Apcotex Industries Limited (NSE:APCOTEXIND) Q2 FY23 Earnings Concall dated Oct. 21, 2022
Corporate Participants:
Sachin Karwa — Chief Financial Officer
Abhiraj Choksey — Managing Director
Analysts:
Amar Maurya — AlfAccurate — Analyst
Anuj Sonpal — Valorem Advisors — Analyst
Aditya Khetan — SMIFS Limited — Analyst
Anand Kumashi — Company Secretary
Karan Bhatelia — Asian Markets Securities — Analyst
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Ankit Kanodia — Smart Sync Services — Analyst
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Saurabh Shroff — QRC Investment Advisors — Analyst
Dhiral — PhillipCapital — Analyst
Abhishek Sharda — KM Securities — Analyst
Anirudh Shetty — Solidarity — Analyst
Alisha Mahawla — Envision Capital — Analyst
Dhanush Mehta — JM Financial — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen. Welcome to the Q2 FY23 Earnings Conference Call of Apcotex Industries Limited. 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. [Operator Instructions] Please note that this conference is being recorded.
At this time, I would like to hand the conference over to Mr. Anuj Sonpal, CEO of Valorem Advisors. Thank you. And over to you, Mr. Sonpal.
Anuj Sonpal — Valorem Advisors — Analyst
Thank you. Good morning, everyone and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Apcotex Industries Limited. On behalf of the company, I’d like to thank you all for participating in the company’s earnings call for the second quarter and first half of financial year 2023.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on the management’s belief, as well as assumptions made by and the information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review.
Now let me introduce you to the management participating in the earnings call today. We have with Mr. Abhiraj Choksey, Managing Director; Mr. Sachin Karwa, Chief Financial Officer, and Mr. Anand Kumashi, Company Secretary.
Without any further delay, I request Mr. Sachin Karwa to start with his opening remarks. Thank you, and over to you, sir.
Sachin Karwa — Chief Financial Officer
Thank you, Anuj. Good morning, and welcome everyone to this earning conference call for the second quarter and half year ended of financial year 2023. Along with me in today’s earnings call, I have our Managing Director, Abhiraj Choksey; and Mr. Anand Kumashi, the Company Secretary. I hope you had an opportunity to review the financial statements and earnings presentations which have been circulated and uploaded on the website and the stock exchanges.
So briefly on the financial performance of the second quarter of the financial year 2023. We had a strong growth on year-on-year basis. In Q2 FY23, the revenue from operations grew by 16% on year-on-year basis of INR288 [Phonetic] crores. The EBITDA grew by 44% on year-on-year basis at around INR45 crores, with EBITDA margins reported at 15.96%. The net profit grew by 39% on year-on-year basis for INR31 crores and PAT margins were 10.88%. For the H1 FY23, the revenue from operations grew by 38% on year-on year basis to around INR590 crores, while EBITDA grew by more than 64% to around INR94 crores with EBITDA margins of 15.89%. And the net profit also grew by 40% to around INR64 crores, with PAT margin of 10.92%.
We witnessed balanced growth in first-half across all the indices and product group. We continue to run at nearly 100% capacity utilization. On the credits front, both projects in Valia and Taloja, expected to be completed in Q3 of financial year ’22, 23. Also happy to inform that the company received the procedures for easier recognition of best under the [Indecipherable] company for ’22-’23. We’re one of 200 companies from all over Asia.
With this, I would like to open the call for question-and-answer session.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Amar Maurya from AlfAccurate. Please go ahead.
Amar Maurya — AlfAccurate — Analyst
Yeah. Sir, thanks a lot for the opportunity. And congratulations for a very good set of numbers. A couple of questions from my side. Sir, number 1 is, highlight what would be the kind of volume growth you would have seen in this particular quarter? And secondly, in terms of the latex capacity which is coming in Valia that is for gloves, I mean, when it is likely to come? Is it likely to come at the end of the quarter? And what kind of ramp up you’re seeing, because this is the product which is largely going to be used into glove, so do we got the approval or how much time it will take once the facility comes, if you can throw some light on that? And what is the overall world capacity and what is the world dynamics pre-COVID, post-COVID? Any demand led down something like that?
Operator
Hello?
Abhiraj Choksey — Managing Director
Hello. Yeah. Tell me, Rami [Phonetic].
Operator
Yes, sir. You may please proceed.
Sachin Karwa — Chief Financial Officer
Okay. So Amar thank you for your questions. One is, on the volume growth we’ve seen — as we’ve been mentioning for the last many quarters that we’ve been running at almost full capacity utilization. So compared to the same period quarter last year, it’s been about a 5% to 6% volume growth. Again from the value positive 16% volume growth — value or revenue growth for the quarter. As far as the ramp-up is concerned, as you know we’re coming up with..
Abhiraj Choksey — Managing Director
So, I’ll take your third question first about the glove facility — gloves market. Overall, the gloves market as you can imagine thereafter the sort of extremely high of ’20 and ’21 for this industry — for the gloves industry where a lot of demand and a lot of production. In he last few months we have — the glove industry is going through a deep downturn. And if you read anywhere about the glove industry and some of the top glove manufacturers, they’re all going through a difficult period right now. There’s no question about that, mainly because a lot of inventory was created in ’20 and ’21, a lot of capacities were quickly added starting from FY — or calendar year ’20 and then getting into ’21.
So I think there was a lot of excess production all the way to ’22, you know, middle of ’22. And because Omicron was still sort of — Omicron variant was still fairly widespread in the early part of the year. And what we have seen in the last few months is that the glove industry is going through — the deepest downturn that they’ve seen in many, many years. So it is a definitely a challenging time for the industry and therefore, a challenging time for raw material players also like us who are coming into the market, where we have been in the market for the last 2 years, 3 years and we are coming with extra capacity. Of course, from what we hear all the additional capacity that was planned has all been kept on hold, both on the latex side, as well as on the glove side. Of course, companies like us that we’re already in advanced stages of — sort of putting up the project. We will be going ahead and completing our project, but a lot of our competitors have put their expansion plans on [Technical Issues]. So that’s a little bit about the glove market.
And to answer your second question, obviously, the ramp-up that we expected even 3 months to 6 months ago was that, we would be able to easily ramp-up within six months [Technical Issues] which is an indication that I gave. We will still — we are still aiming to do that within the first year that we would be able to ramp it up, but given the current scenario where demand is extremely muted, obviously, the pull from the market is much weaker than it was a few months ago. So that it may take us a little longer. More importantly, the margin that we expected in the first year are also — looks like there would be much lower than what we had anticipated. It seems like lower than pre-COVID margins as well.
However, I must say that, look, in the long-run we still believe that this is a great business to be in. It’s growing at double-digit worldwide across the world. While there has been a dip obviously in the last few months, because of over manufacturing or a lot of production that happened. We feel in the long-run, of course, it is still a good business and will be one-offs of few nitrile latex manufacturers. The gloves industry is also not hard — it’s not easy to crack. You need a lot of economies of scale with some of our customers have. So yeah, I mean, it’s definitely a challenging time to come into the market. There is no question about it. And I mean, that’s just the glove industry, but in general, the macroeconomic environment in the world is going to be challenging as well from the look of it in the next six months. So that’s fine.
So that as far as the glove industry is concerned in our projects in Valia, as you know the project in Taloja, which we — which is a more swing capacity, there now we’re going to focus on manufacturing some of our earlier products, Styrene Butadiene latex, because we believe in the next one year the glove industry is going to go through a tough time. The silver lining is, of course, the Styrene Butadiene latex market has been extremely strong, whether it’s in construction, carpet, paper. And again, there we feel that, you know, we will have some extra volumes.
Earlier, I had mentioned that totally 60,000 tonnes between [Phonetic] these projects. But we are still working through the details, but because, starting to try latex, the cycle times are lower, we will be able to manufacture more products from our Taloja plant, which we had early envisioned for 10,000 tonnes of nitrile latex, instead we will be able to do much more of Styrene Butadiene latex. The exact numbers, I will come back to you in a few — maybe in a few months. But we’re working through that. And unfortunately, that plant is completely flexible to make any kind of it.
