so the utilization of coal to steam ratios may be better. Correct. Sir, just a last clarification on the other expenditure, where we have seen a sequential jump by close to INR 5.5 crores. So INR 84 crores to INR 89.5 crores. Was there any one-off element in this, or it was something cost increases which we have witnessed this quarter and because of which the sequential cost increases have been there in the P&L? Sorry, which costs are you talking about? Sir, in the result document which we published, the other expenditure has gone up from INR 84 crores in Q1 to INR 89.5 crores. There's nothing significant. Just CSR expenses have been more in Q2 compared to Q1. Nothing significant other than that. Okay. So it has nothing to do with the one-time plant startup cost, which you have incurred because the Ethyl Amines plant has been commissioned and some of the startup costs which would have been incurred, and it has been debited in this quarter. No. Because we just started at the end of September, so there was hardly one or two days cost of startup. And that has been capitalized as a thousand costs. Okay. Thank you so much, sir. Festival wishes to the entire team of Alkyl Amines, and I will join back in the queue. Thank you. Happy Diwali to you too, sir. Thank you. Participants, you may press star and one to ask a question. Next question is from Nana Rajiv Rupani, individual investor. Please go ahead. Yeah. Good afternoon, sir. I had a question on ACN, acetonitrile. First question I would like to know is, have we applied for anti-dumping duty? Number one. Number two, I believe there was dumping by Chinese companies of ACN. What are the current prices of ACN? Okay. Sorry, go ahead, sir. Okay. The question about the anti-dumping duty, we have not yet applied, but we are in the process of putting the papers together to apply for anti-dumping. As you know, anti-dumping process first goes to Ministry of Commerce, then to Ministry of Finance, and the whole process is about six months. We are just on the verge of applying for anti-dumping, and it may take some time. The current prices of acetonitrile, the CIF is about $1.4 a kg or so, in that region. Yes, it is fairly low compared to fairly historical low where ACN is concerned. Okay. Last time you had guided us that the capacity, you have a 30,000 ton plant. The capacity utilization will be 60%-65%. For this current year, can we expect lower levels or similar levels of capacity utilization? Well, the first half has been in that region, 60%-65%. Second half, we hope to see that. I think the Chinese have some sense, so we can maintain this 60%-65% capacity utilization. But you never know, if these prices, they become more aggressive and these kind of prices persist, we could have some impact. But hopefully, I think some sense will dawn and we try and maintain this 60%-65% capacity utilization if we can. Okay. My next question was on Ethyl Amines. Sir, in the con call now, you have said that you have added about 30,000 to 35,000 tons capacity and our competitor has, as far as I know, 22,500 tons. You have said the domestic demand is 30,000 tons. So, how do you expect to utilize our new capacity, and do you think new capacity? Could you guide us? Yeah. I think both of us, it applies to both of us. When we add new capacity, when he's added the 15,000 tons, the older capacity has been mothballed or used for something else. Similarly, for us, our original 15,000, 16,000 ton capacity will be, and it has in fact, as we speak, the plant has been brought down, and only the new plant, which is 30,000 tons. Well, in the first phase, not that much, 24,000 tons will be commissioned. So we are not adding 30,000. We are adding 15,000 in our case capacity in two phases. In their case also, they've gone from 6,000 to what we estimate is about 10,000-12,000. So it's not a dramatic change, yes, but there is an overhang of capacity compared to the domestic market. Even if you add the 10%-15% exports that both of us do, yes, there is a capacity available now in ethylamines. We were a little tight until the new plant got commissioned in terms of capacity, and we had to bring in Patalganga plant also online to support Kurkumbh. Now going forward, don't see any reason we will need to use the Patalganga plant for ethylamines. Okay. My next question is, in last phone call, you had talked about new products. One is DEK, which you have already commissioned, and two derivatives were mentioned and specialty products. Sir, could you let us know the names of the two derivatives and the specialty products which we are going to introduce? Yeah. As you know, as a principle, we do not talk about future products until they are already commercialized. Even for example, DEK, we started talking about them only after February, after they had launched it in the market. The product DEK is now commercialized. It is having some difficulties with imports coming in and the market being a little tight. But we are fairly confident that that will meet its target sales and capacities as we go along. The other two products are to be launched a little later. One of them, of course, will have to wait until the old ethyl plant comes down and is repurposed to this thing. So it may be another six months before we launch another new product. The rest of the products. They're all going to come next year. Okay. My last question is this PLI scheme for API industry. When does this benefit our company? After how long? Difficult to say because we are suppliers to the people who make the APIs, and depending on how they react to taking the APIs, we will benefit. At the moment, a PLI takes a period of time before it materializes. So it is a kind of a five-year