Chemplast Sanmar Limited (NSE: CHEMPLASTS) Q1 2026 Earnings Call dated Jul. 29, 2025
Corporate Participants:
Unidentified Speaker
Ramkumar Shankar — Managing Director and Director
N. Muralidharan — Chief Financial Officer
Krishna Kumar Rangachari — Deputy Managing Director of CMCD
Analysts:
Unidentified Participant
Rohit Nagraj — Analyst
Harsh Shah — Analyst
Bharat Sheth — Analyst
Dhruv Muchhal — Analyst
Sanjay Jain — Analyst
Dhara Ganatra — Analyst
Kiran Gadge — Analyst
Abhijit Akella — Analyst
Madhur Rathi — Analyst
Archit Pandit — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Chem Plus Sanmar Limited Q1FY26 earnings conference call. As a reminder, this conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on the date of this call the statements are not the guarantee of the future performance and involves risk and uncertainties that are difficult to predict. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference has been recorded. I now hand over the conference to Mr. Ramkumar Shankar, Managing Director. Thank you. Thank you and over to you sir.
Ramkumar Shankar — Managing Director and Director
Thank you and good morning everybody. On behalf of Kentla Sanmar Ltd. I extend a very warm welcome to everyone joining us on our call today. On this call I am joined by our CFO N. Murligaran Dr. Krishnakumar Gangachari who heads our Custom Manufactured Chemicals Division and fga our Investor Relations Advisor. I hope everyone has had an opportunity to go through the financial results and the investor presentation which have been uploaded on the stock exchanges website and on our company’s website. In a very challenging market environment during the previous quarter the company achieved a revenue of 1,100 crore rupees and an EBITDA of 17 crore rupees.
The industry continued to face pricing pressures due to persistent dumping of base PVC primarily from Europe and suspension PVC from China and other countries. While the antidumping duties on Pace PVC are already in place for countries like China, Korea, Malaysia, Norway, Taiwan and Thailand. India witnessed a shift in dumping with significant flow of material from EU and Japan. DGTR has since initiated an ABD investigation on these countries and the process is ongoing. We are confident that there will be action on this in the near future. Regarding the antidumping duty on suspension PVC, the Honorable Supreme Court in May stayed the Honorable Gujarat High Court’s order dated 25th of April 2025 which had excluded certain grades from the ambit of ABD.
Consequently, the disclosure statement has been issued by the BGPR and the final findings are expected soon. The demand outlook for both PVC products remains robust however, price volatility was observed during the quarter due to anticipated policy actions on trade remedies. Focusing on the business specific performance on the Pace PVC side, we are pleased to share that our new Pace PVC plant in Kadalur has been successfully ramped up to full operating capacity and is delivering consistent operating performance. The demand for paste PVC remains steady in India at approximately 40 to 45,000 kilotons 45,000 metric tons during the quarter and encouraging signs are emerging from the automobile sector on a custom manufactured chemicals business.
In Q1 we delivered as per schedule and best practice remained on track. The agrochemical sector is showing signs of recovery from the recent slowdown while the overall business trajectory and pipeline remains strong. Sales volumes may reflect timing differences due to prevailing global conditions. As part of our plan to drive long term growth, we are focused on broadening our customer base. We are seeing good progress on this front, especially in light of the strategy adopted by global agrochem majors to diversify the supply chains away from China. Construction activities for NPB3, Phase 3 and civil works for NPB4 are progressing as planned with completion expected by Q3 of the current financial year.
We remain firmly committed to this segment and are confident in its potential to generate long term value for the company on refrigerant gases. We have received environmental clearance for the R32 project. The final decision on sizing and sizing of the project will be taken shortly. Our value added chemicals business portfolio includes caustic soda, chloromethanes and hydrogen peroxide. Volumes for our value added chemicals fell by 16% on sequential basis. This was due to lower caustic soda production at nature on account of temporary plant operational issues. This resulted in lower availability of hydrogen impacting the same quantity of hydrogen peroxide as well.
