Ladies and gentlemen, good day and welcome to the Q3 FY 2025 Results Conference Call of Camlin Fine Sciences Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on the touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Dandekar, the Chairman and Managing Director. Thank you, and over to you, sir.
Thank you. Ladies and gentlemen, welcome to this earnings call. I know you have a busy day ahead, so without much pause, we'll get into the actual workings of the call. Our CFO, Santosh Parab, will give you a brief of the highlights, following which he and our MD, Nirmal Momaya, will answer all your questions. Over to you, Santosh.
Thanks, Ashish, and good evening to everybody. You would have seen our investor presentation uploaded on our website and also the results. The current economic situation is slowly improving over the years, but the Chinese impact on pricing and supply still remains. But still, we have done a far better performance in this quarter. Our turnover has increased from INR 422.97 crore to INR 433.49 crore, which is a 2% increase, but in the current circumstances, it's not a bad performance. Our gross margins have also increased from 48%-50%. Operational EBITDA has also increased from 10%-12%, so the business is stabilizing. Of course, we have profits, but it's an improving trend.
We had some other income on foreign exchange gain last quarter, which is not there because the foreign currency has been very volatile, and we had taken some hits on foreign currency in this quarter, so we have lost. But overall, the situation is improving despite the difficult conditions at present. Briefly on the verticals, our vanillin vertical has, with the sale prices increasing, moving to the likely anti-dumping action on the Chinese manufacturer in the U.S., the prices have been improving almost every day, I can say. We have also increased our output from last quarter to this year. We had a realization of around 600 metric tons as compared to around 500 metric tons last year. The average price has also gone up. We are slowly ramping up our production at our Dahej plant of vanillin.
We will be reaching around 70% of capacity utilization by this year end and based on the market scenario and the pricing, we will slowly ramp it up to 100% capacity utilization. Another vertical which has performed very well is blends. We have done extremely good performance in the American continent. Even in India, we are improving, so it has been a 20% growth vertical for now almost two to three years, and it is performing. All other verticals are also performing. As you know, we just completed the rights issue. You know that we had an overwhelming response to that issue. We just last week completed the issue. The monies were received. We have, if you know, in December, we had taken some NCD for easing out the liquidity. That NCD, we have repaid yesterday itself along with interest.
So the debt almost remains at the same level as it was in September. So the things are good. I think we'll keep on improving as the economies over in the world stabilize and the Indian situation also improves. Thank you very much. You can ask the questions now.
Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. The first question comes from the line of Tushar Raghatate from Kamakhya Wealth Management. Please go ahead.
Yeah, good afternoon, sir. Thank you for the opportunity. I just wanted to know the vanillin you have guided 75% utilization for FY 2026. Firstly, do you hold that guidance? And second, sir, in terms of realization, how do you see that the increased margin to adding the company-level margin going forward?
I didn't really understand the question, but I think that you are saying that your capacity utilization of 35% will go to higher % by this quarter. Was that the question?
Sir, in the last call, you guided for 75% utilization of your vanillin plant for FY 2026.
FY 2026, yes.
FY 2026.
Yeah, that's right. That guidance remains.
Got it, sir. Sir, so in terms of improving the realization for FY 2026, I'm asking, do you see the margin to improve now sequentially and why over going forward?
Yeah, there would be some improvement. Very difficult to predict where the prices would ultimately go to, but we are seeing some improvement as compared to last few months. There has been some improvement in pricing.
Got it, sir. And sir, considering the current capacity, what sort of peak revenue potential do we hold?
For FY 2026?
No, yes, I'm not asking for FY 2026, just the current capacity which we have. So the peak revenue potential of that capacity?
The revenue for vanillin is 6,000 tons, so between $60 million-$70 million. That's about INR 600 crore.
Sir, I'm asking for company level, actually.
Company level. Company level, with the current capacities that we have, it's between, depending on pricing, between 2,500 to 2,800.
Got it, sir.
The blend business can be expanded even further without much capacity constraints.
Got it, sir. And sir, historically, you have been doing very well in the blend business. Sir, going forward, how do you see the future of the blend in terms of percentage contribution of your team?
Yes, the blend business will continue to grow. I think we've been growing the business in excess of 15%-20%, and that will continue to grow at that level, at least for the next few years.
Got it, sir. We get back in a bit. Thank you.
