Chemicals Cygnus April 2012

Industry Monitor
Chemicals & Petrochemicals
Vol. 1204
April 2012
CONTENTS
INDUSTRY AT A GLANCE ....................................................................................................2 KEY DEVELOPMENTS ..........................................................................................................3 Marketing and Investments .....................................................................................................3 Mergers, Acquisitions, and Partnerships..................................................................................3 Operations ..............................................................................................................................5 INDUSTRY STATISTICS .........................................................................................................6 PRODUCT FOCUS ...................................................................................................................7 Formaldehyde .........................................................................................................................7 Introduction........................................................................................................................7 Industrial Uses ....................................................................................................................7 Health Effects.....................................................................................................................8 Outlook ..............................................................................................................................9 COMPANY SCAN...................................................................................................................10 National Fertilizers Limited...................................................................................................10 Overview ..........................................................................................................................10 Cost Structure Analysis .....................................................................................................12 Stock Market Performance................................................................................................12 Outlook ............................................................................................................................12 UPCOMING EVENTS ...........................................................................................................14
Cygnus Business Consulting & Research Pvt. Ltd., 2012
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Industry Monitor Chemicals & Petrochemicals
April 2012
INDUSTRY AT A GLANCE
MARKETING AND INVESTMENTS BASF Invests $13.5m in Allylix, Renewable Specialty Chemicals Germany ICC seeks removal of customs duty on input materials India SNF India all set to capture Indian specialty chemicals market India MERGERS, ACQUISITIONS, AND PARTNERSHIPS Mitsubishi Chemical Signs Limited Exclusivity Agreement USA FMC Signs Agreements USA Quantum Kapital AG to acquire BASFs offset printing inks business in Maastricht Switzerland Omkar Speciality Chemicals to purchase LASA Laboratory India Clariant Chemicals buys minority stake in Asahi Songwon India OPERATIONS Shell May Build Chemical Plant Near Pittsburgh to Tap Gas The Netherlands: China petrochemical sector to fare better in 2012 Barclays, China Kao Indonesia chemicals to construct a new plant Indonesia: Zuari, Chambal eye UB's Mangalore Chemicals India:
April 2012
KEY DEVELOPMENTS
Marketing and Investments
Europe Germany: BASF Invests $13.5m in Allylix, Renewable Specialty Chemicals BASF Venture Capital GmbH invested $13.5m in Allylix Inc., a U.S.-based renewable specialty chemicals company. The BASF subsidiary led $18.2m financing round, joined by existing investors Tate & Lyle Ventures, Avrio Ventures and Cultivian Ventures. Allylix has a proprietary technology platform to produce a wide variety of renewable specialty chemicals, such as terpenes and their derivatives, for several industries, including fragrance and cosmetics. The technology, based on fermentation, allows for the creation of highly pure, renewable compounds that have previously only been available from natural resources in limited quantities. The investment in Allylix could allow broadening the use of renewable raw materials for sustainable chemical solutions in the future and leverage competency in aroma chemicals, nutrition and cosmetic chemicals. The company demonstrated the ability to produce highquality products at scalable commercial quantities and at a lower price point, which is one of several compelling reasons to invest in Allylix. Asia Pacific India: ICC seeks removal of customs duty on input materials The Indian chemical industry has an output of around US$80 billion and ranks 12th in the world while the size of the global chemical industry is in the region of USD3 trillion. Basic Chemicals and Chemical Products (except products of Petroleum and coal) is the single largest group with 14.002% weight in the overall Index of Industrial production. In the process, the sector contributes significantly towards industrial and economic growth of the nation, contributing approximately 3% to the GDP. The industry primarily consists of basic chemicals and its products, petrochemicals, agrochemicals, specialty chemicals, pharmaceuticals and biotech, paints and varnishes, dyestuff and inks, and alco-chemicals. The Indian Chemical Council (ICC]) represents one of the major sectors of Indian economy i.e. Chemical Industry. The Council has over 370 members representing all segments of Chemical Industry such as Inorganic and Organic Chemicals, Petroleum Refining and The Indian chemical industry has an output of around US$80 billion and ranks 12th in the world while the size of the global chemical industry is in the region of US$3 trillion. India: SNF India all set to capture Indian specialty chemicals market India is looking at market with strong potential for specialty chemicals like polymers with wide range of applications. The CEO of SPCM SA, France, the parent firm of SNF opined that SNF India Private Limited is all set to tap a chunk of the specialty chemicals market like polymers. The plant with capacity of 35,000 tonnes per annum is established at the cost of Rs2000m and is in operation for more than a year. The CEO also stated that SNF is the world's largest manufacturer of water-soluble polymers, which are used in water treatment, mineral extraction, paper manufacture and for boosted oil recovery in the oil sector. The firm had market share of 40% globally. SNF would be taking up the development of monomer and powder lines at the Visakhapatnam unit in phased manner and also new plant. SNF have capacity of 35,000 tonnes more and it would be established at the site by the second half of 2013.
Mergers, Acquisitions, and Partnerships