horizon before its impact really is felt. Because they make it, then they will apply for PLI, then they will get it after a little while. So the whole cycle is a longish one. But it's a good trend. I would say that it is a positive trend for us. Okay. I'll join back in the queue. Thank you. Thank you. Next follow-up question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Yeah. Thanks for the opportunity again. Sir, you mentioned about the ethylamines market, and you mentioned that the pharma is one of the areas where the demand was slightly lesser and because of which those additional capacities were putting pressure on the realizations. Apart from this, were there any other sectors or industries which were putting the similar amount of pressure on the realization part and then that tends to now getting improved, because of which we are confident that the demand supply situation is getting more balanced at this point of time? Nirav, the pharma industry comprises a large segment of the ethylamine market. The others are rubber chemicals and agro. Yes, the agro has been having some difficulties in the last 3 to 6 months. The rubber chemicals also has gone through a somewhat difficult period. But both those segments of customers are talking about they are seeing light at the end of the tunnel. So it looks like maybe pharma has been, as we said, the least talking because their last year has got over and they are growing. I think the other two segments also will probably turn around now. Got it. I am a little positive about ethylamines. Got it. And sir, on the methylamines part, if you can talk similar, like before 3-4 months, we have seen ammonia prices making a low of around $350-$400, and they are now again inching up closer to $550-$600 FOB Saudi. So what's the situation there like in terms of the industry scenario where also we have been able to pass on the raw material cost increases to customers. How is methylamines versus ethylamines at this point of time, both in terms of industry as well as where we are placed in terms of not only methylamines, but the derivatives of methylamines also. Okay. So the ethylamine is very different from the methylamines in terms of what the market has been, because there is not much overcapacity there. The RCF, us and Balaji have had these capacities in place for some time. Balaji, I am told, is expanding the capacity, but it's a little down the road. So at the moment we have all been able to pass on these increases of raw materials onto the customer and the market has been balanced. So they have maintained their margins in the whole methyl chain. A couple of our derivatives have done well in methyl and on the whole methyl has not been the big worry for us at all. In fact, it has done well, the methyl chain. And we still have some headroom in capacity in methyl but, as you know, we have a plant in Patalganga also available in case required. Of course. So, sir, here I think we are at 45,000 tons of capacity. And let's say if a derivative starts doing well, let's say DMA HCl or DMAC or other products, we would try to use those capacities at Patalganga plant and could further be diverted towards these derivatives. Or we additionally need to expand the derivative capacity also to utilize the Patalganga plant. Well, the derivatives that we make out of DMA and MMA, they have enough capacity. Okay. No, sir, I was talking about DMA HCl. Further down the line, we may have to debottleneck either of both of the major derivatives we make. But for the next year, we do not see any additional capacity requirements. Because the problem may be more that because of the mono, di, tri. Di is always a short supply and mono is always the excess supply. That balancing is where the whole trick comes. Correct. All of us, whether it is RCF, Balaji or Alkyl, always struggle with the availability of DMA. Correct. DMA is doing well, and because of which the methyl chain is doing well. That is a safe assumption to make? Yeah, I would say more or less there is a balance there, so there is no great competition. Fortunately, that is a product which we do not have Chinese competition or Because of the unavailability of imports coming to India, probably. Yeah, the freight element. In between about two years ago, the Middle East had tried to compete, but they also, I think, have now desisted from trying it, because it is gaseous and when you make solution out of it, you are transporting water. Yeah. Once you put water, the freight cost goes up. Yeah, correct. It is not a very high-value product as you know, so it does not work out economically. Got it. Sir, just last question from my side is on the volume growth of 15%, which you have mentioned. So that is for H1 FY 2024 and not for the quarter, right? Yeah, it is for H1. Okay. From which of the product segments out of methyl, ethyl, and acetonitrile we have achieved this sort of 15% volume growth, if you can break it down in the volume. It is largely secular. It is across products. It may be 10% in one, 20% in the other, but every product has grown a bit. One or two smaller ones have not grown. But yes, we have an issue with, as we have mentioned in the last con call about MIPA going out of anti-dumping, but that is a very small product overall. So that has had a problem, but all the others have grown. Correct. Sir, just last bit because if we remember last quarter or the last con call, what we were trying to aspire is that, let us say if we do close to 25%-30% of the volumes, we could surpass our earlier PBT targets of close to INR 400 crores, which we have achieved in 2021. If we see 2021, 2022, 2023, we were close to INR 300 crores. This first half we have achieved INR 100 