Amar Maurya — AlfAccurate — Analyst
Okay.
Abhiraj Choksey — Managing Director
I hope that answers your question.
Amar Maurya — AlfAccurate — Analyst
Okay. And sir, like, just to harp a little bit more on this — the gloves part of the business, which is going through some problem or issues at this point of time. But given that our facility what we are putting, I mean, do we see that even to sell that kind of capacity will also be a challenge or?
Abhiraj Choksey — Managing Director
No. We don’t expect it to be a challenge, because it’s a — 3,000 tons is a very small capacity, compared, I mean, pre-COVID level entire nitrile latex production or consumption in the world was around 2 million ton. So it’s a very small capacity compared to the entire globe or entire world production. Of course, most of the world production is around Southeast Asia and East Asia. I would say, 90%, 95% of it. So we as a South Asian player, we do have enough opportunities in the Southeast Asian region and the Southeast Asian region. And as I said, the volume is not so much of a challenge, it may take us a few more months to ramp-up, because the pull in the market is little less. Who knows the market may turn in about six months as well, 3 months to 6 months. We are not sure. But the volume is not an issue. Currently, the margin are definitely affected because of the pull in the market and overall downturn.
Amar Maurya — AlfAccurate — Analyst
So let’s say margin would have been impacted, likely, you know, earlier margin versus what the prevailing margin would be something around 200 basis point to 300 basis point impact?
Abhiraj Choksey — Managing Director
When we look at margins, it’s contribution margins. And I think the contribution margins — I mean, the impact will be much more. In terms of EBITDA margin, yes, also more. But we’re still looking — our main purpose is — I mean, obviously, the main figure that we look at is return on capital. And while earlier, we were — as I mentioned earlier that we always look at a minimum of 20% to 25% return on capital. We still feel and we have done the reworking of all our numbers. But we feel that given the downturn that we see right now, we think 20% to 25% is doable over the next sort of, if you look at ROCE over five years.
Amar Maurya — AlfAccurate — Analyst
Okay, okay. Got that. Fine, sir. I’ll come back in queue.
Abhiraj Choksey — Managing Director
Thank you. Thank you very much.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. The next question is from the line of Aditya Khetan from SMIFS Limited. Please go ahead.
Aditya Khetan — SMIFS Limited — Analyst
Yeah, thank you sir for the opportunity. Sir [Technical Issues]
Operator
Sorry to interrupt. Mr. Khetan your audio is breaking up.
Aditya Khetan — SMIFS Limited — Analyst
Ma’am, is it okay now?
Operator
Yes, sir. Please go ahead.
Aditya Khetan — SMIFS Limited — Analyst
Yes. Sir, my first question was that in H1 you had made around 15% EBITDA margin. So anything in the second half [Indecipherable] consistency right [Indecipherable] Any sense on the margin front, so we would make around 15% to 17% or [Technical Issues].
Abhiraj Choksey — Managing Director
You know, Aditya, I’m sorry if I — your voice is not very clear. But if I heard you, right, I think you’re asking about EBITDA margin over the next second half of the year. Yes, first half of the year, EBITDA margins have been around 16%. And as I’ve mentioned before, that, look, quarter-on-quarter in our kind of business it’s very hard to sort of predict EBITDA margin. And certainly, the next few months seems to be more difficult for various reasons. And I’ll list out three or four reasons, because I’m sure a lot of the other callers also have similar questions on sort of how we’re looking at the market going forward.
So one is, some of the tailwinds that we had, for example, one of the tailwinds that we had is at the higher cost of freight for import competition. As you know about for 40%, 45% of our product range, we don’t have any manufacturer in India that we compete with. So a lot of the competition is import. Now over the last 2.5 year or so we had been protected. I would not say, protected, is a wrong word. But we had an advantage where freight — shipping freight rates have gone up. Obviously, those are correcting. There are still not down to pre-COVID levels, but they are down by 50%, 60% from the highs at least. So those are slowly returning to normalcy. So those that sort of benefit that we had for a few quarters may not be there going forward. In addition to that, you know, inventory — the raw material prices ever since the first wave of COVID have obviously kept going up, once oil hit rock bottom and then kept going up.
Now, we’re seeing that turning in the last. I would say, a month or two where some of our key raw materials, the prices are coming off. And in recent weeks, it’s quite a steep crash, even though oil has not really dropped. But because of the overall macroeconomic environment and the demand situation worldwide, some of these commodities that we — petrochemicals that we buy, they’re crashed quite quickly. So obviously there is going to be a short-term pain as well for us, because of some of the supply chain issues we had stocked up on inventory and on raw material inventory. And we had increased our inventory days and obviously, now we’re obviously stuck with some higher cost inventory and that’s going to play out in the next few quarters.
So I would say, look, we will still endeavor to maximize margin, but there can be some quarters where margins are lower, very hard to predict given where we are today at the beginning of the third quarter. And yeah, that’s what I would say. An overall, of course, as you know there is a macroeconomic global recession in Europe and probably in America, high interest rates and war. China is going down. So all these are obviously depressed market sentiment, people are waiting and watching people. People, I mean, customers are waiting and watching. They don’t want to produce more than they need to, therefore, they’re not buying as much they normally would have. So there’s obviously challenges in pockets of our business. And so, it’s very hard to predict what will happen in the next six months.
Aditya Khetan — SMIFS Limited — Analyst
Perfect, sir. Got it. Sir, second, sir so quarter-on-quarter..
Operator
Sorry to interrupt, Mr. Khetan. Sir, we are not able to hear you clearly.
Aditya Khetan — SMIFS Limited — Analyst
Hello. Now is it audible ma’am?
Abhiraj Choksey — Managing Director
Yeah. Go ahead. Go ahead.
Aditya Khetan — SMIFS Limited — Analyst
Yeah. Sir second question, on quarter-on-quarter sir — so we are witnessing a dip of almost 8% in revenue. So this is largely, because of the realizations front only. We can assume because there is a slowdown as you mentioned in [Technical Issues] also. So quarter-on-quarter details?
Abhiraj Choksey — Managing Director
Yeah. That’s right. Mostly on the realization fronts, volume has been largely — I mean it’s a little bit lower, but that is more — as I said we had — even in Q2 we were almost at 100% capacity utilization. There were some — Q2 in general for us all of our industries like carpet manufacturing in India or the footwear that is a little slower. So I would say the volume has been a marginal dip, but largely because of realizations coming off. Yes.
Aditya Khetan — SMIFS Limited — Analyst
Okay, okay. And sir..
Abhiraj Choksey — Managing Director
And I think we can expect that further in Q3 realizations coming off.
Aditya Khetan — SMIFS Limited — Analyst
Got it. Got it. Thanks, sir. So capacity also [Speech Overlap]
Operator
Sorry to interrupt. Mr. Khetan, may we request that you return to the question queue.
Aditya Khetan — SMIFS Limited — Analyst
Ma’am, just one last question, please.
Abhiraj Choksey — Managing Director
Sure, go ahead. Go ahead.
Aditya Khetan — SMIFS Limited — Analyst
Sir, on to the capacity for the gloves front. So sir, just wanted to know is this capacity [Technical Issues] and can be used for other set of latex also? Or is it only used for gloves only?
Anand Kumashi — Company Secretary
So the ones that we have — as I mentioned again, we have done two projects in the last year, or we’ve invested in both coming on stream very soon. The sort of the commissioning of both these projects will start in the next, I would say, month-to-month, month and a half. And the project in our Gujarat facility is only for gloves. And the project in our Taloja manufacturing unit is only — is a swing we could make most — many other latexes. So as of now, given the current situation in the gloves market, the current thinking is that we would first utilize our Valia capacity for the glove industry. And for the Taloja new plant, we would focus on our other products that we already have for styrene butadiene, Styrene Acrylic latexes for paper, carpet and such.
Aditya Khetan — SMIFS Limited — Analyst
So this capacity of 65,000 metric tons. So how much would be gloves and how much would be the SBR latex sir into this?