Americas USA: Mitsubishi Chemical Signs Limited Exclusivity Agreement Genomatica announced that Mitsubishi Chemical Corporation signed an agreement to exclusively negotiate definitive agreements for a joint commercial operation in Asia for the production of BDO using Genomatica's process technology. Mitsubishi made an up-front payment to Genomatica of $3.5m while the companies continue to work toward completing their definitive agreements, some or all of which may be repaid upon certain conditions. The agreement continues until the earlier of June 30, 2012
April 2012
or the date the companies execute a definitive agreement. The agreement builds on a previously announced memorandum of understanding between the companies signed in April 2011 and an equity investment by Mitsubishi into Genomatica in December 2010 and strengthens the partnership between the two organizations. USA: FMC Signs Agreements FMC Corporation entered into exclusive technology license and commercialization agreements with East China University of Science and Technology (ECUST) and Shanghai Shengnong Pesticide Co. Ltd. (SSPC). The three parties would develop and commercialize a new insecticide active ingredient. It was invented at ECUST and licensed by manufacturer SSPC. FMC will hold exclusive global development and commercialization rights outside of China. The agreement also provides for additional new pesticide research collaboration. Combining the research strength of ECUST, the China manufacturing leadership of SSPC, and FMC's deep product development and marketing expertise is an incredibly strong formula for success. The East China University of Science and Technology is pleased to enter into these agreements with FMC and SSPC. Europe Switzerland: Quantum Kapital AG to acquire BASFs offset printing inks business in Maastricht Quantum is a financial investor specialized in the acquisition and the successful development of nonstrategic businesses of large companies. The sale covers all BASFs offset printing inks activities and includes the transfer of all BASF employees in Maastricht dedicated to the business. Quantum plans to continue the IMEX business at the Maastricht site. Legal closing of the transaction will be in the third quarter of 2012. The profitable IMEX business is expected to total sales of about 60m in 2012 and is an important supplier of heat set printing inks worldwide. BASF sold its printing inks and printing plates business in 2004. The IMEX business was part of BASFs acquisition of former Ciba in 2009. At the Maastricht site BASF currently produces offset printing inks and pigment preparations for the plastics industry. Asia Pacific India: Omkar Speciality Chemicals to purchase LASA Laboratory Omkar Speciality Chemicals in India is set to acquire LASA Laboratory, a company engaged in chemical process operations and with common effluent treatment plant. Omkar Speciality manufactures speciality chemicals such as selenium compounds, iodine compounds, molybdenum compounds and pharma intermediates including potassium iodate, bismuth ammonium citrate, bromoform. The company has four units and R&D activities at Badlapur in Thane, Maharashtra, India, and exports its products to Europe, Canada, Asia, South America & Australia, reported the DealCurry. LASA Labs is focused mainly in the segment of Anthelmentic/Veterinary API. India: Clariant Chemicals buys minority stake in Asahi Songwon Mumbai based Clariant Chemicals India acquired 5.87% stake in Gujarat based pigments manufacturer Asahi Songwon Colors for Rs66.5m. Clariant purchased 7,18,600 shares of Rs10/- each, representing 5.86% of the paid up capital of Asahi Songwon at Rs92.50 per share in a block deal aggregating to Rs66.5m. Asahi Songwon is engaged in the manufacturing and exports of phthalocyanine pigments and its derivatives. The company has two manufacturing facilities - Kadi plant manufactures Green pigments, while Vadodara plant is involved in CPC Blue Crude & Beta Blue Pigment. Clariant already holds a minority stake in Asahi through Clariant Pigment Korea Limited. As on Dec 2011, it holds 5.86% stake in the company. According to annual report 2011, the company is planning to expand its manufacturing capacity by adding 5000 MT p.a. to its present capacity of 14000 MT p.a.
April 2012
Operations
Europe The Netherlands: Shell May Build Chemical Plant Near Pittsburgh to Tap Gas Europes largest oil company, selected a site northwest of Pittsburgh for a chemical complex that may manufacture plastic from a glut of natural gas produced in the region. The companys Shell Chemical LP unit has an option to buy the site in Potter and Center Townships near Monaca, Pennsylvania. Shell last year joined competitors including Dow Chemical Co. (DOW) and Chevron Phillips Chemical Co. in proposing an ethane cracker, which makes raw materials for plastic that would take advantage of low gas prices relative to oil. The plant may also make polyethylene, the most widely used plastic, and monoethylene glycol, a raw material for polyester, to meet rising U.S. use. The project depends on adequate supply, continued economic viability and environmental and engineering studies. Asia Pacific China: China petrochemical sector to fare better in 2012 Barclays Barclays Capital opined that the Chinese government's expansionary fiscal policy along with the first signs of stabilizing petrochemical and plastic prices in China will lead to a better performance of the Chinese petrochemical sector in 2012 compared with 2011. A healthier petrochemical sector would propel a stronger performance of petrochemical feedstock naphtha in Asia in 2012, and would also be positive for gasoline. Naphtha plays a very important role, required for blending into finished gasoline. In 2011, a weakening petrochemical sector backed off a significant amount of naphtha, which weakened the gasoline balance by blending into it. With the demand for naphtha underlined by the health of the Asian petrochemical sector, the cost of production of the gasoline chain was now closely tied with petrochemicals. The note added that gasoline supplies were "comfortable" in 2011 due to the modification in the average output mix of those refineries endowed with some flexibility. Indonesia: Kao Indonesia chemicals to construct a new plant Kao Corporation announced that PT. Kao Indonesia Chemicals would construct a new plant at Karawan International Industry City (KIIC), located in the suburbs of Jakarta, Indonesia, and expand its production facilities. This plan aims at meeting increased demand for industrial products in Asia. The new plant site covers about 120,000 square meters, which is double the area of the production site currently being used. Construction will start in February 2012, and operations will be initiated sequentially from January 2013. In this expansion, a new production facility for surfactants, Kao's main chemical product, will be built. This will increase annual surfactant production capacity (total capacity of newlybuilt and transferred facilities) by approximately 50% compared to current capacity. The new plant will produce surfactants used as raw materials for toiletries and chemical products for industrial use. The initial investment is estimated at over 4 billion yen. India: Zuari, Chambal eye UB's Mangalore Chemicals With Vijay Mallya finding it difficult to raise money for his flagship cash-strapped Kingfisher Airlines, the focus is on the smaller businesses in his UB Group empire. According to two independent sources, Mallya is approached by two Indian companies to buy him out of Mangalore Chemicals & Fertilisers (MCF), a 36-year-old company owned by the group. leading agro chemicals players Zuari Industries and Chambal Fertilisers & Chemicals had preliminary dialogue with the group brass, with buyout proposals, and have even submitted initial term sheets. Both Zuari and Chambal are part of the K K Birla Group of Companies but have always been kept separate listed companies. The two also joined hands to successfully buy out the government in Paradeep Phosphates in 2002. Even today, it is an operational JV. K K Birla Group flagship, Zuari Industries own 14.18% of Chambal Fertilisers.
