The growth in the global demand for textile products in the US and Europe led to a positive demand environment for VSF. Chinese fibre and yarn manufacturers witnessed a sharp uptick in the operating rates (OR) in Jan-22 after a brief dip in Q3FY22. The OR for VSF improved to a 12-month high of 83%, and for yarn, it improved to 55% in Jan-22. The VSF prices averaged higher in Q3FY22 compared to the previous quarter. Though towards the end of December-21, the realisation started to trend downwards due to COVID concerns.
Grasim is continuing with their successful commissioning of expansion projects like the Vilayat brownfield VSF project of 220KTPA commissioned in two phases, 110KTPA in Nov-21 and the balance 110KTPA in Feb-22, Caustic Soda: 117KTPA (BB Puram, Andhra Pradesh phase-1: 26KTPA and Rehla, Jharkhand: 91KTPA) (Dec-21). They are expecting to complete Net Zero Carbon emission across VSF Business by 2040.
The growth in the global demand for textile products in the US and Europe led to a positive demand environment for VSF. Chinese fibre and yarn manufacturers witnessed a sharp uptick in the operating rates (OR) in Jan-22 after a brief dip in Q3FY22. The OR for VSF improved to a 12-month high of 83%, and for yarn, it improved to 55% in Jan-22. The VSF prices averaged higher in Q3FY22 compared to the previous quarter. Though towards the end of December-21, the realisation started to trend downwards due to COVID concerns.
The strong operational performance of VSF has been induced by the strong demand for textile products in India during Q3FY22, despite the curbs imposed by various state governments. The domestic textile value chain has been operating close to its peak capacity, which is led by the demand uptick. The VSF sales volume for Q3FY22 was further boosted by the commissioning of brownfield expansion (300 TPD) at Vilayat. The share of value-added products in the overall sales mix increased to 29%. The VFY business reported strong operational and financial performance on a sequential basis driven by strong demand and improvement in realisation despite cost pressure.
International caustic soda prices maintained an upward trajectory in Q3FY22, for the fourth straight quarter. The domestic caustic soda prices mirrored the global trend in caustic prices, strong domestic demand conditions also supported the prices. The caustic soda capacity utilization stood at 93% in Q3FY22, up 7% sequentially. The Chlor Alkali business is on the path to improving the share of green power in the overall power mix from 3.4%(9MFY22) to 10% (FY23). This will further enhance the sustainability performance and will also lead to cost competitiveness.
The company has received Environmental Clearance for two of its plant sites at Panipat and Ludhiana of the five sites as part of its Pan India footprint for paints manufacturing. This quarter witnessed the commissioning of various ongoing capex projects in both the VSF and Chemical business. The 300TPD line of the VSF brownfield expansion (out of total 600 TPD) at Vilayat commissioned in November 2021 is operating at full capacity, the balance 300TPD has also been successfully commissioned on 12th February 2022. In the Chlor-alkali business, BB Puram (phase-1) plant of 26KTPA was successfully commissioned in Dec-21, and the balance (47KTPA) is expected to be commissioned in Q1FY23. The Rehla plant of 91KTPA and the Chloromethane plant of 55KTPA at Vilayat (Gujarat) was also commissioned in Q3FY22.
The VSF business has taken the target to achieve Net Zero Carbon emissions across all its operations by 2040. The company participated for the first time in CDP (Carbon Disclosure Project) in 2021 and has received a management band score B-. The VSF unit at Kharach has been bestowed with the CII-ITC Sustainability Award 2021 for Excellence in Environment Management. Grasim received the Gold Shield award for “Integrated Reporting” and “Excellence in Financial Reporting” from the Institute of Chartered Accountants of India (ICAI).
UltraTech’s Consolidated Revenue was at ₹12,985 Cr. up 6% YoY. The company reported an EBITDA of ₹2,490 Cr. and sales volume stood at ~23.13 MTPA. The impact of the rise in input costs was felt across the board, with energy costs up 39% YoY, raw material costs up 7% YoY, and logistics costs up 4% YoY, which impacted the EBITDA margins. UltraTech has commissioned 3.2 MTPA of new cement capacity taking its total cement manufacturing capacity in India to 114.55 MTPA. The UltraTech board has approved a CAPEX of ₹965 Cr. for the modernisation and capacity expansion of the White cement plant at Kharia (Rajasthan) from 6.5 LTPA to 12.53 LTPA.
