Supreme Petrochem Ltd, a leading petrochemical company, has announced significant expansions of its production capabilities with the commissioning of a new Acrylonitrile Butadiene Styrene (ABS) plant and additional compounding lines in Maharashtra. These developments mark notable milestones in the company's growth strategy and reinforce its position in the Indian petrochemical industry.

New ABS Plant Details

• Location: Amdoshi, Maharashtra
• Capacity: 70,000 tonnes per annum (TPA)
• Status: Production operations have commenced

Technical Collaboration

Supreme Petrochem has partnered with M/s. Versalis, Italy, for technical support in setting up this state-of-the-art ABS facility. This collaboration underscores the company's commitment to leveraging global expertise for enhancing its manufacturing capabilities.

New ABS Compounding Lines

• Location: Amdoshi facility
• Capacity: 20,000 TPA
• Status: Production has commenced

Strategic Importance

The commissioning of the new ABS plant and compounding lines is a strategic move by Supreme Petrochem to strengthen its market position in the petrochemical sector. ABS, known for its impact resistance and toughness, finds widespread applications in various industries, including automotive, electronics, and consumer goods.

Official Announcements

In an official communication to the stock exchanges, Deoki Nandan Mishra, Company Secretary of Supreme Petrochem Ltd, stated:

"We are pleased to intimate that the Company has commissioned its first Line of ABS project with installed capacity of 70000 TPA facility at its Amdoshi Plant, Nagothane, Maharashtra with the technical support of M/s. Versalis, Italy and the plant has commenced production today."

Additionally, the company announced the commissioning of two new ABS compounding lines, further expanding their manufacturing capabilities.

Conclusion

The successful commissioning and commencement of production at the new ABS plant and compounding lines represent significant steps forward for Supreme Petrochem. These expansions are expected to enhance the company's product portfolio and potentially contribute to its revenue growth. With a total additional capacity of 90,000 TPA (70,000 TPA from the new plant and 20,000 TPA from compounding lines), Supreme Petrochem is well-positioned to meet growing market demands.

Supreme Petrochem Ltd , a leading petrochemical company, reported a 12% year-on-year decline in operating income for the first quarter, primarily due to lower styrene monomer prices and subdued demand in key sectors.

Financial Performance

The company's operating income for Q1 stood at Rs 1,386.00 crores, down from the previous year's corresponding quarter. This decline was largely attributed to the fall in styrene monomer prices, which dropped from $1,150.00 to $1,000.00 per ton during the period.

Operating EBITDA saw a more significant decrease of 29% year-on-year, reaching Rs 115.00 crores. The EBITDA margin contracted to 9.36% for the quarter. Net profit after tax was reported at Rs 81.00 crores.

Operational Highlights

Despite challenging market conditions, Supreme Petrochem managed to increase its sales volume of manufactured products marginally by 0.5% year-on-year, reaching 93,853 MT in Q1.

Rakesh Nayyar, Executive Director and CFO of Supreme Petrochem, explained, "Unseasonal rains and a milder summer led to subdued domestic demand for cooling appliances such as air conditioners and refrigerators. Additionally, styrene monomer prices were lower in Q1 compared to the same quarter in the previous year, which impacted revenue despite a marginal increase in the volume of manufactured products sold."

Strategic Developments

The company reported progress on several strategic fronts:

1. ABS Project: Pre-commissioning activities for the first phase of the ABS (Acrylonitrile Butadiene Styrene) project are ongoing with support from technical collaborators, M/S Versalis. Commercial operations are expected to commence in the current quarter.

2. Xmold Polymers Acquisition: The acquisition of Xmold Polymers was completed during the quarter, with integration of operations and processes currently underway.

3. Financial Position: Supreme Petrochem continues to maintain a debt-free status, with an investable surplus exceeding Rs 700.00 crores as of June.

Export Outlook

The company is targeting to increase its revenue from exports to 13-14%, up from about 9% in the previous fiscal year. This strategic move aims to diversify the company's market presence and mitigate risks associated with domestic market fluctuations.

Future Prospects

Looking ahead, Supreme Petrochem remains optimistic about its growth trajectory. The company expects the ABS project to contribute positively to its financial performance in the coming quarters, albeit with an initial period of stabilization and market acceptance.

Mr. Nayyar commented on the ABS project, stating, "We are confident that we will certainly make some money out of it. Though it will be our first six months of operations and at lower capacity, with new product acceptability issues, we still expect to earn some contribution from that business."

The company also plans to focus on both the ABS expansion and the development of its Haryana plant to cater to the North Indian market.

As Supreme Petrochem navigates through the challenges posed by market dynamics and global economic conditions, its strategic initiatives and strong financial position are expected to support its growth and market presence in the petrochemical industry.