Abhiraj Choksey — Managing Director
So earlier, it was 60,000 tonnes is what we were looking at. So obviously now as I mentioned to the earlier caller, what — the 50,000 tonnes is in Valia, which will be only for gloves and the 10,000 tonness in Taloja will be converted to Styrene Butadiene Latex, which will definitely be more than gloves. Exact number, I’ll come back to you in a few months. But that we would be focusing on Styrene Butadiene Latex for the next few quarters anyway, because we are running at full capacity and this has seems to be higher demand for those products currently.
Aditya Khetan — SMIFS Limited — Analyst
Sure, sir. Thank you, sir.
Operator
Thank you. The next question is from the line of Karan Bhatelia from Asian Markets Securities. Please go ahead.
Karan Bhatelia — Asian Markets Securities — Analyst
Hi, good morning, team. Thank you for the opportunity. Sir, while you did mention that volumes were kind of flat Q-o-Q, plus the raw materials prices started to correct. So how were you be able to manage the EBITDA margins? 16% is a quite impressive numbers. So, how did we arrive to such a better margins?
Abhiraj Choksey — Managing Director
Look, no, I mean, we held on to EBITDA margin numbers. As I’ve said, when — but if you see our overall profit before tax or overall EBITDA, is a little lower than Q1, because of this correction. But overall, yes, we were able to sort of manage our cost and manage Q2 numbers at about 16% EBITDA margins which is the same as Q1 and that has been our endeavor around this mid-teens number.
Karan Bhatelia — Asian Markets Securities — Analyst
Right. Right. And I also wanted to understand, given the global challenges, any strategic changes in the raw material sourcing, because still bulk of our raw material is imported. So anything — so any changes as of now more focused on India sourcing or something of that sort?
Abhiraj Choksey — Managing Director
Yeah, absolutely. Look we have a — unfortunately as far as some of our major raw materials go, I will give you an example of styrene is one major raw material that we consume. Unfortunately, there is no Indian manufacturer until a petrochemical complex comes up with that product. And I believe there hasn’t been one announced recently, which will come on stream in a couple of years. But those kinds of products we can’t do anything about unless those petrochemicals available in India. So we have to rely on imports.
As far as other smaller raw materials, what we call B and C Class raw materials, there has been a huge push from us for the last couple of years, in fact, to derisk from imports. And earlier the derisking was from China, everyone working in China, plus one. But what people don’t realize is even Europe has a lot of specialty chemical manufacturing only available in Europe. And they maybe small quantities for us, but it’s a high-risk for us in case. So currently in the current context, Europe is also become high risk, given the war situation. So yes, we have a huge push and we have been successful and quite a few raw materials are developing and working with suppliers to develop indigenous sources.
Karan Bhatelia — Asian Markets Securities — Analyst
Right, right. So as of now bulk of it comes from Japan, Taiwan or just can you, like, throw some light on?
Abhiraj Choksey — Managing Director
No. I mean, look, I mean, as I said, we have many different raw materials from some of our A Class raw materials like, I just give you an example of Styrene, that largely comes from Middle-East and Southeast Asia. Another raw material from Europe, East Asia, Acrylonitrile all over the place. And yeah, I mean, we don’t have a specific sort of geography. We import from everywhere.
Karan Bhatelia — Asian Markets Securities — Analyst
Okay. Great. I have two more questions. I’ll follow-up in the queue. Thank you so much for the answer.
Abhiraj Choksey — Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Farokh Pandole from Avestha Fund Management, LLP. Please go ahead.
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Yeah. Hi, Abhiraj, congratulations on the good results. My first question was on the expansion in Valia, where exactly we are at this point. And you mentioned that, there would be some decommissioning in a month or month and a half. So with respect to revenues, say, in quarter four, at what level will we be at? And what will be the level of ramp-up given the fact that – obviously, the gloves market is in a bit of turmoil at this point? Also you mentioned some numbers in response to an earlier question about capacity. Now, am I right in saying that, we also have the ability to expand 50% of this capacity further at a very negligible cost?
Abhiraj Choksey — Managing Director
Yes, thanks. Thanks for the question. So you mean the glove capacity in Valia? I thought [Speech Overlap]
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Yes.
Abhiraj Choksey — Managing Director
Yes, that’s correct. So I’ll answer your second question first, it’s a easier one. Yes, absolutely. So we can expand by 60% at an investment of, I would say, about 15% of what we’ve invested. So I mean the [Technical Issues] numbers into 20%. So further expansion is what we have — yes, left some room for. And we’re done with the both plants by the way. And Taloja is [Technical Issues] the focus is going to be now [Technical Issues] earlier. Because there was such a large [Technical Issues].
Operator
Sorry to interrupt, sir. Your audio is breaking up.
Abhiraj Choksey — Managing Director
My audio? Well, I apologize. Is it okay now?
Operator
Much better, sir. Please proceed.
Abhiraj Choksey — Managing Director
Okay. So I was just saying as far as Taloja is concerned, you know, we’re going to focus on Styrene Butadiene Latex and where we see the demand is quite strong. As far as ramp up is concerned, Farokh, you know, we — earlier — as mentioned in my earlier calls, I think, was six months to one year ramp-up. I think we’re still setting a target for that. Because as I mentioned earlier in terms of volume, that’s not a major issue, because we are a small percentage of the overall glove nitrile latex production in the world. I think we could do that, the issues with margins. And of course, the pull from the market is definitely less earlier where customers were bending over backwards to get our product approved. There is a little bit of a– more of a push right now, because there is no urgency on the customers side.
So you know, our team is still working with that one year target. We’ll see how it goes. Quarter-on-quarter very hard to predict what would happen. As I said one of the other uncertainties, even though we’re commissioning and we — is final approvals from the state pollution control boards to finally stop bulk production. So we expect that to come through as well in the month of December or early Jan once initial trials have started. So very hard to predict quarter-on-quarter, Farokh.
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Got it. And…
Abhiraj Choksey — Managing Director
I also just want to mention one more — one or two more things that, while obviously the macroeconomic environment remains challenging, I mean, the bigger picture is, look, we believe that the products that we had developed and we are working with are harder. It’s quite hard for people to get into. Barriers to entry are high. You know approvals take a long-time, some of the stuff we’ve talked about.
So our focus over the next year or two or next year, I would say, while we expect a more challenging environment, we are going to focus on our market share. We are going to focus on quality and improving quality consistency, introducing some new products in, focus on quality, all the approvals, customer approvals and most importantly, focus on a healthy balance sheet. Let’s not forget that even after this project is done, we will still be almost net debt free. Besides some working capital use, we have cash in the books and whatever debt we have raised, there is a little more than the cash we are. So we are almost net-debt free. So focus on our healthy balance sheet, focus on market share and focus on quality, I think that’s the mantra that we’re looking at.
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Got it. That’s great. Just my second question is on how much of, if required and let’s assume if the gloves market is going to be under pressure for longer than we think it is, how much of this styrene latex can be sort of — can we do a sort of swing production at — to some extent at least at Valia as well? And on the NBR side, is there any further thinking from the previous quarter?
Abhiraj Choksey — Managing Director
No. So the first answer is, no. We will not be able to make Styrene Butadiene latex in Valia. As I said, the swing capacity was made in Taloja with a higher investment, but what we can do, this, the latex manufacturing is like let’s say much worse than we think. We can use it towards NBR Manufacturing, which again NBR for the last many — two, three years, we have been running at full capacity, so there is little bit of a — I mean, not a little bit, there is obviously that’s something that we’re looking at anyway, so we can use part of the latex manufacturing capacity towards our captive NBR production. Of course, but for that, there is — reason is sizable investment required. So we’re working through the different options right now and seeing in the worst-case scenario. But frankly, we have worked out a pretty bad case scenario and even with those, that scenario we’re looking at 20% to 25% ROC on nitrile latex, our focus will be to try and ramp-up nitrile latex production, get to full capacity as soon as possible. Margin, yes, will be affected for the first few months, it looks like and given the current state and hopefully, things will normalize, right. They have to because this doesn’t last forever. Any cycle doesn’t last forever, so every industry goes through a cycle and so we feel — and given lot of experts we’ve we have talked to, they think within sometime in 2023, the glove market will also turn. So if it goes back to normal, then we can see reasonably good ROC, then focus on this business itself without looking at contingency plans.
