Chemplast Sanmar Limited (NSE: CHEMPLASTS) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Ramkumar Shankar — Managing Director and Director
N. Muralidharan — Chief Financial Officer
Krishna Kumar Rangachari — Deputy Managing Director of CMCD
Analysts:
Sanjesh Jain — Analyst
Jayesh Parekh — Analyst
Dhruv Muchhal — Analyst
Sajal Kapoor — Analyst
Rohit Nagraj — Analyst
Ranjit Cirumalla — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day and welcome to Kemplas Sunbal Limited Q3 FY ’25 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on her touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Ram Kumar Shankar, Managing Director. Thank you, and over to you, sir.
Ramkumar Shankar — Managing Director and Director
Thank you. Thank you, Michelle, and good afternoon, everybody. On behalf of Genpla Sanmar Limited, I extend a very warm welcome to everyone joining us on our call today. On this call, we are joined by our CFO, N.; Dr Krishna Kumar Rangachary, who heads our Custom Manufactured Chemicals division; and FGA, our Investor Relations Advisor. I hope everyone has had an opportunity to go through the financial results and investor presentation, which have been uploaded on the stock exchange website and on our company’s website.
Our results for the current year show a marked improvement over the same-period in FY ’24, even though on an absolute basis, we still are reporting losses. The last couple of years have been challenging for the company due to dumping of product, especially of suspension and paste PVC resulting in margin pressures. Dumping of suspension PVC, particularly from China and paste PVC, especially from the European Union, have resulted in pricing headwinds and the consequent impact on margins.
However, domestic demand has been quite good with the apparent consumption of suspension PVC registering 11% growth on a year-on-year basis in the nine-month period April to December 2024, while PACE PVC registered a 13% growth over the same-period. The total revenue for the first-nine months stood at INR3,195 crores, a growth of 11% on a year-on-year basis. This growth was largely on account of better prices and margins in the PVC businesses and improved performance of CMC division.
Coming to the specific segments, the Specialty Chemicals segment saw sales volume of 24.9 kilotons, reflecting a 51% year-on-year growth for the quarter, while for the nine-month period April to December 2024, sales volume was 71.6 kilotons, a year-on-year growth of 35%. In the Specialty Paste PVC segment, continued availability of imported material at low prices, particularly from EU-based producers, resulted in lower realizations.
Demand has been good with a 13% growth in the country in the first-nine months on a year-on-year basis. The provisional anti-dumping duty on stressing announced on the 13th of June 2024, initially provided some relief addressing dumping from China, Thailand and Taiwan. However, this was soon replaced by increasing import volumes from Europe at very low prices, offsetting the benefits of the imposed anti-dumping duty. The fresh anti-dumping investigation has since been initiated on imports from European Union and Japan. The new PVC plant is being ramped-up and we expect to achieve full utilization levels in the coming quarters.
On our custom manufactured chemicals business, the multipurpose Block III Phase-1 commissioned last year has been ramping-up well and we expect healthy business from the host of molecules which have been commercialized. The Phase-2 of was commissioned in December 2024. We expect to close FY ’25 with a healthy revenue growth in the CMC business. As stated in the earlier calls, we have commenced work on building additional capacity, keeping in mind the growth pipeline. The pipeline of products under development is strong and is continuously growing with increase in new inquiries from customers.
As stated in the earlier quarters, we see this segment to be the growth driver for Sunmart in the coming years. There will thus be continued focus on this business with appropriate capital allocation for growth. The value-added chemicals business encompassing caustic soda, chloromethanes, hydrogen peroxide and refrigerant gas witnessed mixed demand trends across End-User industries. Volumes for our value-added chemicals grew by 5% in the quarter and 24% over the first-nine months of FY ’25, driven by steady demand across diverse sectors.
Chloromethanes faced price pressure due to increased domestic supply, whilst demand, especially for methylene by chloride and chloroform remained stable in three sectors. Refrigerant gas HCFC ’22 sales declined due to imports and cheaper substitutes, though prices are expected to increase in the months ahead due to reduced quota in-production for non-feedstock applications. Hydrogen peroxide saw strong competition, leading to price drops, especially in South India. Caustic solar demand remained stable with price fluctuations driven by global supply constraints and seasonal demand shift.
