Chemplast Sanmar Limited (NSE: CHEMPLASTS) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Ramkumar Shankar — Managing Director
Krishna Kumar Rangachari — Deputy Managing Director
Analysts:
Rohit Nagraj — Analyst
Pujan Shah — Analyst
Nikhil Gandhi — Analyst
Bharat Sheth — Analyst
Kiran Gadge — Analyst
Praneet Verma — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Chemplus NMAR Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing 10.0on your touchtone phone. Please note that this conference is being recorded. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
I would now like to hand the conference over to Mr. Ram Kumar Shankar, Managing Director. Thank you and over to you sir.
Ramkumar Shankar — Managing Director
Thank you very much and good afternoon everybody. On behalf of Chempla Sunmar Ltd. I extend a very warm welcome to everyone joining us on our call today. On this call we are joined by our CFO N. Murali Dharan, Dr. Krishna Kumar Rangachari who heads our Custom Manufactured Chemicals Division and fga, our Investor Relations Advisor. I hope everyone has had an opportunity to go through the financial results and investor presentation which have been uploaded on the stock exchanges and on our company’s website. During the quarter the company reported consolidated revenues of Rupees 835crores and a net loss of Rupees 119crores.
This has been the most challenging quarter in the last three years with multiple factors impacting our performance. The suspension PVC business faced a challenging environment with the seasonal decline in demand, weather related production disruptions caused by inability of feedstock ships to berth due to unusually rough seas during this year’s northeast monsoon and a sharp fall in import parity prices caused by regulatory uncertainty. At the beginning of the quarter we had setbacks on the regulatory side with antidumping duty recommended by the Director General of Trade, remedies not being accepted by the Ministry of Finance. The quality control order on PVC which was scheduled to be implemented in December was also rescinded in November along with the quality control orders on various other polymers.
On the Pace PVC side we saw continued pricing pressure from imports originating from the European Union. However, we believe that Q3 represents the bottom of the PVC cycle with an uptrend being visible in January continuing into February. Market sentiments are more positive resulting in higher demand and better prices boding well for the company in the days and months ahead. Getting into details during quarter three, domestic demand for Pace PVC remained stable thanks to the footwear and automobile segments. The Kadloo Pace PVC facility is operating at full capacity utilization reflecting steady operations and market absorption. Post the end of the quarter we see an uptick in demand for Pace PVC which resulted in a significant drawdown of inventory in January.
Some price improvements in Pace PVC are also being seen. The antidumping investigation on paste PVC imports from the European Union and Japan is ongoing with the final findings expected before the end of Q4 of the current year on the custom manufactured chemicals business. As highlighted during the earlier analyst call, the slowdown in agrochemicals impacted our quarterly performance. That said, our new product development and customer diversification initiatives continued in Q3. We now have 17 products commercialized with additional products under development on the capacity expansion. Work on NPB 3 Phase 3 and NPB 4 continue during the quarter.
MPB 3 Phase 3 is expected to be completed in Q4 of the current year with pilot commissioning also targeted for Q4 of this year, following which production is expected to ramp up gradually. Civil works for MTB4 are targeted for completion in Q1 of FY27 on our refrigerant gas project, the R32 capacity expansion of 14 kilo is underway including two new R32 plants of 10 KTPA and 2 KTPA capacity respectively, and conversion of the existing R22 capacity into a swing plant at Metoor. Commercial sales are expected to start post the swing plant commissioning by the end of this quarter.
Moving on to our value added chemicals business. Our business portfolio in this segment, as you may be aware, includes caustic soda, chloromethanes and hydrogen peroxide. During the quarter, prices and margins for caustic soda and chloromethanes remained under pressure. Globally, caustic soda’s domestic demand remains stable from key consuming sectors including pulp and paper, soaps and detergents. Alumina and textiles Sales volumes declined in quarter three primarily due to lower production at the Metoor facility. Caustic soda output was impacted by technical issues which in turn reduced hydrogen peroxide volume as well. We expect the production to normalize by March 2026.
In two months from now, prices are expected to remain stable barring any material changes in market conditions on the suspension PVC business. As mentioned earlier, the suspension PVC business faced a difficult environment in Q3 with a perfect storm of adverse conditions including weather related production disruptions, lower import prices following the non implementation of the long awaited antidumping duty and softer domestic demand due to both seasonality and uncertainty around regulatory action. A Key positive development post the end of the quarter has been the decision by the Chinese government to withdraw the export tax rebate on PVC suspension PVC effective from April 2026.