As far as NBR is concerned, we are — we have sort of started the process of detailed engineering of the plant. We will be taking a call once the detailed engineering is completed in the next few months. I think it will take three to four months. And we’ll take a call maybe by January or March on when to start. Then we’re also waiting to just see how the macroeconomic sort of environment stands out in the next few months.
And as I was mentioning earlier in my earlier call, we are also seeing — hello? Can you hear me?
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Yes, yes.
Abhiraj Choksey — Managing Director
Yeah, okay. I will — we are also seeing some of the commodity prices are coming off. So the capex costs should come down the longer we wait a little bit, so we’re trying to optimize for time and cost.
Farokh Pandole — Avestha Fund Management, LLP. — Analyst
Great. That’s very encouraging to hear. Thanks a lot and wish you all the best, Abhiraj.
Abhiraj Choksey — Managing Director
Thank you, Farokh.
Operator
Thank you. The next [Technical Issues] from the line of Ankit Kanodia from Smart Sync Services. Please go ahead.
Ankit Kanodia — Smart Sync Services — Analyst
Thank you for taking my question and I appreciate your detailed views on the industry, specifically gloves. So my two questions, the first question would be, is one, our relationship with Asian Paints. And why I’m asking this is that in the last two presentations, for the first time, we have seen Asian Paints as customer. And if you go back to our history and see we started up as a unit of Asian Paints and then we all know what happened and so I want to know, having them as just a customer or are we also going to get the leverage of the kind of distribution they have because our product ApcoBuild can be leveraged really well if we can. So if you can share some thoughts on that, that would be great.
Abhiraj Choksey — Managing Director
So, I mean, Asian Paints has completed [Indecipherable] dealing. There is a history to Asian Paints where the ownership is completely different between Apcotex and Asian Paints as you know. So, yes, recently, we are not really [Technical Issues] specialty products [Technical Issues]
Operator
Sorry to interrupt. Mr. Choksey, your audio is breaking up.
Abhiraj Choksey — Managing Director
I’m very sorry, I’m not sure. I’m — okay, is it better now?
Operator
Sir, still breaking up.
Abhiraj Choksey — Managing Director
Hello, I have full signal on my mobile. Hello?
Operator
Okay, sir, please proceed.
Abhiraj Choksey — Managing Director
Yeah, so what I was saying is they launched the SmartCare brand of products and we are supplying to the construction chemical portfolio.
Ankit Kanodia — Smart Sync Services — Analyst
Okay. So no arrangement offers getting any part of the distribution benefits from them, right?
Abhiraj Choksey — Managing Director
Correct.
Ankit Kanodia — Smart Sync Services — Analyst
That is completely different, right?
Abhiraj Choksey — Managing Director
Yes, this is like buyer-seller relationship, yeah.
Ankit Kanodia — Smart Sync Services — Analyst
Sure sir, thanks. Second question was related to — so as you mentioned in the answer to one of the participants that due to the inflationary pressure coming down, you see raw material prices coming down and also the freight costs coming down. So, right now, inflationary position is something which is very dicey. There are divided views, so you have spoken about one view wherein if the inflation comes down due to recession and interest rate hikes and all, what if — is it fair to assume that if the raw material prices or if there is an inflation going ahead, then you will be benefiting out of it because as we saw during the 2022, 2021period when the prices was — you continued to do well.
Is it fair to assume or do you have anything else to comment on it?
Abhiraj Choksey — Managing Director
No, look, there are two types of inflation and I’m not sure if you’re confusing the two. One is on the raw material prices front going up, right. And if that — and that obviously benefits us in the short term. Any time raw material prices go up because we are importing a lot, because we have some inventories of raw materials and finished goods, that helps us. And on the — vice versa, when prices come down as well, that is not great for us in the short term.
The other issue which is inflation worldwide, when you’re talking about macro, like inflation that you’re reading off in the papers, obviously, that’s not good for, I think, for anyone, right, because there is — consumers consume less, they don’t consume normally that they would, some non-essential products immediately get hit, some essential products get hit. There is a demand issue in some areas. So now unfortunately in India, I think, so far, we’ve been fairly insulated and local demand remains okay. But if you think about it from a B2B company like Apcotex’s point of view, there are some final — some customers that we have in the B2B space which are finally catering to the Indian customer. But there are some customers that we have that are catering to exports. So indirectly, it is exports and from exports, as you know in Europe, in America, in China, they have been fairly badly affected from what I understand from some of our customers. So, that’s — I don’t think it’s good for anyone, extended high inflation around the world.
Ankit Kanodia — Smart Sync Services — Analyst
Right. Sir, my point was basically related to freight costs. How the freight cost over the world, if it will rise, how it will impact our dynamics? That was the main point I wanted to say.
Abhiraj Choksey — Managing Director
As I mentioned — yeah, so I mentioned that to one of the earlier callers, for 40% to 45% of our business, we don’t have a competition that manufactures in India, so that’s not only for imports and when that happens, that is — that was a benefit that we had for the — we continue to have even now compared to pre-COVID levels, so that’s slowly normalizing. And I — I mean, we expect in the next few months, it will normalize. It — so yes, from that point of view. As far as exports are concerned, fortunately, our sweet spot for exports is Middle East and Southeast Asia where the freight cost is not a very large percentage of the total cost of the product. So it’s really not as impacted us much at all.
Ankit Kanodia — Smart Sync Services — Analyst
Thank you sir, I’ll come back in the queue if I have anymore questions.
Abhiraj Choksey — Managing Director
Sure.
Ankit Kanodia — Smart Sync Services — Analyst
Thanks.
Operator
Thank you. The next question is from the line of Manav Vijay from Deep Financial Consultants Private Limited [Phonetic]. Please go ahead.
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Yes, thank you very much for the opportunity, Abhiraj. So, actually, I just have one question and I want to ask you, so we saw in last quarter when basically yes, Top Gloves, they have released their results and we saw that for the first time in their — I would say in the history of their listing, they’ve reported losses. Now you alluded to many, I would say, to multiple reasons that the inventory buildup in the channel was very, very high, lot of production facilities came in a very short period of time. Now when the largest player in the industry starts to make losses, you believe that the way capacities came up, they will also go away in the same fashion at the same speed?
Abhiraj Choksey — Managing Director
Look, very hard to predict but obviously in any industry where — I mean, as you rightly said, not only Top Glove, but the entire industry is going through the deepest downturn that they’ve ever seen and in any industry, obviously, this is not sustainable, long period of losses. Yes, they had made some abnormal profits as well for a little while during the peak COVID period. So maybe the staying power is longer with most glove manufacturers, but at some point, yes, there is probably going to be consolidation or rationalization of production and so on that’s going to happen.
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Okay and one…
Abhiraj Choksey — Managing Director
I mean. I’m not an expert in the glove industry. I know a lot about it because we have been doing business with them. But in any industry, when this happens and this is not the first industry that this happened where there was overcapacity suddenly and then it takes a little bit of time for things to sort of even out.
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Yes, I agree, because I was — just some of the global reports suggest that let’s say whatever excess capacity that has been created, it will take roughly seven or eight years for that capacity to get fully utilized and everything, but generally things don’t happen in a leaner fashion. So maybe the way capacities came up in 1.5 years in the same fashion, you will see lot of capacities maybe going out in a very short period of time.
Abhiraj Choksey — Managing Director
Yeah look, I was in — I mean I was in Malaysia just last month and I mean there are different views to it and it’s hard to see how it will play out. Obviously, there are some players that have cash in the books. There were some new players — entrants that came in and they don’t have cash in the books and whether they can sustain long periods of this in — I mean I’m not so sure, so very hard to predict, Manav. So if you have a specific question, I’m happy to answer it, but it’s hard to sort of
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
[Speech Overlap] Okay, one maybe one last point also. So, your Top Gloves, after, I would say, running off, let’s say, throughout their listing history, so they always used to run on cost-plus basis in terms of the pricing and last 1.5 or two years because of the abnormal demand, they changed all that. Now in last quarter, they again went back to the original thought process of cost-plus. Now obviously, they will have some issues in terms of whatever inventory that they have. Now — so now, when the industry leader takes such a call, you believe that the — even the other players in the industry will be forced to go back to cost-plus model and in turn, the pricing discipline will be faster, which in turn will help players like you who are also suppliers.