Moving on to Cardload Limited, domestic consumption on suspension PVC saw sequential growth after a soft Q2 due to the extreme monsoon. The industry has seen healthy demand growth, thanks to increased traction from housing, construction, irrigation and drinking water segments. We remain positive on the demand-side in the coming period as well. The extension of the mission to 2028 announced in the recent union budget augurs well for suspension PVC demand. Internationally, China continues to offer suspension PVC at lower prices due to sluggish growth in their housing sector. Similarly, in the US, weak demand and excess capacity have led to surpluses being directed towards the Indian market, adding further pressure on PVC prices. We remain optimistic about the implementation of the announced anti-dumping duties on various countries. This measure will create a level-playing field for domestic players and help combat rate practices. On a marginal basis, as feedstock prices have been following PVC prices, raw-material margin remain strong. This bodes well for the industry once old inventories are depleted and prices stabilize. Looking ahead, with demand continuing to remain strong across the main products and the expected implementation of the announced anti-dumping duties, we expect the situation to look up. The continuing strong performance of the custom manufactured Chemicals division also will add to the improved performance. Now I’d like to hand the call Over to our CFO, Mr Moli, to walk you through the financial performance of the company. Over to you,.
N. Muralidharan — Chief Financial Officer
Thank you. Thank you,, and a very good afternoon to all the participants on the call. Talking about the quarter three performance, the revenue for the quarter stood at INR1,058 crores, a growth of 19% on a year-on-year basis. Our EBITDA stood at INR32 crores compared to a loss of INR7 crores in the Q2 of last year. The net loss for the quarter was INR49 crores, an improvement over Q3 FY ’24, which reported a net loss of INR89 crores. Now coming to our segment-wise performance, revenue from Specialty Chemicals stood at INR377 crores, which is almost a 100% increase on a year-on-year basis, driven by higher sales volumes from the projects that got commissioned. Value-added chemicals saw a margin improvement of 10% on year-on-year basis at INR154 crores. Suspension PVs revenue declined by 5%, amounting to INR527 crores. This is mainly due to build-up of some suspension PVs inventory, which is expected to get largely in the Q4 of this year. Now coming to the nine months highlights, during the nine months FY ’25, the company reported a revenue of INR195 crores with EBITDA of INR182 crores, registering a year-on-year increase of 11% on revenue and a sharp increase in EBITDA from INR5 crores in the previous year. This performance was largely on account of the increase in volumes on account of the projects that were commissioned, higher margins across almost all product segments under strong traction in the CMCT business.
Employee costs for the period were higher, primarily due to the impact of PVC and CMC projects commissioned, strengthening of the R&D and technical teams, senior-level hires and increments. Increase in other expenses is primarily due to the higher-power and fuel costs driven by higher volumes from the projects that were commissioned. The finance cost came in at INR174 crores, a 34% jump on a year-on-year basis, mainly due to interest costs on project financing. Net loss came in at INR56 crores for the Nine-Month FY ’25 as against net loss of INR127 crores for the same-period last year. Coming to the segment-wise highlights, Specialty Chemicals revenue grew by 62% year-on-year, reaching INR1,031 crores. This growth was primarily driven by higher sales volumes from the projects that were commissioned. Revenue from value-added chemicals stood at INR466 crores, reflecting an 18% year-on-year increase, again driven by higher volumes against steady end-user industry demand. Suspension PVC revenue stood at INR699 crores, an 8% drop year-on-year basis due to lower volumes due to the slightly higher inventory, which I explained earlier.
With this, we conclude the presentation and open the floor for further discussions.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may plus star and one on the touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and want to ask questions the first question is from the line of Sanjesh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah, good afternoon, sir. Thanks for taking my questions. First, on this value-added chemicals division, this quarter there was a sharp drop quarter-on-quarter, almost 9% drop-in the volume. While market generally has remained very healthy in this space, why haven’t been able to place the volume?