Prices of caustic soda were firm though we expect some volatility going forward. Chloromethane’s prices were steady and this trend is likely to continue. The domestic demand for suspension PVC registered a growth of 4% during the quarter. The outlook for pipe demand remains positive, supported by a strong pipeline of infrastructure projects. Government procurement activity is expected to gain momentum in the coming quarters. We sold 92,849 tonnes during the quarter representing a growth of 17% on a quarter on quarter basis. This is driven by the destocking of excess inventory that had been built up towards the end of last year.
Meanwhile, traders and processors continue to import low priced PVC from China, capitalizing on the uncertainty surrounding ADB. This led to an estimated increase of approximately 50,000 tonnes in imports compared to Q4 of last year. There has been some positive movements on the add front. With the disclosure statement having been issued. It is now expected that the final finding on suspension PVC will be released soon. We are hopeful that we should see the add in place by Q3 of this year. There are other green shoots that are emerging. Anti involution measures in China directed towards addressing destructive price competition by reducing overcapacity in that country augurs well for various chemical sectors including pvc.
If these measures are taken through to their logical conclusion, the overcapacity in China in PVC would finally be addressed with favorable consequential benefits for the PVC industry worldwide. We believe that we are nearing the end of a long winter in pvc. While the last few quarters have indeed been very tough, we have used this period effectively to build capacity in our specialty businesses which would act as a springboard for future growth. Now I’d like to invite our CFO Murali Dharan to walk you through the financial performance of the company. Thank you Ramkumar and a very good morning to all the participants on the call talking about the performance in Q1 FY26.
On a consolidated basis, the revenue for the quarter stood at 1,100 crores as against 1145 crores representing a drop of 4% on year on year basis mainly due to lower realization in PVC businesses coupled with lower volumes in Caustic Soda. This was partly offset by the higher Sachan PVC volumes. The company reported an EBITDA of Rs. 17 crores for the quarter and the net loss for the quarter was at Rs. 64 crores. Now coming to the quarterly segment for its performance, specialty chemical revenue stood at 355 crores, a flat trend on year on year basis.
Dispatches from Custom Manufacturing division were as per plan. Revenue from the value added chemicals saw a small 3% drop on year on year basis at Rupees 140 crores. Suspension PVC posted 6.6 crores revenues implying a growth of 12% on sequential basis and remained flat on year on year basis. Remediation of unfair trade practices is key to the performance of the company. With the impending announcement of the ADD Delhi, we anticipate improvement in the performance going forward. As Ramar highlighted, we remain optimistic about a positive outcome. With this we conclude the presentation and open the floor for further discussions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 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 Rohit Nagraj from BKC Security. Please go ahead.
Rohit Nagraj
Thanks for the opportunity. So first question is on the likelihood of the add on subscription cvc. So in terms of spreads, what are the spreads that we are currently making and once the add is in place based on the initial trending and initial rates, what is the likelihood of the spreads post add? So just a broader number. I know that it’s very difficult to give a specific number but on a broader basis. Thank you.
Ramkumar Shankar
Hi. Thanks for your interest in the company. As you rightly said, it is very difficult to give a specific number on the add. That would be clearer when the final findings come out. The disclosure statement has been issued. The comments on the disclosure statement are expected. The last date for the comments are on 30 July and we hope that by early August we should have the final finding and maybe the preliminary duties that were announced sometime last year towards the end of last year may give you an idea about what the final findings could be.
Though that is only an indication and that is not really what will actually come. In the preliminary findings we had duties ranging from 82 to $167 on China and around 104 to $339 on the US and on other countries it ranged anywhere from 50 to $200. So this was on the preliminary duty. The final findings or the final duties will be known only from around by around the first week of August. Like I said, the current margins again would also be impacted by the stocks that we have, et cetera. The variable contribution margin would be anywhere from 5,000 to around 7,000 rupees and obviously anti dumping duty should positively impact this.
Rohit Nagraj
That is helpful sir. Second, a question on the CMCD division in terms of the project completions and our target of FY27 are we completely on track and just on a broader basis given that incrementally the large part of investments will be directed towards the CMCD part of the business. Now what are we looking at from a five year perspective maybe by FY30 we want to have this division significant ramp up beyond FY27 as well. So any such target that we are looking at and in terms of investments also what is the kind of investments which is envisaged over the next five years beyond the ones that are currently on board? Thank you.
