Camlin Fine Sciences Limited (NSE: CAMLINFINE) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Ashish Dandekar — Chairman of the Board, Managing Director
Santosh Parab — Chief Financial Officer
Analysts:
Unidentified Participant
Rajesh Bhayani — Analyst
Raman KV — Analyst
Chaitya Doshi — Analyst
Jatin Sangwan — Analyst
Surya Narayan Patra — Analyst
Satish kumar — Analyst
Dhavan Shah — Analyst
Kritin Arora — Analyst
Rohit Nagraj — Analyst
Presentation:
operator
Foreign. Ladies and gentlemen, good day and welcome to Camblyn Fine Sciences earnings call for Q1FY26. As a reminder, all participant lines will be in listen only mode. Then 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 Star then zero on your touchstone phone. I now hand the conference over to Mr. Rahesh Bhayani from Incred Capital Wealth Portfolio Managers Private Limited. Thank you. And over to you, sir.
Rajesh Bhayani — Analyst
Good evening everyone. On behalf of Incred Equities, I welcome you all to the Cameron Fine Sciences Q1FY26 earnings conference call. We have with us today Mr. Ashish Dandikar, Chairman and Managing Director. Mr. Nirmal Mumaya, Managing Director and Mr. Santosh Parab, Chief Financial Officer. I would like to thank the management for allowing Incred the opportunity to host this call. I now hand the conference over to Mr. Ashish Dandekar from Camden Fine Sciences. Thank you so much. And over to you, Ashish sir.
Ashish Dandekar — Chairman of the Board, Managing Director
Thank you. Ladies and gentlemen, a very warm welcome you for the earnings call of this first quarter. As is our convention. Santosh Parab, our CFO will give you a brief and run you through the quarter’s results and issues. After which both he and Nirmal Mumaya, our Managing Director will be there to answer your queries. So I’ll hand it over to Santosh now. Santosh.
Santosh Parab — Chief Financial Officer
Thanks Ashish. Welcome everybody and good evening. By this time I think you have got our investor presentation also and UFR which was hosted on the website and also on the stock exchange. As you can observe, our revenue have been at 423 crores as compared to 437 crores of last year. There’s a slight decrease. The major decrease is because of the deep in the specialty ingredients trade sections where there were lower revenues. And of course two aspects have impacted this lower revenues. One was we had taken an annual maintenance shutdown in the month of April in all our DAIS facility as well as Sarapur facilities.
So both throughput and output were impacted. This is an annual exercise. Every 12 to 18 months we have to take one shutdown. This impacted the production also and of course the margin. There was an unabsorbed fixed cost in the month of April of around 12 crores. We hired the other two main verticals which are the hallmark and which has been the growth story of the company. The blends business which has witnessed a strong growth in almost all the all our geographic geographies. Vanillin Business also has been stable. As you are aware, there are channel stocks lying in the main two geographies of Europe and US where the anti dumping duty is there and there are very fairly attractive prices which are going up.
We are observing that there are channel channel stocks. So. To maintain the revenues at what they are and the volumes has been a really nice performance. If you had seen, we also had an increased employee cost. We had paid one time performance bonuses to our blend business. The blend business as you know has been growing at a very very fast rate. And it was imperative that we reward the efforts of our employees. So one time performance bonus of around 67 and a half crores was paid to the employees mainly in Mexico and us. We have been strengthening our teams in blends business largely on the sales side where we have been recruiting salespeople.
The new employees have also increased and that is also reflecting in the increase in the employees cost. As you can see, the other expenses or the other operating expenses have been fairly under control. We have been able to control it despite the slowness. Some of the plants were not working in this. But the fixed costs are under control at the end. With the impact of lower production, higher debits, higher unobserved cost and some one time employees cost. We have seen deeply EBITDA. We have clocked around 19 crores of EBITDA which is only 4.5% of EBITDA margin.