This rebate, which amounted to 13% of the export price or roughly around $70 to $80 per metric ton, had been a significant factor supporting Chinese exports to India. Its withdrawal is expected to reduce the price advantage of Chinese exports and indeed has already helped improve market sentiment in the last few weeks. Despite the challenging operating environment, we continue to execute our strategic priorities with discipline. Our pace PVC expansion has seen precision and execution with the new line reaching 100% utilization in quick time with key capacity additions and custom manufactured chemicals nearing completion, new products gaining traction and the regulatory and structural developments supporting improved market sentiment, particularly in suspension pvc.
We believe that the company is well placed to emerge stronger from what has been a long trough and deliver sustainable growth going forward. On a personal note, after 13 years at the helm, I will be stepping down as Managing Director of the Company with effect from 1st April 2026. I would like to take this opportunity to place on record my sincere appreciation to our shareholders, the analyst community and all other stakeholders for the understanding, trust and and support you have extended to the company and to me personally over the years. Subject to requisite approvals, Mr.
Ganesh Kumar will be taking over as Managing Director from April and I am confident that the company will continue to build on its strong foundations under his leadership. Now I’d like to invite our CFO Murvidan to walk you through the financial performance of the company. Thank you Ramkumar and a very good afternoon to all the participants on the call talking about the performance in Q3FY26 the company went through a very difficult quarter. On a consolidated basis the company recorded revenues of Rs. 835 crores, a 20% drop on a year on year basis. The net loss for the quarter shoot at Rs.
119 crores. Now coming to the quarterly segment Wise performance, the Specialty chemicals segment generated revenues of 336 crores with volume increasing 13% on year on year basis. The value added chemical segment revenue stood at Rs. 105 crores for the quarter down from rupees 153 crores reported in the same period last year. Performance was impacted by price volatility and production related challenges. As mentioned by Rahma earlier, the suspension PVC recorded a top line of Rs. 394 crores for the quarter down from Rs 525 crores in respective cost to last year mainly due to lower volumes on account of weather related disruptions and adverse pricing dynamics due to unabated damping which showed that a significant headwind throughout the quarter.
Looking at the split of revenues for the quarter, Specialty chemicals contributed 40% of revenues, value added chemicals accounted for 13% while the suspension PVC segment comprised the remaining 47%. For nine months FY26 the company reported revenue of 2,968 crores with EBITDA at Rupees 4 crores while the net loss for the period was at Rupees two hundred and thirty four crores. Coming to the segment one highlights during the nine month period, while the value added chemicals and suspension PVC witnessed a drop due to pricing pressure and lower volumes, Specialty chemicals registered a marginal growth during the period.
The company incurred a one time impact of rupees 2.68 crores due to the implementation of the new labour codes. As Ramkumar highlighted, we are seeing green shoots emerging more specifically in the suspension PVT space. This combined with the traction that we are gaining for the new products in the custom manufactured chemicals business will help improve the profitability of the company in the coming quarters. With this we conclude the presentation and open the floor for further discussions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Rohit Nagaraj from 361 Capital. Please proceed.
Rohit Nagraj
Thanks for the opportunity. The first question on R32 you mentioned that the swing plant will be operational by the end of this quarter. So is it possible for us to operate the plant at its optimal capacity throughout FY27 and which are the markets that we are targeting for R32? Is it going to be domestic or a mix of domestic plus exports? Thanks.
Ramkumar Shankar
Thanks for the question Rohit. The first swing plant would have a capacity around 2kt and that should come in by the end of this quarter. It will have some ramp up period. It will not operate at 100% from day one. There will be some ramp up obviously like we always do with all our expansions. We would aim to get to 100% as early as possible as we had done in Pace Pvt. As well and that would be a rain but I would not say that it would run at 100% from day one. This 2kt should be.
We should be selling it in the domestic market. But once we have the full 14kt online next year that would be a mix of domestic and exports.
Rohit Nagraj
Thanks. The second question in our highlights, key highlights. You have mentioned that CMCD performance was impacted by agrochemicals slowdown. But our new product development and capex are on time here. In terms of setback, is it going to be still a short term setback on the agrochemicals and the expect that FY28 things should again come back to a large part to normalize business. Our earlier guidance of thousand crores for FY27 has been postponed by a couple of quarters. Is there any possibility of that getting further stretched to maybe a second half of FY28? Just a broader view on this.
Thank you.