April 2012
INDUSTRY STATISTICS
Products Acetic Acid Acetic Anhydride Acetone Phenol Methanol Formal-dehyde Production of Organic Chemicals in India Production In 000'Metric Tonne (MT) 2005-06 2006-07 2007-08 2008-09 2009-10 305.91 287.85 316.01 203.34 146.09 28.63 30.60 29.32 36.14 43.42 36.79 44.22 47.19 46.83 44.25 58.21 71.27 74.94 75.75 71.59 386.76 396.23 351.73 237.66 330.83 249.39 234.82 242.76 231.84 259.67
2010-11 156.60 43.90 56.20 73.61 367.70 262.60
Source : India Stats. Cygnus Research;
500 400 '000 tonnes 300 200 100 0 2005-06 Acetic Acid Phenol
Production of Organic Chemicals in India
2006-07
2007-08
2008-09
2009-10 Acetone
2010-11
Acetic Anhydride Methanol
Formal-dehyde
Source : India Stats. Cygnus Research;
April 2012
PRODUCT FOCUS
Formaldehyde
Introduction
Formaldehyde is a colourless, strong-smelling gas. It has wide applications in different industries. Its most significant use is in adhesive resin manufacturing in pressed wood products. There are two types of formaldehyde resins: urea formaldehyde and phenol formaldehyde. Products made of urea formaldehyde could release formaldehyde gas; products made of phenol formaldehyde generally emit lower levels of the gas. Formaldehyde is a natural constituent of all living systems, from bacteria and fish to rodents and humans. In fact, it is one of the most abundant organic compounds in the universe. In outer space, measurements of methyl formate a product of alcohol and formaldehyde in the swirling dust clouds of the Milky Way suggest that if the gas is condensed into liquid form, a typical dust cloud would contain a thousand trillion (1 with 27 zeros after it) gallons of formaldehyde. Formaldehyde is an important industrial chemical used to make other chemicals, building materials, and household products. It is used in glues, wood products, preservatives, permanent press fabrics, paper product coatings, and certain insulation materials. Building products made with formaldehyde resins could "off-gas" formaldehyde gas. These products include particle board used as sub-flooring or shelving, fiber board in cabinets and furniture, plywood wall panels, and foamed-in-place urea-formaldehyde insulation. Incomplete combustion, cigarette smoking, and burning wood, kerosene, and natural gas also release formaldehyde. Synthesis Although formaldehyde is a gas at room temperature, it is readily soluble in water. It is most commonly sold as a 47% aqueous solution with trade names such as formalin or formol. In water, formaldehyde converts to the hydrate CH2 (OH) 2. Thus, formalin contains very little H2CO. These solutions usually contain a few percent methanol to limit the extent of polymerization. Industrially, formaldehyde is produced by the catalytic oxidation of methanol. The most commonly used catalysts are silver metal or a mixture of an iron oxide with molybdenum and vanadium. In the more commonly used iron oxide system (Formox process), methanol and oxygen react at 250C to produce formaldehyde. The silver-based catalyst is usually operated at a higher temperature, about 650C. On it, two chemical reactions simultaneously produce formaldehyde. One is the reaction between methanol and oxygen leading to the production of formaldehyde. The second one is dehydrogenation of methanol leading to formaldehyde production. Further, oxidation of the formaldehyde product during its production usually gives formic acid that is found in formaldehyde solution, found in ppm values. On a smaller scale, formalin can be produced using a whole range of other methods including conversion from ethanol instead of the normally-fed methanol feedstock. Such methods are of less commercial importance. Uses: The major uses of formaldehyde are in biology and in industries. In industries, it is used to make other chemicals. The primary uses for formaldehyde are for the production of urea-formaldehyde resins (25% produced), phenol- formaldehyde resins (20%), plastics (15%), and intermediates (22%).
Industrial Uses
Polymer and Chemical Industry: Formaldehyde is used in the production of polymers and other chemicals. When it combined with phenol, urea, or melamine, formaldehyde produces a hard thermoset resin. These resins are commonly used in permanent adhesives, such as those used in plywood or carpeting. It is used as the wet-strength resin added to sanitary paper products such as (listed in increasing concentrations injected into the paper machine headstock chest) facial tissue, table napkins, and roll towels.
April 2012
Photo Film Industry: Formaldehyde is still used in low concentrations for process C-41 (color negative film) stabilizer in the final wash step, as well as in the process E-6 pre-bleach step, to obviate the need for it in the final wash. Industries using Formaldehyde Chemical Industry: Industry/Segment Use/Application Formaldehyde is used to For Fibrous Materials - Monomers make numerous other Impregnation Agents Organics chemicals, used in Laboratory Chemicals Synthetic Organic Leather Tanning Agents personal care products Leather Industry Process Regulators - Paper Coating such as toothpaste. Many Paper Coatings of these are polyfunctional Pesticide Manufacturing Solvents - Herbicide Manufacture alcohols such as Photochemicals Hardeners pentaerythritol, which is Pulp and Paper Industry Wet Strength Agents - Pulp and Paper used to make paints and Rubber Industry Vulcanization agents explosives. Other Source: Cygnus Research formaldehyde derivatives include methylene diphenyl diisocyanate, an important component in polyurethane paints and foams, and hexamine, which is used in phenol-formaldehyde resins and to make the explosive RDX. Textile Industry Formaldehyde resins are used to treat textiles to impart wrinkle-resistance to clothing. About 60-85% of all apparel fabric is finished with formaldehyde-containing resins. As apparel manufacture is the sixth largest industry sector in the United States, this use is the major source of widespread exposure to formaldehyde because of the large number of workers potentially exposed. Pharmaceutical Industry Formaldehyde, along with 18 molar (concentrated) sulphuric acid (the entire solution often called the Marquis reagent) is used as an MDMA (3, 4-methylenedioxy-N-methylamphetamine), "testing kit" by such groups as Dancesafe as well as MDMA consumers. The solution alone cannot verify the presence of MDMA, but reacts with many other chemicals that the MDMA tablet itself may be adulterated with. The reaction itself produces colours, which correlates with such chemicals. Cosmetic Industry & Hospital Formaldehyde destroys bacteria, fungi, molds, and yeast. Its commercial importance as a fungicide is probably its greatest use as a disinfectant. Because of its bactericidal properties, formaldehyde is used in numerous cosmetic preparations. It is used to clean primary tumours on skin.
Health Effects
Formaldehyde is normally present at low levels, usually less than 0.07ppm, in both outdoor and indoor air. When present in the air at levels at or above 0.2 ppm, acute health effects can occur including watery eyes; burning sensations in the eyes, nose and throat; nausea; coughing; chest tightness; wheezing; skin rashes; and other irritating effects. Formaldehyde affects people in various ways. The World Health Organization recommends that exposure should not exceed 0.05 ppm. Colds, flu, and allergies can cause symptoms similar to some of those produced by exposure to formaldehyde. Formaldehyde caused cancer in laboratory animals and may cause cancer in humans; there is no known threshold level below which there is no threat of cancer. The risk depends upon amount and duration of exposure.