But this is a one time thing because of the close one annual maintenance send out taken in the month of April. As far as margins are concerned, the operating margins and the product sale margins have reduced from 48 to 44%. Mainly on account of crop production. As you know, these are very sophisticated high temperature plants. When we close and we restart, there is higher consumption of product. And that has impacted around 2 to 3% of our margin. But all of the margins we have been holding on the prices are stable, fairly stable on both the sides on the revenue as well as raw material side.
In this quarter Vanlin business we had a small dip in the revenues are on 5 crores. But volumes have been fairly almost same. Prices are going up. But in this quarter because we are observing the channel stock, as I said, the average realization have not gone up as we had expected. The production of Van lean in this quarter was if we exclude the non closure dates or the maintenance dates, it was around 50% of the capacity utilization which have it. At present we are running the plant at 60% capacity utilized. So the two main verticals are doing well.
And we think that the State will come back. There is sluggish demand. There is Chinese issues all over the world as you know. And of course Trump tariff is there. We are closely watching. We know that this can have an impact on our business especially in the vanilling business. We are concentrating more on us. However other than that we don’t have much exposure in US. The US income of blends is manufactured in US It’s a local business. So you’re not will not be impacted from that because the local business service from Mexico so and we have not been selling any other major raw material.
Only few crores is sold to us. So thank you. I will now hand over for question and session. Thank you.
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. The first question is from the line of Raman KV from Sequent Investments. Please go ahead.
Raman KV
Hello sir. Thank you for the opportunity. So my first question is I just want to understand how much is the one off for the entire quarter and can you just break it break down like how much was with respect to the employee owners and with respect to annual maintenance, shutdown and etc.
Santosh Parab
So as I said I’ll repeat the numbers. We had unobserved fixed cost about 12 and a half crores in all our plants in the month of April. And around 7 and a half crores was paid for one time bonus to the employees of plants.
Raman KV
Apart from this there was no.
Santosh Parab
As I said we also had 2 to 3% away margin loss because of startup of plants. We had closed the plants to start the plants. The the first dosing the consumption increases that will be around 2 to 2%. That will be another 7 to 8 cross.
Raman KV
Okay sir. So. And my second question is with respect to the blend business side. So. In the previous call you mentioned it’s the. It’s margin. So if I am doing the calculation, if I even if I’m. If my understanding is right it should have fetched during this quarter around even if the margin is 10% around 23 crores of EBITDA. But our entire EBITDA is 19 crores. So was there any impacts on the blend business? Martin?
Santosh Parab
So we have been saying that yes when the blend when business is matured it does get a higher team margin. But as you know there are couple of geographies which are very mature especially Mexico where we have 17 plus EBITDA margins. In America also it’s around 15% but there are other geographies like India or Europe and the Vita 4 piece, these are growing businesses where the margins are in the range of 38 to 10%. So the overall margins are are not 1718 but sub 12 13.
Raman KV
Okay sir, and my final question is with respect to the Vanlin business. So what were the prices of when what was the our selling price of Vanlin in quarter one and what are the prices now and will our realization be impacted with the you US tariff or is it a fast food?
Ashish Dandekar
So in the, in the first quarter our average realization was twelve and a half dollars and currently it is slightly above that as we go forward. The anti dumping duty levied on the Chinese producers for Vanillin in the US that’s only to the US and it is not applicable in other markets. For the Chinese it’s 280%. For us right now currently the tariff is at 50% which is a moving target because in the last few days a lot has changed but we don’t know where it will go and settle. So we yet have a very highly competitive position versus our Chinese competitors.
So our understanding is that we will be highly competitive and we should be able to gain market share in the US market. As far as Europe goes there are no tariffs. There’s just an anti dumping duty on the Chinese producers at 131% and that continues. And for us there is no other additional tariff.
Raman KV
And one just doubt with respect to Europe have we started any commercial export to of Vanlin to Europe or have we assigned any contract for foreseeable export to Europe?
Ashish Dandekar
We started sales to Europe right now Europe is on holiday so it starts business starts in September. So we expect to start negotiating for contracts for the next year for January. So that’s expected in September October.
Raman KV
And sir, in the previous quarter you gave a guidance of 60 to 65 to 70 crores of EBITDA run rate every quarter. So I mean this has been like a one off quarter. Can we expect this guidance going forward or are you planning to revise it?
