“Camlin Fine Sciences Limited

Q1 FY2021 Earnings Conference Call”

August 11, 2020

ANALYST: MR. ARCHIT JOSHI - DOLAT CAPITAL

MANAGEMENT: MR. ASHISH DANDEKAR - MANAGING DIRECTOR -

CAMLIN FINE SCIENCES LIMITED
MR. NIRMAL MOMAYA – DIRECTOR - CAMLIN FINE
SCIENCES LIMITED
MR. SANTOSH PARAB - CHIEF FINANCIAL OFFICER -
CAMLIN FINE SCIENCES LIMITED

Page 1 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Moderator: Ladies and gentlemen, good day and welcome to the Camlin Fine Sciences Limited Q1 FY2021
earnings conference call hosted by Dolat Capital. 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 “*” then “0” on your touchtone phone. Please note that this conference is
being recorded. I now hand the conference over to Mr. Archit Joshi from Dolat Capital. Thank
you and over to you Sir!

Archit Joshi: Thanks Lizaan. On behalf of Dolat Capital, I welcome all participants to the Q1 FY2021
Earnings Conference Call of Camlin Fine Sciences Limited. We would like to thank the
management for giving us this opportunity to host this call. We have with us today, Mr. Ashish
Dandekar, Managing Director of Camlin Fine Sciences Limited, Mr. Nirmal Momaya, Director,
and Mr. Santosh Parab, The Chief Financial Officer of the company. Without further ado, I
would like to hand over the floor to Mr. Ashish Dandekar for his opening remarks after which we
will have the floor open for a Q&A round. Over to you Sir!

Ashish Dandekar: Thank you. Good afternoon ladies and gentlemen. Good morning. Welcome to the investors
conference call. The details of the first quarter will be explained to you by Santosh Parab, our
CFO and after that Mr. Nirmal Momaya will take questions. Over to you Santosh!

Santosh Parab: Thanks Ashish. Hello everyone and a very good morning. As Ashish said I will start with the call
with some highlights on the performance of the company for the quarter and then we will open
up for the questions. We have had a good performance in the first quarter of the financial year
and we are extremely proud of our team, we have been able to achieve this with most high times.
As you are aware our manufacturing plants were working even though there were lockdowns and
also in the global arena also our plants are working. This was because of our products are under
shelf life solution business, we generally falls under the category of essential services. The
authorities have extended the permissions to manufacture other products as well. At present all
our manufacturing facilities situated in India and globally are working at an optimal capacity in
spite of the tepid circumstances.

I will now share some of the highlights of the financials starting with the standalone financials.
Our operational revenue in the standalone was Rs.121 Crores as against Rs.139 Crores in last
quarter while it was Rs.143 Crores in the corresponding period in last financial year. The
operational EBITDA was Rs.16.3 Crores, which represent an EBITDA margin of 13.45% an
expansion of 349 basis points on year-on-year while 454 basis points sequentially. Company
posted a profit after tax of Rs.3.8 Crores in the quarter against Rs.16.5 Crores in last quarter and
Rs.1.6 Crores in the corresponding last year’s quarter.

Now on a consolidated basis, the company posted record operational revenue of Rs.305 Crores,
this is the first time that this has crossed quarterly revenue of Rs.300 Crores as compared to the
last quarter’s revenue of Rs.292 Crores and corresponding last year’s quarter it was Rs.260

Page 2 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Crores, which represents some growth of 4.4% sequentially while 17.5% on year-on-year basis.
EBITDA stood at Rs.51 Crores as compared to Rs.34.3 Crores in the last quarter and Rs.30.5
Crores in the corresponding period in the previous financial year. This is an improvement of 497
and 303 basis points respectively. Profit after tax was Rs.20 Crores in the current quarter as
compared to Rs.2 Crores only in the last quarter while it was 16.4 Crores in corresponding last
quarter. Then increase in the topline and margin is mainly due to favorable product mix, which
was brought by the situation under COVID and of course efficient management.