Major Players In India, formaldehyde production is highly regionalised and most players are located in western India. A majority of the players are diversified into other streams of business because of the low value addition and smaller size of the industry. Demand is growing by 5-8% and is expected to grow by 8-9% in 2010-11, due to burgeoning construction activities and the furniture industry. Many small and medium companies are located in Kolkata and Mumbai.
April 2012
Major Players in Formaldehyde Production Basic and Synthetic Chemicals Pvt. Ltd., Kolkata Aldehydes India, Faridabad Kothari Group Of Industries, Mumbai Vardhman Industries, Valsad Arora Chemical Works, Ghaziabad G. V. K. Petrochemicals Pvt. Ltd., Hyderabad Pioneer Chemicals Inds. Pvt. Ltd., Mumbai Vandana Chemicals, Chennai Hester Pharmaceuticals Ltd., Kolkata S.P.Chemicals, Baroda, Baroda Crystal Qunone Pvt. Ltd., Ahmedabad
Outlook
With increase in industrial use of chemicals, like methanol, the use of formaldehyde is set to Source: Cygnus Research increase. By the end of 2009-10, the production is expected to grow by 5-7%. Consumption of this chemical will increase drastically in textiles, leather, pharma or clinical, and automobile industries in coming years. Due to its extensive applications in different industries, production is increasing and it is expected to grow in future in line with needs. Research and development activities in biology and chemistry are diagnostically diversified; it will create more demand for formaldehyde in future.
April 2012
COMPANY SCAN
National Fertilizers Limited
Overview
National Fertilizers Limited, Mini Ratna Company, is the second largest producer of Nitrogenous Fertilizers in the country with 16.8% share in domestic production of Urea achieved in the country during 2008-09. The company was incorporated on 23rd August 1974 with two manufacturing Units at Bathinda and Panipat. The company provides comprehensive capsules of various fertilizer promotion activities, which includes agronomical programmes, use of extension media, publicity and farmer development programmes. NFL, a profitable public sector undertaking, operates under the administrative control of Department of Fertilizers in the Ministry of Chemicals & Fertilizers. Business Organization It has five Urea Plants, one each at Nangal and Bathinda (Punjab), one at Panipat (Haryana) and two at Vijaipur (Madhya Pradesh). Industrial products like Sulphur, Nitric Acid, Ammonium Nitrate and Argon are also produced at Nangal, Bathinda and Panipat units. The company operates a bio-fertilizer plant at Vijaipur, where three strains of bio-fertilizers namely Phosphate Solubilising Bacteria (PSB), Rhizobium and Azotobacter are produced. Urea accounts for major portion of the turnover. Products Urea Sulphur (S) Industrial Grade Urea Liquids of Oxygen, Nitrogen, CO2, Argon, Methanol, Nitric Acid, Ammonium Nitrate Carbon Slurry[ C ] Carbon dioxide Gas, Anhydrous Ammonia, Sodium Nitrite Sodium Nitrate
Source : Company Website; Cygnus Research
Recent Strategy The company entered into agreement for supply of gas with M/s Reliance Industry Ltd. for long term supply gas for its plant. The company formed a Joint Venture Company Urvarak Videsh Limited (UVL) with M/s RCF & KRIBHCO to explore investment opportunities abroad. Under the initiative, new state-of-art Steam Methane Reforming based front-end plant is proposed to be installed in the existing ammonia plant, which shall improve energy efficiency and costlier fuel will be substituted with cheaper fuel. The company also developed Neem coated Urea, which on demonstration, showed improved results in terms of increase in yield by 4-5% and environment friendly. Companys Performance at a Glance 2010-11 Net Sales 58207.10 Operating Profit/Loss 3019.70 OPM (%) 5.19 NPM (%) 2.38 Depreciation 889.00 Interest 91.50 PAT 1385.00
Source: BSE India; Cygnus Research
2009-10 51297.40 3646.60 7.11 3.34 937.50 109.60 1715.10
2008-09 51953.80 2929.10 5.64 1.88 964.10 408.90 974.60
Rs in m 2007-08 41406.50 2616.10 6.32 2.62 891.50 166.40 1086.50
10