Ramkumar Shankar
This would only be a normal drop. Actually, if you look at it, our was more or less on a volume on quarter-on-quarter basis, it’s more or less TD. Caustic has actually gone up and so is hydrogen peroxide. So I’m trying to understand where you see the volumes actually dropping. We are reporting — I’m sorry, sorry in FY ’23. I’m so looking at the wrong one. My apologies. Let me look at the right one.
N. Muralidharan
Primarily due to reasons. One is we have taken a regular maintenance for 10 days, that is one on the caustic soda side. And second, it was due to one timing of, a couple of which are to go in the last take or shifted to the next quarter. It’s effective the same there is nothing else. You are — as you are right, the demand has been steady and we’ve been able to sell our — all our materials significantly. Two reasons. One is regular maintenance for 10 days, which is a scheduled maintenance and the second was the couple of rigs getting shifted to the next quarter by one day.
Ramkumar Shankar
This is only in caustic funds. So caustic some 4,000 tonnes has come down. That is largely because of keeping up the inventory for the sales. So it’s essentially a timing issue.
Sanjesh Jain
Okay. So that means next quarter should have that kind of a bump-up, right?
Ramkumar Shankar
That’s right. The production has not really changed much.
Sanjesh Jain
So that means next quarter we will have that going up to 48,000 metric ton. 44 is the normal run-rate, 4,000 should have been additional volume next one.
Ramkumar Shankar
Yes. Yes.
Sanjesh Jain
The second is on the conversion margin in SPVC. So we have been seeing there is a steady rise in the conversion cost. So earlier, below the raw-material cost, the prices used to be INR10 per kg, it has jumped to INR12 per kg. Any particular reason because we haven’t added capacity, plant is running quite well, demand remains full. Why there is 20% rise in the other operating expenses in the suspension PVC, which is in the CCVL
Ramkumar Shankar
The variable conversion costs haven’t been moved by March. We’ve had been pretty much stable unless there is some inventory-related — because inventory has built-up in suspension PVC. So maybe the absorption on the fixed side could be — could be what is driving this.
Sanjesh Jain
No, it’s been for last two-quarter earlier. I used to see the operating cost, which is below COGS. It used to be INR10 a kg. Now it is coming almost INR12 per kg. I think there is a sharp jump-in the employee cost around 18% 20%. Any particular reason for such a sharp jump? I don’t think we have been adding manpower in the CCVL, right?
N. Muralidharan
It’s primarily because of two, three reasons. One is it’s the annual increments and like if we normally give senior management increments once in two years. So you will see a cumulative impact this year. That is one. And second, the senior hires we had and we also strengthened the technical team. All three together had the impact of higher employee costs during the year.
Sanjesh Jain
Now this should yield the benefit somewhere, right? The technical employee coming in and all either it should come with better utilization or a better yield, which should completely offset that cost. Finally, we should — we are protecting, right?
Ramkumar Shankar
It will happen, it will happen in a good time. It doesn’t happen overnight, right? So it will happen. You’re right. It will happen.
Sanjesh Jain
Okay, okay. The next on the PVC business, that appears to be undergoing more pressure. I think there is a further price cut in the month of February. It is fair to assume that the March quarter will have a even lower spreads or a lower contribution margin versus what we have seen in the past two quarters?
Ramkumar Shankar
See, as I was — as I mentioned in the speech, on a marginal basis, the margins are still holding strong because the feedstock VCM is following the PVC prices. It is only on account of the inventory that is there, which is at a higher-cost and normally in a falling price market, the inventory impact will always be there. So yes, that will impact the margins on a weighted-average basis for the March quarter. But once that inventory is moved out, then you would see that the margins have a sharp jump because the — like I said, the marginal raw-material margin is actually quite good. It’s not really moved by much. And hopefully, we are quite confident that very soon there will be the anti-dumping coming into effect. Anti-dumping duty has been announced and it is awaiting notification or the final thing by the Ministry of Finance and we are hopeful that will happen anytime soon.
Sanjesh Jain
Thank you got it. Got it. One last question on custom manufacturing business. We have been hearing a positive commentary from the peers on the agrochemical intermediate demand. Is it also showing up in our order book? And if so, what is the expectation for FY ’26?
