Here are some notes from the latest presentation of Asahi Songwon Colors ๐งต
Remember, this is neither a recommendation or any analysis, nor our RA @EkanshMittal_KW has any holding
We make these notes for our understanding and future reference and sharing here
(1/n)
Remember, this is neither a recommendation or any analysis, nor our RA @EkanshMittal_KW has any holding
We make these notes for our understanding and future reference and sharing here
(1/n)
General details:
- one of the leading manufacturers of blue (Phthalocyanine) pigments for ink, plastics, paint, textile and paper industry
- company has also ventured into manufacturing of yellow, red and orange (AZO) pigments
(2/n)
- one of the leading manufacturers of blue (Phthalocyanine) pigments for ink, plastics, paint, textile and paper industry
- company has also ventured into manufacturing of yellow, red and orange (AZO) pigments
(2/n)
- generated 100% revenue from Phthalocyanine Pigments till Q3 FY 21
- Acquired Atlas Life Sciences to enter into API business
- revenue contributions from the ink industry have come down from more than 90% to ~ 55%
- 56% revenue contribution from exports in FY 22
(3/n)
- Acquired Atlas Life Sciences to enter into API business
- revenue contributions from the ink industry have come down from more than 90% to ~ 55%
- 56% revenue contribution from exports in FY 22
(3/n)
Manufacturing capacity:
- 14,400 MTPA blue pigments - CPC blue crude 10,200 TPA, Beta Blue 3,600 TPA and Alpha Blue 600 TPA
- 2,400 MTPA Red and Yellow Pigments (infra in place to expand to 10,000 MTPA)
(4/n)
- 14,400 MTPA blue pigments - CPC blue crude 10,200 TPA, Beta Blue 3,600 TPA and Alpha Blue 600 TPA
- 2,400 MTPA Red and Yellow Pigments (infra in place to expand to 10,000 MTPA)
(4/n)
Reputed customers:
- Clariant - 19 years of collaboration
- DIC - Supply agreement since last 16 years
- SunChemical - Supply agreement since last 16 years
- BASF - Repeat business since last 11 years
- SIEGWERK - Repeat business since last 10 years
(5/n)
- Clariant - 19 years of collaboration
- DIC - Supply agreement since last 16 years
- SunChemical - Supply agreement since last 16 years
- BASF - Repeat business since last 11 years
- SIEGWERK - Repeat business since last 10 years
(5/n)
Phthalocyanine Pigment characteristics:
- switching cost for customers is high
- mature market with established players
- Earlier China contributed 70% share...changed in last 15 yrs with India accounting for 70% share
- Major RMs - Phthalic Anhydrite & Curpuros Chloride
(6/n)
- switching cost for customers is high
- mature market with established players
- Earlier China contributed 70% share...changed in last 15 yrs with India accounting for 70% share
- Major RMs - Phthalic Anhydrite & Curpuros Chloride
(6/n)
Azo Pigments:
- Asahi has entered into JV with Tennants Textiles Colours Limited (TTC) to manufacture red, yellow and orange Azo pigments
- A 51:49 Asahi : TTC JV has been formed
- Capacity - 2,400 MTPA at a cost of 82 crore
- JV can achieve 140 cr sales at optimum levels
(7/n)
- Asahi has entered into JV with Tennants Textiles Colours Limited (TTC) to manufacture red, yellow and orange Azo pigments
- A 51:49 Asahi : TTC JV has been formed
- Capacity - 2,400 MTPA at a cost of 82 crore
- JV can achieve 140 cr sales at optimum levels
(7/n)
- have approvals to expand capacity to 10,000 TPA
- can be ramped up to 4,800 TPA with CAPEX of 40 cr in less than 6 months
- TTC to buyback 20% of qty manufactured from JV
- Margin profile in Azo will be higher than phthalocyanine
(8/n)
- can be ramped up to 4,800 TPA with CAPEX of 40 cr in less than 6 months
- TTC to buyback 20% of qty manufactured from JV
- Margin profile in Azo will be higher than phthalocyanine
(8/n)
- Global organic and specialty pigment market is estimated at $5 billion
- Azo is the largest in volume at 55% and 20% is Phthalocyanine Pigments
- For Azo, there is high demand that is largely met through imports from China
- Global customers Looking to shift from China
(9/n)
- Azo is the largest in volume at 55% and 20% is Phthalocyanine Pigments
- For Azo, there is high demand that is largely met through imports from China
- Global customers Looking to shift from China
(9/n)
Atlas Life Sciences acquisition:
- Atlas is leading maker of Anti-convulsant, Anti-psychotic and Anti-diabetic APIs
- Key products - Pergabalin, R-Compound, Levosulpiride, Amisulpride, Glicazide, Phenylephrine
- FY 22 - Sales - 119.23 cr, EBITDA - 8.64 cr, PAT - 4.34 cr
(10/n)
- Atlas is leading maker of Anti-convulsant, Anti-psychotic and Anti-diabetic APIs
- Key products - Pergabalin, R-Compound, Levosulpiride, Amisulpride, Glicazide, Phenylephrine
- FY 22 - Sales - 119.23 cr, EBITDA - 8.64 cr, PAT - 4.34 cr
(10/n)
- 78% acquisition of Atlas financed through mix of 28 cr of internal accruals and 20 cr of debt
- Asahi will acquire additional stake in Atlas each year for next 2 yrs based on performance metrics
(11/n)
- Asahi will acquire additional stake in Atlas each year for next 2 yrs based on performance metrics
(11/n)
- Asahi will establish new plant on vacant land parcel in Chattral in order to backward integrate existing products
- greenfield project is estimated to cost 55 crore
(12/n)
- greenfield project is estimated to cost 55 crore
(12/n)
Disclosure: No recommendation, no holding of RA @EkanshMittal_KW
All the details are from the presentation of the company and not our analysis
(end)
All the details are from the presentation of the company and not our analysis
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