KEY RATIOS Item Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio OPM (%) NPM (%) ROCE (%) RONW (%)
April 2012
2009-10 0.25 0.00 2.22 7.11 3.34 17.27 10.84 2008-09 0.18 0.00 1.49 5.64 1.88 15.72 6.62 2007-08 0.37 0.00 1.46 6.32 2.62 15.24 7.71
2010-11 0.36 0.36 1.95 5.19 2.38 9.32 8.28
Performance Analysis of National Fertilizers Ltd (Rs in Million) Quarterly Performance Financial Year Performance OND11 OND10 Var(%) 2010-11 2009-10 Var(%) Sales 20508.30 14721.90 39.30 58207.10 51297.40 13.47 Other Income 22.90 54.10 (57.67) 164.40 182.80 (10.07) PBIDT 1261.00 997.60 26.40 3019.70 3646.60 (17.19) Interest 242.10 12.30 1868.29 91.50 109.60 (16.51) PBDT 1018.90 985.30 3.41 2928.20 3537.00 (17.21) Depreciation 212.20 223.20 (4.93) 889.00 937.50 (5.17) PBT 806.70 762.10 5.85 2039.20 2599.50 (21.55) TAX 259.20 253.10 2.41 654.20 884.40 (26.03) PAT 547.50 509.00 7.56 1385.00 1715.10 (19.25)
Sales Performance Revenue Performance During the year 2010-11, the company achieved 60,000 turnover of Rs.58207.10m when compared to the previous year which was at Rs51297.40m, an increase of sales at 13.47%. The profit before tax 55,000 is decreased by 21.55% which was at Rs2599.50m and profit after tax is Rs1385.00m, a 50,000 decrease of 19.25% compared to the previous year, which was at Rs 1715.10m. The decrease is mainly due to improvement in the energy 45,000 efficiency at Panipat unit and reduction in interest expenses. The marginal reduction in production is due to additional production of 40,000 0.39 lakh tonnes at fuel-based Nangal and 2007-08 2008-09 2009-10 2010-11 Bathinda Units in previous year being Source: BSE India; Cygnus Research economically viable considering the prevalent import parity price of urea. The production includes 0.99 lakh tonnes of additional production of urea from Vijaipur unit. During the Quarter OND11, the companys Net sales increased by 39.30%, which was at Rs20508.30m. Other income decreased by 57.67% which was at Rs54.10m. Depreciation decreased to 4.93%, while Interest increased from Rs12.30m to Rs242.10m. The net Profit increased by 7.56% when compared to the last quarter of the same year.
Rs mn
11
April 2012
Cost Structure Analysis