Abhiraj Choksey — Managing Director
Again. As, I said, I’m — I understand where you’re coming from. I’m not the expert to ask him on the glove industry pricing. I just want to mention that one thing is that, one is as far as glove pricing is concerned, the other is as far as nitrile latex pricing is concerned. So, obviously because of the huge pressure on the gloves side, those — the nitrile latex margins have also come off. Obviously, nitrile latex, there have been a few players but it has mainly been most of the capacity addition that has been announced and again, I’m saying announced because some of it has already been sort of challenge [Phonetic] what was mostly from current players. So unlike the global industry which had a lot of new players coming in as well, most of the capacity addition on latex has been from current players, people who have been in the latex industry. So the point I’m trying to drive is that it’s probably easier technology to get into the glove industry than it is to the latex industry and so I’m not sure — it’s not necessary — so my point is that the latex industry is not necessarily linked completely directly proportionate to the glove industry, it is what I’m trying to say.
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Sure, the last one would be on your NBR rubber…
Operator
Sorry to interrupt, Mr. Vijay. [Speech Overlap]
Abhiraj Choksey — Managing Director
Let Manav finish his last question since he mentioned and then we can move on.
Operator
Sure sir.
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Okay, thank you. So last one, maybe on the NBR rubber margins. So now you — you mentioned about the freight cost benefit that you had, let’s say, compared to the imports. Now since that cost is coming down, but still do you feel — I would say, the margins in NBR rubber, are those margins now, I would say, equivalent to the margins that you have at the company level or margins — I’m talking about the operating margins or they are slower, still.
Abhiraj Choksey — Managing Director
Look, again, we don’t talk about product-to-product margins and as you know, there is sort of legal case going on. So I don’t want to mention too much about NBR rubber and specifically talk about that in this forum. So, all I want to say is look, there is — it’s not the freight component was an additional benefit not only for India, but other products as well where we were facing competition from import, especially imports coming in from Europe and East Asia — Far East Asia. And obviously, that has come off. The rest of, as you know, it’s depending on demand supply around the world. So I would say the next few months depending on the macroeconomic situation in general, it seems like margins are going to be under pressure on a lot of the product or some of our product.
Manav Vijay — Deep Financial Consultants Pvt Ltd — Analyst
Okay, okay. Thank you and all the best.
Abhiraj Choksey — Managing Director
Thank you, Manav.
Operator
Thank you. The next question is from the line of Saurabh Shroff from QIP Investment Advisors. Please go ahead.
Saurabh Shroff — QRC Investment Advisors — Analyst
Yes, hi, Abhiraj. Firstly, on Valia, so you mentioned that you still think that we can do a 20%, 25% ROCE on this project which is obviously very heartening to hear. My question is that what utilization do you think this break even, like if the ramp-up was to take longer, just wanted to get a sense for how much pain could there be?
Abhiraj Choksey — Managing Director
When you say breakeven, in what do you mean breakeven? How do you calculate it?
Saurabh Shroff — QRC Investment Advisors — Analyst
At an EBITDA level?
Abhiraj Choksey — Managing Director
Well, it will mostly depend on margins and where margins are at that particular time. Right now, we are assuming that for the next six months, margins are going to be quite depressed given the glove industry. But we think [Technical Issues] in this business are very low because [Phonetic], it’s is a brownfield project. So — and it’s a highly automated plant, so it’s not like we have hired hundreds of people to run it. So breakeven is very low. I mean, we expect to literally break even literally in the first few months — from the first few months.
Saurabh Shroff — QRC Investment Advisors — Analyst
[Speech Overlap]
Abhiraj Choksey — Managing Director
At an EBITDA level, yeah, but payback, payback will be longer depending on margins and volume ramp-up of course.
Saurabh Shroff — QRC Investment Advisors — Analyst
Sure. That’s understood, of course [Speech Overlap]
Abhiraj Choksey — Managing Director
I think the ROC. I, mean, ROC covers that, right? IRR [Speech Overlap]
Saurabh Shroff — QRC Investment Advisors — Analyst
And I guess on the base business, you did allude to some of — I guess the raw material prices crashing and hence that pressure, but again, that is something that is cyclical which we’ve known [Phonetic] over the — I guess, the last decade seeing more than a few times. So is there [Speech Overlap]
Abhiraj Choksey — Managing Director
I mention it in every quarterly con-call that look, we have been at an advantage for the last eight quarters in a row when prices have been going up. There will come a quarter or a two where obviously, prices will come down. Sometimes the prices come off gently, which is okay and then, you may not see it in the quarterly results. But if prices correct sharply, then sometimes, you are left with high-cost — very-high cost inventory for two, three months and you can have that issue. Yes, that’s cyclical.
Saurabh Shroff — QRC Investment Advisors — Analyst
So — yes, that is exactly my question, but this is just par for course or is there something more exceptional than what you would have let’s say bargained for or anticipated? Given the nature of this business, I think that we’ve obviously seen these shocks more than a few times over the last five, seven years.
Abhiraj Choksey — Managing Director
So, the raw materials fall — the drop is as you put it par for course. It happens once in a while every few quarters and we are okay and we explained to you guys that this is the nature of our business and I think a lot of our investors and analysts understand that. In this — in the current scenario, of course, the flip side is that the macroeconomic situation looks really dire, so — and I don’t know how long that will last. But again, once the prices come down, then we can look at sort of building it up again, so yes.
Saurabh Shroff — QRC Investment Advisors — Analyst
Okay. Got it. [Speech Overlap]. Yes, sure. And just finally, we had seen a bit of a ramp-up in exports over the last few quarters. And there’s obviously a little bit of that diversification and say that, is that still going well or do you think that because we’ve been running at a 100%, we haven’t had too much to do on sort of market development, et-cetera?
Abhiraj Choksey — Managing Director
Yeah, you are right. In some cases, we’ve had opportunities but we’ve not been able to exploit them because we go to a customer saying, give us approval, they give us live approval and they say, okay, you send us bulk quantity, we don’t have bulk quantity to send. So, yeah, there has been a delay but I think in the next few quarters — we have established relationships, that’s a good thing and yeah, so we expect the ramp-up to continue. The other thing that I did not mention to the earlier callers but worth mentioning is, there is a silver lining here as well for us while the whole macroeconomic situation looks dire.
Some of our competitors in Europe are facing really tough time competing with us. Raw material prices in Europe for them are significantly higher than Asia. Conversion or power and gas prices are currently, I believe significantly higher. So we’re seeing a lot of interest from not only European final customers but also customers that they were exporting to in Asia. There were some specialty products, so we have seen an opportunity to work with certain customers to develop certain specialty products that we did not have in our range within the same Styrene butadiene, Styrene acrylic, vinyl pyridine, VP Latex, similar range. So we’re seeing a lot of interest and that’s why we also decided that our current thinking is to focus on our Taloja facility only on our current products and focus on nitrile latex from Valia.
Saurabh Shroff — QRC Investment Advisors — Analyst
Okay, got it. Thank you very much. That’s clear and all the best for the next few quarters.
Abhiraj Choksey — Managing Director
Thank you very much.
Operator
Thank you. The next question is from the line of Dhiral [Phonetic] from PhillipCapital. Please go ahead.
Dhiral — PhillipCapital — Analyst
Yeah, good morning, sir. Thanks for the opportunity. So, what will be the growth driver for H2 FY ’23 and for the full-year FY ’24 if let’s say this nitrile latex industry issue persist little longer than what we expect since we are running at full capacity even now?