crores. Now if you can just help us understand, when can we surpass the FY 2022, 2021 numbers, 2023 and 2022 numbers in terms of the PBTs what we have achieved? Or let us say, what sort of volume growth needs to be done in current environment so as to surpass this sort of PBT? Yeah, I think the volume growth is not In fact, our volume growth this year is pretty good. If you see 15%, it is not a bad volume growth at all. One of the best we have had for many years. Yeah. The margins is where the problem is. Predicting margins, as I've always said- Yeah, it's a difficult game. it's a foolish game. It's a very, very difficult thing. Correct. I may tell you that, "Oh, it'll take me three years." For all I know, the next year we may cross it, if the margins widen. So we could surpass INR 300 crores PBT next year. Is it a safe assumption? It's your call. I would love to have it. We would like to plan it that way. Yeah. But plans are what you planning while life goes on on a different track. Yeah, correct. So just to conclude, methylamines is doing well, but the problem in terms of the margin contraction is predominantly coming from the acetonitrile part as well as the ethylamines part. Yes. I think, and the other smaller products are helping us stay afloat, methylamines and the other derivatives. Yes, ethyl and acetonitrile are the main pain points. Ethyl is sorting itself out. Acetonitrile, we have still to work on the anti-dumping and the competition from abroad. Correct. Sir, at $1.4 a kg, are we making profits at the contribution level or the realizations need to be improved from here so as to make money at the contribution level? Nirav, I am not going to comment on the profitability of individual products. Okay. But since we are selling, you can guess that we are still water above our heads. Our heads are still above water. Got it. Thank you so much, sir, for answering the questions in detail, and all the best. Yeah. Thank you. Next question is from Jaiveer Shekhawat from Ambit Capital. Please go ahead. Sure. Thanks for taking my question. Sir, good afternoon. We are having a lot of challenges that we have seen on revenue and margin front, not only this quarter, but over the last 2 years. These challenges somehow do not seem to be subsiding. Given your multiple years of experience and the fact that competitive intensity is only increasing, do you see these challenges continuing over the next 1-2 years as well? What does it take for those to subside? Okay. You are comparing a period which we had record profits of INR 400 crores, where we had margins which were very wide, to a set of numbers which are a little low. I would say that somewhere in between is the norm. Not the great times which we had 2 and a half years ago during this COVID period, and certainly not as low as we have today. The competitive scenario in terms of domestic, I think, is settling down and there is no great concern there. Where the Chinese are concerned, yes, it is not just us, but it is probably a fear that all manufacturers in India are now struggling with. Most chemical companies have faced some sort of the other Chinese competition here and there. It is not helping that Europe is not doing well, they cannot absorb the overflow from the Chinese. The Americans have put trade barriers onto the Chinese. For them, the next large market is India. Unless we put our barriers up, we are going to suffer for a little while, and these take time. I am sure the government is well aware of what the industry is facing, and they will wake up and try and help. Sir, it does appear that the profitability or even the to a large extent are being determined by the industry forces, and there is a little possibly that is in control of the management to sort of drive that. One, would you agree with that? Secondly, given that we also commissioned the ethylamine capacity, especially at a time when we have been facing a lot of pressures on realization. Could we have been more agile in terms of shifting other products wherein possibly outputs is better and sort of investing our money there? Yes. As somebody said, hindsight is always 20/20. We could have delayed the ethyl plant for another year or two, given the scenario just now. But it is very difficult to predict. I do not think in the longer term it does make so much of a difference. Maybe three, four years down the line, if you ask me the same question, it will look like the ethyl plant was a great investment. These plants are, by the way, fairly specific to products, so it is not easy to reprovision, realign them for newer products. They are not like the batch plants which say the drug manufacturing people have. The API people. We have continuous dedicated equipment for these plants. So we have to go through that, these difficult periods. But it also implies that this industry is difficult to penetrate, so it also creates a barrier for new entrants. Competition scenario hasn't changed much. The Chinese are always there. No new player has come in. In fact, it has got consolidated, the amines business. So it isn't as if the competition has increased. It is just the market forces are balancing. You cannot have a fantastic year like we had two and a half years ago continuously. Even then, I think if you will recollect, Yogita had always said that, "Be careful. These are unusual margins" in those days. It is difficult to predict whether they will be continued. But yes, today we have unusually low margins, so it is a compensatory effect. Right. Just to finally get the sense in terms of when do you see these challenges sort of stop and what exactly would it take for those challenges to stop? Because there are people who are increasing