Geographically if you start look at our global business, CFS posted operating revenue 111 Crores
in the current quarter as compared to Rs.74 Crores in the last quarter and Rs.103 Crores in year-
on-year. Our Mexico subsidiary reported revenue of Rs.72 Crores in the current quarter as
compared to Rs.74.8 Crores and Rs.56.8 Crores quarter-on-quarter and year-on-year respectively.
Our subsidiary in China, which manufactures vanillin, clocked revenue of Rs.59 Crores in this
quarter as against Rs.29 Crores in last quarter and Rs.46 Crores in the corresponding period last
year. CFS Brazil netted revenue of 15 Crores as compared to 17 Crores in the sequential quarter
and 11.9 Crores in year-on-year. CFS North America posted a revenue of around 8.8 Crores
against 7.6 in the last quarter and 12.2 Crores year-on-year. In the situation of COVID pandemic
the company has been able to record a better performance in this quarter; however, the COVID
scenario remains unpredictable and uncertain, the company in Brazil itself to face this uncertainty
in the quarters to come. While achieving these results, our focus has been on the well being of
our employees and efficient delivery to our customers. Company had desisted from restricting the
salary of its employees and had rather focused on increase in their efficiency and output of the
work force in these circumstances. Company has retained its entire staff across the globe and our
employees are good our faith in them with their unflinching support and efforts during this
pandemic. In the current times the priority was also focused on efficient cash management and
maintaining the liquidity position. The company was successfully maintaining its indebtedness at
a tad below the level as FY2020 year end. As you are aware the trial runs were impacted, this is
regarding Dahej project, as you are aware the trial runs were impacted first in March due to the
nationwide lockdown and then due to the unfortunate blast that occurred at our neighboring
factory on June 3, 2020, this frequent and major disruptions have impacted the successful
completion of the trail runs. The company has produced Diphenol during this train run and it has
been internally consumed at Tarapur plant. Looking at the progress of trial runs at present the
commercial production is likely to commence before the end of Q2 FY2021.

Lastly the shareholders of the company approved the preferential issue of up to 180 Crores in last
week of June 2020. Post the statutory approvals (inaudible) 7:07 of this issue is expected in the
very near future. Company’s plan to acquire the balance stake in the Mexican subsidiary and
building up vanillin facility in India is on track as per envisage plan. With that we can now open
up the call for questions. Thank you.

Moderator: Thank you very much. We will now begin the question and answer session. The first question is
from the line of Madhu Kela from MK Ventures. Please go ahead.

Page 3 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Madhu Kela: Fantastic set of numbers, congratulations to you and the entire team. I wanted to ask one thing
that in the last five years there has been significant free cash outflow from the company basically
the company has not generated free cash, with the implementation of Dahej plant and the
prospect improving when do you think the company will be in a position to generate some
substantial free cash flow because that will be the key to rerating of this company?

Nirmal Momaya: Sorry, could you repeat the questions; I have a very bad poor network today?

Madhu Kela: Nirmal Ji I was asking first congratulating you for fantastic set of numbers in this quarter you and
the entire team. I was asking the company have been in an investment mode and working capitals
have also increased, so essentially the free cash out of the company has been to the tune of
Rs.450 Crores in the last five years negative when do you expect that we will be able to get back
to free cash flow from the operations Sir that was my questions.

Nirmal Momaya: Okay. Thanks MadhuJi. Our expectation is by FY2022 we will be back in a positive free cash
flow position.

Madhu Kela: After that we will intend to reduce the debt out of free cash flow or you are still going for some
acquisition or some other investments?

Nirmal Momaya: At this point we do not have an acquisition plan anything on the table, but the idea is that over a
period of time we want to reduce the debt for sure in the next three to four years, any which ways
we have an IFC, which is maturing in 2023 and also we are paying off our Mexico debt so the
two long-term debts will get cleared by FY2024.

Madhu Kela: NirmalJi, the second question can you give a little bit more detailed colour on the Dahej plant it
is not only the commercial production starting, but over the next two to three years what are the
possibility, how the backward integration will happen, how the value addition will happen can
you speak a little bit about that?

