Misr Chemical Industries Company (MCI) has raised its production capacity for disinfectants to 120,000 tonnes annually, as part of efforts to combat the ongoing coronavirus (COVID-19) pandemic.
The increase reflects an 800% increase in sodium hypochlorite, which is used to eliminate viruses and germs, and in disinfecting and sterilising surfaces, buildings and equipment.
MCI, a subsidiary of the Chemical Industries Holding Company, is working to meet customer requirements despite the high demand. It is catering to the needs of a number of ministries, governorates, companies and hospitals.
MCI has achieved total revenues of EGP 92m in the third quarter (3Q) of the fiscal year (FY) 2019/20, ending in March, with an annual increase of 22%. This surge was supported by the company’s sales growth and higher product prices due to the high demand since the beginning of the coronavirus outbreak.
The pandemic has caused a sudden growth in demand for chlorine and caustic soda which are used in the manufacture of soap, detergents, and disinfectants.
The MCI’s net profit in 3Q 2020 reached EGP 11m, an annual decrease of 30%.
Naeem Research said the MCI has witnessed a remarkable leap in terms of sales volume since March as a result of increasing concerns about the pandemic. The company’s operating profit increased by about 60% in March, compared to January and February 2020.
Regarding the MCI outlook, Naeem expects that the MCI’s financial performance will remain positive benefiting from the high demand for caustic soda and chlorine and the energy price reduction of EGP 0.1 per kW/hour. This will also affect the company’s financial statements for 4Q 2020 positively, with profit margins expected to grow.
“We continue our recommendation to buy MCI shares at a target price of EGP 7.26 per share,” Naeem said.
MCI said earlier that it targeted a net profit of EGP 77m in FY 2020/21, with EGP 404.8m sales.