Chemfab Alkalis Ltd

On course to excel

We have also been continuously working on productive usage and recycling of our Non-Hazardous Solid sludge. I am Happy to share that we have become the First Company in India to successfully convert our Sludge to Bricks and we have patented the same. The Bricks produced by us through this process is now gaining market acceptance and we are slowly scaling up the operations with a long term objective of achieving and sustaining complete recycle.

As we look back on the past year, FY 2023-24 has certainly been a period of both challenges and promising prospects for Chemfab Alkalis. While our chlor-alkali division encountered some challenging market conditions stemming from the decline in commodity prices, we are happy to report good progress and growth in our PVC-O segment. While macroeconomic challenges impacted the global landscape, businesses worldwide faced a multitude of challenges in the past year. The impact of prolonged geopolitical tensions in the Middle East and Red Sea, accelerating climate emergency, supply chain disruptions, escalating fuel costs have affected the operating environment. Nevertheless, the Indian economy demonstrated remarkable resilience in the face of challenges driven by prudent monetary policies by the Government of India, healthy consumer demand and a robust macroeconomic framework. Similarly, at Chemfab Alkalis Limited (CCAL) we maintain a positive outlook for the company's path ahead.

The cyclical downturn in commodity prices has had a trickle-down effect, impacting our profits in the chlor-alkali business. However, we remain hopeful about the opportunities ahead, and have taken proactive measures to mitigate the impact and position the company for continued growth. Our diverse product portfolio in the Chlor-Alkali segment caters to a wide customer base and we are committed to providing our customers with the highest quality products. While our chemical business encountered pressures from global factors affecting profits we maintained resilience through strategic initiatives, including product mix and supply chain optimization, particularly strategic sourcing for critical raw materials like salt to reduce operating costs and enhance operational excellence. Our Aluminum Chloride project setup under our 100% Wholly Owned Subsidiary Chemfab Alkalis Karaikal Limited, has been commissioned in February 2024. Our product has received good acceptance from our potential customers. We expect to gradually scale to full capacity of this plant during coming Financial Year. However due to the sharp drop in Global Caustic Soda prices, we have deferred our 250 TPD Caustic Soda project in Karaikal for now. We will keep evaluating the same and move forward at an appropriate time.

We hold a strong presence in the PVCO pipes segment. We have successfully penetrated the market replacing traditional metal and ductile iron pipes with our superior products. The market outlook for PVCO pipes looks quite robust with more State Government Boards accepting and commencing usage of PVCO pipes, which is very encouraging. One of our key strategies going ahead involves significant capacity expansions in our PVCO pipe segment. We will be doubling from our present capacity of two lines to four lines in FY 2024-25 which will be functional from Q2 of FY 24-25. Among these two lines addition in FY 24-25, one of the lines is for manufacturing higher diameter pipes. This will enhance our product range offering to the market from 110 mm upto 630 mm from current range of 110mm to 400 mm.

We further intend to add three more lines during FY 25-26, increasing our capacity to seven lines by 2025-26 to meet the anticipated demand from government initiatives like Jal Jeevan Mission.

Sustainability is a core focus for us at CCAL. We are actively transitioning and working on sourcing more renewable energy to further enhance our renewable energy sourcing portfolio which aligns with our dedication to responsible business practices. This is also expected to add value t our bottom line by bringing down our power sourcing cost.

We have also been continuously working on productive usage and recycling of our Non-Hazardous Solid sludge. I am Happy to share that we have become the First Company in India to successfully convert our Sludge to Bricks and we have patented the same. The Bricks produced by us through this process is now gaining market acceptance and we are slowly scaling up the operations with a long term objective of achieving and sustaining complete recycle. We are also committed to being a Great place to work to CCALmates, fostering employee satisfaction and skill development. I am Happy to share that your company has again been Certified as a " Great Place to Work". Going forward as well, our commitment to organic growth and sustainability are integral components that will drive our strategic expansion plans.

We are also committed to being a Great place to work to CCALmates, fostering employee satisfaction and skill development.

I would like to convey my heartfelt gratitude to the Government, our committed CCAL team and all our esteemed stakeholders for your continued support, valuable contributions and the trust you have placed in our Company.

I also extend my sincere appreciation to the Board of Directors for their continued guidance and insightful inputs.

Wishing you the best of health and abundance in all things good.

Warm Regards,

Chairman