Thank you. The next question comes from the line of Satish Kumar from InCred Research . Please go ahead.
Good evening, sir. I just wanted to know what has been our fixed cost in European operations this quarter?
Our costs have been roughly about INR 16 crore.
Sir, as you guided last time around, that from Q1, this cost will not be there from Q1 FY 2026?
From Q1 FY 2026, it will reduce considerably. We have some materials lying there in the tanks, intermediate materials which we have to evacuate. Once that is done, the costs will get rationalized. So yes, it will get rationalized considerably.
Got it. And sir, Mr. CFO was saying that prices are recovering on a day-to-day basis. So what is the current prices of vanillin right now?
Yes, in different markets, it's different kinds of pricing because some markets like the U.S., there is an anti-dumping duty which has been leveraged. In Europe, there's a proposed anti-dumping duty. So the prices are improving in those markets. The other markets, the prices are also slightly improving, but it's market-specific, the pricing.
Yes, I was asking about the U.S.
The U.S. is, of course, not our entire business. It is not in the U.S. It's only a part of our business to the U.S. And the vanillin prices are around $12-$13 range.
Okay. Thank you, sir. Thanks, sir.
Thank you. The next question comes from the line of Shubham Jain from NV Alpha Fund . Please go ahead.
Thank you for taking my question. My first question was on vanillin. What is the total loss that we're still making in the catechol plus vanillin sort of combined entity at a quarter level?
We don't make that calculation.
Okay. And so at what levels of utilization will the vanillin plus catechol sort of break even just for us to understand?
Yeah, I think at about 70% of vanillin utilization, catechol and vanillin lines should break even.
Got it. So by next year, we should see a breakeven over there happening, assuming we get to 75% utilization in FY 2026.
Right. That's right.
Understood. My second question was on the blends business. Just wanted to understand a little more on what are the raw materials that are used in this business? Are they largely captively consumed from the HQ part of our chemistry, or do we take raw materials from other sort of companies as well?
Yeah. So there are several raw materials which we buy also from outside. Our own would probably be about 30% of the purchases would be our own raw materials. 70% would be from third parties.
Got it. And this 70% is what kind of products? Is it the same BHA, BHT kind of antioxidants, or these are?
No, BHA, BHT, and TBHQ is produced by us. The other products which we don't produce, other ones which we buy, there are some antioxidants. There are many, many organic acids. There are more than 30 different items that come under that.
Got it. And what is leading to this growth in the blends business for us? What geographies are sort of helping us build this business? And have we cracked new customers? Is that why we're seeing this 20% kind of growth, and we believe that this can grow at 15%-20% for us?
Yes. So it's basically customer acquisition in all the regions where we're growing all regions at about 15%-20% with new customer acquisitions. So it's quite uniform in the sense all markets are growing at that level.
Got it. My last question was on the interest cost. It's gone up quarter on quarter as well. So what's led to this interest cost increase?
The interest cost. One moment.
I didn't get the question.
Interest cost has gone up from quarter to quarter.
We had borrowed INR 100 crore. That is one thing. Almost all of our long-term borrowings are in foreign currency, dollars. And as you know, the dollar is going up. We have disclosed that in our UFR also that the finance cost includes foreign exchange on the long-term debt. Across almost in all geographies, the dollar has appreciated. The local currencies are depreciated by several percentage points. And that's what is weighing down on our balance sheet. Largely, this is unrealized. Any improvement in the appreciation in rupee or the local currencies, this will come back. As far as average rate of interest is concerned, it has been in the range of nine and a half-10 for the consolidated balance sheet.
Got it. If you could just quantify the impact of the currency translation on the interest cost increase in this quarter?
You can see it in our UFR. There is a note where we have separately shown what is the foreign exchange included in the finance cost.
Done. We'll take a look. Thank you. Thanks so much.
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Ravi Mehta from Deep Financials. Please go ahead.
Yeah, hi. Thanks for this call. My question was on vanillin. So I heard in the opening remark that probably we sold 600 tons of vanillin. And when I look at the top line, so that gives me an average $11 realization that we made in Q3. So I wanted to understand how it has moved from October to December gradually and where is it now?
I don't think the price has moved to $11 in this quarter. The average is lower than that. And the prices have actually started going up since December when the anti-dumping duty was expected. But really speaking, in January, it was levied in the U.S. So we saw the pricing started to improve from there on.