their capacity, especially Chinese specialties. Why do you think those should go away over, say, the next 1 or 2 years? I don't know if anybody else is putting up amines capacity in this country, barring our competitor who has announced an ethylamine plant. I think he may also be not in a great hurry to do it given the circumstances just now. Other than that, I don't think competition is. Your other question about what can the management do. The management actually focuses on improving its efficiencies and its costs in these times. In fact, these times are good for a company because what happens is that you tighten your belts, you understand what your strengths and weaknesses are, and you come out fighting out of this. It's happened to us every decade or so. 1 year or 2 years, we go through like this, and we come out much stronger. That is something, over the last few decades, it's happening in cycles. I don't think there is going to be a structural change in the market. The Chinese have to absorb their excess capacity at some point or close it down and learn to live within their territories. They can't dominate the world as they feel they can. Sure. Thanks a lot, and wish you the best. Right. Thank you. Happy Diwali to you. Thank you. The next question is from the line of Nilesh from HDFC Securities. Please go ahead. Yeah. Hi, Kirit sir. Good afternoon. Hi, Nilesh. How are you? Good sir. What about you, sir? I am fine. Tell me. Yeah. Sir, particularly on the CapEx. How much CapEx have we incurred in first half, and what are our plans in FY 2024 and 2025? Yeah. In first half, we incurred around INR 85 crores. Okay. Most of it was on derivatives plant, which we have commissioned. Okay? Most of the expenses are now incurred on that, barring few modifications. In next half, we will incur around INR 50 crores. Major in that will be solar plant, which we will commission in few days, okay, and few other small projects. Around INR 140 crores to INR 150 crores. For FY 2025, what are our plans? Well, FY 2025 plans are not yet formed, but I would give a good guess. It is again going to be about INR 150 crores or so. Sir, now we are done with the ethylamine capacity. What different product are you planning to launch apart from this couple of products you talked about? The capacity particularly, the incremental capacity where you will be spending close to, as you said, about INR 150 crore in FY 2025. This INR 150 crores or whatever CapEx we are going ahead, the portion which is for growth, there is always some normal CapEx, which is for efficiencies and all for existing businesses. The portion which is for growth will be not in the amines current business, but will be in the new product business. New products, which as I said earlier, we will discuss after we launch those products. They are still at various stages of R&D, engineering, procurement, and in one case, erection of equipment. You mean we are moving away from the amines to that? No, it is not that we are moving. We were always adding newer and newer products. Okay. But our core business has always remained amines and amines grows. Yes, as a percentage of the total, if you see historically, we were a totally amine company, then we became amines plus derivative company, then we became amines plus derivative plus specialty company, and now it is, say, about 25% specialty, 25% derivatives, and 50% amines. Yes, the proportions will change, but the amines will still remain our core business for some time to come. Okay. Thanks, Kirit sir, and wish you all a very happy Diwali, sir. Thank you, and same to you. Thank you. Participants, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. Next question is from the line of Niten Gandhi from Inopus Advisors. Please go ahead. Yeah. Thanks for taking my question. What is your expected timeframe by which this Chinese excess production will be able to absorb all the surpluses there in the market? It's difficult to say, but I am sure it will take at least six months before we can get some protection, and maybe a little longer than that for the Chinese to actually find optimum capacities and pricing. They are going through, as you can read in the papers, they are going through a tough time themselves. A lot of over capacities, wrong investments, and they are trying to find markets wherever they can. So it is going to take some time for them. But in the meantime, we are having to survive through our own efficiencies and through whatever little government protection we can get to ensure that we do not suffer permanent damage. All right. As you can see, basically, this is, of course, acetonitrile that we are talking about, but our domestic competition is all kind of backed out of the market because they feel this is too low for them. Right. And at some point, it will all come back once the margins come back to normal. So maybe FY 2025 should be starting with a better positive rates. That is the way we can think, right? Yes. I would say that yes, we are hopeful that FY 2025 will be a better year than FY 2024. Thank you, and all the best. Thank you. Sorry, just one second. Yes. What is the current difference between the landed cost and our selling price for where we are targeting anti-dumping? Not different? Normally the anti-dumping, today, we would be targeting about 15% higher than where we are, 15%-20% anti-dumping duty we would like to get. At the moment, the past records, looking at the six months ago, it would not come to that much, but now it is close to 15%-20%. Thank you. All the best. Thank you and all the best. Thank you. Thank you. Next question is from the line of Rajiv, Individual Investor. Please go ahead. Yes, sir. I had a follow-up question