Ashish Dandekar
No, so we have not actually guided anything specific. All we are saying is that our Vanillin business will work at about the estimated volumes are at about two and a half to 3,000 tons is what we are saying expected realizations would be in the 13 to $14 through the year average for the year and we continue to hold that as going forward we continue to hold our blends business growth. So I think overall that’s what we’re guiding.
Raman KV
So 20% blends business growth is intact, right?
Ashish Dandekar
Yes.
Raman KV
Okay. Thank you sir.
operator
Thank you. Before we take the next question, we would like to remind participants to press star and one to ask a question. The next question is from the line of Chaitiya Doshi from Inkwet Equity. Please go ahead.
Chaitya Doshi
Hello. Thank you for the opportunity. Sir, I have a couple of questions. The first one is sir, as observed that CIF US prices for methylene vanillin were around 16 per kg for June. Could you confirm if this aligns with the realization and any like if you can share the price trends if you’re seeing in the export market.
Santosh Parab
So I don’t know from where when we are selling. As you know we are selling to our subsidiary and the subsidiary ultimately sales. So in consolidated sale when India sales to North America it doesn’t reflect obviously when we get a higher rate contracts in US we’ll sail at a with some discount from India. So there are some transaction which which could be at $16. But that’s not the average realization price. At present there are transition with $16. But that’s not the rule because that the sale is on the basis of quantity also. So smaller the quantity higher the realization.
But when we are. When we get an order and we transfer from India, we do discount it and sell at the discounted price to them. So some prices would appear to be very high.
Chaitya Doshi
Okay, and so what would be the current retail or end user price range for vanillin in the US market?
Ashish Dandekar
Currently it would be at about 18 to 19.
Chaitya Doshi
Okay. And so with potential tariffs on Indian when an exports to the U.S. can you clarify how currently like who currently bears the cost of this duty? Like our company distributors or the end users.
Ashish Dandekar
It’s always the importer. Whoever is the importer has to bear the duty.
Chaitya Doshi
Okay, and going forward how do you plan to manage up like in the next if the 50 tariff is planned on. So how do you plan to go on?
Ashish Dandekar
No wherever is importing our product will have to pay the 50% tariffs. And like I explained earlier our competitors in China are at 280%. With the anti dumping duty and tariffs on China we are competitive versus that.
Chaitya Doshi
Okay, and the last question. What is the current vanillin production level in absolute terms or capacity utilization percentage.
Santosh Parab
So the during the quarter when we were producing it was around 50% capacity utilization. As I said in my introduction and at present we are running at 60% capacity.
Chaitya Doshi
And when can we expect it to reach like 100%?
Santosh Parab
It’s a market say, right? Because we can reach 100% tomorrow. But we have to match the market demand.
Ashish Dandekar
So the demand expectations are that the channel stocks should clear out by the next few months and the real demand should start showing up. What ultimately is going to be the real demand coming from Europe and us.
Chaitya Doshi
Okay, thank you sir.
operator
Thank you. The next question is from the line of Jatin Sangwan from Burman Capital. Please go ahead.
Jatin Sangwan
Sir, you mentioned that you had some impact on gross margin also because of your plant shutdowns. And also what’s your sustainable gross margin number that we should look at without including the impact of vanillin that will come in and of course losses of catechol will go away. But let’s say sustainable gross margin for.
Ashish Dandekar
You it will be in the region of 40 to 45% gross margin. In that range, 2 or 3% up or down will be sustainable. So we are at 44. It could go to 47, 48. It’s 2 or 3% up or down from where we are.
Jatin Sangwan
So we are saying that we are at. We are in the range of our sustainable gross margin.
Ashish Dandekar
Yes.
Jatin Sangwan
So the last two quarters we were showing 50% plus gross margin. That there was some one offs in that. And going forward gross margin would be around 45 plus minus 2%.
Ashish Dandekar
Correct.
Jatin Sangwan
And sir, you mentioned that the prices in US for vanillin are 18 to $19. Can you give some color around what are the prices in Europe and other geographies?