Abhiraj Choksey — Managing Director
So, the current growth driver — again, I’m mentioning two things. One is nitrile latex will continue to be a growth driver. The issue is margin, not so much volume. We will — maybe the ramp-up will take a little [Technical Issues] growth driver. And the second is, in our Taloja facility, we have — we could make more styrene butadiene latex and Styrene acrylic latex and so on. So, that could be another growth driver. Those are the two growth drivers and so we are quite confident of the growth. It’s just that with whole macroeconomic environment, what the glove industry is going through, we’re not sure — completely sure of how the margins will play out and I think it’s a cycle. Look, as I said, in a — if you’re looking at a very long term which is what generally as management of the company that I look at, of course, we’re looking at short-term numbers but the long-term is more important for me. We use this adversity if it is an adversity. Who knows things may turn as well very quickly, but if it is an adversity, use it as an opportunity. We focus on market share, we focus on new customer approvals and we focus on managing a healthy balance sheet. The rest, I think, takes care of itself and you go through business cycles and it will play itself out, I’m not too worried about that.
Dhiral — PhillipCapital — Analyst
And sir, any reason why we are taking a longer time to finalize NBR capex?
Abhiraj Choksey — Managing Director
Yeah. I mean, as it mentioned before, [Technical Issues] we talked about finalizing one of the things we felt in the last couple of years is commodity prices had run up so much the project cost was going completely out of whack. I think that’s correcting now and given that we weren’t very comfortable, but now that it’s correcting, as I said, we are — we have already started the process of designing the details of the plant. That should be completed in the next few months and we will take a final call depending on overall, as I mentioned to one of the previous callers [Indecipherable] optimizing of capex cost, as well as timing in terms of we don’t want to enter the market where it’s depressed, the time is depressed. I mean, that’s not the ideal scenario. So both those, we’ll take a quick call on and decide in the next few months. That’s the only reason. But we still believe it’s a good opportunity not only in India. Globally, we are only one — less than one third of the Indian market today, everything else is being imported. So there is a good case for it. But we just want to see how some of the things pan out.
Dhiral — PhillipCapital — Analyst
Okay. Got your point, sir. Thank you so much, sir.
Operator
Thank you. The next question is from the line of Abhishek Sharda [Phonetic] from KM Securities. Please go ahead.
Abhishek Sharda — KM Securities — Analyst
Hello.
Abhiraj Choksey — Managing Director
Yeah, go ahead, Abhishek.
Abhishek Sharda — KM Securities — Analyst
Yeah, thank you for the opportunity sir. Sir, can you share sales mix for the quarter between nitrile rubber and nitrile latex?
Abhiraj Choksey — Managing Director
I don’t think it has changed much, it’s the same. I mean, overall, we have about 45% is our total solid rubber business, which includes nitrile rubber, nitrile powder, nitrile PVC blend, high styrene rubber and 55% is latex. Largely, I mean, given plus or minus 1% or 2% remains the same.
Sachin, Suraj, if you’re on the call, is that approximately right? Any significant change?
Sachin Karwa — Chief Financial Officer
Yes. No, no. Absolutely right.
Abhiraj Choksey — Managing Director
Right, okay.
Abhishek Sharda — KM Securities — Analyst
45:35, right sir?
Abhiraj Choksey — Managing Director
45% is latex — is solid rubber, 55% is latex. Actually, these are broad indications, yeah, it maybe 43%, 57%, I’m not sure exactly, yeah.
Abhishek Sharda — KM Securities — Analyst
Okay and sir broadly, I mean, approximately how much revenues we are getting from the auto industry? If you can share a broad number?
Abhiraj Choksey — Managing Director
Well, look, indirectly, directly, look, first of all, we supply VP latex to the tire industry. Now do you account that as auto? I’m not sure. That is maybe 8%, 10% of our business and the rest is NBR and — NBR PVC blends and all and I would say totally, tires would be 8% to 10%. Auto maybe about 8% to 10% is my rough estimate.
Abhishek Sharda — KM Securities — Analyst
So, it’s roughly around 18% to 20%, right sir?
Abhiraj Choksey — Managing Director
Yeah, but, I mean, I think auto is very different from tires, right? They’re two different industries. I mean, the auto industry could be in a bad slump, but the tire industry could still be doing well because the replacement market is a huge market.
Abhishek Sharda — KM Securities — Analyst
Got your point. [Speech Overlap] Sir, 8% to 10% is tire and around 8% to 10% is auto.
Abhiraj Choksey — Managing Director
Yeah, that’s right.
Abhishek Sharda — KM Securities — Analyst
And sir, one thing I want to understand, like, maybe I have missed in the previous commentary. Right now, you said capacities in the Taloja facility is 65,0000 metric ton per annum synthetic latex, 7,000 high styrene rubber, right? So after ramp-up, what would the capacities would be? After the ramp up?
Abhiraj Choksey — Managing Director
Yeah. So as I mentioned, good question. Earlier, we were thinking we’ll make 10,000 tons of nitrile latex. But given the current scenario on the glove industry, we are going to utilize that capacity at least in the short-to-medium term for our current other products. And I think depending on which product we decide to manufacture and all, it will be a little different but it will be much more than 10,000 tonnes because the cycle times are much lower. So I’ll have to come back to you, that’s the working that we will do once the plant starts up and I’ll come back to you maybe next quarter or in six months with those numbers.
Abhishek Sharda — KM Securities — Analyst
Okay sir and in the Valia capacity, right now, it is in your latest investor presentation, it is showing 21,000 metric ton nitrile rubber and allied products. So after ramp up, what would be the final capacities?
Abhiraj Choksey — Managing Director
So it would be around 21,000 for NBR and 50,000 tons for nitrile latex.
Abhishek Sharda — KM Securities — Analyst
50,000 tons for nitrile latex?
Abhiraj Choksey — Managing Director
Yeah, and again, I’m just mentioning that [Speech Overlap]
Abhishek Sharda — KM Securities — Analyst
Yes, these are the broad numbers. So basically, 50,000
Abhiraj Choksey — Managing Director
[Speech Overlap] numbers. We have an ability to go up to 80,000 ton. It’s a minimal investment and similarly, in Taloja as well, we have left some place for additional capacity with very, very minimal investment.
Abhishek Sharda — KM Securities — Analyst
Okay. So basically sir, after the ramp up of this 50,000, you can get around 60% more at minimum investment that you mentioned that would be around 15% to 20% of investment, right?
Abhiraj Choksey — Managing Director
That’s correct.
Abhishek Sharda — KM Securities — Analyst
That’s very helpful, sir. Thank you, sir.
Abhiraj Choksey — Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Anirudh Shetty from Solidarity. Please go ahead.
Anirudh Shetty — Solidarity — Analyst
Hi, thank you for taking my questions. Sir, my first question was, I just wanted to understand our right to win in the nitrile latex business given you mentioned that there two million ton market and presume there would be players larger than us. So what is our differentiation to the customer, which allows us to — which will allow us to kind of gain market share here?
Abhiraj Choksey — Managing Director
Yeah, absolutely. No, look, there are two, three differentiation. One is there are product differentiations, but they’re technical and I don’t want to get into that with this forum. I think it may not be useful, so there are certain product differentiations that we’re certainly bringing in. More importantly, as you know, everyone is looking for to derisk from countries. So far, all the nitrile latex has been either largely made in two countries. And we bring in an option and that’s the strategic advantage that we have coming from India. Especially customers in Sri Lanka, India, Bangladesh, we provide that, as well as customers in Indonesia, Thailand that don’t have their — a large capacity or they don’t have much nitrile latex in-house production. So I think there is strategic geography geographic advantage, as well as some technical advantages. In addition to that, we have — we believe we have no — I would say, we have no disadvantage on the raw material pricing front. Let me put it that way. If anything, we have a small advantage but no disadvantage. So from a cost, quality and geographic standpoint, we have certain advantages that we bring and certain competitive advantages and strengths that we bring to the table.
Anirudh Shetty — Solidarity — Analyst
Got it. This one is raw material cost front or we — what would the key raw material be for our nitrile latex and I believe we imported, but would our players — our competitors been manufacturing it in-house or also, they’re reliant on imports for this?
Abhiraj Choksey — Managing Director
So the key raw materials are acrylonitrile and butadiene. Butadiene is manufactured in India and it’s very close to our plants, so we have we have a good advantage there. And acrylonitrile is all imported into India and I think most of these guys are importing a large quantity of that, as I said, from other countries anyway — some of our competitors.