The companys overall cost including Cost Structure as Percentage of Net Sales operating and non-operating cost 2010-11 2009-10 2008-09 2007-08 stood at 58.02% in 2009-10 whereas it Raw materials 58.44 53.09 56.54 56.55 is 67.08% in the year 2008-09 showing Depreciation 1.53 1.83 1.86 2.15 a decrease of 67 basis points due to Employee Cost 6.65 6.81 6.36 7.32 company. The company continues to Other Expenditure 7.41 8.08 8.32 10.19 work as efficiently and productively as Power & fuel 21.45 20.80 23.87 21.35 possible. The company is simplifying Interest 0.16 0.21 0.79 0.40 processes and creating leaner and Tax 1.12 1.72 1.12 1.14 flatter structures, could work more Source: BSE India; Cygnus Research quickly, in less complicated ways. Avoiding unnecessary costs enables to invest more in research and to cope with pricing pressures. Common Size Comparison for 2010-11 (% of sales) Common Size Comparison: National Chambel Deepak National Fertilizers other income, when Other Income 0.28 1.44 2.29 compared with its peers, chambel fertilizers Raw Material 58.44 25.25 43.79 and Deepak Fertilizers, is high for Deepak Staff Expenses 6.65 2.45 6.83 which was at 2.29% when compared to Other Expense 7.41 14.58 11.92 remaining peers. Raw material cost for national Depreciation 1.53 5.72 4.57 is high at 58.44% when compared to its peers. Interest 0.16 2.18 2.81 Interest, and depreciation Tax is low for PBT 3.50 9.42 16.71 national fert when compared to its peers. Tax 1.12 2.47 4.78 PAT 2.38 6.95 11.93
Stock Market Performance