Nirmal Momaya: Dahej facility basically currently the plant that has been commercialized is for Diphenol, which
is hydroquinone and catechol, which are the base raw materials that we make in Italy, so we have
a capacity of 10000 tonnes in Italy total combined capacity and a similar capacity setup in Dahej,
so the total capacity of our hydroquinone and catechol will double and our idea is in the next two
to three years the downstream product made from hydroquinone and catechol we will start
producing those as we go along so that we become 100% fully backwardly integrated for
hydroquinone and catechol, which means we will consume the entire hydroquinone and catechol
produced from both these facilities. So the idea really is that today we are consuming about
10,000 tonnes of hydroquinone and catechol and our business size is x with this we will double
our business size with taking that is a basic raw material and then value adding in the next two to
three years.

Madhu Kela: Thank you.

Page 4 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Moderator: Thank you. The next question is from the line of Surya Patra from Phillip Capital. Please go
ahead.

Surya Patra: Congratulations for great set of numbers Sir. Although you have mentioned about the plan of
consolidating your position in the Mexico business and vanilla business as well as the kind of
activities towards the healthcare thing product areas that is on track, but if you can give some
more increment and update on that side how is that progressing and also if you can give me some
sense what was the kind of EBITDA contribution of Mexico and the vanilla business for the
quarter?

Nirmal Momaya: Well the talks are progressing as we discussed on our last call and we are hoping by end of the
year we will complete the acquisition of Mexico minority interest and the vanillin facility also in
the next 12 to 15 months depending now because of COVID setting up the facility in Dahej
transferring it from China or also setting up some brand new facility, capacity here would take
anything between 12 to 18 months purely because of labor and the condition that we are currently
facing in India. So difficult to give an exact timeframe but it is within the next 12 to 18 months
that will be ready and on the health and wellness front, we are progressing, we are setting up an
extraction facility in Karnataka, we have acquired rather we can take on leave one facility, which
ultimately we will acquire and that should become operational in the next quarter and that was
start giving us contribution in terms of sales coming from the natural products in the health and
wellness position. So you will see some contribution coming in from the next quarter.

Surya Patra: You are saying that immediately we will be seeing some traction on the health and wellness side,
but how it is that investment or anything on that front?

Nirmal Momaya: So right now the investment is small because they are starting small.

Surya Patra: No. capacity that you are…

Nirmal Momaya: So that can give us potentially annually about 50 to 60 Crores of topline, which is expandable,
this capacity is expandable to about Rs.100 Crores in this facility.

Surya Patra: Okay and investment is there?

Nirmal Momaya: No. The investment is small. It will be a couple of Crores.

Surya Patra: Is it because of the kind of low volume high value nature of this product or something?

Nirmal Momaya: Yes that is right because we are taking this on lead ultimately when we acquired also the total
acquisition is not much. The products are typically Rs.4000 to Rs.5000 per kilo so therefore it
was very high value and the volumes you handle are much lower, so investment and the turnover
that you get in terms of investment is much larger.

Page 5 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Surya Patra: Okay. Now since we are internalizing that in the minority stake of Mexico as well as the China
one, can you just share what is the EBITDA number for this quarter for these two entities?

Nirmal Momaya: China is a breakeven, of course there is some margin we make in the Glycol but on the final
vanillin on the CFS Wanglong it was a breakeven on EBITDA level and Mexico was about 26%
was EBITDA margin.

Surya Patra: Okay. So, whether it has gone up because in the last year I think…

Nirmal Momaya: Yes. It has gone up from about 20% to 25%.

Surya Patra: Fine. Sir coming to the overall revenue mix if you can share what is the share of blend this
quarter in the other product areas, so my interest is just to understand that whether the product
mix has changed or the kind of superlative margin performance what we have seen, I think this is
one of the best over the last four to five years period?