Ashish Dandekar
So Europe would be about 14 to 15 right now. Like I said again, there is stock in the channel which is getting cleared. Once that gets cleared, we’ll have a clear idea where this price will go and stabilize. But going by the anti dumping duties, I think Europe will be at 1516 and US should go up further than northward of $30. And the other rest of the world? Rest of the world. The market prices are. The Chinese prices are between seven and a half to eight dollars.
Jatin Sangwan
Got it. And sir, when we say that we will do 2.5 to 3,000 tons of vanillin. So how much are we expecting from US and how much from Europe and how much from rest of the world?
Ashish Dandekar
So I would say US and Europe should be at about 1800-2000 depending on like I mentioned about the channel stock. And 600 to 800 will be rest of the world.
Jatin Sangwan
And sir, once this channel stock gets cleared, US/Europe combined is around 7,000 to 8,000 tonnes of market. So by when we expect to reach full utilization for Vanillin. Because there is not much capacity available outside China.
Ashish Dandekar
Correct. The estimate is that we should be at about 70 to 80% capacity utilization in FY27. And I think there we get a clear idea. But FY28 is what we are saying. We should be at a full capacity utilization.
Jatin Sangwan
Sure. Got it. Thank you.
operator
Thank you. The next question is from the line of Surya Narayan Patra from Philip Capital India Private limited. Please go ahead.
Surya Narayan Patra
Yeah. Thank you for approving this opportunity. Sir, my first question is on the impact the EBITDA level because of the planned shutdown. This is which plant maintenance that you have indicated sir. And.
Ashish Dandekar
Both sides the age and because they are interconnected. So we took a shutdown in both sides.
Surya Narayan Patra
Okay. So this is. This is the annual, this quarter, the timing wise. This is also the annual timeline for maintenance are done or how is it Right.
Ashish Dandekar
So it’s basically between 12 to 18 months we’ve been taking these shutdowns. So last time we had divided into actually two parts. We had not done one single one. But here we had a boiler inspection. So we had to upgrade the boiler. So we took the shutdown for the entire maintenance. So that for the next 12 months we don’t need to. Or at least for 12 months we don’t need to take any other further shutdowns.
Surya Narayan Patra
Okay, so then the put together it is a kind of 2% so 78 crore as well as 12.5 crore almost anti crore kind of impact relating to the plant shut down and the restarting of the plant. Okay, there’s now regards the Vanillin business. So is it. See the tariff is also there which is an uncertain thing currently. But it is high also 50. And on the contrary we are also kind of having a significant advantages position to the competition. Practically we are the second player to solve it. To cater to the US and European demand in this current situation.
So if that is the case, is it. Is it right to think that whatever tariff, whether it is 25%, 50%, whatever the tariff that will be passed on only will not bear anything.
Ashish Dandekar
So see the way to view it is that there is an anti dumping duty and tariffs on our competitors from outside of these two geographies which is in US it is 280. In Europe it is 130. So and as is 50 in US and in Europe it is the standard five and a half. So this is 131 plus five and a half. We are at five and a half. So we have a distinct competitive advantage over our competitors.
Surya Narayan Patra
So hence ideally we should not be bearing this tariff pressure at all because it is a. Since it’s being we are the only second player for US market. So then it is a response.
Ashish Dandekar
But yeah, you’re right in a way. But what the way you have to look at it is that there’s a limit to what you can pass on also. Right? Because the competitors come in, if it is more than 280% of what they have to pay, then of course they also come into the market. This becomes viable for them.
Santosh Parab
So if you try to sell it $20, it becomes a $30 product to the. To the end customer, right? And then suddenly the Chinese will be interested. Then they get more than $8.
Surya Narayan Patra
Okay. Even if it is passed on to the importer. But we have to bear something because we have to compromise on the realization front, correct?
Santosh Parab
Yes.
Surya Narayan Patra
Okay. So is it possible, sir, that instead of focusing on the US given the. If it is like let’s say 50% and likely to sustain this way, so can we manage, since it is a two player market for the two major regions, so can we focus largely on the European side and vacate the US market for Solvay? And can Solvay cater the entire demand of the US from US?