Okay, and even in EU, Europe, also the prices are tracking closer to the U.S. market prices, or is it very?
Not the same as U.S. market because the anti-dumping duty is proposed. It's not yet levied. But the pricing there is, of course, a little higher than what it is in other markets.
Okay. And how much of business when we talk of 70% utilization, what kind of market splits, region splits we are trying to build as a business plan in terms of U.S., Europe, and other markets?
I think a third, 1/3 U.S., 1/3 Europe, and 1/3 rest of the world.
Okay. And with this anti-dumping, are you seeing dumping in other markets like Asian markets and all? Because that usually happens that China would try and divert the material elsewhere.
I think in the other markets, they generally have almost 90% of market share. So there can't be further dumping by them because they already have large market shares.
Okay. Sure.
So we don't see them dumping any further. I mean, the prices are constant in those markets.
Okay. Q4 is basically will have a better pricing compared to the Q3, what we are seeing here is?
Yes. There will be some improvement, yes.
Okay. And just one clarification. I think you probably answered it to an earlier participant that at 70% utilization, it will kind of break even. I think that was meant for the catechol losses, not for vanillin.
Yes, catechol losses. The whole catechol chain will be about.
Okay. But vanillin itself will be profitable maybe at much lower utilization, right?
Yes. Correct. That's right.
Like any ballpark, like 25% or something?
No, vanillin break even, I mean, on a full cost basis, would probably be at about 40% utilization.
Okay. Sure. Okay. Cool. Yeah. Thanks. I'll come back. Thank you.
Thank you. The next question comes from the line of Raman KV from Sequent Investments. Please go ahead.
Hello, sir. Can you hear me?
Yes. Please go ahead.
Sir, I just wanted to know what is the current capacity utilization with respect to catechol and vanillin?
Diphenol plant is working at around 75% of the capacity, and in the last quarter, we were working at around 85%-90%.
Sir, can you come again? Which plant?
Diphenol plant. Hydroquinone.
Okay.
Yeah. And regarding vanillin plant, I said that we'll be gradually going up to 75% by the end of the year.
Okay. Basically, the catechol plant will break even by Q4?
Catechol must be the joint product. So it is breaking even on its own at this moment of time.
Okay, and with respect to catechol itself, what is the capacity utilization only to produce vanillin?
Oh, vanillin plant or catechol plant?
Vanillin plant.
As I said, we are working at around 50%-55%, and we'll be moving to 75% by this year.
Okay. And sir, can you give us the average price of vanillin and how the price has moved across the imposition of this anti-dumping?
I think Nirmal just answered that question.
Anti-dumping is only in the U.S., which is a part of the business. It's not the only business. So that's it.
Can you give the average price of vanillin as of now?
I mean, it's improving. It's about 10% better than it was in the last quarter.
Okay. Also, sir, with respect to the blends segment, the specialty ingredient value-added blends, you said you are expecting 20% growth because of customer acquisition. Apart from that, do you see any growth triggers?
Basically, new customer acquisition and some, of course, growth of business within the existing customer. It's both, a combination of both things.
Okay. Thank you, sir.
Thank you. The next question comes from the line of Jatin Sangwan from Burman Capital. Please go ahead.
Thanks for taking my question. So my first question is around the EBITDA. We have reported an EBITDA of INR 48.8 crore. And if we add back the forex loss of INR 4.4 crore, it becomes INR 53 crore. So of course, it includes the loss from Europe, China, and some maybe other exceptional items. So my question is around what is the EBITDA from the continuing operations, excluding the losses from Europe, China, and exceptional items?
It'll be about INR 70 odd crore.
INR 70 odd crore.
Yes.
Okay. And my second question is around vanillin. So you mentioned that at 70% capacity, we would be break even vanillin and catechol combined. So what kind of EBITDA swing would be there in absolute amount?
I think. You can expect in absolute amount, difficult to say because prices are both on the raw material side as well as selling prices are dynamic, but there can be an improvement of EBITDA margin by a couple of percent.
Okay. And just following up on vanillin part, earlier you used to say that your cost of producing vanillin used to be around $8-$9. So is it the same, or has it also increased?
No. Right now, it has remained the same because raw material prices are generally stable in the last quarter.
Okay. And our next thing around this anti-dumping duty. So the U.S. has determined the preliminary anti-dumping duty of 187% in the mid of January. So what kind of price increase have you seen, and what kind of talks with clients are you having at this point?