Nirmal Momaya: So it is not really so much the product mix, I think the COVID effect has done two things one is
some raw material prices have come down, which we saw with the crude prices going down in
that quarter so that of course does help a little bit, but also some of the currencies have also
devalued, so our business is in dollar but expenses are in local so that also helps in a profitability
and also in the COVID since there were some logistics problems and stock problems and things
the realization also has improved slightly in terms of the pricing that one has charged has
improved a little bit, so it is a combination of many factors which has led to improvement in
margins, so if you were to look at it, it is not one thing that really has given.

Surya Patra: That is fine, but if you can share Sir what is the blend share for this quarter?

Nirmal Momaya: Santosh, can you give the numbers, he will give you the exact numbers.

Santosh Parab: On a consolidated basis total business on a standalone only blend was around 27% of the total
revenues and shelf life the balance states were around 24%.

Surya Patra: Okay. So that means that it really this is interesting fact that despite blends remaining relatively
lower than the 30%, which used to be generally this quarter the margin performance may have
seen a kind of significant surprise, so my question is that is it fair to believe the base business,
see the base old business what we used to generally have, so that has got a kind of a margin put
in like this and which would further be complemented with the commissioning of the Dahej plant
and also the way that you are indicating health care product, which is obviously value wise, is a
value proposition addition and on the top of that even the Mexico the way it has performed
margin wise, so all those are giving me a kind of significant margin, growth trajectory or
expansion trajectory, am I right or anything else to be factored?

Nirmal Momaya: I would like be a little cautious on this is that times are not very certain with COVID especially
in some geographies and obviously in India also, new lockdowns may come, you think already

Page 6 of 18
 Camlin Fine Sciences Limited
August 11, 2020

we have lot of rumors of what is going to happen, so keeping that in mind, keeping how interest
rates are, how currencies are, everything is connected ultimately and keeping all that in mind we
are hoping that this is the base business. We are hoping that this is the base business, but with
these uncertainties it is really, really difficult to say that this is what it to be for sure, but having
said that we are seeing that there is an implementation in the margin and the business itself we
have not seen too much contraction in volume offtake, but in some markets there has been
because of the lockdown, some markets there has been more because of lockdown happened at a
different point of time, it is all very uncertain in the next six to eight months, nine months, so it is
very difficult to say whether this becomes your base case, but yes this is what we hope that it will
be our base case and yes of course with the Dahej commissioning around the corner in this
quarter in the next two quarters we will see the upside that we will get from Dahej as well as we
will see certain debottlenecking that we are doing in our Tarapur facility, we will see upside
because we are receiving capacity in some of the performance chemicals almost 30% to 40%, so
the value addition that will come out we will see some upside coming from there as well in the
next two quarters.

Surya Patra: Last one question from my side, on the blend side I was getting somewhere that because of the
increased demand for the packaged food and all that, so generally there is a kind of a significant
positive scenario or demand outlook for antioxidants so whether that is applied to your product
also and the secondly whether that is giving any kind of additional visibility in terms of growth
trajectory for your blends business?

Nirmal Momaya: So there are two aspects to this one is of course the package food means oil consumption goes
up, which means the antioxidants consumption goes up, so that cycle surely will see some
volume uptake increasing in TBHQ sale especially that is where what goes into edible oil, but at
the same time, on the animal nutrition side because of the lockdown and because of some
institutions are telling their restaurants not being opened and there is more home consumption, so
there is a bit of churn that is happening in that market, so somewhere you will see a bit of volume
contraction during the lockdown times in some part of the world. So if you balance the two I
think we are okay, we are well balanced to cater to both sides of the market so whether it is home
consumption or whether it is restaurant consumption. From that perspective I think we will be
very much on target there.

Surya Patra: The same questions, the blends what I was asking, so whether any optimism that you are finding
in terms of your overall outlook for the blends business how should one really look at given the
current scenario that is prevailing in the world across?

Nirmal Momaya: In the next three to four years what we set out to grow in excess of 25% a year that looks on
track.

Surya Patra: Okay. Great Sir.

Nirmal Momaya: Take few quarters here or there but generally speaking we will grow at 25%.

Page 7 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Surya Patra: Sure. Okay. Thank you Sir. Wish you all the best.

Moderator: Thank you. The next question is form the line of Tarang Agrawal from Old Bridge Capital.
Please go ahead.

