Cochin Minerals & Rutile Ltd Management Discussions

Cochin Minerals and Rutile Limited is a 100 percent Export Oriented unit in the Mineral Processing sector with manufacturing, marketing and research capabilities. The Companys products and their applications are:

a) Main Product

The main product is Synthetic Rutile, used as raw material for Titanium pigment and sponge/metal industry. The annual licensed and installed capacity is 50,000 MT.

b) By-Products

The following are the by-products.

i) Ferric Chloride is an effective coagulant for drinking water purification in Desalination plants and for Industrial waste water/sewage treatment. It is also used as an etching agent and in pickling plants.

ii) Ferrous Chloride is an effective coagulant for waste water from Paper & Pulp and textile processing industries. It is also used in Chromium industries to treat waste mud.

iii) Iron Hydroxide (Cemox) is used in Cement, Steel and Ceramic industries as a substitute for iron ore.

iv) Recovered Ti0₂ is used as a cost-effective substitute for Ti0₂ in the Paint industry.

v) CMRL BF Protector is used as hearth-protecting material in the Blast furnaces.

vi) CMRL Rutoweld is a flux in the Welding Electrode industry.

Raw Materials

The primary raw materials of your company are llmenite and Hydrochloric Acid. The rationale for this project was the indigenous availability of both these items. Since its estab- lisment, the company has never engaged in mining operations and consistently relied on purchasing llmenite predominantly from abroad. While Hydrochloric Acid is indigenously available, llmenites availability from domestic sources has significantly declined. Hence the company has relied on imported sources of llmenite for over a decade to produce Synthetic Rutile. Your Company has made all-out efforts to procure a higher quantity of primary raw material, llmenite, from various foreign sources and maintain the quality of our product through process adaptation. The efforts to procure more imported llmenite will be pursued in the future.

Operational Performance

The operational performance highlights for the year 2023-24 are given below:

	2023-24	2022-23
Gross Revenue	30328.90	44778.45
Profit before tax	3904.36	7336.82

The companys gross income for the financial year ended 31^st March 2024 decreased to Rs. 30328.90 lakhs against Rs. 44778.45 lakhs in the previous financial year, thereby registering a decrease of 32.27%.The profit before tax decreased to Rs. 3904.36 lakhs against Rs. 7336.82 lakhs in the last financial year. The downward trend was due to the decrease in volume and price of its main product, Synthetic Rutile

Outlook

During 2023-24 the Syntheic Rutile market experienced subdued growth. We anticipate further improvement in demand. Despite the challenges in the raw material supply chain and geopolitical tensions, the sales outlook for Synthetic Rutile is optimistic due to advancements in the Titanium industry. However, the market is currently experiencing destocking and intense competition from competitors. In case of raw materials, we are aggressively diversifying our international supply sources to mitigate potential disruptions in the supply chain and fluctuations in raw material prices, particularly llmenite. Furthermore, we are actively exploring opportunities to expand the production of our by-products by researching new applications and introducing innovative products to the market, positioning us to excel in this competitive market situation.

Risks, Concerns and Strength

Our companys operations are subject to certain risk factors, primarily related to the unpredictable availability and pricing of ilmenite and hydrochloric acid, our critical raw materials. As we do not engage in mining, we rely on external sources for ilmenite, whcih poses a challenge. The domestic supply of ilmenite remains uncertain and limited, necessitating the import of a higher quanity of ilmenite. Despite these challenges, we are striving to maintain optimal production levels. Our Directors actively address the ilmenite shortage by exploring international sources to secure a more stable and sufficient supply. This proactive approach aims to mitigate the risks associated with ilmenite procurement and ensure the continuity of our operations.

The market for Synthetic Rutile is currently volatile. The prices for Titanium Dioxide, for which Syntheic Rutile is used as competitive feedstock, has been affected by Chinas economic instability and the European recession. Whereas, the Titanium Metal industry, which uses Syntheic Rutile, is showing a positive trend.

The major strength of your company is that its products follow the highest International Standards and are well accepted by reputed international buyers. Your company has been granted ISO 9001:2015 by the prestigious agency Bureau Veritas, accredited by UKAS London and NABOB India. Your company has also been awarded ISO 45001:2018 for safety by the prestigious agency Bureau Veritas, certified by UKAS London and NABCB India. The Company also got certification from N S F International, an organization designated as a Collaborating Center by the World Health Organization (WHO) for our products Ferric Chloride and Ferrous Chloride with hydrated Titania catalyst and these products conform to NSF/ ANSI standard 60 for drinking water treatment & safety

A Skilled and dedicated work force is another strength of our Company.

Health, Safety and Environment

The company gives high priority to issues concerning health, safety and environment.

Health - The Company aims to provide all employees with comprehensive health services covering protective, preventive and curative health care. Apart from being covered by Employee State Insurance scheme (ESI), the employees are also entitled to medical reimbursements under the employees medical beneficiary scheme of the company.

Safety - The Company gives the safety of employees the utmost importance. The protection of persons overrides all other considerations. This vision drives the company continuously to look for ways to break new barriers in safety management for the benefit of all.

There has not been any significant accident since its inception. Safety awareness programmes are regularly conducted for the employees.

Environment - The Company aims to maintain a clean and pollution-free environment. Environment impact assessment and qualitative risk analysis are conducted for all new/major expansion or diversification projects and all necessary safeguard measures are incorporated in to the project. The effluent treatment plants, air emission abatement units, waste treatment/disposal facilities etc are maintained as per standards. The company complies with all pollution control and environment protection regulations. The company also undertakes various ecological protection programmes such as tree planting, water conservation measures, water purification and energy-saving initiatives etc.

The Company had also bagged Excellence Award for 13 years from the Government of Kerala for implementing Pollution Control measures. The companys by-product, Ferric Chloride, is now widely and successfully used worldwide in water purification and effluent treatment. Another by-product, cemox helps reduce ecological problems by helping to minimize clay mining and as a supplement to the Iron Ore supply.

Internal Control Systems and adequacy

Your Company maintains formal internal control systems and procedures, which are continuously and strictly enforced. These have been designed to provide reasonable assurance about reliable financial information, compliance with applicable statutes, safeguarding assets and ensuring adherence to Companys corporate policies. These systems and procedures, which are routinely tested and certified by your Companys statutory and internal auditors and reviewed by the audit committee, are found to be adequate and effective.

Human Resources

Your Company values human resources as the most significant asset and maintains harmonious industrial relations. The Company provides adequate employee training and undertakes various employee welfare measures.