The price increase would typically be in the U.S. would be about 20% or so higher than it was in the last quarter. And of course, everybody now wants to look at longer-term contracts because there could be some shortages in the market because, of course, ultimately, we are not only going to be selling in those markets. We need to have a balanced approach to the business. So overall, the vanillin business, we are not focused only U.S.-focused. So overall, the vanillin business should see an improvement of about 10% at least, 10%-15% on pricing.
Okay. Got it. Thank you.
Thank you. The next question comes from the line of Surya Patra from PhillipCapital. Please go ahead.
Yeah. Thanks for the opportunity, sir. The first question is on the volume ramp-up in the vanillin. This is, I believe, the contracting period for the next year. And we are anyway being vocal about the kind of 70% kind of utilization for the full year FY 2026. So have you seen any kind of ready contract that is giving a kind of visibility for next year? And what portion of the business that we can have from the spot market, so far as vanillin is concerned?
So now, in fact, with the prices being a little dynamic with all these different anti-dumping duty actions in different countries, we have not actually signed any long-term or a yearly contract. And it also so happened that some of the companies were also looking for quarterly contracts because this anti-dumping duty was expected. So everything was very uncertain. So which is a good thing for us that we have some contracts, but those kind of run out in this quarter, in Q4. From Q1 of FY 2026, there's hardly any contracted, very small quantities contracted. And we are in conversations now to see because now there is certainty in some markets of the anti-dumping like U.S. You can enter into some contracts in the U.S. But Europe, we are not yet there with the anti-dumping duty. We don't know the quantum that will be there.
The timing will come around June to start contracting.
Okay. So that means the final order, which is due in July, was that the optimal pricing situation also will be seen, and that is when the volume visibility will also be 100%?
Correct. Correct. What is final in Europe is expected in June, the first one. U.S., more or less, preliminary and final, generally, there's not much difference that is expected. But yeah, certainty is only when it is final.
Second question is on the Vitafor acquisition, the progress on the integration front, and how is that going to benefit us in our blends business? So anything on that front, if you can give some sense, what is your experience so far, and what progress in the blends business of Europe that you are now witnessing?
Yes. So with Vitafor, after the acquisition, we have made many applications for registrations in several countries, and a few of them have started now. We've started getting those registrations. So we are rolling out our launches in Mexico, in Colombia, Peru, India. U.S. also will get launched. Brazil will get launched. So from FY 2026, we see that there could be substantial growth in the business at Vitafor. It has opened up a new market in terms of the kind of product profile that they have. It's more a farm product, which, of course, is something which we didn't have in our portfolio. So all in all, I think in FY 2026, we will see some good movement in Vitafor.
So it is already broken even at the bottom line level, or it is still?
No. At bottom line level, it is not break even. But on EBITDA level, it is break even.
Okay. From the loss-making situation prior to the acquisition?
Yes. Correct. So now, at least, we are breakeven on EBITDA, and I think next year, we should get into above breakeven.
Okay and with this, if once the turnaround of this Vitafor that we will see and the integration happening properly, so can we expect an elevated growth for the blends overall guidance, what we have been giving around 25%, or it will be part of that story?
It'll be part of that story.
Okay. Just last one question from my side is that, see, having quashed all these loss-making operations in, let's say, China and Europe, so the remaining operation, what I find is it is an integrated, fully end-to-end integrated shelf-life business, end-to-end integrated vanillin business, and a kind of established global operation on the blends front, where we would be just scratching the surface, where the scope of opportunity is quite significant. So given these three verticals that is there as a growth trigger for us, so what is the way forward that we would be having here for Camlin, sir? Whether we will be focusing more on these three verticals and try to optimize our profitability, or we will think for some incremental business opportunities going forward?
Going forward, I mean, our focus area will remain in the three verticals. Clearly, blends is something which is our focus area. Aroma is also vanillin. There are many types of vanillin, and we want to ultimately get into all the different types of vanillin which are being offered in the market so that we are a complete solution provider in the vanillin business, and we can service our customers with the entire portfolio. So the idea is to focus on other value-added HQ and catechol products other than what we are in today. So we've launched a few new products, and now we're trying to scale those up. So focus will be where we are in these kind of businesses.
Okay. Sir, do you find any challenge flowing from this tariff-related talks, which is not clear as of yet, but still?