Anirudh Shetty — Solidarity — Analyst
Okay, so, competitors
Abhiraj Choksey — Managing Director
We hope — there have been announcements of acrylonitrile production in India. Hopefully that will come on stream in the next couple of years, so that will certainly help.
Anirudh Shetty — Solidarity — Analyst
Got it. So our peers also don’t make it in-house. They’re also kind of [Indecipherable]
Abhiraj Choksey — Managing Director
No, they don’t make it in-house, but they may have some capacity available closer by that product advantage is there on. But not the entire capacity that they require, is what my understanding.
Anirudh Shetty — Solidarity — Analyst
Got it and in the past calls, you had mentioned that the
Operator
Sorry to interrupt, Mr. Shetty.
Anirudh Shetty — Solidarity — Analyst
Okay, sure, sure.
Operator
Sir, may we request that you return to the question queue.
Anirudh Shetty — Solidarity — Analyst
Sure, sure.
Operator
Thank you. The next question is from the line of Alisha Mahawla from Envision Capital. Please go ahead.
Alisha Mahawla — Envision Capital — Analyst
Hi, sir, good afternoon. Thank you for taking my question. Just one, quickly wanted to understand [Technical Issues]
Operator
Sorry to interrupt. Alisha, your audio is not clear. Can you use the handset mode while speaking and not the speaker phone?
Alisha Mahawla — Envision Capital — Analyst
Sure.
Operator
Thank you.
Alisha Mahawla — Envision Capital — Analyst
Is it audible now?
Abhiraj Choksey — Managing Director
Yeah, go ahead, Alisha. I think [Speech Overlap]
Alisha Mahawla — Envision Capital — Analyst
Thank you for the opportunity. Just wanted to understand that with the new capacity coming on stream for the next quarter, there is going to be some amount of lead time for client approval, product approval or rather batch approval, et cetera. Also I believe earlier in the call, you mentioned that there is an approval from the Pollution Control Board which is still pending. So will you expect the new facilities to start contributing at least from Q4 or is it largely going to be from FY24?
Abhiraj Choksey — Managing Director
No. It will — I mean, look, it will start contributing from Q4 but as I said, the ramp-up takes time whether or not, I mean — generally, you need — after the plant is ready, you still need to go back and there is something called a BPO consent to operate that you need from the pollution control board. Now, we don’t — sometimes — it’s generally quick, but sometimes, it takes longer, but notwithstanding that, obviously, you’re right. The approval — while we already have approvals in place, anytime a new plant comes up, customers do want to take it a little slowly.
They may take smaller quantities in the first month, then they ask for little larger quantities. So the ramp-up as I mentioned, takes six months to a year. As far as gloves is concerned, given that the demand pull isn’t there in the market, it may take us a little bit longer, but we are still pushing for six months to a year and so, yeah, from a from an overall number standpoint, obviously, FY ’23 will — this will not have a big impact. The new project will not have a very large impact. It’s only towards the fag end of the year, but in FY ’24, we’ll have a larger impact, of course.
Alisha Mahawla — Envision Capital — Analyst
Sure. And earlier, we’re expecting the new capacity both combined to contribute somewhere around INR500 crores of incremental revenue and now with Taloja being — capacity going to be used for the Styrene Butadiene latex as you were explaining, are we expecting the revenue contribution now to change significantly?
Abhiraj Choksey — Managing Director
Yeah, it should go up.
Alisha Mahawla — Envision Capital — Analyst
It should go up?
Abhiraj Choksey — Managing Director
Yeah, that’s right, because we can actually manufacture — in the sense, we can manufacture much more Styrene Butadiene [Technical Issues]
Alisha Mahawla — Envision Capital — Analyst
Okay sure.
Abhiraj Choksey — Managing Director
I just said, we’re not clear on this right now, so we will — I will come back to you at the right time with the right numbers, but it will definitely be in terms of volume and value will be higher. In terms of contribution, we were earlier thinking because nitrile latex contributions were very high for two years. We were thinking would focus on that, but now that’s not the case, so therefore — when I say contribution, I mean gross margins are higher. So now, we — the current thinking is to focus on Styrene Butadiene latex and frankly two years ago, if you had asked us that would there be this kind of pull for Styrene Butadiene latex, we hadn’t thought it would be this great.
And as I said, there are some silver linings. Some of our competitors in Europe are finding it hard to compete given their raw material costs. And so, yeah, we’re going to adapt to the current business environment and while the gloves industry is not doing so well, we see some of our current product industry is doing much better than expected and therefore the focus is on that.
Alisha Mahawla — Envision Capital — Analyst
Perfect and just one last clarification. In latex, so what is the 55% odd revenue that you spoke of, how much of that will be nitrile latex?
Abhiraj Choksey — Managing Director
Currently, low because we are only doing some quantity, so I want to say less than — maybe 7%, 8% of that or 10% of that. Sorry, 10% of 55%, so totally, about 6% to 8%. I don’t have the exact numbers on me, but that’s a broad guess, yeah.
Alisha Mahawla — Envision Capital — Analyst
Okay, it should be 10% or thereabout.
Abhiraj Choksey — Managing Director
Yeah.
Alisha Mahawla — Envision Capital — Analyst
Okay, sure, great. Got it. Thank you so much and best of luck.
Operator
Thank you. The next question is from the line of Amar Maurya from AlfAccurate. Please go ahead.
Amar Maurya — AlfAccurate — Analyst
[Technical Issues]
Operator
Sorry to interrupt. Amar, we are unable to hear you.
Amar Maurya, we are not able to hear you.
As there is no response from the current participant, we will move on to the next [Technical Issues], Dhanush Mehta [Phonetic] from JM Financial. Please go ahead.
Dhanush Mehta — JM Financial — Analyst
Yeah, hi. Hello, sir, good afternoon.
Abhiraj Choksey — Managing Director
Go ahead. Good afternoon.
Dhanush Mehta — JM Financial — Analyst
So, sorry if I could ask a question, I joined the call a bit late. So firstly, sir I wanted to know that how is the industry scenario different vis-a-vis when we compare to 2018, 2019 times where the industry in which we belong to had a slowdown or maybe price correction or whatever we may term out to be. And my second question would be that Europe is a major market for us as well. On the same lines, it’s actually competitor. I mean, a few competitors are present there as well, so is Europe failing is an or maybe Europe slowdown is an opportunity for us or a threat? If you can just explain?
Abhiraj Choksey — Managing Director
First of all, Europe is not a major market for us at all. It’s a very small market for us, in fact, as far as our current sales into Europe are concerned. Overall, obviously, Europe manufacturing competitiveness has been badly hit over the last couple of — last few months, as well as the risk has gone up given the war. As I said, it’s actually perhaps a silver lining advantage for us because some of the places that they were exporting to or some of the customers they were exporting to are now looking for other options in Asia and we are well positioned and suited given the work that we’ve done over the last few years, developing products and ensuring high-quality consistency. So that’s an opportunity. And your first question on ’18, ’19. I think the company is much better positioned than we are — today than we were in ’18, ’19. We have a diverse set of products. Our volumes have grown significantly. Our competitive strengths have grown, number of customers we’ve added has grown. So from all perspectives, I think it is a more diverse and stronger company than it was three years ago.
Dhanush Mehta — JM Financial — Analyst
Okay. So basically when we talk about the company as a whole, a few products are there in which we are having our own key strength and maybe a few products which are having demand as of now and we are there into the market. So if I was to divide the entire market into two parts, one is the basically specific products which we have developed and maybe we are the first to our client. And the other set of products which are actually market driven where the market has its own growth. So if you could throw some light on both of them?
Abhiraj Choksey — Managing Director
Sorry I have not understood the question. What specifically — what are you looking for?
Dhanush Mehta — JM Financial — Analyst
Sir, I wanted to understand that the growth drivers would be our — I mean, whatever accessory products we have and we would be manufacturing them and selling it to our clients, so I was to divide the growth into two parts, one is the products in which the industry is growing itself and the other product in which we are creating our own market. So if you could throw light on both of them?