Krishna Kumar Rangachari
This is Krishna here and Morli can add to This. Yeah, we are hearing a general input from the marketplace that sometime by the middle of the year, but it’s already started reversing in terms of the downtown and we should start seeing a turnaround in the calendar year, I mean sometime by the middle of this calendar year. We have — I mean, we have been marginally impacted over the past year or so because of the nature of the molecules that are commercial as well as what we have been working in the pipeline. So for us, you know, it didn’t have a significant — it did have an impact, but not a significant impact. And so our next year would be similar to ramp-ups that we have earlier projected. So I don’t see any major changes in terms of our projections for the next two years.
N. Muralidharan
Okay. Sanjesh, broadly most most of our products are new products which are tied to molecules being launched. So our — except one specific product within the whole met product that we carry, other than that there was no impact on our order book per se. So you will you will see significant growth in CMC business this year. You will definitely see a significant growth in CMC business when you see the annual numbers. And like Krishna is saying that we continue to project whatever we have sort of indicated, we continue to target those numbers for next year as well as in FY ’27. So I think we are broadly on-track.
Sanjesh Jain
So what we said is INR1,100 crores by FY ’27, we are telling that we are on-track for that.
N. Muralidharan
We are on-track for that. And even this year, you will see a significant growth and the growth you will see this year.
Sanjesh Jain
And how has been the profitability? Are we tracking the profitability where we said that EBITDA margin will be tracking anywhere between 23% to 25%, are we tracking that,
N. Muralidharan
Sanjesh, like we explained earlier also in the initial period, it’s a learning curve. So as we stabilize, we will hit that EBITDA margin. So in the initial periods, the margin level should be slightly lower. And as we move to stable level of operations, we will keep that level because we are introducing new products, it has some learning. So to that extent, we are tracking on the lines, we had anticipated it is progressing on those lines. Definitely.
Sanjesh Jain
Got it. Got it. Very clear. Thanks for answering all those questions and best of luck for the coming quarters.
N. Muralidharan
Thanks thank you, Sanjesh.
Operator
Thank you. Participants, you may please press star and want to ask questions. The next question is from the line of Jaysh Parik from GMPJ JMP Capital. Please go-ahead.
Jayesh Parekh
Good morning, sir.
Operator
I’m sorry to interrupt, sir. Your voice is not clear. May I request you to use your now, please.
Jayesh Parekh
Can you hear me now? Sir, it’s actually. It’s not clear. Is it clear now then? Yes, sir, much better. Please continue. Thank you. See, my question is that currently, you know, the environment is, you know, going to be a global competition and challenge and can’t we work-in a direction whereby independent of anti-dumping duty, we make our entire, you know viability of a company. Why should we depend on anti-dumping duty? There are — there are, you know, a couple of players in chemical segment, I can’t name them at this point, but they are also facing similar challenge of global competition and dumping and they have made them viable independent of anti-dumping duty. So can you just throw some light on this, sir?
Ramkumar Shankar
Sir. Sure. That’s a — actually it’s a very interesting philosophical question. So let me address that. Anti-dumping is actually response to something that is unfair, an unfair freight practice. So it is not something that is a standard practice. We do not depend on anti-dumping, but then we also do not expect dumping. If a country is going to be unfair and dump products at lower than their domestic market, right, or sometimes even lower than their cost because of some subsidies that they are getting from their own government, I believe that puts the domestic industry in the country where it is being dumped at a very unfair — in a very unfair position. There is no level-playing field. So there is absolutely no shame or no nothing wrong in insisting on the being leveled. This is not unique to India. This is being there across all countries. You can see the US embarking on it. The European Union is embarking on it. And very often we see that this question is, India is a very aggressive player on anti-dumping, so is unfair and so on. I have WTO data from 1995 to 2023. And while India has definitely filed the most number of anti-dumping cases of 790, the US is not far behind. They have filed 634 and the European Union has filed 364. So every country looks after its own domestic interest and I believe that is what India is doing. Now your question on whether is there something that we can do to make ourselves immune from the pressures of dumping, well, we are doing it by diversifying our products. We have other divisions which are for instance, the custom manufactured chemicals division, which is export-oriented and so on. But where we are hit by dumping, we will have to take necessary measures. I see no embarrassment or anything wrong in doing that.
