ICI Pakistan had posted record consolidated net profits of PKR5.3bn (EPS: PKR60.30) for FY21, more than doubling yoy from PKR2.4bn (EPS: PKR28.14) in FY20. Alongside, it announced a final cash dividend of PKR20.0/sh, taking the total payout to PKR40.0/sh for the year.
Soda Ash & PSF
ICI is set to expand the total capacity of its Soda Ash plant by 135,000 tons pa from 425,000 tons to 560,000 tons pa. The project will be completed in two phases – first 75,000 tons pa by June 2022 and the second by 60,000 tons pa. The total capex of the project is PKR11.0bn.
ICI has filed for antidumping duty on Soda ash imports from Turkey. The case is presently being considered by the levying authority NTC.
The company will also add a new line to its Polyester (PSF) plant, which involves a new product, RPET, made from recycled fiber. RPET will be geared towards Textile exporters – tapping into the global demand for exports made out of greener substances. The new plant will have a capacity of 16,320 tons and will come online by March-April 2022 (Capex: PKR0.9bn). RPET will be more profitable than PSF, because it fetches premium prices and uses cheaper recycled material as input.
ICI achieved production of 135,000 tons of PSF during the year, compared with a total capacity of 122,000 tons pa in the past. The increased production was possible after a debottlenecking of the PSF plant.
Morinaga-Nutrico
ICI will complete the merger of its hitherto associate and now a subsidiary, Nutrico Pakistan (trading company) and Nutrico- Morinaga (manufacturing facility) in the coming months. It has 51% stake and management control in both companies.
The Morinaga facility of 12,000 tons pa operated at a capacity utilization of 13% in FY21. It is likely to increase in FY22 on the back of new products and recipes. ICI foresees ultimately exporting Morinaga products to Afghanistan and other regions (west of Pakistan).
Nutrico-Morinaga had an 11% share in the overall Baby Food market, which is estimated to have a total size of PKR85bn, of which PKR70bn is the market size of infant milk formula.
Pharmaceutical & Animal Health
The Pharmaceutical segment had the second fastest growth among all Pharmaceutical companies in Pakistan, with sales up 32% yoy. ICI was the 19th largest pharmaceutical company by sales in FY21, up from 21st the year before.
ICI expects to continue outgrowing the industry in the near future, which itself is expected to grow by 11-12% yoy in the coming years. The segment launched six new products in FY21 and is present is almost all major drug categories.
Its Animal Health (AH) segment is able to reach c.15,000 farmers, through products from three manufacturing facilities. It has a 9.5% market share in the Livestock AH market, and 7.8% in the products sold to the Poultry market.
Courtesy – Intermarket Securities Limited