No. I mean, that is very difficult to predict. It's there today. Tomorrow, there's no tariff. I don't know. I mean, very difficult.
Okay. And what is the final gross debt level that is now we are having, sir, having added the 100, repaying that, and now having the equity through this route?
Yes. The gross debt now, after repayment of INR 100 crore, is around INR 600 crore.
Okay, so that has been kind of a constant over the last two years?
Yes.
Okay. We just come back to the normal.
Normal. Yeah.
Except for only last year, we had that Vitafor acquisition in which there was some growth. Otherwise, the debt is at the same level.
So, sir.
Okay. Yeah. Thank you.
Thank you. The next question comes from the line of Saurabh from Multi-Act. Please go ahead.
Yeah. This is Rahul Picha from Multi-Act. So continuing on the debt part, so what is the debt repayment plan for FY 2026?
So we generally repay around INR 45 crore-INR 50 crore per annum. So we'll be repaying that. And if you can see, we have arranged for the repayments also some. We have reserved some of the rights issue money for repaying the debt. Obviously, we will not be accelerating the debt, but we have kept them in reserve.
Okay, so by the end of next year, we expect to be around INR 550 crore from INR 600 crore right now?
Yeah.
Okay, and what is the CapEx plan for FY 2026?
The CapEx plan is roughly about INR 30 crore-INR 35 crore.
Okay. So this will largely be maintenance CapEx in the year?
Yes. Yes.
Okay. And then on the Europe plant losses, so this quarter, we had around INR 16 crore of loss, and you mentioned that next year, that loss is going to reduce. So how much reduction do we expect?
I think once the total wind-down happens of the diphenol activity, including evacuating all the materials, we should be able to annually bring it down to an annual cost of between INR 20 crore-INR 25 crore.
Okay. And so far, in the first nine months, how much loss have we had in Europe this year so far?
I think this year, we have had a loss of about.
INR 44 crore.
INR 45 crore in nine months?
PAT was INR 45 crore.
Okay. So from an annualized run rate of around INR 60 crore, next year, it's expected to be around INR 25 crore?
Yes. It was about INR 55 crore a loss. It'll come down to.
Okay. And in China, how much loss are we making right now?
INR 45 crore.
China is not bleeding like Wanglong, so there is a loss. We are getting around INR 3 crore-INR 4 crore on China.
Per quarter.
Per quarter.
Okay. Okay.
Which also we should be able to reduce by in the next year.
Yeah.
Okay. Got it. Thank you. Thank you so much.
Thank you. The next question comes from the line of Nisarg Vakharia from NV Alpha Fund Management. Please go ahead.
Sir, what are the gross margins in your blends business?
Typically, they are in the region of 30%-35%, more towards 35% than 30%.
And EBITDA margins are close to 20%, right?
Depending on geography, once the threshold is reached, they typically end up at about 20%. But till that minimum number is reached, it can be anything up to 20%.
And secondly, sir, how much working capital do you need for a blends business with an approximate annual run rate of INR 900-odd crore?
So there, I think roughly our working capital requirements in the blends is about 100-110 days.
100-110 days of working capital requirement in blends?
Yes.
That is generally inventory or receivables?
Both. Inventories and receivables.
Inventory and receivables.
Yeah.
Okay. And sir, just to clarify, you said that the EBITDA from continuing operations today is INR 70 crore?
Right.
That INR 70 crore run rate will be visible to us from Q4 or Q1 of next year?
No, this is the quarter three right now. The INR 53 crore were INR 17 crore from discontinued businesses. That's 70 crore.
Okay. But the reported is 53. So INR 70 crore EBITDA will be visible from Q4 ?
No, no, no. 53 is the EBITDA, where INR 17 crore is a loss from discontinued business. So if you add that back, it becomes 70 from operating businesses.
Okay.
That's how.
So operating cash flow today is INR 70 crore for this quarter?
No, no, no. From operating businesses, we are saying. The discontinued businesses are where we are losing INR 17 crore.
That's right. So that discontinuing business of INR 17 crore loss will become negligible by which quarter?
By Q2 of FY 2026, it'll become much, much smaller.
Q2 of FY 2026.
Yeah.
And why will it take two more quarters to sort of reduce itself significantly? Why it cannot be reduced overnight? Just for my understanding.