Tarang Agrawal: Congratulations for a great set of numbers especially for CFS Mexico. I have a couple of
questions one I wanted an update on the shifting of plant from China to India, second if I look at
your India business what is the standalone business there is revenue of around 120 Crores in Q1
and your Europe business did a revenue of around 111 Crores, so just wanted to get a number of
what would have been Europe’s captive sales to India and India’s captive sales to China and
those numbers?

Nirmal Momaya: Santosh you can answer that.

Santosh Parab: Yes. Europe sold around 38 Crores to India during this quarter, from India to China there was a
sale of only 10 Crores.

Tarang Agrawal: So balance Europe and balance India is largely all external right?

Santosh Parab: Another12 Crores from India was sale of subsidiary, sale to subsidiary other subsidiary.

Tarang Agrawal: I wanted your two bids on China?

Nirmal Momaya: As soon as just got the approvals now and once we have the money we will start the conversation
for that project, so we will give an update in the next meeting, but overall like I mentioned earlier
in the call it is between 12 to 18 months.

Tarang Agrawal: Got it. Thank you.

Moderator: Thank you. The next question is from the line of Rohit Sinha from Emkay Global. Please go
ahead.

Rohit Sinha: Thank you so much and congratulations for great set of numbers. So few questions from my side,
first of all on the gross margin on the consolidated basis it slightly down, but on a standalone
basis it was gaining a gross margin, the revenue was down there, so how has been the volume
and pricing factor played in the standalone and subsidiary level?

Nirmal Momaya: So basically if you look at it the gross margin is slightly down maybe 0.25%, in Italy we have
produced record production in the last quarter compared to in the past, so where the gross margin
is slightly lower, so that is the reason but the volume is much higher that is the reason why you
will see that the margins are at the EBITDA level higher now. To answer your question on India
we got a slightly better price and product mix, basically we sold more of the food products
because first two months we were allowed only to produce for essential items, which was food
and pharma so the balance 15% to 20%, which is nonfood business we were not producing at all

Page 8 of 18
 Camlin Fine Sciences Limited
August 11, 2020

and that is a slightly lower margin business. India had a better margin profile and overall the
margin profile remains constant or very same.

Rohit Sinha: So basically on the subsidiary level, Italy facility where gross margin was down, on other
subsidiaries there is also some traction in the gross margin?

Nirmal Momaya: No, they more or less remained the same. Everywhere it remains more or less the same that is
why it is almost the same.

Rohit Sinha: Secondly as you mentioned the EBITDA margin of Mexico jumped over almost 500 to 600 bps
so how we should be going forward this thing and majorly I believe it would be some currency
benefit as well in there and gross margin benefit also, but going forward what kind of stable gross
margin would be there?

Nirmal Momaya: I answered that earlier, as I said that in these COVID times it is very difficult to say especially for
the next six months, nine months depending on lockouts and if there is a lockdown plants
running, not running, all of that is always question mark because there are so many different
geography so very difficult to say that whether this is the base margin or it can be improved or it
will be lower, but we are hoping it will remain in this region.

Rohit Sinha: Okay. That is it from my side. I will come back on the queue.

Moderator: Thank you. The next question is from the line of Mithun Soni from GeeCee Investments. Please
go ahead.

Mithun Soni: In terms of our capacity utilization like we indicated that Italy is almost running at full
utilizations, how is the situation is in blends and aroma, where is that we can get additional
revenue other than the Dahej plant?

Nirmal Momaya: In aroma of course we have additional capacity, we are at about 60%, so we have scope in that,
blend capacity is never a problem, so we can easily produce 50% more if required because it is a
blending operation so really capacity constraints are not significant and in the performance
chemicals we have potentially, which I mentioned earlier we are debottlenecking at Tarapur
facility to increase capacity in our performance chemical products, which will reflect in the last
two quarters, there is potentially about we can debottleneck by about 22 to 40%, so there is a
chance of at least growing that business by about 30% to 40%.

Mithun Soni: By when will this debottlenecking happen?