Krishna Kumar Rangachari
Hi, this is Krishna here. Rohit, as we outlined in the last quarter call, the global active market remains mixed. The demand is picking back up. But there’s a lot of price pressure due to low cost generics in terms of from China. And while this is not impacting us directly in any way, the launch of new molecules by the innovators, the ramp up is not happening as quickly as they had originally anticipated. And so we see this impacting in the near term but not in the long term. The long term projections and the demand for many of the molecules we have commercialized is very healthy and very strong.
So from a guidance standpoint we are still comfortable. While there is a delay by a few quarters in terms of our ramp up to the thousand quarters it’s 1000 crores. We don’t see any significant issues in realizing that by FY 2728.
Rohit Nagraj
Sure. Thanks. Thanks a lot for answering all the questions and all the best.
Krishna Kumar Rangachari
Thank you.
operator
Thank you. The next question is from the line of Poojan Shah from Molecule Ventures. Please proceed.
Pujan Shah
Yeah. Hi sir and thanks for the opportunity. Am I audible or.
Ramkumar Shankar
You’Re audible? Please, please go ahead.
Pujan Shah
First question would be the consideration of VFC EVC price hike of 7 to 8 rupees. And there is also a discussion on MIP which is going on an industries forward. So first question would be on the MIP that how. How much tenure we have been looking in terms of government that they will allow us a leeway for MIP and are we filing any add refiling the add ex us or. We are still on the. We are still in the deciding mode. That we want to file ADD or not.
Ramkumar Shankar
Thanks for the question. As far as you’re right there have been, there have been a few PVC price increases rolled out from January onwards. Which was what I was talking about when I said that the sentiment has changed and we are seeing a positive upswing right now. As far as MIP is concerned, this is traditionally a short term measure which can be up to a year and that is while. And this is a measure, it’s a bridging measure that will give time to the industry to apply for any other longer term solutions that we see fit.
And the industry is looking at certain other longer term measures that we have approached the government on and we are confident that one of those will move ahead in the coming months. We’ll be able to give you better details on this in the maybe in a couple of weeks time.
Pujan Shah
So any expectation or any timeline for MIP or it is just right now industry discussion. So I won’t be able to justify. The timeline
Ramkumar Shankar
MIP is. We wouldn’t. Obviously we would not be able to come here and give you a timeline on that. But all I can say is that the process started some time back and it is at least halfway into the process. So I think. And this is not a very long drawn out process so I think we should see some traction on that in a couple of months.
Pujan Shah
Okay, got it. On this, this run. So just wanted to understand the current prices versus the last quarter prices is that a firm prices has been stayed along or it has been cooled off on a largely basis right now.
Ramkumar Shankar
It’S, it’s, it’s stable. There is no major change in R32.
Pujan Shah
So want to understand sustainable thing is that if you look at a break even on R32 so understanding that it will take time to take to 14km. But if we want to understand a break even point at which we have been able to sustainably generate at least a flat EBITDA margin, what would be that breakeven price or would it be difficult to justify? Because right now the temporary scenario has been changing.
Ramkumar Shankar
We are very confident that this is a very short term break even for this project. We believe that it will not extend beyond a couple of years.
Pujan Shah
Okay, I just wanted to understand on the anti involution front are we seeing any improvement in PVC on nt involution front or it is just right now on the state of books only?
Ramkumar Shankar
That is a very concrete move on that front. In fact the withdrawal of the export tax rebate that I was talking about that was announced by the Chinese government on multiple products including suspension PvP will take effect from 1st April 2026 that is in a couple of months from now and that is in a sense to remove the incentives that were being given for exporting all that capacity that had been set up without real economic justification. So what we expect this to fuel would be an advancing of the rationalization of some of the carbide PVC capacity.
This could accelerate it. At least that is what we believe. Once this export tax rebate withdrawal is completely, you know that withdrawal comes into effect on the 1st of April. We do believe that some of those carbide PVC capacities which are dependent on merchant carbide purchase could those capacities could be rationalized sooner than we thought. So I think this is one step forward in the anti involution program of the Chinese government.
Pujan Shah
And if we look at the prices right now and this inting or this export duty incentives been removed, do you feel that in a short term like let’s suppose in a fab March there would be a dumping effect which can be seen due to low prices start keeping on like inventory will be filled by low pricing and then eventually it will reset to a new pricing. Is it a possibility that would happen right now or it is now a far case scenario because shipping time and all this delay will take time to ultimately reset to the new prices.
Ramkumar Shankar
It’s a very fair question from your side and I think that the possibility definitely is that since this was announced we have also been tracking it will there be a sudden flood of imports coming in to beat the April deadline And so a lot more comes in right now and then it settles into the higher level. But actually what we are seeing is that the prices have only gone up in January and it continues to go up in February and we hear that even some of the older orders placed on Chinese supplies have not been shipped out.