Jayesh Parekh
Thank you so much for the nice. I appreciate that. Thank you, sir. Thank you.
Operator
Thank you. Participant, you may please just start in one to ask questions. We’ll take the next question from the line of Muchla — I’m sorry, Muchal from HDFC AMC. Please go-ahead.
Dhruv Muchhal
Yeah, thank you so much. Sir, just I might have missed on your — from your opening comments, the SPVC volumes are declining for the last few quarters on a Y-o-Y basis. So what’s driving this? Because you mentioned that the demand is reasonably strong, but so I think 11% for the nine months India demand. So what’s leading to this decline in volumes for us?
Ramkumar Shankar
Yeah. That is — it’s a good question. And I also mentioned in response to an earlier this thing that there have been some inventory buildup that has happened. And that is largely because of the dumping that we have seen, especially from China in suspension PVC. So when material is being dumped at such low prices, which are actually not really in-line with even economic reality. There is obviously a propensity to start buying from the lowest price supply seller. And that is what has been happening and that is really the very unfair situation that we are combating and we are hopeful that this will turn-around soon with the imposition of anti-dumping duties.
Dhruv Muchhal
Okay. Because —
Ramkumar Shankar
But this is not a permanent loss. This is — we have the inventory, so we will be in a position the minute this is reversed, we will see the increase in volumes.
Dhruv Muchhal
Okay. Okay. Because on EBITDA level, you are gross positive. So of course, I understand it can be a strategy, how do you manage that? But on an EBITDA level, you are gross positive, of course, very low volumes, low quantum, but gross positive. So why to hold-on volumes at least as long as more than variable-cost, you should probably offload the volumes in the market as I stated. I’m just trying to understand what am I missing.
Ramkumar Shankar
Fair enough. It’s a very good question. In fact, that’s what we normally do. We would — so long as it is — that is at on a variable contribution level, if it is positive, then it at least contributes to the fixed expenses meeting part of the fixed expenses. We do not want to at the same time be so aggressive that we push the industry into our price — downward price. So it is equally strategic. We would not want to do that and be the price leader into that. We will take the appropriate action. Our focus is on reducing inventory and we will do that because then it shouldn’t become a raise to the bottom.
Dhruv Muchhal
Sir, one second. And sir, the second is the SPVC duty now it’s pending with the Ministry of Finance, that’s the current stage. That’s right. And for the PESH PVC we have already filed for the duty against Europe and some of the other countries.
Ramkumar Shankar
Yeah, actually the promotional duty on has already been notified on China, Taiwan, Thailand, Norway. But you know, immediately after that came in, unfortunately the Europe a dumping started from the European Union. So now we have we had made an application Last year for filing a new — starting a new investigation into imports from Europe and Norway and Japan and that has actually now been initiated. So that process is now on. That is starting. And sir, lastly, what would be a net-debt level as of the end of Q3 be? Around INR1,000 crores. Net-debt of INR1,000 crores.
Dhruv Muchhal
Got it. Yeah, sir. Thank you and all the best. Thanks, sir. That’s all.
Operator
Thank you very much. Thank you. Thank you. We’ll take the next question from the line of Sajal Kapoor from Antifragile Thinking. Please go-ahead.
Sajal Kapoor
Yeah, hi, thanks for taking my questions and good morning to you all. And my question is, how do you — how do you contrast and compare the entry barriers in pharma and agro custom synthesis? And just to give you some context for my question, the largest agro CMC player in India has been attempting to get into pharma CMC for over 10 years now. And they have not seen much success. And whereas a major pharma CMC player recently entered agro CMC relatively easily. So does that not mean that the capabilities and resources required for pharma CMC are very different and the gestation period is also much longer. Thank you.