Krishna Kumar Rangachari
This Krishna. I’ll take the first part of the question. The project completion is going as per plan. We committed to expansion of the multipurpose block which we commissioned two years back in August 23rd that phase three is on track to get completed over the next two to three months. And similarly we have triggered an investment on a civil structure for the next production block which is also coming towards a completion in similar timeline. And so both were triggered based on the health of our pipeline which continues to be strong and our engagement with all our customers, you know, very active engagement over the past 12 months with number of visits, audits as well as inquiries that we are working on.
So 27 mostly on track is what. I would say. With respect to future investments.
N. Muralidharan
Murali, you want to like we had indicated earlier, whenever we see visibility for 60% of the current loss that we have, we will trigger the next investment. And we have also indicated clearly that our first preference for capital employer deployment is in the CMCD business. So that guidance still holds.
Rohit Nagraj
That’s helpful. Thanks a lot and all the best.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from the line of Harsh Shah from Access Capital. Please go ahead.
Harsh Shah
Yeah, so thank you for the opportunity. So my first question was on the PVC side. So what is the current demand supply outlook globally? So has China seen any recovery or maybe Europe has seen any recovery which can restrict low price imports to. And the second question was on the CSM vet. So you mentioned Akin is seeing a sign of recovery. So have you signed any new Lois there or have you seen any increasing inquiries there? Yeah, thank you.
Ramkumar Shankar
Morning Harsh, this is Ram Kumar here. I’ll take the question on PvP. As far as the demand supply globally is concerned, it is still at the same time there’s no great improvement in the demand front in China. But there are some movements on the supply side in China. There has been some recent action by the government there to address overcapacity across multiple sectors. They have identified the disruptive price wars arising out of overcapacity as a big problem for their own economy. And therefore their government bodies have started looking at these overcapacities and studying them. But this is likely to if they take it through to completion, as I mentioned in my opening remarks, this could rationalize the excess capacity especially in China and that could have an impact here in India.
But we have to wait and see. As far as demand is concerned in China, it really hasn’t improved by much. The rest of the world also there is stable demand. There’s no great improvement. Europe is actually going the other way. Europe recently saw one announcement of a plant closure as well of a PVC plant closure with a capacity of around 225,000 tonnes. India demand is strong and India will continue to be strong given that the potential here is much much higher.
Harsh Shah
Okay, and so you expect more planned closure announcements to come in India. So there has been a lot of news flows that chemical industry in Europe is going through a tough time. So are there any other players which are likely to shut shops in Europe?
Ramkumar Shankar
Possible. That is what everybody expects. But you know they can only wait and see. There are in over the last year and a half there have been three plants for PVC that have been shutdown or at least announcements have come and one chloro vinyl plant which is caustic sort of up to VCM which has also been. They said that they have a plan for shutdown by end of 27. So Europe closures are likely. You would likely to see more announcements going forward. At least this is my view helpful.
Harsh Shah
Answer on the CSM bid. So since Eckchem is you mentioned that Ektam is witnessing recovery. So have you seen any increase in inquiries there? Any new Lois? We have signed during the quarter.
Krishna Kumar Rangachari
So this is Krishna here again. So the inquiries, the pipeline continues to be healthy. You know we are actively engaging with the innovators and we do see a lot of traction. While the recovery is, you know the turnaround in the ACM is happening we believe, you know sometime next year onwards. Again the, the speed of the inquiries and the number of inquiries in general will start accelerating and increasing, increasing further. But overall our engagement continues to be on traction.
Harsh Shah
Okay, yeah, that’s all for my session. Thank you so much.
operator
Thank you. Before we take the next question we would like to remind participants, you may press participants star and one to ask a question. The next question is from the line of Bharat Set from Quest Investment Advisors Private limited. Please go ahead.