So I guess there is some logistic issues as well that Chinese exporters are facing and therefore since we are already into mid February, we have hardly six weeks now. So the risk of it coming in after the 31st of March deadline is there. So there could still be some increase in quantities coming in in March but we believe that it is manageable especially given the fact that the demand has come back strongly.
Pujan Shah
Got it sir. I will just join back in the question. Thank you for detailed answer.
operator
Thank you. Before we proceed with the next question, a reminder to the participants in order to ask a question you may press star N1 on your touch tone telephone we take the next question from the line of Nikhil Gandhi from Bajaj Life Insurance. Please proceed.
Nikhil Gandhi
Hello, thank you for the opportunity. Am I audible?
Ramkumar Shankar
Yes Nikhil, please go ahead.
Nikhil Gandhi
Yes. Yeah, yeah. Sir, considering the current trajectory, how should we look from the fundraising perspectives? Should we expect any kind of fundraising in the form of equity or debt in, in the next 12 years kind of in time frame because currently we are facing some losses. And the second question which I just wanted to understand is at what price? Since we have seen around 6 to 8 rupees kind of price increase in SPVC and at what price should we expect and break even for SPVC as well as for PACE pbc?
Ramkumar Shankar
This is Murali on the fundraising part. Actually fundraising is an ongoing exercise both for projects and also for our short term requirements. I think those will go as per our plans that we have done over time. That’s where equity raising is concerned. We don’t have any plans as of now. I can’t come out about the next two years but we don’t have any plans as of now. And the question on the suspension pet breakeven, actually we look at it more from the contribution that is the that contribution that we get rather than the prices because the prices may move up and down.
But what really matters is the margin that we get from the suspension pvc. After all the variable cost, that’s what we look at that generally varies between somewhere around 11 to 12,000 rupees per ton.
Nikhil Gandhi
Answer for paste pvc.
Ramkumar Shankar
Paste PVC is slightly difficult to sort of say because chemplast is an integrated entity. It has paste, plastic, chloromethanes, cmcd, all that as an integrated operation. So it will be difficult for us to look at the EBITDA of individual products and then look at the breakeven. I think in paste we see the price increase has only been, you know, we’ve just rolled out one price increase of around 2000 rupees very recently. And I think we have some way to go there before we can say we are comfortable suspension pvc? I think by we are in the comfort zone.
We are heading into that comfort zone. We are talking about the break.
Nikhil Gandhi
Okay, okay. So at the current pricing scenario should we expect it is in breakeven kind of thing for suspension pvc?
Ramkumar Shankar
Suspension PVC by February and March? Yes, the answer is yes.
Nikhil Gandhi
Okay, okay. So if we expect 1 to 2. Rupees kind of price like in the PVC prices, so we will be attend break even kind of thing.
Ramkumar Shankar
I think with the current numbers we would Already be at the break even level in February and March. Because it’s not just the visible price increases. There are also some discount schemes that we were, we had to give in December which have been rolled back now.
Nikhil Gandhi
Okay, thank you sir.
Ramkumar Shankar
Thank you Nikki.
operator
Thank you. We take the next question from the line of judge from Dalal and Rocha, please proceed.
Nikhil Gandhi
Yeah, good afternoon sir. Thank you for the opportunity. So just type forwarding the last question. You saying that we are now breaking even in the suspension PVC at the break at the contribution level. How much more price increases we will require now to break even at the EBITDA level?
Ramkumar Shankar
Okay, no, when we said the break even we were talking about the PBT level, not, not contribution. So that is really what it is. Obviously given the investment that we have, you would need to get a decent return on the investment. You would need to earn more. So this is really at a break even level. But this is the first step. That’s what I would like to make a point. We still need to ensure that we can’t take our eyes off the ball in terms of preventing unfair trade practices. We need to ensure that dumping is stopped.
But this is a good first step.
Nikhil Gandhi
Got it. Sir, one last question. Assuming the Chinese prices move up post April rather post March because of this withdrawal of 13% export rebate tax, how much more price increases are possible? I think the seven you spoke about 78 rupees already being increased. So. So does that equate to 13% rollback or there is still more room for the prices to go up?
Ramkumar Shankar
See, you can’t really relate that export tax rebate to the current price increases. It would be difficult to draw a direct correlation between the two. It is a mix of economic conditions and the change in sentiment, the return of demand in India and so on. However, we would not be able to draw that direct correlation. And as to how much more is possible, that is not something that we can predict with any certainty at this point in time. Okay.