Krishna Kumar Rangachari
Hi, this is. That’s a good question. The — they are two completely different markets and you know the — and as you rightly pointed out, out the gestation period, the hurdle rate, the number of molecules that become successful, it’s completely different between the agrochemical and the pharmaceutical. And yeah, so each one has its own complexity and to go from one to another, it’s not that straightforward. Although on the back-end in terms of the technical capabilities and maybe the manufacturing capabilities could be similar, the approach to the market is very different between these two. I don’t know who you’re referring to in terms of a pharma player trying to get into adrochemical. It — again, it depends on the business model that they — that they are planning on pursuing. Our model is, whether it is pharma or whether it’s agrochemical, it is to work with innovators, not with the generic manufacturers. And so that by itself is a very completely different model because the requirements of innovators is very different, both in pharmaceutical as well as in agrochemical. So it would depend on the model this particular company is trying to — is trying to pursue in terms of what their hurdle rate could be. Yeah.
Sajal Kapoor
No, thanks, Dr Krishn. I mean just to give you some more context, so both companies have got a very similar philosophy in terms of they are using their R&D capability as more of a horizontal to work across various industries from food and nutral utiles, cosmes verticals and human health, animal health and crop signs. So playing across the 360 kind of spectrum. And one — and yes, while there are some common elements between, let’s say, in agro and pharma, when it comes to simple things like material handling and sterility and you focus on clean rooms as an example and not to mention the stringent Japanese regulators like the PMDA and the US-FDA, the landscape very different from a barrier perspective. So based on our interactions, I know we have been mentioning pharmaceuticals in our presentations for a while now. Have you seen any serious engagement or interest coming from the pharma side of innovators?
Ramkumar Shankar
Yeah. So our — and I mentioned this in the past, we — we had a healthy mix of both pharmaceutical and agrochemical in the past. And the proportion changed not because of any significant drop-in the absolute pharma business, but because the agrochemical side of the business really took off. So we have experience in terms of handling innovators both on the on the pharma and agrochemical side. And having said that, which we have a number of projects. Yes, as you pointed out, very similar to the experience of others in this space, it is not that straightforward terms of ramping-up that business significantly at a very short period of time. So the gestation period is going to be long. And so it is a long — it’s a long-term strategy on our part and it will take time.
Sajal Kapoor
Yeah. No, okay. In terms of my second question and that’s very helpful by the way, your response to first question was really helpful. In terms of my second question, when did you start considering custom manufacturing as a potential source of future revenue and cash flows? And how much time did it take you from that quote-unquote drawing board and planning moment to getting the first few LOIs.
Ramkumar Shankar
Okay. So at the history of this business, we have been in custom manufacturing for a number of years. So it’s not something that we entered recently. But we over the — in the late-2018, ’19 onwards is when we articulated a very clear strategy to grow in this business. And to grow in this business obviously requires investment in manufacturing capacity. We didn’t have significant excess capacity over the past prior to that period. So we articulated a strategy and we started investing in people, in R&D capabilities, in pilot capabilities and manufacturing capabilities to execute on that strategy. So the LOIs that we have been announcing and the traction we have had, had this is linked to the strategy — the growth strategy that we outlined prior to our IPO and that we started executing from 2018, ’19, ’19 onwards. But we have been in the CMO business for a number of years. In fact, many of our customers prior to this new articulation of strategy and execution were actually requesting us to invest in this business because they found in us a very reliable partner who satisfied many of their requirements such as focus on safety, you know, protection of intellectual property as well as our track-record in terms of managing long-term partnerships and relationships with — with innovators as well as our stated strategy with respect to not compete with our customers, which means that we are not interested in manufacturing the final product that our customer is making. So all of these factors have started sort of helping us over the past three or four years to ramp-up our presence in this space.
Sajal Kapoor
No, that’s very helpful. And with your permission, can I squeeze the last couple of questions or I’m happy to join the queue again. Thank you. Okay. So just a couple of — yes, sure. Thank you. Just a couple of questions. How many — how many scientists do we currently have and at full capacity, how many CMC projects can we handle with our current R&D capacity? That’s one. And then for a CMC product to be blockbuster for you, what kind of sales should it be able to generate? And a range of satisfactory enough for me. I know between Phase-1 and Phase-2, we have been public saying that INR1,000 crore approximately is our aspiration. And since then, I know we have added the third phase. So obviously, we are very serious about this segment going-forward, but what it takes to be becoming a blockbuster product and how many scientists do we have? Yeah. Thank you.
