Atul Ltd 2013-14

Atul Ltd | Annual Report 2013-14 Polymers Products Epoxy Resins and Hardners, Reactive diluents, Sulphones, Others Polymers Business mainly comprises Epoxy Resins and Hardeners and formulations thereof, other components such as air release agents, reactive diluents, rheological modifiers, wetting agents, etc and Sulphones. These products are used by Automobile, Construction, Defence, Electrical and Electronics, Footwear, Handicraft, Marine, Paint and Coatings, Paper and Wind Energy industries. The Business comprises about 64 products and 275 formulations. During 2013-14, sales increased by 35% from ` 468 cr to ` 633 cr. Sales in India increased by 33% from ` 312 cr to ` 415 cr. Brand sales which is currently only in India increased by 18% from ` 72 cr from to ` 85 cr . Sales outside of India increased by 40% from ` 156 cr to ` 218 cr and formed 34% of the total. Increase on account of volume was 24%. Sales from new products were ` 12 cr. The Company completed 4 projects and undertook 5 projects for implementation. Though already incorporated, Atul Elkay Polymers Ltd, a JV company, is still assessing the demand potential for stone care chemicals in India. World market for Epoxy Resins and Hardeners is estimated at US$ 6.2 bn and is growing at about 2% and Indian market is estimated at US$ 225 mn and is growing at about 5%. There are about 7 major companies which dominate the world marketplace. The two key raw materials, namely Bisphenol-A and Epichlorohydrin, are imported into India. World market for Sulphones is estimated at US$ 300 mn and is growing at about 4%. The user industries, Construction, Defence, Electrical and Electronics and Paint and Coatings, are growing well, particularly in India. The Company will participate in this growth by i) widening its market reach, ii) increasing its manufacturing and working capital efficiencies, iii) generating and adding new capacities of Epoxy Resins and Hardeners and iv) introducing new products and formulations. Cheaper imports of Epoxy Resins and Hardeners will keep the contribution margins under pressure. Since the two main raw materials are imported, fluctuations in foreign exchange may impact margins.