Nirmal Momaya: By September end, so that is why I am saying from the last two quarters October to March the
last six months to year.

Page 9 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Mithun Soni: In the blends business in last year December quarter we had done almost like about 120 odd
Crores topline, are we seeing an increased demand from people who want to move away from
China or increased inquiries can we hit that sort of revenue again?

Nirmal Momaya: Yes. China is not really a player so the blends business is all local, you need local blending
facilities to sell, we are producing everywhere wherever we are present locally and yes there is an
opportunity like I said earlier in the call that COVID lockdowns can impact some of the plants,
which were shutdown for month and month-and-a-half in some of these geographies, so keeping
that in mind the demand will come back once everything normalized.

Mithun Soni: So basically currently for the coming two quarters your benefit what you can get is a little bit
from the aroma and Dahej plant will start coming towards the end of the quarter facility will
come after two quarters from the topline perspective?

Nirmal Momaya: No. In this current quarter which is September ending we will finish Dahej commercialization
and we will finish our debottlenecking and from October onwards those capacities are available
to us.

Mithun Soni: Okay. So Dahej will not give any revenue in September quarter?

Nirmal Momaya: It is difficult to say.

Mithun Soni: From December quarter we will see the benefit of both Dahej as well as Tarapur?

Nirmal Momaya: Right.

Mithun Soni: Perfect and one question in this quarter we have seen the lowest operating cost and compared to
even the last two quarters any particular area where we got the cost savings and sustainable?

Nirmal Momaya: Yes. This work from home and lot of the travel and establishment costs and things we saw lot of
and we did rationalize many other costs, we got many opportunities to cut cost on an operating
level as well. So going forward work from home looks like it is the new normal for most of the
functions we have been able to do it very efficiently and very effectively, so kind of sustainable
in the long run this kind of cost even if there is a slight increase in the cost we are not going to
add many more people for the added turnover, we believe that it is so much more efficient people
working from home than travelling four to five hours daily to their work space is actually not
really required physically, so it can be done online so we see that benefit will continue.

Mithun Soni: Okay what will be your current net debt?

Nirmal Momaya: Current net debt would be around 420 Crores or so.

Mithun Soni: Thank you very much.

Page 10 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Moderator: Thank you. The next question is from the line of Sumit Bhalotia from MK Ventures. Please go
ahead.

Sumit Bhalotia: Congratulations for the good set of numbers. My question is on the update of Dahej plant, so
assuming that our commercial production will be from September end, what is the strategy for
the Italy plant production in the second half, how are we going to absorb the second half
production of HQ and catechol given the current demand environment, so basically is there a
plan of moderation in utilization of Italy plant that is the first question and secondly how the
product quality and how the cost structure, we have seen compared to whatever assumption we
have done, we have shared two, three years back, so basically $1 cost saving, is it impact, are we
seeing that kind of efficiency in current production?

Nirmal Momaya: The first part of the question, first question is what are we going to do with the hydroquinone and
catechol, so basically what I said earlier that we have done some debottlenecking, which will
give us at least 30% to 40% more capacity for the downstream performance chemicals for us as
well as we have debottleneck our shelf life solutions that is TBHQ, BHA, so we have an
opportunity there also to gain more market share, so the idea is really to continue to consume
from Italy, the hydroquinone and catechol specifically I would say about 80% of the catechol and
about 50% to 60% of hydroquinone and the balance only that portion will be sold in the market
for which we already have a predefined market, so we are not going to cut down or to curtail the
production because of absorption of material and second part of your second question was on the
cost structure yes, so we have seen in the trial production pretty much the assumption that we had
is pretty much visible.

Sumit Bhalotia: I understand that as you mentioned earlier it is difficult for you to comment on the sustainable
from a margin perspective reported this quarter, but whatever be the base case margins the
margin benefit that we were earlier expecting from the Dahej plant from both low production
cost and as well as the release of capital those will be intact?

Nirmal Momaya: That will be intact absolutely.

Sumit Bhalotia: If you can share a little bit on the working capital improvement that we would be seeing on Dahej
plant that will be very helpful?