N. Muralidharan
Okay. So that — that’s again a good question. For us in this business, I something I keep saying, this business is all about the chemists and the chemical engineers or the engineers who work on bringing these projects to commercialization. So we look at not just scientists Scientists, we also look at engineers who are involved in taking what the scientists do in the lab and then scaling it up into pilot and commercial-scale. And so our total count in terms of technical resources focused on bringing these projects to the commercialization stage, look today probably close to around 75 chemists and engineers. And we have enough capacity in terms of R&D labs pilot assets to almost double this in the next 12 to 24 months. So what this means is if the project pipeline continues to grow as it has been growing, we are in a very healthy situation to keep resourcing or putting in resources to — to support the pipeline. So I don’t see that at all as a constraint. We have enough spare capacity in our R&D lab. Similarly, our approach in terms of pilot plant is like modular, you know expansions. And so we have enough land. So for us to bring additional pilot assets would be, let’s say, six to Nine-Month type approach or timeline and then so we would proactively keep putting those assets and then soon be bringing in the chemists and engineers to in those in those areas would not be would not be an issue at all. Reference to your second question, I think we would like to stick to the to the guideline that we have given. We don’t look at — right now, we don’t look at any project as whether it’s a blockbuster or not because I think we take a long-term view on that on all of these. Our understanding and our assumption in all of the projects that we are working on is maybe in the initial years, there may be a slow ramp-up. It may take some time to ramp-up, but our long-term view on these projects means that and all of them would be a blockbuster at some point the time or the other. But we don’t have a defined boundary with respect to what we work on and what we don’t work on.
Sajal Kapoor
That’s very helpful, Dr Chari. Thank you so much for all those detailed responses. Much appreciated. Thank you.
Operator
Thank you. Thank you. Thank you. Participants, you may please trust R&1 to ask questions. The next question is from the line of Rohit Nagraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Thank you. Thanks for the opportunity. Sir, first question or other clarification on SPVC. So you mentioned that after imposition of duty on China, Thailand, et-cetera, there have been higher imports coming from EU and Japan. But as I understand and correct me if I’m wrong, Japan, there is still AUD in-place and we are still seeing imports coming from Japan. And another question related to this will be to — now there are lot of countries where only the AUD is in-place except maybe EU from where the material is coming. Are there any material other countries which are left and from where you know the dumping may happen for SPVC? Thank you. No, no.
Ramkumar Shankar
The first part of the question on you know on EU, Japan itself, that was not SPVC, that was based. So based we had in anti-dumping duty provisional was notified on China, Taiwan, Thailand, Norway and then that was gacited also. And then now the final has also come in at a higher-level than the provisional, but that is awaiting sitting. And in-between the dumping started increasing from producers in the European Union. Now a new case has been initiated against European Union and Japan. That was on pace, not on suspension. And could you repeat the second question, please? Sorry, it was a little.
Rohit Nagraj
Right. So in terms of SPVC or face PVC, are there any other countries from where the dumpling may happen? Like we did not anticipate when we see dumping coming from EU and Japan.
Ramkumar Shankar
Okay. No, no, this would kind of be the entire — these are all the countries where you have the capacity. So if EU actually is addressed, I think there would be no other on paste PVC. On suspension PVC already, you know others like China, US, they’ve all been addressed. So I think and the Northeast Asian producers like Japan, Korea, Taiwan, all have been addressed in the case the provision duties have been notified by the DGPTR. This is awaiting by the Ministry of Finance.
Rohit Nagraj
Got it. Our second question is on PVC, what would be the current utilization and generally what would be the breakeven utilization for us?