on ACN. Do pharma companies prefer ACN through acetic acid route or the other way? I don't think it's preferred either way if you have the right purity, because in the acetonitrile, there are many grades. In Alkyl Amines, we have managed to make all the various purities which are required by various people. Different customers have different specifications. Earlier, India used to only, before we came into the picture, India used to make only the grade which the agrochemicals people used to use. But since we've started manufacturing and improving our qualities and adding more grade, we have been able to service the whole range of pharma and electronics industries. Okay. One more question. Do we have REACH registration for exporting methylamines? Methylamines? Yes. No. Methylamines we do not export to Europe. It is the same logic where imports to India are difficult, so methylamines exports are also difficult, except that in countries where they do not have a methylamine plant. There are, and we do export methylamines to Southeast Asia and to Latin America, Central and Latin America, where they do not have methylamines plants. So there you can compete, but selling to Middle East or to Europe or to America or China or Japan does not make any sense. That was it. My last question is on the raw material side. Could you guide us, what are the current prices of ammonia, acetic acid, and methanol? Going forward, will they stabilize or we can expect lower prices or higher prices? I will just hand this question over to Udipt, our Chief Commercial Officer. Good afternoon. My name is Udipt Agrawal. To the raw material prices, what is back to the Chinese capacity? Mr. Kirat Patel earlier alluded to that, the Chinese capacities which are there in the marketplace. Plus, at the same time, let us not forget that we are also getting into the winter season. So what happens to the energy prices there? Because that is also related to the raw material costs. Yeah. I think earlier in the discussion, during this call, there was some discussion about ammonia prices, how they are going to move, and what are the current price levels. We have some kind of information into that. I think there was also some discussion on ethanol prices. Yeah. What we have in the system is that these are commodity products, and they behave like commodities. They move in cycles. Yeah. While acetic acid, which was very low during the last financial year, the second half of last financial year, things have moved on from there. Yeah. It has increased significantly, and now it again seems to be showing some downturn. There are different factors. If all the major producers strike, if they shut down at the same time, then suddenly there is a supply-demand issue internationally, which has an impact on our raw material prices. Rajiv, do you have any follow-up question? No. Thank you. Next follow-up question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Sir, in terms of the sales mix for this first half, if you can break it down between the aliphatic amines, derivatives, as well as the specialty chemicals. Participants, please stay connected on the line for the management call. We will return them back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management. You can begin. Hello. Hello. Yeah. Sir, just wanted to get a breakup in terms of the H1 sales for aliphatic amines, derivatives, and specialty chemicals. What is the mix in this first half? As I had mentioned earlier, it is about 50% amines, 25% derivatives. The mix hasn't changed dramatically, it's about the same. Got it. Sir, in terms of our current capacities like methyl, we are at currently 40,000-45,000 tons. Ethyl, we are at 50 plus some swing capacities which we are having. Acetonitrile, we are at currently 28,000-30,000 tons. Apart from those specialty products, which are the smaller products, where probably the margin pressures are not there. What is the capacity of those smaller products in total? I'm not talking about the individual products. What are the capacities of the smaller products where probably the margin pressures are not there? One. Secondly, when we intend to put up or launch newer products, one we have already launched, some more would be launched based on our R&D and the commercial success of the product. What could be the end capacities of these newer products which we are intending to set up over these 2-3 years? The capacities are very fungible. You are already talking about the various capacities of the amines. Yeah. The methyl, ethyl, and we have some higher amines capacity. Overall, I do not know if we add it all up, it may be about 2 lakh tons per annum. All the 14 plants that we have. Okay. Currently it is 2 lakh tons. They are actually not at full capacity, so how this is- Okay. Total currently is 2 lakh tons, including the derivatives as well as the upstream methyl, ethyl combined together. Yes. I mean, my best guess would be close to 2 lakh tons. Got it. Sir, the newer products which we intend to put up over the next 2, 3 years. Would that be in the blocks of those 5,000, 7,000 tons, single product or the capacities would be smaller and that would get a higher realization products which we intend to put up over the next 2, 3 years? No, they would be in that 5,000 to 10,000 tons kind of range. Not smaller than that because to absorb the overheads and everything, we need a certain amount of volume now. Got it. They will not be very small products. They will be in the region of 5,000 tons. Correct. Sir, just a last bit on this. The products which we are targeting in the subsequent years in terms of the products which we intend to launch, are those products imported in India or this