Nirmal Momaya: Currently I would say at least beside the blends business, all the other business, the raw material
comes from Italy which is a long cycle because produced in Italy shipped to India, converted in
India then shipped to China, converted in China or ship to customers it is a long cycle, so here we
are eliminating for at least more than half of the raw material, we are eliminating the long period
that we have because Dahej is right here, so we save at least 45 to 60 days in the cycle for the
product that comes out of Dahej, so on a blended basis because we will be importing it is not that
we are going to import from Italy, so on a blended basis there should be good amount of
reduction in the working capital cycle.

Page 11 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Sumit Bhalotia: In that case other than Rs.50 Crores, Rs.60 Crores of working capital environment that we have
already planned and provided for Dahej, our net debt which is currently 430 including the
expansion, it should not go up beyond 550, the next year?

Nirmal Momaya: Correct.

Sumit Bhalotia: Thanks a lot.

Moderator: Thank you. The next question is from the line of Andrey Purushottam from Cogito Advisors.
Please go ahead.

Andrey Purushottam: Thank you. Congratulations for a great set of numbers. You had mentioned that commercial
production Dahej will start from Q3 onwards, so what I would request to do is to give us a
comprehensive idea as to how would your capacity ramp up from Dahej let us say from next
calendar year onwards and also trace what is going to happen in Italy, will you be utilizing the
entire 10000 tonnes of capacity and you gave us some hints that 80% of catechol and 50% to
60% of that production will go to India, does that mean the balance quantity will be sold in the
European market and the balance quantity on what capacity utilization should I make that
resumption. The second thing is that what will be the margin improvements that will happen as a
result of the operation in Dahej in terms of improved EBITDA either per tonne or in terms of
your margins and simultaneously in China if you go to be there for the next 12 to 18 months what
is going to happen in China in that period and you also mentioned that there is a possibility that
your transfer of Chinese operation to India, which we thought was a transfer earlier may also
happen for possibility of a brand new facility, which is the word that you used, which is the first
time I am hearing that in the conversation, so I just wanted to check whether there is some
rethinking on that or some other alternatives that you are talking about?

Nirmal Momaya: I will start with your last question first. There is no rethink what we are saying is we are building
a ethyl vanillin facility in India, which has always been the case and for the vanillin we have to
look at the shift from China to India, so there is no difference in what we said earlier and what is
on the table right now.

Andrey Purushottam: Sorry, I do not understand, could you just repeat that sorry?

Nirmal Momaya: It was always the case that we are going to build and we are building up facility in India for ethyl
vanillin and for methyl vanillin it is a shift of plan from China to India.

Andrey Purushottam: That remains?

Nirmal Momaya: Yes. There is no difference in that and as far as capacities we will be selling the surplus that we
have on 100% capacity basis, 40% to 50% of hydroquinone in the European market and 20% of
catechol in the European market from Italy.

Andrey Purushottam: Right, so the 10000 tonnes capacity will remain at 100% surplus?

Page 12 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Nirmal Momaya: Yes.

Andrey Purushottam: There are enough customers for you to be able to feed them that it can ensure 100% capacity
utilization?

Nirmal Momaya: Yes.

Andrey Purushottam: Then what is the ramp up plan?

Nirmal Momaya: Basically the ramp up is commercial production will be announced or we will commercialize it
as soon as we are at 70% capacity utilization and from there on the ramp up to 10000 tonnes,
which is about 900 tonnes a month should take not more than three to four months.

Andrey Purushottam: Can you talk about the EBITDA expansion in terms of margin?

Nirmal Momaya: In terms of expansion of margin there are two levels one is at the Dahej level and one is also on
the performance chemicals where we are debottleneck, so there will be some additional margin
that will come from the new business, the new capacities that we are getting, so both put together
annualized we should be able to improve the margins by at least 3%, 4%.

Andrey Purushottam: This should happen by what end of calendar year next year?

Nirmal Momaya: These are from calendar year next year because all these capacities are all in falling into place
now.