Ashish Dandekar
The way to see it is that what will be ultimately the net realization that we get in our hands, where will it be more lucrative? We will focus more on that. Today the US and Europe to us even with the 50% are more or less on the same line. Maybe US is even slightly better. Today, even with the 50% tariff, the realizations will be better going forward in the US than they would be in Europe. So I think it is better as a strategy to keep a balance and to be in the market because you have customers in both these geographies who are going to buy from us.
So the large FNF companies have multilocational supplies and they expect us to supply in both these locations. And I think it is safer for us to be servicing both of these, even though one may be slightly more profitable than the other to have a face in front of the multinational customers, which is that we are a stable supplier and we can service them across the world, which only. Which only our principal competitor out of Europe and US can do. The Chinese cannot do that. That’s why I think that’s a very strong position for us to be in and to take in the market is to be able to service them across all geographies.
Surya Narayan Patra
Okay? Sir, since the anti dumping duty got implemented in the last week of July, it’s in. So when one should think about commencement of the supply deals, the annualized supply deals of Vanillin with the largest customers.
Ashish Dandekar
So generally these deals are finalized October, November because from January they need the material. So with the lead times of at least 60 days for shipping, they typically look at September, October to try and finalize these.
Surya Narayan Patra
Okay, so then
Ashish Dandekar
like I said, we. Don’T know what is in the channel, what stocks is in the channel. But our estimated that stock also should not. The orang of that should not go more than three, four months.
Surya Narayan Patra
Okay, so then in that case from both the angle from the inventory left out inventory in the channel level angle as well as the kind of new contract commissioning. So from both the angle one can believe that the true benefit of vanilla ramp up will be seen from the October means October, November, December quarter means the third quarter of FY26.
Ashish Dandekar
Correct.
Surya Narayan Patra
Okay. And sir, is there any compulsion for us to sell in the non US, non Europe market for vanilla?
Ashish Dandekar
Not, not really, but some of the multinational customers we would have to give some material at least in those other markets to. To prove our second supplier source in. In each of the markets, at least in major markets.
Surya Narayan Patra
Okay. Okay, so now just see obviously vanilla is a greater opportunity of the near future. But if you can talk something about your blends business which has been consistent and also if you can possibly give some some monitorable there like generally we have been seeing the growth for this business which has been very consistent and I think in the difficult times of the European losses and all that. So that was a business which was kind of bearing all the kind of or observing all the kind of a negative. So now all those negatives are out. So this business anyway is growing consistently.
So on the profitable true profitability of the business will be reflected now onwards, ideally. So what growth as well as what change in the profitability for the blends business that one should see going ahead?
Ashish Dandekar
So when you look at say different geographies where we are in and each are at different levels of advancement, when you look at say Central America, which is Mexico, we are at an advanced level there where revenues this year should be over $50 million and EBITDA margins will be in high teens to touching maybe 20. Then you look at the second most advanced development for us is North America where this year we should probably end up at about between 30 to 35 million dollars with a 10% to 12% EBITDA margin. Next year that same thing would be 50 million plus with a very high teen margin.
Then comes Brazil, where we are at a say this year we should do about 25 to say $28 million. And the margins again there, because it’s at lower advancement will be in the region of 10%. Next year the same thing will look like at 35 to 40 million. It looks like a mid teen kind of margin. Then you come to CFS Vita 4 which is at 15 million this year, 15, 16 million with a margin of between 5 to 10%. Next year the same thing will be at an advancement to 25 million where it will be northwards of 10%.
So it’s at different levels. And the growth as you see in these different geographies are all the target is to grow in all the geographies at least at 15% and some of them more than 15% so that the average at least comes to 20. And the EBITDA margin evolution for each geography starts going towards what say, like a Mexico’s advancement is.