Bharat Sheth
Hi sir, thanks for the opportunity. So you have given a color on this CPS pvc. Can you give little more color on page pvc? What is happening Because I understand last year some anti dumping was already introduced from certain countries and rate were under again investigation. So what is happening over there? How do we see paste PVC demand supply and our positioning?
Ramkumar Shankar
Good morning. In fact the total market for phase PVC in the country is around 170,000 tonnes. And as you know we are by far the largest producer of paste PVC in India. We have a capacity of around 110,000 tonnes including our latest expansion at Cuddlewood and there is one other producer who makes around 10,000 tonnes or so. So that is where you know that is the demand supply in the country and demand is expected to continue to grow at around 7, 8% a year. As far as India is concerned, on the imports coming into India, you are right.
Last year there was anti dumping duty that was announced on a clutch of countries, China, Taiwan, Thailand and Norway. And numbers range from anywhere from $247 to $707 per metric ton. Unfortunately, when this was done the dumping shifted to European Union, to producers from the European Union and the imports that were coming in from the European Union which in 2324 were only around 20,000 tons, in 2425 jumped to 36,000 tonnes. So that is really what has resulted in that earlier set of anti dumping duties not really giving the full benefit that they should otherwise have given.
So we have as an industry, we have filed a petition for anti dumping on producers in European Union and Japan. This was initiated in January this year and the investigation is ongoing. And we are confident that before the end of this calendar year we will see some action on that.
Bharat Sheth
Can you give some color on what is the currently our capacity utilization and our spread in pace PVC as well as suspension PVC and with the expectation of how do we see anti dumping coming in, it can play out.
Ramkumar Shankar
Our current capacity utilization is at 100%, very close to 100% in both of these products. We do operate fully as far as the spreads are concerned. Like I mentioned earlier on suspension pvc, the variable margin that we have is somewhere depending on the level of stock of the earlier inventory that we have. It would be between 5,000 to 7,000 rupees right now because of the pressure from imports and how much this will go up to really depends on what is the level of anti dumping duty. And I think those are matters that we’ll have to wait and see.
When we see the final finding and then that gets finally notified, then we will start seeing the benefit of that. As far as paid PVC is concerned today the variable margin would be around 24,000, 25,000 rupees per ton and that again depending on the level of anti dumping duty that comes in, we should see the benefit. It would be difficult to have that at this point in time.
Bharat Sheth
And last question sir, how is the pricing of the input cost and how that is playing out availability as well as pricing of input vc.
Ramkumar Shankar
Sorry, can you repeat that last bit please?
Bharat Sheth
So I mean how is the pricing of ethylene and vcm?
Ramkumar Shankar
All right, so the pricing, the VCM always tends to follow the prices of pvc. Therefore you know, the Margin between PVC and VCM usually holds good. There could be a lag of maybe a few weeks. But other than that, they would normally follow closely together. Therefore that is not really a concern for us. Availability is not an issue. We are, our requirements are tied up. And Italy prices, Italy prices have been reasonably soft. They are continuing where they are. We are not a very large producer buyer of ethylene, but ethylene prices are not too strong, let me put it that way.
Bharat Sheth
And now coming with plant commissioning, the caustic soda outlook and the caustic soda output outlook and its output, I mean derivatives pricing and spread.
Ramkumar Shankar
Caustic soda in India is already. It’s a long market because the capacity for caustic in India is around 6%, 6.3 million tonnes and the demand is a little under 5 million tonnes. But then the operating rates of people who are not caustic producers, who are not integrated on the chlorine side would be less than 100%. It will possibly be around 75 to 80%. Therefore, the country is balanced with around half a million tonnes of exports from India. So over the last couple of years India has moved from being a net importer to being a net exporter.
And this length in the market is likely to increase with two large projects coming in between 26 and 27. And with that, while the demand will also increase obviously for a period of two years, that could be excessive length in the Indian caustic market and that will have to be addressed by increased exports from the country. But caustic is a regional product and most of this new capacity is coming in the western region, in the southern region it is a little better balanced, I would say. And we are able to sell all the products that we make.
Bharat Sheth
Thank you, sir, and all the best.
