GHCL Will Focus On Delivering Cash Surplus By The End Of FY23
November, 5, 2022: GHCL Limited Managing Director R.S. Jalan is positive about turning GHCL into a cash surplus by the end of FY23 with a focus on deleveraging.
GHCL Limited Managing Director R.S. Jalan spoke to ET Now about the company’s performance in the second quarter of FY2022-23, the demand situation in the soda ash market and the sluggishness in the textile business.
On the tightness in the soda ash market, Jalan said the global scenario is very tight in terms of supply. “There has been no new addition in production over the last few years and demand has increased.
This has led to a mismatch between demand and supply of soda ash. This situation is expected to continue for the next 2-3 years till 2026-27, barring some de-bottlenecking No new capacity is coming”.
On the rise in soda ash prices, Jalan mentioned that historically the volatility of soda ash prices has always been minimal compared to other commodities as supply has always followed demand.
Volume is also expected to move northward due to the shift to green energy. Additionally, soda ash is a major raw material for solar panels and hence the volume of soda ash is expected to increase.
Additionally, he added that the dynamics of the soda ash market in China are changing. China’s construction business is facing headwinds that could cause global prices to fall slightly in the short term.
China is also gradually exiting the global soda ash trade and will focus on domestic demand. Jalan is positive about turning GHCL into a cash surplus by the end of FY23 with a focus on deleveraging.
On other segments viz. The textile business is pulling in this quarter, the GHCL MD added, “The current cycle will continue for the next 6 months.
After that, 2023-34 will be a good year for the textile business due to destocking in the US and softening cotton prices.
Shift from green energy to power costs will also decrease. New capacity expansion will also help increase profitability.”
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