Surya Narayan Patra
So for for a better understanding about the profitability generally. Food additives are also believed to have a margin profile north of 25%. Also. So whether there is a threshold limit beyond which the margin really expands faster or how do you monitor whether it is the growth is linked to, let’s say here the capacity is not relevant because it is with limited capacity, significant volume can be created. So capacity not a parameter. So how do you monitor whether it is the people based on which you monitor the business or it is on what investment level that you monitor the business to expand to certain level.
Ashish Dandekar
So basically the business is defined by gross margin and people. Okay, so gross margin average for the blends business is 35 to 40%. Now in a product mix in some markets you may be having a better product mix which gives you better gross margin. So your EBITDA levels could possibly be higher at some point. The balance is always as to what are the kind of investments you make in terms of salespeople, technical support and application laboratory people in all these departments where that drives the sales. So the drivers, the key drivers of the sales are those people.
So like for example, in this year in Q1, we increased our strength in the US by almost 35% in the last six months. So obviously we are investing from the ebitda in the U.S. now the impact of that will come from say Q3 and Q4 because it takes six months for a person that you got in to start delivering on businesses. So for us it’s a balance of keeping in mind that what are the gross margins in the market, which are the products, which is the focus area and what are the people that we require to push more in that focus area? That’s what drives the business.
Then there are some businesses which are like say for example, antioxidant business, which is where we are fully integrated. That becomes a door opener. Maybe the gross margins for the blend business may be a little lower there, but that becomes your door opener into a market. So again, it depends on the market, depends on strategy for each market, where it is, what is the level of maturity of the market? What is the level of maturity of us playing in the market? What is the product mix? What are the products that essentially where we have significant advantage over competition? It’s all defined by a lot of these things.
Yeah.
Surya Narayan Patra
So then this recent two acquisition particularly.
operator
Sorry to interrupt. Sorry to interrupt. Mr. Suryan Patra, we request you to rejoin the queue as there are several participants waiting in the question queue.
Surya Narayan Patra
Sure. Okay.
operator
Thank you. The next question comes from the line of Satish Kumar from Incred. Please go ahead.
Satish kumar
Yeah, hi, sir, this question is regarding the gross margin. So what is the gross margin that you estimate? X Vanillin. Because when we were not selling Vanillin, we were making a gross margin of around 46, 47%. So what sort of margin we can expect? X Vanillin.
Ashish Dandekar
Yes. So that’s the margin will continue at that. That’s what I mentioned earlier, that we’ll be in that range. And Vanillin margin, of course will get defined by ultimately at what price. The market settles that. But yeah, it’s as it stands today, we are in this range of 45, give or take 3%. Up or down.
Satish kumar
Yeah. So, and if the Vanillin goes up or down, then it will increase our. Decrease our margins, right?
Ashish Dandekar
Yes, correct.
Satish kumar
And so sir, just to recheck, so when we were selling blends, when we are selling blends and straits, then what sort of gross margin do we expect? Only in vanillins and straights. Sorry, only in blends and straights.
Ashish Dandekar
So blends are typical. Gross margin is about 40%. And in straights for the hydroquinone chain it will be more than 40%. It will be probably closer to 50%. And for the catechol chain, it will be closer to 20%. So that’s how the average margin then comes to around 45%.
Satish kumar
Okay, got it. Thank you. Thank you, sir.
operator
Thank you. The next question is from the line of Chaita Doshi from Incred Equity. Please go ahead.
Chaitya Doshi
Hello there. I have a Couple of more questions. So first one is that how much vanillin have we export like we sold this quarter in the US as compared to the last quarter.
Santosh Parab
So it was almost the same amount of panel in which we sold to us this quarter.
Chaitya Doshi
Can you number, can you give this number?
Santosh Parab
It’s an internal sale. Actually you should ask me what I sold to the third party. The third party sale all on consolidated basis was around 540 tons.
Chaitya Doshi
Okay. And the production cost, what is the production cost for 60% utilization?
Santosh Parab
60% utilization. The production cost will be in the range of between 9.25 to 9.75 based on the group value.
Chaitya Doshi
Okay. Okay. Thank you sir.
operator
Thank you. The next question is from line of Dhavan Shah from of accurate advisors. Please go ahead.