Ramkumar Shankar
Thank you very much.
operator
Thank you. The next question is from the line of Dhruv Muchal from HDFC amc. Please go ahead.
Dhruv Muchhal
Yeah, sir, thank you so much. Sir, a question on the European paste PVC market structure. So if you can share any insights on what their capacity is, what their demand is. Are these players, you know, integrated from the ethylene or, I don’t know, from PVC to paste pvc? And as you mentioned, there are some closures that you see from Europe. Are they also likely in the paste PVC segment? Because I’m assuming they will also be under pressure in the paste pvc.
Ramkumar Shankar
Good morning. You had asked a question about how much does Europe have as. Just give me a second, I’ll pull out that number.
Dhruv Muchhal
Your voice is I don’t know, it’s my end or your voice is going a bit low.
Ramkumar Shankar
Base capacity in Europe is around a million tons. And. This is largely across three, maybe four producers who have the capacity. The difficulties that European producers face are likely to be there because it’s the difficulties that around, you know, the cost structure, etc. The energy cost and so on. And also the demand is also mute with that because one of their large markets and after the hostility, that market is not. Which is the reason why they are looking to export into Russia. The closures that have been announced so far are not in the base side. What we’ve been in the suspension side. Therefore we do not know whether there are any closures that are on the cards.
On the baseline.
Dhruv Muchhal
1 million ton is the capacity in.
Ramkumar Shankar
That’s right. A little less than that, but around.
Dhruv Muchhal
Okay, around that number. Got it. And what leading to that change in supply chain. Got it. Sure, sir, that’s helpful. Thank you so much. Thanks, that’s all and all the best.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from the line of Sanjay Jain from ICSI Securities. Please go ahead.
Sanjay Jain
Yeah, Good morning sir. Thanks for taking my question. I got few of them. First on the R32, one of your peers said on the call that the new capacity which is coming in will unlikely qualify for the copa. We are among the last to announce the capacity. How do we make sure that we get the quota allocation and this CAPEX is safeguarded from a long term value creation perspective.
Ramkumar Shankar
Sanjay, good morning. To comment on some other company in our call. So I will refrain from doing that. But the question that you raised is valid. We have taken enabling approvals right now. We have the environmental clearance, we have the investment approval. But the actual sizing and the siting of the project, the decisions on those has not been taken yet. We will take it very soon and we’ll let you know. Obviously we are as much sensitized to the fact that we should put capital to the extent that we can get the quota approval. So we will keep that in mind.
Definitely.
Sanjay Jain
But your thought on the quota allocation because last quarter we were confident of a larger quantity. How do we see this as in how do we ensure that whatever we put we get a quota? So can you help us understand the quota regime itself?
Ramkumar Shankar
So the quota regime is dependent on two things. One is, you know, first 65% of the HCFC production that was there in the period 2009, 10, you know, the total carbon emissions during, you know, that will be calculated based on the production we all know the carbon dioxide units and then based on the actual HSC production between 2024 and 26. So these are the two components based on which the quota will be allotted. And obviously those who are producing HCHC 22 back in 2910 will qualify. Therefore there is some claim that we also have on that basis and Those who produce HFCs between 24 and 26 will have the balance entitlement to quota.
Sanjay Jain
In that sense then the capacity, what we can get is not very big. Right. We had only 1700 metric ton of R22.
Ramkumar Shankar
But the, you know, the carbon dioxide equivalents are very different. There is a multiple HCFC 22 has higher carbon dioxide equivalent as compared to.
Sanjay Jain
I think the multiple is three if I remember it right, even if I take 65% and three times that doesn’t cost a 5,000 metric tons.
Ramkumar Shankar
Right. And therefore the quota is also for the country, that is it’s not for companies, so it is for the country. And obviously the country’s need is going to be higher than the available capacities that could be spaced. Like I said, these are all the factors that we are looking at and we will consider all this while deciding on the appropriate cycle. Comment to the.
Sanjay Jain
So the second question was on the SPBC side. It appears that there is an additional hit this time because we have taken a inventory destocking which we held last quarter problematic and the prices have only fallen from those level. Is it fair to assume that the underlying spreads were better than what we have reported for this quarter in SPVC because of the inventory destocking?