would be predominantly for the export markets which we are targeting? Any understanding if you can share? It's a mix of both. There are a couple of products which are imported into the country, and we are looking at domestic market, and there are some which we are looking very optimistically at the global market also because we may be among the top two or three producers because these are all very specialized products, so there are not too many producers of that. For that, we need a global market. Correct. The competition intensity here would be lesser as compared to the existing line of products and probably the contribution margins once those volumes are ramped up, would be far superior than our existing product slate. That's the hope. That's the logic and the strategy. But, of course, reality sometimes goes differently. But I think that is right. That's the way we would like to go, and that's how we have planned these plants. Correct. More volume, very few players abroad, and hopefully we will get better margins. Correct. Sir, once we put up a plant and start selling those volumes, how quickly we can fill up those capacities for all the products put together? If you can share that, let's say currently we are at a run rate of INR 300 crores-INR 400 crores on a quarterly basis, which sums up to close to INR 1,500 crores-INR 1,600 crores. So over a period of time, let's say over the next three, four years, what portion of our sales or what absolute amount of sales these newer products could contribute to overall sales mix of Alkyl Amines? Once they are launched, I would say that looking at the products they are, because they are a slightly higher value product, in terms of sales in the next 5 years after they are launched, it would be probably next year or the year after. They would comprise at least 15%-20% of our overall sales. But at the same time, you must accept that the Existing will also grow. will. Yes, correct. There is a possibility that there will be, I mean, today I will add it up, it will look like 20, but by the time 5 years down the line when we get there, they would be only 10% of the turnover. That is why, sir, I asked about the absolute amount of sales which we could fetch from these newer products, which probably- That I cannot give you the exact numbers. These products would be predominantly towards the agrochemical markets, or this would be a newer industry usage which we are targeting for the products which we are going to launch? It is both agro, pharma and some other uses also. Thank you so much, sir, and wish you all the best. Okay. Thank you, and happy Diwali to you, Nirav. Thank you, sir. Thank you. Next follow-up question is from the line of Nizam Gandhi from Inoch Quest Advisors. Please go ahead. Yeah. Thanks for taking question. I have two questions. One is, what is expected overall power cost saving for the full year, FY 2025, if you can share. Sorry, power cost? Yeah. Post-implementation of 60. Power cost. Is that what your question is? Savings on power cost, post-implementation of 60. Power cost. Because of what I was talking about the solar and the turbines and the new boiler, is it? Right. Okay. We haven't totaled it up, but I would have to come back to you on that. But it's a good question. I think we need to work that out and see what the combined energy saving, what is our impact on today's standard prices. Assuming that the prices remain stable, how much would we save? Right. Of course, prices never remain stable, but it is a good question. But my guess would be, and do not hold me to it would be at least INR 10 crores-INR 20 crores. Yeah, because when you are putting INR 60 crore, I thought at least 10% yield extra to be. Yeah. Because I think it will be at least INR 10 crores-INR 20 crores given standard prices, base prices. Maybe I will catch up offline subsequently. Yeah, if you can. Otherwise, we work this out. It is a good question. Yeah. The second thing, in the best of the times, what was the utilization, and H1, what were the utilizations? Of the capacity utilizations? Yeah. Overall. All put together. All put together, I would say today we would be at about 50%-55% utilization, given some plants are working at 80%-90%, which in our kind of situation means you need to look at a new plant. There are some which are working at 20%-30%. Right. Overall, we would be at about 55% capacity utilization, 50%-55%. And- As I said earlier to Nirav, our capacities are about 200,000 tons, and I think this year we would be in the region of about 100,000-110,000 tons. What were they when in the best of the times when things were very executed, when you were not- Oh, no. It goes up and down because sometimes it becomes very tight, and then we have to add capacity, you know. Yeah. But at different periods of time, it is very different. But somewhere around 80%? That plant-wide, sometimes it reaches. Like methylamines, before we commissioned the new methylamines plant, it had reached 100% for two years almost. Almost 90%, 95%. Every day we lost, we were losing market. Got it. Thank you. Thank you very much for enlightening. I will reverse back. Let me know whom to coordinate. Yeah, just call me. Kirat here. I think you can. Thank you. Thank you very much. Okay. Thank you. As there are no further questions, I will now hand the conference over to the management for closing comments. Okay. Thank you, everybody, for the patience and the listening. I would look forward to meeting you again after six months, hopefully with better numbers and better view of the future. All of you, please have a happy Diwali and a Happy New Year. Thank you. Thank you very much. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.