Dhavan Shah
Yes, my question is on the vanilling side of the business. I think you mentioned that there is an inventory of roughly 1800 to 2000 tons in US and Europe and around 600 to 1200 tons for the rest of the world. So if you can help us to understand you how much is the demand from US and Europe annually and how much is it from rest of the world and versus that how is the supply environment? I mean we have roughly 6,000 tons of capacity. We are running at 50, 60% right now. And Solway is also there in the Chinese are also there.
So if you can help us to understand, you know, the demand supply dynamics of vanilling at the moment. And by when do you expect this inventory will be over if you can help us on this part.
Ashish Dandekar
Sorry, I didn’t understand your question. Because the inventory, we don’t know what the inventory is in the channels in US and Europe. That is unknown to us.
Dhavan Shah
You mentioned earlier. I think in the earlier question
Ashish Dandekar
12 to 14,000 tons. Sorry.
Dhavan Shah
Yeah.
Ashish Dandekar
So 12 to 14,000 tons is the demand of US and Europe and about 16 to 18,000 is the demand for the rest of the world.
Dhavan Shah
Okay. And. And how is the supply environment at this moment and inventory by when do you expect this inventory will get over that you are seeing from US Europe.
Ashish Dandekar
US Europe was pre anti dumping duty. The inventory has been built up. Difficult to say. We don’t know the numbers. So very difficult to answer that question. But we estimate that probably in the next three to four months that inventory should be largely cleared.
Dhavan Shah
Understood sir. Understood. And let’s say you know right now you said that when price is probably 13 to 14 and assuming that 50 duty right now from us so our lender cost would be around 2021, right?
Ashish Dandekar
Yes.
Dhavan Shah
Correct. And Chinese, Chinese is roughly 28 at this moment.
Ashish Dandekar
Right.
Dhavan Shah
And how is, how much is this always cost costing?
Ashish Dandekar
We don’t know what. But they’re selling that they are selling. Market price is, is $20. Like I said, they’re at 1819, but they’ll probably take it closer to 25 as the, once the inventory is clear, they don’t want to obviously push in the market right now. So I estimate they’ll take it to about $25.
Dhavan Shah
Understood. And let’s say the tariff, you said that by September, October there will be, you know, the new contract revision for the next calendar year. So let’s assume that this study won’t go away. You know, this 50% will remain at least for next one or two months. Okay. And if that negotiation, negotiation happens, then do you foresee, will there be any upward revision of the vanilla price or to revise you will maintain the price of 1314 for the next calendar year?
Ashish Dandekar
Very difficult to say at what point the tariff will go. So essentially what we are, what we will naturally try and do is give them a price which is the delivered price, which will obviously take care of this 50%. So the pricing will be a little higher. So if it goes away, we get the higher price. If it doesn’t go away, we get a lower margin.
Dhavan Shah
But if 50% tariff will remain the same, you use, you are saying that you will revise the price upwards when the negotiation happens, is that correct?
Ashish Dandekar
No, I’m saying that the price in the negotiation will be defined by what the competitors are doing. So Chinese will come in at $28, Solway will come in at maybe 24, 25. I don’t know what price they will come in at. So we have to see if we even land up at $20, for example, or $21. That is including the tariff. If the tariff doesn’t come, we get the 21. If it comes, we’ll get 40.
Dhavan Shah
And let’s assume if you know by the end of this month if there’ll be more tariff on India. Okay. And if your lender cost would go up to $25 and if the tariff doesn’t go, then will there be any clause in the contract that if the tariff goes away maybe within next three to four months, the, the price would be revised afterwards. Or the price
Santosh Parab
generally. These are fixed rate contracts.
Dhavan Shah
Okay. Okay.
Ashish Dandekar
Unprecedented. No tariff has ever been like this. So it’s very difficult to say what people are going to do as a buyer, what their strategy will be.
Santosh Parab
And we don’t know whether this is the end tomorrow morning we can get a tweet with 150%.
Ashish Dandekar
Who knows? Or 0 or 15 or 20 or who knows?