Ramkumar Shankar
Yeah. First of all, you know, we didn’t take additional inventory because we wanted to keep it back. We generally don’t do that because you know, these kind of commodities you don’t try to add risk by trying to anticipate these things. It so happened that last quarter because of all the uncertainty on pricing there was the offtake itself was muted and therefore inventory built up. Then this year during the peak period just before the monsoons, there was good demand and again because of the uncertainty on QCO and all of that, that there was some lull in the arrival of imports and therefore we were able to liquidate most of the inventory that we built up.
And that of course because of the higher cost of the inventory that we carried, our margins dropped. Our variable margins did drop. That observation of yours is right. Without that, if you look at the current margins between VCM and CVC, that is coming to somewhere around 180, $190. Right. Now, so that margins are healthy, we just need to ensure that the volatility comes down.
Sanjay Jain
One question on the specialty side, sequentially there is a 200 crores of drop in the revenue. What explains such a sharp decline in the revenue on a sequential basis?
Ramkumar Shankar
Primarily bunched up dispatches in the quarter. That’s what accounted for in the last quarter. We had significant dispatches in CF up.
N. Muralidharan
To the tune of 200 crores.
Ramkumar Shankar
And of course there has been some changes in paste PVC price which also impacted the overall specialty sales.
Sanjay Jain
Got it, got it. And just last on the pace PVC this quarter, I think there was a problem. You said initially in your remarks Ram, that there was a problem with the caustic plant. That means we imported lot more EDC than what we produced, right? Was that the scenario and hence even the standalone specialty spread were much lower than what was aspired?
Ramkumar Shankar
I wouldn’t say that. Actually if you look at the last quarter of last year and first quarter of this year, our spreads on pace PVC were actually slightly better. The EDC prices actually also fell towards the end of the first quarter. So it wasn’t a bad time to import feedstock. So that wasn’t the reason.
Sanjay Jain
Got it, got it. That’s all from my side. Thanks for answering all those questions so patiently and best of luck for the coming quarters.
Ramkumar Shankar
Thanks Ramesh. Thank you.
Rohit Nagraj
Thank you sir.
operator
Thank you. As a reminder to the participants, if you wish to ask question, you may press star and 1. The next question is from the line of Dara from Valleyquist. Please go ahead.
Dhara Ganatra
Thank you for taking my question. Am I audible?
Ramkumar Shankar
Yes, please.
Dhara Ganatra
Your opening remarks, you have mentioned about anti involution in China. So if you can please elaborate on what are the regulatory steps or the steps taken by the Chinese government that is directed towards maybe consolidation on capacities on the chemical fronts including PVC or other chemicals. If you can throw some more light on that.
Ramkumar Shankar
Sure. Thanks Tara for joining the call. Involution is actually a pretty new term that it was new to me at least and this is something that is being spoken about a lot, especially with reference to China. And it refers to destructive price wars caused because of overcapacity. And therefore to address this, this came about in the electric vehicles category, came about in photovoltaics and then they have looked at various other sectors and journal that in petrochemicals and chemicals as well. This is something that is a problem and therefore there is a new anti involution campaign that has started in China from the government, the Ministry of Industry and Information Technology in China is nodal ministry and they have recently issued a draft policy where they have said that they would look at are plants that are over 20 years old.
Earlier they used to say that 30 years age is when they will start looking at these plants. Now they have reduced it to 20 years and said that any plant over 20 years of age, they will look at it, take a hard look based on energy efficiency, based on carbon footprint, and then decide whether, especially in areas where there is overcapacity capacity, and then decide whether there needs to be some rationalization or some other form of integration or improvement of the plants itself. So I think that is where they are right now. They have announced this, they have come out with some target industries as well.
And that, that was what I was referring to.
Dhara Ganatra
Understood SSS regulation guidelines that they have mentioned for the chemical sector.
Ramkumar Shankar
They have come up with a draft policy where they said that these are the points that they will be looking at and this is what they will be studying while taking the decision on rationalization of capacity. So that needs to now be taken through to its logical conclusion. We have to wait and watch.