Nikhil Gandhi
Okay, thank you sir. One second once again. And sir, just in case that the. Prices move up by say 8 to 10 rupees, how much the contribution will move up from here from say 11 to 12,000?
Ramkumar Shankar
That depends on how the feedstock prices also move. So it’s not just the contribution is both the product price and the feedstock price. So we would expect that the feedstock price would also start moving up as the PVC prices move up. But obviously in a rising market, as we’ve always said in these calls, in a rising market we would get the benefit of the time lag between the product price movement increase and feedstock price change. Whereas in a falling market we would always be hit by that. The last three years unfortunately have been the latter case.
Hopefully going forward we would get the benefit of that.
Nikhil Gandhi
Okay, so perfect. Thank you so much.
operator
Thank you. We take the next question from the land of Bharat Sheth from Quest Investment Advisors Private Limited. Please proceed.
Bharat Sheth
Hi sir, good afternoon and thanks for the opportunity. So my first question, as you said that CBC price has already moved up by 7,800 to 3 and hence we are at a break. So can you give some more color on EDC price which is a bridge to how much it has increased and how are we seeing the availability and demand scenario over period?
Ramkumar Shankar
All right, EDC prices have been at around less than, you know, $200 right now. If you look at the last few months from January onwards from around $225 by around April or end of March prices are right now, by end of January it’s come down to $194. These are all CFR Asia prices for US EDC we see because we do not use and a little for our suspension PVC we import VCM straight away. So both EDC and VCM prices have been soft over the last nine months in keeping with the softness in PVC.
Bharat Sheth
Prices but supposed to increase in this PVC price. How are we seeing currently ruling in February and margin forward? If you can give some
Ramkumar Shankar
if PVC prices go up, definitely VCM prices will follow because VCM is a one trick pony which is used only for making PVC largely so therefore it should follow pvc. But like I was explaining to the previous caller as well, there will be a lag in a rising market which would work to our benefit. EDC dances to a different tune. It is equally dependent on power price, energy price, economic and also positive realizations. We believe that EDC prices will also slowly move up and ethylene will also play a role in that.
But it’s not going to move up sharply unless of course there is some major supply side constraint that develops all of a sudden which we don’t typically.
Bharat Sheth
And can you give some color on the spread between the page PVC and PCM price? Can you. Can you give some sense on the spread of past PVC and vcm?
Ramkumar Shankar
Normally the VCM price you can say that the spread between VCM and PVC suspension PVC right now is around 200. It usually moves between 175 to $200 and pace PVC is another around $200 above suspension.
Bharat Sheth
Okay, this is with the post. As you said that price of past VCS we have seen increase by 3000 rupees per ton. Correct.
Ramkumar Shankar
2000 rupees so far.
Bharat Sheth
And how is the demand in pest PBC in domestic market as well as pvc? If you can give some more color.
Ramkumar Shankar
The demand of suspension PVC till December was actually a little flat. In fact marginally negative. If you look at April to December 25 the apparent consumption in India is around 3.2 million tons as compared to 3.3 million tons in the same period last year. Year and this is largely because of this year. There’s been a far more extended monsoon and a pretty strong monsoon at that as also a lot of uncertainty on price volatility and regulatory uncertainty. So there has been a holdback in demand and destocking happened. But we believe that from January with a lot more positivity around prices and the return of positive sentiment in the market we are seeing a good strong demand returning.
Therefore for the year as a whole I believe that we would make up this very small negative in the first nine months and we’ll end up either at the same level as last year or maybe slightly more than that. As far as pace PVC is concerned actually the demand has been pretty strong. There has been an 8% increase increase in the first nine months of the year on a year on year basis. And we are seeing a very strong pull in you know in January and February as well.
Bharat Sheth
Okay, CRM, I mean custom manufacturing. I miss initial remark. So we, we were targeting around thousand crore kind of a top line by end of 27 in 2627. So where are we in that journey or will be able to achieve that or there will be some quarter leg will be there.
Krishna Kumar Rangachari
Indicated last call that we anticipate a delay 2/4 and we continue to hold that that projection. So there’s just a deferment primarily because the ramp up of some of the new molecules are not happening as quickly as we anticipated. The pipeline continues to be strong. Our engagement with all our customers in terms of what we are working on new projects continue to be strong as well. But as you are aware the whole active industry has been growing going through a very difficult cycle for the past couple of years and each one of them one by one is coming out of that and which is impacting many of their pipeline launches and ramp up.
Bharat Sheth
Are we seeing some, I mean bottoming out of that their inventory earlier which was piled up restocking as well as the new launches is bottomly doubt and we are seeing any uptick.
