Grasim VSF revenue soars 35%
The caustic soda prices in India moderated during the quarter led by temporary softening in global caustic soda prices. The underlying demand from the user industry (alumina and textile) continues to remain buoyant.
In the first quarter of fiscal 2018-19, the revenue of Grasim Industries from the viscose staple fibre (VSF) business has climbed 35 per cent to Rs 2,480 crore and EBITDA has been recorded at Rs 3,212 crore, up by 33 per cent. The VSF business has reported its highest ever quarterly production and sales volume of 134KT and 132KT respectively. The share of the domestic sales in the overall sales of VSF has risen to 82 per cent in the first quarter in comparison to 69 per cent in the first quarter of fiscal 2017-18. This was primarily driven by expansion of the domestic market, aided by brand Liva initiative of the company.
The debottlenecking of the VSF capacity at multiple plant locations is almost complete and is reflected in the production volumes of fiscal 2018-19. Grasim is committed to achieve global benchmarks in sustainability through close loop production/ European Union Best Available Technologies (EUBAT) technology. The companyâ€™s overseas pulp JVs registered an improvement in operational and financial performance on the back of strong pulp realization and a continued focus on cost optimisation. The recently announced brownfield capacity expansion plan of 219 KTPA at Vilayat is under implementation. Project related work has commenced with the placement of orders for long lead time equipment, Grasim said.
The caustic soda prices in India moderated during the quarter led by temporary softening in global caustic soda prices. The underlying demand from the user industry (alumina and textile) continues to remain buoyant. In fiscal 2019, the VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through brand Liva and enriching the product mix through a larger share of speciality fibre. However, new capacities likely to come on stream in China may impact the global VSF prices in the near term. The chemical business is witnessing a healthy growth with the completion of its recent capacity expansion. Further growth is expected from the new capex plan for caustic soda expansion and new product lines for speciality chemicals.