Ramkumar Shankar
And in the new facility, we are already at around 80% to 85%. The whole facility, we are running it at 100%. There it is running continuously at 100%. The new one which we commissioned in February ’24, we’ve now ramped it up to around 80%, 85% and we expect to reach 100% by March or April. So that will happen. It’s more — it’s breakeven is not so much on the volumes, it’s more on the price. I think you have another INR11,000, INR12,000 of prices you know if we address it, if the anti-dumping duty comes in, we would be more than breakeven and that is really what we are working on. It’s only because of the dumping. Yeah, it’s only because of the dumping that we have a pressure on margins. If the prices are fair, the import prices are fair, then we would have no problem. So that is the reason why the anti-dumping cases are being pursued.
Rohit Nagraj
Okay. Got this. And just one last clarification on CDMO. So I just missed the number on the EBITDA margins. So at optimal utilization, we will be able to have a consistent maybe 20% plus EBITDA margin. Is that assumption right?
N. Muralidharan
Generally the industry operates somewhere between 20% to 25% EBITDA margin levels. So we will answee operating.
Rohit Nagraj
Okay. Okay. That’s all from my side. Thank you so much and all the best.
Operator
Thank you. Thank you. The next question is from the line of Ranjit from IIFL Capital. Please go-ahead.
Ranjit Cirumalla
Yeah, sir. Thanks for the opportunity. Clarification on the anti-dumping duty front. So as I understand, as of now, there is no anti-ramping duties either on PVC or suspension PVC that is in-force in India. Both of them are either recommended by DGTR yet to approve by Ministry of Finance or on the suspension or the PVC from the European and Japan, the investigation is currently undergoing. Is that understanding?
Ramkumar Shankar
Correct. Yes. Your understanding is correct. So the pace there — anti-dumping duty on all other than EU and Japan has been notified by DGTR. The final findings that have been announced have been actually significantly higher than even the provision findings. That is awaiting by the Ministry of Finance. On suspension PVC as well, the provisional duties have been announced and those are awaiting by the Ministry of Finance.
Ranjit Cirumalla
So here, just wanted to get a bit more understanding, we had already a provisional duty for six months on 14th of June and that got expired and even before the expiry, we have kind of seen a DGTR recommending the duty. In the — all previous cases, what we have seen the provisional duty automatically gets converted without much of a gap. But here in PVC, we haven’t seen that. So what has led to that delay in approving a provision to a final one.
Ramkumar Shankar
It was only a timing issue. The provisionals are valid for six months and the final has to come into the picture. The final actually came in a week later. But ultimately it will have to be notified by the Ministry of Finance. So that is where we are waiting. That is what we are waiting for. So this is more a timing issue rather than anything else. Sometimes it happens in terms.
Ranjit Cirumalla
How much delay has that happened in the past, just as a ballpark figure.
Ramkumar Shankar
See that was actually if you look at the provision duty was there for six months and then within that when you collapsed within two weeks, you had the final duty being notified. But then it takes any a few weeks for the process at the Ministry of Finance to get done. So we are that. Obviously, as you know, in the intervene, you also had the budget and so on union budget. So obviously that the attention would have been elsewhere. So I think now we should see it happen anytime now.
Ranjit Cirumalla
So post the expiry, have you seen any increase in intensity of imports from China and Korea.
Ramkumar Shankar
Not so much paste China and Korea is not really the main countries it’s largely right now it is a European Union that we are facing The challenge from as far as paste is concerned.
Ranjit Cirumalla
So probably that could look at
Ramkumar Shankar
If you look at for instance in the last few period April 24% to, but around 64,000 tonnes has been the total imports Europe alone is around 40% of that.
Ranjit Cirumalla
But this investigation typically takes three to six months at least from the European and Japanese state
Ramkumar Shankar
Yeah, investigation normally takes around six months
Ranjit Cirumalla
Thank you. Thank you.
Operator
Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Ramkumar Shankar
Thank you everyone for joining us today on this earnings call. We appreciate as always your interest in our company, Kempla Sunmar Limited. And if you have any further queries, please do feel free-to contact SGA, our Investor Relations Advisor, and we will do our best to address your questions. Have a good day.
Operator
Thank you. Thank you, members of the management. On behalf of Kemplas Sanmar Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.