110 100 90 80 70 60 50 Jun '11 Jul '11 Mar '11 May '11 BSE Sensex National
Source: BSE India; Cygnus research
Relative Market Cap
Shareholding Pattern
Public 2.36%
Sept '11
Dec '11
Apr '11
Aug '11
Jan '12
Source: BSE India; Cygnus research
During the 52 week long period under consideration, the Sensex firmed up and ended at 17752.68 points in February 2012, down by 1692.54 points when compared to March 2011. Sensex declined by quarterly results. The companys stock price, which was at Rs104.55 at the end of March 2011, is decreased to 13.82% by February 2012. The 52-week high seen is in the month of April 2011 was at Rs106.70 and a 52-week low was at Rs54.05 in the month of December 2011. Major part i.e., 97.64% of the companys stake is in the hands of promoters and the remaining 2.36% is with public as of December 31, 2011.
Outlook
NFL over the years developed a team of dedicated professionals in the areas of production, maintenance, project management, safety and environment control. These professionals are sought after in the Industry both in India and abroad for their Specialized Services. The company also developed Neem coated Urea,
Nov '11
Feb '12
Oct '11
Promoters 97.64%
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April 2012
which on demonstration showed improved results in terms of increase in yield by 4-5% and environment friendly. Accordingly, the company is manufacturing and selling Neem Coated Urea from its manufacturing plants .The company is further focusing its thrust to widen the marketing operations of Neem coated Urea. The company also took initiative to make available other agro inputs under single window like quality seeds, Insecticides and Bio-pesticides by collaboration with other reputed organizations. R&D trials are under way for testing the efficacy of Bio-pesticides, elemental Sulphur, in collaboration with Agriculture Institutes.
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April 2012
UPCOMING EVENTS
1. Event Date Venue Highlights NPGA South Eastern Convention and International Propane Expo Apr 14-16, 2012 Georgia World Congress Center It will facilitate training initiatives and display new technologies in the respective field. With the changing demand of propane, propane industry is responding in the most innovative way and through this exhibition, exhibitors would unfold many unknown aspects and bring out various innovative strategies which will enhance the sales figures to a large extant. National Propane Gas Association; 1899LST, NW,Suite350, Washington DC, USA; Tel: 1-202-4667200 PaintExpo April 17-20 2012 Messe Karlsruhe Exhibition Centre, Germany It is the one of the information and procurement platform for users, due to the fact that it presents the worlds most comprehensive offerings ranging from pretreatment right on up to final inspection. Jrgen Haumann; Fair GmbH; Max-Eyth-Str. 19; D-72644 Oberboihingen Tel: +49 7022 60255; Fax: +49 7022 60255 77 Email: haussmann@fairfair.de; graber@fairfair.de; Web: www.paintexpo.com Biopolymer World Congress 23 - 24 April 2012 NH Laguna Palace Hotel Viale Ancona, 2, 30172 Mestre-Venice, Italy It brings together the biopolymer industrys key participants to discuss the latest advancements in the Biopolymer & Biobased Chemical industry covering: R&D science, technology innovation and design, business and product development, and commercialisation and policy & regulatory matters. Tel: +18585926951; Fax: + 1 (858) 592.0045 Email: congress@biopolymerworld.com; Web: congress@biopolymerworld.com Midwest Propane Gas Convention & Trade Show Apr 26-28, 2012 Indiana Convention Center Midwest Propane Gas Convention & Trade Show is most popular propane gas trade show of the country. This show will be showing products and services related to propane gas industry. This provides an excellent opportunity to the entire exhibitors participating to show to present their best products and services. Midwest Propane Gas Convention & Trade Show; 135 S. Mitthoeffer Road. Indianapolis, Indiana 46229, Indianapolis, USA; Tel: +(+1)-(800)-3195823 2nd International Conference on Chemistry and Chemical Process 5 - 6 May 2012 Mines Wellness Hotel; Kuala Lumpur, Malaysia. The aim is to provide a forum for laying the foundations of a new principled approach to Chemistry and Chemical Process. To this end, the meeting aims to attract participants with different backgrounds, to foster cross-pollination between different research fields, and to expose and discuss innovative theories, frameworks, methodologies, tools, and applications TO The Editor; APCBEES; Unit B on 15th Floor, EU YAN SANG Tower, Nos.11/15, Chatham Road South, Kowloon, Hong Kong. E-mail: icccp@cbees.org; Web : www.icccp.org; www.cbees.org
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Contact Details 9. Event Date Venue Highlights
Contact Details 10. Event Date Venue Highlights Contact Details
Chemspec USA May 08-09, 2012 Pennsylvania Convention Center Chemspec USA goes from strength to strength as the only dedicated event targeted at and delivering high quality custom, fine and speciality chemicals professionals. Chemspec continues to grow, welcoming more visitors and exhibitors from Europe, Asia, USA, North Africa and the Middle East, ensuring exhibitors receive the widest possible exposure. World Media, Queensway House, 2, Queensway, Redhill, United Kingdom Tel: +(44)-(1737)-768611/768111; Fax: +(44)-(1737)-855474/761941 Achema 2012 18 - 22 Jun 2012 Messe FrankfurtFrankfurt, HesseGermany It is a renowned event on chemical engineering, environmental protection and biotechnology. The event will be attended by large number of manufacturers, importers, suppliers etc. from all over the world. Messe Frankfurt Exhibition Gmb HLudwig-Erhard-Anlage, 1, Frankfurt, Germany; Tel: +49 69 757 5000; Fax: +49 69 757 5643 Dye+Chem 2012 Bangladesh 11 - 14 Jul 2012 Bangabandhu International Conference Centre, Dhaka City, Bangladesh It is one of the biggest meeting place in Bangladesh for Buyers and Suppliers of Dyes & Chemicals. It will also provide an interactive platform for Exhibitors to generate business through displays / direct interaction & will enhance the synergy effect and attract top level professionals from the Industry. Conference and Exhibition Management services Limited; House 19, CEMS House, Unit A3, Road 1, Banani Block F, Dhaka 1213, Bangladesh; Tel: +880 2 881 8111; Fax: +880 2 988 8816 India Chem 2012 4 - 6 Oct 2012 Bombay Exhibition Centre, Mumbai, Maharashtra; India The trade fair promises to offer an infinite number of opportunities to the participants. It will be dream come true for the industrialists who were looking for a one stop solution shop for all their business needs. The trade fair will act like a catalyst in accelerating the growth of the pharmaceutical and petrochemical sector. Federation of Indian Chambers of Commerce and Industry33/B, Krisnamai Building, Pochakanwala Road, Worli, Mumbai - 400030, Maharashtra, India Tel: +91 22 2496 8000, +91 22 2496 6633; Fax : +91 22 2496 6631 SpeChem China 2012 19 - 21 Nov 2012 Shanghai Everbright Convention and Exbhition Center, Shanghai, China The professional international trade promotion organization in China Chemical Industry and Zhejiang Netsun Co., Ltd., SpeChem China is the leading exhibition in China Fine & Specialty. Zhejiang Netsun Co.,LtdYisheng Building No.187, Moganshan Road Hangzhou, Zhejiang, China - 310 012; Tel: +86 571 8822 842, Fax : +86 571 8822 8166
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Industry Monitor

Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Mergers, Acquisitions, and Partnerships

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

2010-11 156.60 43.90 56.20 73.61 367.70 262.60

Source : India Stats. Cygnus Research;

Production of Organic Chemicals in India

Acetic Anhydride Methanol

Source : India Stats. Cygnus Research;

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

2009-10 51297.40 3646.60 7.11 3.34 937.50 109.60 1715.10

2008-09 51953.80 2929.10 5.64 1.88 964.10 408.90 974.60

Rs in m 2007-08 41406.50 2616.10 6.32 2.62 891.50 166.40 1086.50

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

2010-11 0.36 0.36 1.95 5.19 2.38 9.32 8.28

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cost Structure Analysis

Stock Market Performance

Source: BSE India; Cygnus research

Relative Market Cap

Source: BSE India; Cygnus research

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Contact Details Event Date Venue Highlights Contact Details

Event Date Venue Highlights

Contact Details Event Date Venue Highlights

Contact Details Event Date Venue Highlights

Cygnus Business Consulting & Research Pvt. Ltd., 2012

Industry Monitor Chemicals & Petrochemicals

Contact Details 9. Event Date Venue Highlights

Contact Details 10. Event Date Venue Highlights Contact Details

Cygnus Business Consulting & Research Pvt. Ltd., 2012

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