Yeah. Because there are several employees, and those employees have to be maintained right now because we have some intermediate materials in those plants which have to be evacuated as per law. So that should get done in the Q1. By Q1, those materials will get evacuated, and then we can rationalize the cost.
I understand. Okay. Great. Thank you. Sorry, last question, if you may. Sir, any reason why you're not giving the catechol loss separately?
No, it's a combined operation. It's a joint product. So.
We don't sell. If we sell catechol in the open market, there is a loss. If we are producing vanillin, we'll not be selling catechol in the market. So in this quarter, we hardly sold any catechol. So the question and hydroquinone and catechol is a joint. If I stop at that level, hydroquinone chain is making enough profit to justify the carry of catechol.
Yes. Okay. Cool. Thank you so much.
Thank you. A reminder to all participants, please press star and one to ask a question. The next question comes from the line of Tushar Raghatate from Kamakhya Wealth Management. Please go ahead.
Thanks for the follow-up, sir. We just wanted to understand post HQ FY 2026, what sort of incremental margin are you seeing as all the losses will be taken out and also the vanillin will start adding the margin?
Okay. Sorry. No, what kind of growth after FY 2026?
No, I'm asking for H2 FY 2026. What sort of margins are you seeing like YoY, H2, and SASK?
H2, yeah, difficult to predict at this point of time because prices are. I mean, it's not that we've reached any stable stage of to come to a conclusion on what that margin will be. So right now, it's positive. It's looking good. But let's see where it settles down. I mean, it's too early in the day to give you really what that margin will look like.
Okay. Got it. Then, sir, your North America business is doing great. I just wanted to know the incremental growth will come from which country exactly and what sort of growth are you seeing for FY 2026?
We are seeing about 20% growth across all the geographies. So all the geographies will grow at 20% or so.
Got it, sir. That was really helpful. Thank you.
Okay.
Thank you. The next question comes from the line of Jatin Sangwan from Burman Capital. Please go ahead.
Sir, in earlier calls, you have guided that cost of producing vanillin will go down as you ramp up your production. So I just wanted to ask at, let's say, 75% kind of utilization, what will be your cost of producing vanillin and what will the cost at 100% utilization?
At 100% utilization, the cost from where we are today should come down by about 10% or so.
Okay, and what's the cost today? Is it $9 or $8?
It's about between 8.5 and 9.
Okay. So then the cost would be around less than $8?
Yeah. In that region.
So at a price of $11, you will be getting an EBITDA of $3 per case?
Correct.
And then $1 positive swing would come from catechol. Is my understanding right?
Sorry.
From catechol. $1 positive swing from catechol?
Not $1. It would probably be more like yeah, it's actually a $1 will come from catechol. Yeah.
Okay. Thank you.
Thank you. The next question comes from the line of Prashant Kothari from Stock Market Read. Please go ahead.
Yeah. Hello. Am I audible?
Yes.
Yeah. Good evening, everyone. Two small questions. First, you acquired Vitafor Invest NV, right, to strengthen the animal feed market presence. Has the integration progressed? How has the integration progressed and what revenue growth are we expecting from there? Second question, there is a lot of scrutiny on the Mexican imports into the U.S. Has there been any impact on Camlin's Mexico operations?
On the first one, Vitafor, yeah, the integration is complete, and now the focus will be in FY 2026 to grow that business by at least 20%-25%, and thereafter to keep growing it at least 20% a year. On Mexico, the tariff on Mexico, we do supply some material into the U.S. from Mexico. So in the event the tariff is applied, we'll have to look at alternatives to produce it in alternate countries and then supply. But at this point of time, we don't see that a tariff is likely. It's been suspended for a month, but seems like it's being negotiated. So should settle now.
Okay. Thank you.
Thank you. The next question comes from the line of Raman KV from Sequent Investments. Please go ahead.
Hello, sir. Thank you for the follow-up. Sir, we raised INR 224 crore via rights issue. Can you tell where we will use this fund?
We have given the details in our objects to the rights issue, but INR 100 crore we have used for repaying the NCD which we borrowed in the last quarter. We are reserving around INR 68 crore for debt repayment and for the general corporate purpose, INR 56 crore.
Sir, with respect to the additional INR 17 crore lost from discontinued operations, did we sell the European facility or I'm not understanding that particular part? Can you just?