Krishna Kumar Rangachari
Correct. So what we hear is that the demand is starting to take off. So that inventory correction as you pointed out, you know it’s behind. However, the price pressure continues in terms of some very high capacity of generic manufacturing put up. So that’s impacting at a price level which in turn is impacting some of the new molecules because the tendency is to use the older chemistries and chemicals which are now available at much lower prices. So the incentive to switch from a farmer standpoint that incentive is not as good as it could have been.
Bharat Sheth
Can you give some more color? I TRF32 how much potential do we have and when we start to manufacturing the same and does it we factor in thousand crore revenue.
Ramkumar Shankar
R32 like we mentioned, we are targeting a total capacity of around 14. There will be three units. We are first converting our R22 plant into a swing plant that will get ready by before the end of this financial year itself. Then there is another new plant of another 2,000 tons and that will get ready by the first quarter of next year and then last 10,000 tons which get ready by the end of this. So overall in the first full year I think we we target to make around 11,000 tons and we should have around annual revenue.
Bharat Sheth
How much would that be?
Ramkumar Shankar
550 crore.
Bharat Sheth
Okay, great. Sir.
Ramkumar Shankar
Yeah, part of that thousand crores. That’S. A separate sort of line.
Bharat Sheth
Okay, last. I mean how much is currently net debt? Okay. Okay. Ma’, am,
operator
I would request you to join back the queue as participants. Waiting for that.
Bharat Sheth
Thank you.
operator
Thank you. We take the next question from the line of Kiran Gadg from Nightstone Capital Management llp. Please proceed.
Kiran Gadge
Hi, good afternoon. Apart from Wesley Corporation rationalizing some PVC raising capacity, are you observing any more shutdowns?
Ramkumar Shankar
It’s an interesting question. Actually we did see some rationalization that has happened in Europe. There was one Netherlands plant that around 230,000 tonnes that shut down towards the end of last year. And then a few other plants of the same company in different parts of Europe have gone into receivership. So I think there is a lot of stress especially in Europe in terms of the PVC industry there. And there could be some announcements, we do not know further announcements as far as China is concerned. Like I mentioned earlier in the call, once this withdrawal of the export tax rebate plays out, there could be an acceleration of rationalization of the carbide PVC capacity which is dependent on purchase of calcium carbide.
So that could be some rationalization there as well.
Kiran Gadge
How much capacity are you expecting for carbide base?
Ramkumar Shankar
These are not things that we can put a number on. All I can say is that China has around 20 million tonnes of carbide PVC capacity of which around 4 to 5 million tonnes depends on purchase of calcium carbide on a merchant basis. How much of that and all of this is operating at maybe around 75, 80% operating rate right now. So how much of that will shut down and what impact it will have is yet to be seen.
Kiran Gadge
Okay, thank you.
operator
Thank you. Before we proceed with the next question, a reminder to the participants. In order to ask a question, you may press star N1 on your Touchstone telephone. We take the next question from the line of Praneet from Samatva. Please proceed.
Praneet Verma
Yeah, thank you for the opportunity. So in terms of the new FDA with the European Union, do we see any green shoots from this or do we see any negative factors? Can you explain how the company sees. It.
Ramkumar Shankar
With the European Union? The way we would see it is that I am not sure that we will have. The details are yet to be seen because the schedules, the detailed schedules are yet to be released. So we would need to figure that out when it is officially released. And anyway the approvals from the European public Parliament and on both sides will also take time. So it is not something that is going to impact us tomorrow or next month. But if assuming that the automobile imports into India increase from Europe and a lot of the artificial leather that is made from paste PVC is PVC based and a lot of our customers are exporting the leather cloth to European car manufacturers, that could result in some positive demand pull in the market.
On suspension pvc I don’t see much on cmcd, I’m sure there would be some benefits. Exactly. We’ll have to wait and see what is included and what’s captured there. But there should be some advantages because on the CMCD, 100% of our sales or our products are exported eventually. So there should be some benefit there as well.
Praneet Verma
Understood. And in term, in terms of the ad, could you also repeat? I think I missed it. So we, we are not going to have the add for this anymore. Right. From the European Union.
Ramkumar Shankar
The add on suspension PVC was not implemented. The add on paste PVC imports from European Union and Japan, that case is still ongoing and we are expecting the final finding from the DGTR before the end of this quarter. And after that of course it will have to go to the Finance Ministry for Notification we’ll have to wait and see how that is received.
Praneet Verma
Understood. So but as China is getting less competitive because they’re removing the subsidies, that’s a green shoot for us overall for suspension pvc. Is that the right understanding?
