Deepak Asher, Director & Group Head (Corporate Finance), Gujarat Fluorochemicals

"Our focus over the next few years is going to be on ramping up capacity utilization, improving realizations by churning product mix in favor of higher value added grades, implementing cost reduction schemes and value adding by diversifying into fluoro-speciality chemicals."

Oct 31, 2015 09:10 IST IIFL Yash Ved |

Deepak Asher, Director & Group Head (Corporate Finance), Gujarat Fluorochemicals graduated in Commerce and Law, and thereafter took up Chartered Accountancy and Cost Accountancy as professional qualifications. He is presently a fellow Chartered Accountant and an Associate Cost Accountant. Mr Asher has been a top ranker throughout his education, including being a national merit scholar, and being on the merit list of the Institute of Chartered Accountants of India. He has been working for the Inox Group of Companies, a US $ 3 billion business group, for more than the past twenty five years now. Asher heads the growth strategy and corporate finance functions for the Group. Mr Asher’s functional area of expertise is Corporate Finance and Business Strategy.
 
Gujarat Fluorochemicals Limited (GFL), a subsidiary of Inox Leasing and Finance Limited, was incorporated in 1987.  It has evolved to being the largest producer (by volume) of chloromethanes, refrigerants and Polytetrafluoro-ethylene (PTFE) in India. GFL has two manufacturing facilities in Gujarat, India’s largest refrigerant plant at Ranjitnagar, and amongst the world’s most integrated and technologically advanced PTFE facility at Dahej. It has incorporated two subsidiaries to strengthen its presence in the international markets - Gujarat Fluorochemicals Americas LLC and Gujarat Fluorochemicals GmbH. GFL has also invested in two joint ventures, one each in China and Morocco, to strengthen its supply chain of critical raw materials. The company is listed on both stock exchanges of India – NSE (GUJFLUORO) and BSE (500173). GFL has been accredited AA (stable) rating for long term credit and A1+ rating for short term credit by CRISIL, India’s largest rating agency.
 
Replying to Yash Ved of IIFL, Deepak Asher says "Our focus over the next few years is going to be on ramping up capacity utilization, improving realizations by churning product mix in favor of higher value added grades, implementing cost reduction schemes and value adding by diversifying  into fluoro-speciality chemicals."
 
Brief us about your expansion plans?
We have already incurred a capex of around Rs. 2000 crore to build up the current capacities and the integrated value chain. Our focus over the next few years is going to be on ramping up capacity utilization, improving realizations by churning product mix in favor of higher value added grades, implementing cost reduction schemes and value adding by diversifying  into fluoro-speciality chemicals as well as other fluoro-polymers based on low cost captive availability of a host of fluoro-feedstocks  Since most of the capex on creating capacities for these feedstocks has already been incurred, value addition will only need very marginal capex.
 
Brief us about your manufacturing facilities in Gujarat?
We have two manufacturing facilities in Gujarat – one each at Ranjitngar and Dahej. The Ranjitnagar facility was commissioned in October 1989, and is situated around 57 km from Vadodara. It manufactures a refrigerant known as HCFC22, used as a cooling agent in air-conditioning and refrigeration applications, and as a feedstock in the manufacture of PTFE. Current installed capacity of HCFC22 at this plant is 25,000 tons per annum. This facility has the capability to manufacture and supply special grade HCFC22 with 99.999+ % purity for applications such as the manufacturing of specialty chemicals and fluoro-polymers. This facility also has a 12,500 tons per annum AHF plant. AHF is used in the manufacture of HCFC22. The multi-purpose plants for the fluorospeciality business are also being set up here. 
 
In 2007, we set up a world class manufacturing facility to produce polytetrafluoroethylene (PTFE) resin at Dahej, Gujarat. It produces a variety of Suspension and Emulsion PTFE resins. At this plant, we have installed capacity of 16200 TPA PTFE, covering a broad product portfolio of granular virgin and modified PTFE resins, fine powder virgin and modified PTFE resins, PTFE based aqueous dispersions and PTFE micro powders. This facility is India’s largest, and the world’s fourth largest PTFE facility, accounting for more than 10% of global PTFE manufacturing capacity. At this facility, we are deeply backward integrated into producing HCFC22 (40,000 tons per annum capacity – the largest in India), AHF (20,000 tons per annum capacity), chloromethanes (1,08,500 tons per annum capacity – the largest in India), caustic soda / chlorine (1,34,750 tons per annum capacity) and captive power (120 MW capacity, across all locations). This backward integration adds diversification to our product portfolio and also makes us amongst one of the most cost competitive producers of these products globally. 
 
What are your plans for global market? 
Around 75% of our HCFC22 and PTFE sales are in the export markets. The major markets that we export HCFC22 to include the Middle East, South Asia and Japan. PTFE exports are largely to Europe and USA.
 
You mentioned that most of your capex is already completed. How much would be your nominal capex for the coming years?
There would be some nominal capex in the flourospeciality and other fluoropolymers business, but that will be in the tune of around Rs 100 – 200 crore over the next couple of years.
 
Brief us about your Financials?
The Company has total income of Rs. 5341 crore and has reported a net profit of Rs. 585 crore in FY 14-15 with a net profit margin of 10.95%.
 
What is your current debt? 
Our current consolidated debt stands at Rs. 2565 crore.

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