So we have repaired the asset, European factory in the last quarter. That factory was shut down because of economic reasons for the last two years. We may not sell it. We may keep it mothballed. We are evacuating all the material which is lying in the system. And that's why the cash burn is there because by Italian law, if any hazardous chemical or any kind of chemical is in the factory, you have to maintain that factory with security, people, utilities, maintenance, and everything. So we have to do and it's not an easy process to pull out the raw material in the plant. So it's taking time. We have to also get clearance from the local authority because the material is lying for two years. So we have to see what kind of chemical composition is there and then. So that's why it will take time.
We are expecting it to sell it off or take the necessary action by end of FY 2026, Q1 2026, next year.
Okay. Thank you, sir.
Thank you. The next question comes from the line of Parthiv Shah from Tracom Stock Brokers Private Limited . Please go ahead.
Thank you very much, sir, for taking my question. I just wanted to understand the trend for blends business. So in the blends business, there are various types of blends like polymer blends, dairy blends, blended fibers, biofuel blends. Just want to get a sense of which particular segment we are targeting because I'm hearing that the dairy blends will have one of the highest growths because of the health consciousness nature of the customers. So where are we targeting as a company?
So our focus area is, of course, human food. It's one of our main target areas. Then there is feed, animal feed, which goes into whether it's poultry, dairy, or swine, or aqua feed. So it's with all species, including dog, cat, dog food, cat food. So we make ingredients that the blends go into these kind of feed products.
Okay. What I see is that generally, the global trend for the various blend growth is anywhere between 4%-5% on a compounded basis, right up to 20, 30, 32 is the projected market. And for the next few years, we are talking of growth of almost 20%. What brings us this confidence? And what are we doing to improve the price mix and the product mix in our blends business versus a lot of global peers like, say, somebody like Super Blends or Pool One Protein or JW Nutritional, etc.?
So I mean, of course, it's a very technical business. Blends is a business which requires a lot of technical service, technical understanding, and teams which understand the function of all the ingredients that we supply into that market. And the product mix, of course, is always a question of competitiveness versus competition in different geographies, different markets require different products and competitiveness. So essentially, we've been growing this business for the last three, four, or five years at that rate. And we have enough visibility from our people who are in the market that to grow at 20% in the next year is very likely.
Okay. And, sir, if I understand, the rated capacity for our vanillin at Dahej is 6,000 tons per annum, right?
Yes.
What we can do to de-bottleneck that capacity and what is the maximum we can go to?
The maximum we can go to is about 7,000 tons or so from that capacity, which will require de-bottlenecking. But yeah, that's at some point of time, we'll see.
So next year, you're targeting not more than 75% capacity utilization. Only in FY 2027, you're talking of, say, 100%?
Yes.
Okay. And sir, I just want to understand the additional EBITDA per kg in terms of ethyl vanillin or methyl vanillin. And if I'm not wrong, just wanted to recheck that in the past, we did face some sort of contamination issue. All of that is now sorted. And what sort of products you are targeting more downstream in vanillin?
In vanillin, no. We are looking at no downstream products from vanillin. Basically, we are producers of vanillin, ethyl vanillin, that's methyl, ethyl. And we will get into the natural vanillin also over a period of time to complete the basket of products in the vanilla portfolio.
Okay. And, sir, what is the additional benefit you get by selling products like ethyl and methyl vanillin versus normal vanillin?
No, that's the synthetic vanillin is called methyl and ethyl, and the natural vanillin are, of course, very, very much more expensive.
What generally you call vanillin is methyl vanillin. Sir, the last question is regarding the China dumping. Along with the CVD, probably I think sometime in June or July, we are expecting the ADD to come from U.S., right? Over and above that, if I'm not wrong, whatever the tariffs that the new president has put, that will be over and above all these ADD-related duties?
Yes, that's right.
So would it be safe to pencil in if at all China, despite its cost disruption, were to dump again at these rates, it will be not less than $14, $15? Or would it be more?
Yes, we're probably a little more than that.
Okay, so that should eventually help us to increase our share of business in U.S. and Europe.
Yes.
Okay. Thank you very much, sir. All the best.
All right.
Thank you. Ladies and gentlemen, that brings us to the end of the question and answer session. I would now like to hand the conference over to the management for the closing comments.
Thank you. Ladies and gentlemen, thank you for your time and interest. Until the next time that we interact, good evening. Thank you.
Thank you, sir. On behalf of Camlin Fine Sciences Limited, that concludes this conference. You may now disconnect your lines.