Abhiraj Choksey — Managing Director
I don’t know what light you want me to throw, but let me — okay, I’ll try and answer your question. So, in most of the products that we are in, in India, we have high market share and therefore, going forward, we will probably grow in those products at sort of whatever the market grows at, right, I mean, GDP-plus, whatever rate some of our customers grow at. In addition to that, yes we are adding new customers mostly in the — there are a few customers in India that also come obviously, new customers but also in — mostly abroad for exports and then our two other growth drivers are nitrile latex for gloves. And in the future, it would be NBR because we are at full capacity and we only have less than one third market share in India. So that’s another opportunity for growth.
Dhanush Mehta — JM Financial — Analyst
Okay sir, thank you and wish you all the luck for the coming quarters as well as for the full year.
Abhiraj Choksey — Managing Director
Okay. Thank you.
Operator
Thank you. The next question is from the line of Karan Bhatelia from Asian Market Securities. Please go ahead.
Karan Bhatelia — Asian Markets Securities — Analyst
Hi, sir. Thank you for the follow-up. Sir, while you did mention that there is no demand pull as of now for the latex gloves. So have you seen some correction in the prices as well?
Abhiraj Choksey — Managing Director
Yes, yes. There has been a correction in pricing. The whole industry is going through a downturn. So therefore, the pricing, margins, everything has been correcting and not only for us, all gloves, any supplier to the glove industry — we’ve had to support the industry. They’re not — some of them have been — most of them are not doing so well, the glove manufacturers, in the last quarter or two. So we had to sort of adapt and support that.
Karan Bhatelia — Asian Markets Securities — Analyst
Right and okay to assume the export contribution in upwards of 18%, 19% for this quarter as well? And so, are we [Speech Overlap]
Abhiraj Choksey — Managing Director
It’s about 21%, 22%.
Karan Bhatelia — Asian Markets Securities — Analyst
Okay. No, and the real benefit to us with respect to the Europe energy crisis, are we done with 20%, 22% or still be at or slightly better compared to upwards of 25% in the medium term?
Abhiraj Choksey — Managing Director
Sorry, can you repeat? I didn’t hear you? [Speech Overlap]
Karan Bhatelia — Asian Markets Securities — Analyst
Yeah, I’m saying 21% is the best that we can do or we can see some more benefits of the Europe and energy crisis?
Abhiraj Choksey — Managing Director
No. I mean, look, it will depend. So far, the business has been different. In the last two years, we had limited capacity and therefore, we were doing business based on obviously, some strategic customers that we have in India, also maximizing margins wherever we could. But obviously, thinking long-term and ensuring we have a diverse customer base and adding customers as well, going forward, of course, exports will go significantly higher in fact. Our prediction is because of nitro latex for gloves, which is largely for export, the exports will be much higher, 25%, 40% of our total turnover could be exports.
Karan Bhatelia — Asian Markets Securities — Analyst
That’s right. Thanks. No. If you just keep aside the gloves business, so the existing 20%, 21% which is [Speech Overlap]
Abhiraj Choksey — Managing Director
Yeah, yeah. That should grow as well, yeah, that’s correct.
Karan Bhatelia — Asian Markets Securities — Analyst
Okay, thank you. Thank you for the detailed answer. That is all from my end.
Abhiraj Choksey — Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Anirudh Shetty from Solidarity. Please go ahead.
Anirudh Shetty — Solidarity — Analyst
Yeah. Hi, thanks for the follow-up. I actually had a question around just the nature of the business. When I compare your gross profit margins and your asset turns with other chemical companies, I see that the GP margins over long periods of time is it’s lower, but the asset turns that [Indecipherable] is actually higher. So just wanted to understand what is the nuance of this business that extends this?
Abhiraj Choksey — Managing Director
Sometimes, I feel like you guys understand this better than we do, but the chemical industry is put into one as one industry, but I firmly believe that look, within chemicals, there are so many subindustries and one cannot compare one to the other. On one hand, there is complete commoditized chemicals which have perhaps, low-margin, high capex, but still deliver the return on capital that’s required because of the steady businesses. The other is on the other hand is extremely specialty chemicals, maybe very high margin, but limited volumes and limited business opportunity. So, it’s very hard to say in our business, exactly what you said, look, I don’t think our business is the kind where you know at least as of now that you can look and we’ve seen companies like ours globally as well and we haven’t seen any companies with 30%, 35% EBITDA margins, right, which you could see in some specialty chemical businesses and those businesses may be require 30%, 35% EBITDA margins because of the capex requirement. So because the asset turn is low, we can live with lower margin.
Bottom line is, look, we want to see the return on the capital and that drives all the numbers, right, so — and all the profitability numbers, so that’s what I would say and I mean, I would encourage you to go deeper. If you’re studying the chemical industry, try and understand the nuances of distinct types of chemical businesses and see what fits where. But you can’t compare one to the other like comparing apples to oranges.
Anirudh Shetty — Solidarity — Analyst
Got it and when you mention 20% to 25% ROCE, this is the pre-tax number or is it post-tax. We look at — Sachin, post-tax, right?
Sachin Karwa — Chief Financial Officer
Post-tax.
Anirudh Shetty — Solidarity — Analyst
Yeah. Got it. And just one final question. I think you had mentioned that the latex business tends to be higher margin than rubber. But you made this point today that you all can actually use the facility of nitrile latex to make rubber, so I’m presuming rubbers are forward integration. So, I guess, what is it about it that latex, besides being more upstream on the value chain and actually more high-value added, is that the freight [Speech Overlap]
Abhiraj Choksey — Managing Director
No, no, no. I don’t know — maybe, I’m mistaken, I’ve never mentioned that latex is a higher-margin product than rubber. I said latex is a more [Indecipherable] margin product than rubber. The rubber business is more volatile. So we see very high highs, followed by lows. And one the reasons for that is storage of latex is very difficult because it’s 50% or more water, 50% to 60% water and so to transport and store that is very difficult and so customers also don’t want to move very quickly, whereas with nitrile rubber or any kind of rubber, I would say, nitrile rubber, styrene butadiene rubber which we don’t manufacture, poly butadiene rubber which we don’t manufacture. The margins are a lot more volatile and choppy. But, I’ve never said that they’re lower.
Anirudh Shetty — Solidarity — Analyst
Got it, so basically
Abhiraj Choksey — Managing Director
In the long run, they’re similar, yeah.
Anirudh Shetty — Solidarity — Analyst
Okay. So just the transportation that is more difficult in latex which means that — difficult and more expensive, so maybe the competition would be limited by geography in that sense unlike in the rubber where [Speech Overlap]
Abhiraj Choksey — Managing Director
Geography is one and also some applications of latex are so critical. Just to give you an example, we supply latex to the tire industry, right? So they’ve not — even if there is a new vendor that comes in and it’s such a small portion of the whole cost of the tire, that is not something that they would change very quickly because even if somebody comes and say, okay, I’ll give you a 50% lower price product, they would not be interested because it doesn’t really impact the total cost of the tire and the criticalities of this product is extremely important because it plays a vital role in the adhesion — in terms of adhesion characteristics of the tire.
Anirudh Shetty — Solidarity — Analyst
Got it, got it.
Abhiraj Choksey — Managing Director
So those are some of the nuances. Similarly, on paperboard, some of this paper packaging is used in food products, extremely sensitive, so once they have sort of set the plant with two or three vendors maximum, they won’t change it for a fourth vendor very easily, as long as we’re reasonably competitive, yeah.
Anirudh Shetty — Solidarity — Analyst
Got it, got it. Thanks for answering my questions.
Abhiraj Choksey — Managing Director
Okay. Thank you very much.
Operator
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the [Technical Issues] closing comments.
Abhiraj Choksey — Managing Director
First of all, I’d like to take this opportunity to wish everyone a Happy Diwali and Saal Mubarak. All the best wishes for the New Year. We as usual, the Apcotex team appreciates the support and your interest in the company and we look forward to seeing you in Q3 again. Thank you very much.
Operator
[Operator Closing Remarks]