Misr Chemical Industries has issued its budget estimates for fiscal year (FY) 2021/22, with expectations for a maintained overall sales buoyancy and profitability, which took-off in the post-coronavirus (COVID-19) pandemic period.
The company’s top-line is expected to come in at EGP 426m, compared to EGP 360m in FY 2019/20, and EGP 240m in the first half (H1) of FY 2020/21.
The bottom-line is budgeted to reach EGP 100m compares to the EGP 57m reported in FY 2019/20, and EGP 82m in H1 of FY 2020/21. The company also highlighted that it would invest in capex worth EGP 203m in FY 2021/22, which will be used to renovate its caustic soda production unit.
With regards to its future plans, the company stated that it was focusing on opening new export markets in Africa, and to increase exports to Middle East and Asia.
Meanwhile, liquid chlorine prices are expected to increase globally at a 43% premium to local prices, while caustic soda will trade at a 30% discount.
Management is looking to increase the company’s market share, which currently stands at 25%, by adopting new price strategies. Plant utilisation rates are targeted to increase to 70%, versus 60% in FY 2019/20 and 67% year-to-date (YTD) in FY 2020/21.
The main challenges highlighted include severe competition from smaller producers that sell poor quality products at low prices. To confront this, Misr Chemical Industries is working on increasing its exposure to high-margin products pertaining to liquid chlorine.
The company has also reported that maintenance shutdowns impacted its performance in H1 of FY 2020/21, given that Misr Chemical Industries’ production lines have to undergo scheduled maintenance activities. The company would tackle the situation by limiting such shutdowns to a maximum of 35 days.