Dhara Ganatra
Thank you so much.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from Kiran Gadge from Knightstone Capital Management LLP. Please go ahead.
Kiran Gadge
Hi, good morning. So for BIS, it was supposed to be implemented in August 24th and then it got delayed to December 24th and then June 25th and now December 25th. So it has been delayed a lot of time. So one of the pipeline factors is anticipating for the delay of six months. So are you anticipating the same?
Ramkumar Shankar
It’s a billion dollar question. I would have no idea. But all I can say is this. The delay was largely to ensure that there is enough capacity capacity available to meet the requirements of the downstream industry in India.
And even in June we did have around 11, 11 and a half million tons of capacity that had been certified against the Indian demand of around 4 million tons, 4.3 million tonnes. So there was enough coverage. But by way of abundant caution, I guess the authorities decided to to give six more months of time for other capacities worldwide who were in the queue to get their plants certified. And since that extension there are a couple of large producers, one in the US and one in the MENA region have got certified and 1 more large US player I believe has had their plans audited and therefore they are on track to get certification.
So by the time December comes around, I think that we should have at least 14, 15 million tonnes of certified capacities worldwide. And given that our demand is around 4 million tonnes. That should give enough comfort for the authorities to enforce the QCO from then. But of course we’ll have to wait and see what happens.
Kiran Gadge
Thank you.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from Abhijit Akela from Kotak Securities. Please go ahead.
Abhijit Akella
Yeah, good morning. Thank you so much for taking my questions. Just a couple from my side. One on the R32 extension. If you could please just help me understand. In the event that we decide to enter into, let’s say long term supply contracts with global customers in that business, say, you know, I mean just people based in US or Europe or something like that, would we still require to have consumption quota allotted to us or even a production quota or would that not be necessary in such a construct?
Ramkumar Shankar
Good morning, Abhijit. For you to produce, you need to have the production quota. So that is a fundamental starting point.
Abhijit Akella
Yes. And on the consumption quota, the consumption.
Ramkumar Shankar
Quotas for the country. So that is not for individual.
Abhijit Akella
Okay, so. So I mean is it, you know, is there a way for us to produce sizably more than we would otherwise be entitled to? Just on the basis of what we. Are entitled to, you know, given our. Historical track record of each, is there a way to, you know, maximize the quota allotment?
Ramkumar Shankar
The fact that we are exporting is not going to drive, you know, the quota we will have to get us. Like I said, the starting point is getting the production quota.
Abhijit Akella
Okay. Okay, fair enough. And then just on the China anti revolution drive, in your assessment, does it apply primarily only to bulk commodity chemicals or could it also apply to specialty chemicals such as agrochemical intermediates, etc.
Ramkumar Shankar
That’s a good question. I am not very sure which is the full list of chemicals it is working on. I saw definitely that they are looking at the polymers. They are looking at. They are looking at caustic soda. I saw that they are looking at resources like coal and steel, of course. But on specialty agrochemicals I’ll have to see. I really don’t have information.
Abhijit Akella
Thank you so much. Wish you all the best.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from the line of Bharat State from Quest Investment Advisors. Please go ahead.
Bharat Sheth
Hi sir. Thanks for the second time opportunity. One question earlier we were looking that on PVC carbide based maintenance capacity may be discontinued from say by 2030. So what is the pro in the China? So what is the progress on that? If you can give some color.
Ramkumar Shankar
Welcome back, Bharat. So this entire thing about carbide PVC is the Question I guess relates to the Minamata Convention to which China is also a signatory. As per the Minamata Convention, the usage of mercury in industries is to be phased out. Where it comes to pvc, mercury is used as a catalyst in the manufacturing of VCM in the carbide process. And while they have not given a specific hard date for staff, what they said is that it will stop within five years of an economically viable alternative being identified. However, while these protocols start like that, usually you know, the dates are advanced even without, you know, sometimes they will try to accelerate the phaseout, the mining of mercury.