Ramkumar Shankar
That is right. On suspension pvc, the removal of the export tax benefit that they had, the debate that they had is going to be a definite positive for the suspension PVC industry here in India. Because China was the significant exporter to India. It was flooding the Indian market with low priced imports exports.
Praneet Verma
So let’s say in terms of imports broad based how much would have China contributed versus EU and Japan?
Ramkumar Shankar
EU and Japan is in base pvc. China’s position is in suspension pvc. So I think we should, you know EU and Japan are not so much. Japan is the player in suspension as well. EU not so much. On Facebook we see China is not so much a player because there is already an anti dumping duty that is in place. So let me just tell you the you know the broad numbers for suspension. First out of the total import arrivals of around 2 million 2.1 million tonnes in the nine month period April to December 25 China accounted for around 52% of the arrivals.
Japan accounted for 14%, Taiwan accounted for 9% and Korea accounted for 6%. So these were the last four large exporters to India. As far as the suspension is concerned if you look at base PVC out of the round 62,000 tons of import arrivals in the nine month period ended December 25th Europe accounted, European Union accounted for around 45%, Korea for 22% and then you had Malaysia for 8% and then Taiwan and Thailand 7% each. So this is really the import arrival breaker, understand.
Praneet Verma
So that is actually insightful. But in terms of price parity what would be let’s say import versus us the price parity number the cost of production, landed price for them versus cost of production for us. What would be the priority between that?
Ramkumar Shankar
Okay, that is really the subject of the anti dumping duty and dgtr. That is exactly what they calculate and that is how they work out on the workout, the injury margin and dumping margin. That’s something that we can discuss offline.
Praneet Verma
Thank you, that’s been interesting. Thank you for your answers.
Ramkumar Shankar
Thank you very much.
operator
Thank you. We take the next question from the line of Nikhil Gandhi from Bajaj Life Insurance. Please proceed.
Nikhil Gandhi
Thank you for the opportunity again. So I just wanted to understand R32 quota and how should we look into to that 10,000 gigah capacity which we are planning.
Ramkumar Shankar
Given the fact that we have resized our ambition and our plans in this product to 14,000 tonnes. And given that we had also a presence in the R22 production in the 200910 period, we are quite confident that we would get the quota for this. For this volume that we are going ahead with.
Nikhil Gandhi
Okay, okay. Okay. And the second thing is relating to the CNC business. So for the CNC business though we have highlighted that we will be achieving that target with a delay up to three quarters. Should we expect 20 to 25% kind of initial margin that is which you have given to be the same?
Ramkumar Shankar
Yeah. In the longer term. Yes. Like we had mentioned in the earlier calls as well. When we are sort of pushing through a number of new products there is a learning curve. So the margin level will be slightly lower in the initial years. But on a steady state basis we still hold that number. That’s what the industry is making. So we believe that we will also be in that range.
Nikhil Gandhi
Okay, sir, any tentative number which we can model in for 27 for FY28H1H2 or something of that sort.
Ramkumar Shankar
We would avoid giving any specific guidance. We’ve already sort of entered that field be somewhere around. We would look at the target of thousand crores by FY28. Beyond that I wouldn’t like to sort of the specific guidance.
Nikhil Gandhi
Okay, thank you so much.
operator
Thank you. We take the next question from the line of BR J from Sapphire Capital. Please proceed. Hello.
Kiran Gadge
Yes. Am I audible? Sir, what kind of revenue are we expecting from the R32 plant?
Ramkumar Shankar
Can you repeat that please? I lost that.
Kiran Gadge
What is the revenue that we are expecting from the R32 plant?
Krishna Kumar Rangachari
The first full year we should have around 550 crores. 600 crores. Roughly around 600. I did say 550 earlier. My team just corrected me. It should be around 600 crores. And going forward that will be the full year. I’m talking about a full year of production after the ramp up. Etc.
Kiran Gadge
All right. Thank you.
Krishna Kumar Rangachari
Yeah, thank you.
operator
Thank you. We take the next question from the line of Poojan Shah from Molecule Inventures. Please proceed.
Pujan Shah
Opportunity again, sir. The first wanted to understand the casting. Soda pricing as we became the net exporter. And we see that once the additional forward integration capacity comes up eventually it also fall out by coming the caustic soda capacity as well. So do you feel that we remain the price will remain range bound over here on due to the scenario of already having a surplus capacity or. It is difficult right now to comment because of the muted demand. So what’s your thought on caustic?