Dhavan Shah
Understood. And you said that by FY20 I mean in FY27 we are assuming 70 to 80% capacity utilization of Vanillin. So how much of that? I mean 4,200 tons. You are assuming the sales volume for Vanillin. So how much of that would go to Europe?
Ashish Dandekar
Over 40% to Europe, 30 to 40% to US and balance rest of the world.
Dhavan Shah
Understood? Understand. European contract would also be negotiated by September, October only.
Ashish Dandekar
Correct.
Dhavan Shah
And this quarter shut down, was it there in the last year also the. Same quarter
Ashish Dandekar
it was in the year before last.
Santosh Parab
You have seen the last quarter result. The plants were at full capacity. Hence we were had to take the shutdown.
Dhavan Shah
Awesome. Sure. Thank you so much for answering all the questions.
operator
Thank you. The next question is from the line of Kritin Arora from Stalion Asset. Please go ahead.
Kritin Arora
Hi sir. Thank you for the opportunity. Sir, as you mentioned, some of the tariffs will be borne by the company. So what initial discussions with your customer. Suggests in terms of the ratio of tariffs that will be borne by Kamlin.
Ashish Dandekar
The price is inclusive of delivered price to customer. That’s what he’s interested in. I explained this whole thing in the last question in detail.
Santosh Parab
Paris was to be born but important. So we have to send the material tire at his stop or at the doorstep in US and he has to clear it. Custom duties will be paid by the. Nobody wants to share this concept. You can only adjust your selling price.
Kritin Arora
Got it. Got it. Got it. Thank you.
operator
Thank you. The next question is from the line of Rohit Nagraj from BNK Securities. Please go ahead.
Rohit Nagraj
Thanks for the opportunity. So you just mentioned that about 80% of our vanillin sales are coming from Europe and the us. How much of that is generally contracted and how much of that is on a spot basis?
Ashish Dandekar
We’ll look at probably 50, 50.
Rohit Nagraj
And in the rest of 20% do we feel that there will be a larger pressure in terms of pricing? Given that all the Chinese players will be eyeing on this market and possibly even the volumes could be subjected to some challenge.
Ashish Dandekar
Yes, the volume is okay. The price will always be challenged by the Chinese. But since we have high priority, high qual, we have some opportunities in some high value added FNB products. So that’s the market that we are targeting. We are not targeting the regular market. We are targeting very specific high end consumers who require high quality, high purity van.
Rohit Nagraj
So Got that. So just last clarification, in terms of the current, you know, tariff scenario, when we are, I mean, are we getting any orders from the US market and if we are getting in those orders, are those backed by, you know, advanced payments or how does it exactly work? Because we sell the material, if the shipper is, I mean the customer is not able to lift the material, will there be a risk of any payment cycle which may get elongated?
Ashish Dandekar
No. Multinational customers and very large customers. So that doesn’t happen if you sign the contract. People generally in the west honor contract.
Rohit Nagraj
That’s helpful. Thanks a lot and all the best.
operator
Thank you. The next question is from the line of Jatin Sangwan from Burman Capital. Please go ahead.
Jatin Sangwan
Sir. Our losses in China and Europe have reduced to around 6 crores per quarter now. So by when do we think that they will completely go away? And.
Ashish Dandekar
So China should go away this financial year by the end of the FY26. I mean we should be by the end of the year, China will go away. Europe, we yet have to maintain the site. So there will be some cost of keeping that mothballed site which we have said that our estimate is it will be about 2 crores a quarter in the next financial year.
Santosh Parab
But this financial year we will have a similar run rate of around 5 crores per quarter.
Jatin Sangwan
Okay, got it. Thank you.
operator
Thank you ladies and gentlemen. This was the last question. I now hand the conference over to the management for the closing comments. Thank you. And over to you, sir.
Rajesh Bhayani
Thank you. Thank you, ladies and gentlemen. Thank you for giving us your precious time and your. And I hope you were able to clarify most of what you wanted. Look forward to interacting with you again. Until then, goodbye.
operator
Thank you. On behalf of Camblyn Fine Sciences Ltd. We conclude this conference. Thank you for joining us. And you may now disconnect your lines. Sam.