However, there is a hard stop and the mining of mercury hard stop is the end of 2031. And since China accounts for around 90% of the total mercury mined in the world, you will have very little Mercury available after 2031. So that could be date that we could keep monitoring. Meanwhile, the carbide PVC producers are trying to find other alternatives. One alternative that they’ve come up with is gold. But not everybody may be able to use that. It’s not a drop in substitute to all of the existing plants. So a new plant may be built using gold as a catalyst.
But not all the existing plants that are there in China can use gold as a drop in substitute for mercury. Therefore that could become an issue for them. There is no hard date yet, but we’ll have to watch what happens after 2031.
Bharat Sheth
Thank you. Thank you. And all the best.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from the line of Madhur Rathi from Countercyclical Investments. Please go ahead.
Madhur Rathi
So, thank you for the opportunity, sir. I wanted to understand regarding our renewable. Power projects and what kind of cost. Savings can we expect from that and what would be what portion of our. Power required requirements will be met through this?
Ramkumar Shankar
I. I think your question was slightly feeble, but what I understand is you want to understand more about the green initiative that we have signed. Is that correct?
Madhur Rathi
Yes sir. On the cost savings we can expect. From that.
Ramkumar Shankar
Actually we have currently cover roughly around 40% of our total power, between 35 to 40% of our power requirement. And I don’t want to get to the specific tariffs, but it will give us a significant saving compared to the grid cost of power. And I think the company as a whole, the estimated saving is somewhere between 50 to 60 crores by that contract.
Madhur Rathi
50 to 60 crores. Right. If I compare our competitors and their PBC segments that they have captured, can we expect our margins to become much more stable and similar to what Synolex Does. I’m not comparing but is that the one of the reason why our margins are much more volatile than them?
Ramkumar Shankar
Our margins are currently. They are volatile basically mainly because of the pricing pressure. It’s not because of the power cost. Our past VSI currently using the grid power and core based power and those have been reasonably stable as you would see. Coal power has been. Prices have been reasonably stable and grid power has been reasonably stable though there have been some increases. So I think it’s more to do with the pricing pressure and it’s nothing. It’s not because of the power cost per se.
Madhur Rathi
That was from my answer. Thank you so much and all the.
Ramkumar Shankar
Thank you.
operator
Thank you. The next question is from Archit Pandit from Green Portfolio Private Limited. Please go ahead.
Archit Pandit
Good morning sir. So I want to ask for the upcoming R32 project. Could you share how the capex is being funded between internal accruals and debt? Also, how much of the planned spend for this year has already been incurred by the end of Q1.
Ramkumar Shankar
On R32? Like I mentioned, the exact sizing of the project is yet to be decided by us. Therefore the total capex on that will be decided when we decide the sizing. So right now whatever we are thinking is only an enabling approval on the actual CapEx for the year. There’s only one project which is ongoing, which is the multipurpose block, phase three of custom manufacturing and that is going as per plan and as per approved capital levels.
Archit Pandit
And one more question. Yes, yes, yes. With the ad implemented from March for six countries, are you now seeing a price floor in the domestic market or are any new rules or circumvention tactics emerging that may dilute this protection? Like have you seen any price lowering related to this in which product. For the. In which the AD was implemented which was basically your.
Ramkumar Shankar
Okay, yes, yes. Basically we see the anti dumping duty was implemented on a few countries. There is no circumvention as such. It is not like producers in those countries routing their production through the other countries. It is more that the producers in those other countries which were not covered by the anti dumping duty and that market suddenly fell off because of geopolitical tensions between Russia and Ukraine and therefore they grabbed this opportunity to dump their product in India at unfair prices. So it was not a rerouting but it was a shifting.
Archit Pandit
Okay, thank you so much sir. That’s all from the time.
Ramkumar Shankar
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments.
Ramkumar Shankar
Thank you. Everyone for joining us today on this earnings call. We, as always, appreciate your interest in Kemplar Sunmar Ltd. And if you have any further queries, please do contact sga, our investor relations advisor. Good day.
operator
Thank you. On behalf of Chempla, Sanmar concludes this conference. Thank you for joining us. And you may now disconnect your line.