Plastiblends India Limited, India’s largest producer and exporter of masterbatches for the plastic industry, today announced results for the quarter and year ended March 31, 2008.

Financial Highlights
– Quarter ended March 31, 2008
· Sales increased by 23% to Rs. 43.62 cr.
· Volume growth of 28% to 7241 tonnes
· Exports increased by 24% to Rs. 9.61 cr. and contributed 22% to sales
· Net Profit increased by 100% to Rs. 5.42 cr.

– Year ended March 31, 2008

· Sales increased by 27% to Rs. 157.18 cr.

· Volume growth of 30% to 26786 tonnes. Growth driven by black masterbatches and introduction of new grades of antifibrillation masterbatches with superior performance.

· Exports increased by 35% to Rs. 33.54 cr. and contributed 21% to sales

· Other income includes profit on sale of investments of Rs. 2.82 cr. against Rs. 1.35 cr. Last year

· Net Profit increased by 32% to Rs. 15.92 cr. despite higher interest and depreciation costs due to expansion

· EPS is Rs. 24.50

· Dividend of 70%

Commenting on the performance, Mr. S. V. Kabra, Chairman and Managing Director said, “We are pleased with the results and are planning to increase capacity to 46,000 tonnes in the current year and further to 60,000 tonnes next year.”

Operational Highlights for the Year Ended March 31, 2008

· Market share of 13% in White, Black, Colour and Additive masterbatches

· Market share of 11% in Antifibrillation masterbatches

· Market share of over 50% of India’s exports

· Capacity increased from 29,000 tonnes to 36,000 tonnes

· Participated as an exhibitor for the first time in K-2007, the world’s No. 1 Trade Fair for Plastics held in Germany

Domestic Market

Indian plastic industry is worth about Rs. 55,000 cr. with exports of Rs. 13,000 cr. Plastic has recorded consistent growth over the last decade and also substituted some scarce natural resources. The average growth of plastics is twice the GDP growth in emerging markets. The masterbatch industry, being linked to plastic consumption, has significant growth potential. Historically, growth of masterbatches has been higher than plastic industry.

Masterbatches consist of two major segments. White, Black, Colour and Additive masterbatches is a high value-added segment with a size of around 80,000 tonnes valued at about Rs. 800 cr. This segment is recording healthy growth from various user industries like packaging, plastics products, PE / PP pipes, films, etc.

Antifibrillation masterbatches, used by woven sack industry, is a low value-added segment with a size of around 1,50,000 tonnes valued at about Rs. 400 cr. Demand for Antifibrillation masterbatches is rising at a very fast pace due to growth in woven sack industry coupled with substantially higher mixing percentage.

Organised sector, with a market share of over 50%, is growing faster than the industry due to increasing demand for quality masterbatches, need for customisation and export of value-added plastic products.

Over 85% of masterbatches are consumed by the extrusion sector, a focus area for Kolsite group. Plastiblends has sustained its leadership with presence across all segments on account of its superior quality products, competitive prices and efficient technical services.

Exports

The plastics industry continues to outperform the world GDP growth, benefiting the masterbatch manufacturers. Global masterbatch industry is worth over US $ 6 billion and is witnessing consolidation. There is large growth potential in Asia fuelled by the twin trends of increasing demand for plastics products and the continuing penetration of masterbatches versus competing colouring methods. China is one of the fastest growing markets in the world with CAGR of over 20% for the last 10 years and projected CAGR of over 15% for the medium term.

The company already exports its products to 20 countries and has plans to achieve higher contribution from exports by widening its market reach from Asia to North America and Europe. The Plastics Export Promotion Council, India has awarded the prestigious award for “Top Exporter of Masterbatches” for the 4th time to the company.

Business Outlook

Plastiblends is the largest producer and exporter of masterbacthes from India. Its growth strategy consists of product innovations, competitive cost structure, higher share of domestic market and penetration into export markets. Its manufacturing unit has attained global scale, comparable to any single location plant worldwide.

The company expanded capacity at Daman unit from 29,000 tonnes to 32,000 tonnes during the year. It has recently set up a new unit at Uttarakhand with initial capacity of 4,000 tonnes. This unit would increase its market share in North India due to tax benefits and lower logistics costs.

The company would be expanding its capacity from 36,000 tonnes to 46,000 tonnes in the current year and further to 60,000 tonnes next year. It has acquired the land and construction would commence soon.

The company scores over its peers in financial parameters like profitability, cash flow and strength of balance sheet. Considering its leadership, vast potential of the industry and significant competitive advantage, Plastiblends is confident of its business prospects.

Sourced From: Equicorp

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