Ramkumar Shankar
Caustic soda? You are right. India from being a net importer for a very long time turned into a net exporter in the last couple of years and today I think we export around half a million tonnes of caustic soda a year and prices are range bound. Right now as you said we are at anywhere between 30 to 34 rupees per tonne, dry metric tonne and it is hovering anywhere in that range in different months. It could be slightly higher in the higher end of that range. Sometimes it’s at the lower end. The one advantage that maybe we could claim to have is the fact that we are located in the south whereas most of the capacity is concentrated in the west of the country.
And caustic by nature of the product is transported, you know, it is sold as 150% solution. So the transportation cost over large, long distances add significantly to the cost of the product. Therefore it is largely a regional market. Therefore we are a little better definitely than the rest of the at least producers in the western region. New capacities coming up, especially again in the western part of the region associated with new PVC capacities would add to the export from India. There is of course definitely some demand improvement also happening on the end user side of the caustic soda industry given the fact that caustic is a significant chemical use in the refining of critical minerals that are used in the EV industry etc.
So there will be an improvement in demand as well. But yes, to some extent prices we expect would remain range bound. We’ll have to wait and see once the new capacities start coming in.
Pujan Shah
Thank you sir. And second question is just to have. A broad thought on can you just. I’m new to the industry so please spare me if I am asking a. Very new question but just wanted to understand what is specifically R32 is when we speak about the quota. So what is that specific quota? Is it. Is it allocated by the government? How it works, the dynamic how it works? Is it that it is a protection for the domestic industry? It is about the environmental concerns, that’s why they have alerted with the quota. What is the key metric where we look at the specifically quota thing?
Ramkumar Shankar
The entire quota is not for protection. This entire quota is arising out of an international agreement amongst various countries and this is a quota that will be decided at the national level and indicated by the government on the exact details of this may suggest that you contact us offline and we can, you know, one of us can take you through.
You know the genesis of this, the entire quota and the protocol and so on. Please do contact us. We would be more than happy to take you through that.
Pujan Shah
Sure, sure, sure. And my last question is can you. Spell out the qoq price prices of 32 and R22 in percentage terms? You can help me just that wanted to understand the brief how the prices form of Last quarter
Ramkumar Shankar
actually R32 like mentioned earlier we had to commission the plant so we are not in the market for selling R32 currency. The R22 price for the last quarter was around 3 lakh 5000. R32 prices currently are at around 7.$5 per kilo. Okay. And it is improved from any. Do you. It was if you look at it one year back it was at $4 a kilo.
Pujan Shah
Okay, okay, got. Thank you so much. I will just connect you. Thank you.
operator
Thank you, thank you. We take the next question from the line of Rohit Nagaraj from 361 Capital. Please proceed.
Rohit Nagraj
Thanks for the follow up. So one question on the CAPEX front. So for this year and FY27 what could be the CapEx and probably if you can split in terms of segment and maintenance capex. Thank you.
Ramkumar Shankar
Apart from maintenance capex, actually the announced Capex is the R32 that we have announced and whatever residual out of the CMCD expansions that we and the rest is only maintenance capex. So if you want details of the maintenance capex and those details we can always take offline and provide you the details. So broadly we don’t see any large capex at least as of now.
Rohit Nagraj
That helps. And second, just theoretically speaking, considering the current raw material or VCM pricing environment, if after 1st April the price goes up in the international market by 70 $80 would that construe to the spreads entirely barring maybe some discounts for domestic production, Would that be the right assumption to work on?
Ramkumar Shankar
This would not go down completely into the margin because there would be some increase in the feedstock price as well because feedstock prices do follow the finished product prices. But it will not. There will be some improvement. We believe the reason being the feedstock VCM price is largely determined in Asia by the PVC price in China. And if the quantum of exports out of China falls and till such time that the capacity rationalization happens, there could be pressure on the PVC prices within China. And if that happens then PCM prices could get impacted downwards which could be favorable to us.
So I think it is a little early right now to talk about how much of it would flow down to the bottom line. Let us just wait and see how it rolls out. We believe that there are certain positives there.
Rohit Nagraj
Thanks. And all the best.
Ramkumar Shankar
Thank you very much.
operator
Thank you, ladies and gentlemen. Due to time constraints, we take that as the last question and would now like to hand the conference over to the management for closing comments.
Ramkumar Shankar
Thank you everyone, for joining us again today on this earnings call and for all your probing questions. We appreciate your interest in the company, and if you have any further queries, please do contact sga, our investor relations advisor. Thank you and good day.
operator
Thank you on behalf of Chemplus and MAR limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.