Andrey Purushottam: Okay, this 3% to 4% will be available from January 2021?

Nirmal Momaya: Yes.

Andrey Purushottam: What was happening in China with your current vanillin plant, what kind of capacity utilization?

Nirmal Momaya: We are working at 60%, we continue to grow in the market, so the idea is that to take it to at least
70%, 75%, the shift any which ways will take seven, eight months before we are ready to shift
given the COVID situation, so till then we are ramping up and we are trying to sell more and
more.

Andrey Purushottam: There is no whittling down of production in this 12-to-15 month period?

Nirmal Momaya: No, at some point we will have to shut the plant because if they are shifting it here we will have
to close it and then move it.

Andrey Purushottam: That period entails a closure of production for how long between the time that…

Page 13 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Nirmal Momaya: Between six to eight months and depending again this COVID situation, labour especially on the
India side it is all very uncertain, China is quiet, we know what you can do, what you cannot do
and you can very well estimate it, but in India it is very difficult even today to get labour for
construction of our repair work or for anything it is not easy.

Andrey Purushottam: Right.

Nirmal Momaya: So we do not know on the lockdown what will happen, how things will progress, it would not get
worse than where we are, if it is not worse than where we are I think six to eight months is a fair
estimate.

Andrey Purushottam: But at the end of 12 or 15 months hopefully there will be no COVID situation right?

Nirmal Momaya: That is what we are thinking, so the worse case is this, unless it gets worse in the interim.

Andrey Purushottam: Thank you very much.

Moderator: Thank you. The next question is from the line of Anurag Goyal from Ampersand Capital. Please
go ahead.

Anurag Goyal: Congratulation Sir for the great set of numbers. I had two questions. One is on the recent
acquisition that you have done, so what is the strategy and are there any plans of further fund
increase in that subsidiary?

Nirmal Momaya: Which acquisition sorry, we did not have any acquisition.

Anurag Goyal: Not acquisition the shareholding that you have purchased.

Nirmal Momaya: That we are proposing to purchase, yes.

Anurag Goyal: What is the strategy and any further fund require there?

Nirmal Momaya: That has already been answered earlier; we have to buy this balance 35% of partner.

Anurag Goyal: On the net position net debt as on June 30, 2020 if you can give and what will be the position
going forward?

Nirmal Momaya: I think we answered that earlier also, it is about Rs.430 Crores and it will go to Rs.565 Crores,
Rs.570 Crores in the next one year.

Anurag Goyal: Okay and it includes the working capital requirement in Dahej plant?

Nirmal Momaya: Yes.

Page 14 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Anurag Goyal: Okay. Thank you Sir.

Moderator: Thank you. The next question is from the line of Ravi Mehta from Deep Financials. Please go
ahead.

Ravi Mehta: Congrats on good set of numbers. Just one question is that are there thoughts of putting up
guaiacol in Dahej because once you get catechol and you intend to make vanillin I think guaiacol
is missing, so are you actually thinking to have a full integrated facility in Dahej?

Nirmal Momaya: At some point we will have to do it, but right now it is costing us about Rs.1.50 per kilo in terms
of logistic path, at some point not immediately maybe in a few years time that would be logical
to do to have at one more location.

Ravi Mehta: Also on the debt number you just spoke about, if you intend to probably have six, seven months
of shutdown of vanillin plant to relocate it to Dahej and you may have to build inventories to sell
in those period, so you are factoring that I think or that could have some more heavy temporary
hit on the debt number because you would be building the inventory?

Nirmal Momaya: Yes, it could have some impact, but also all the investment is also not front ended in the shift so
we plan balance sheet as much as we can so that the investment especially on some of the
construction and some of the moving and some of the acquisition price also could be back ended
so that is the idea, difficult to answer it today it is something that is yet work in progress.

Ravi Mehta: Is the negotiation done or you are still in the process of buying like the minority?

Nirmal Momaya: Not as yet. Right now the challenge is travelling out of India is not permitted, so we are just
hoping that in the next one month it opens up.

Ravi Mehta: Okay, thanks.

Moderator: Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please ago
ahead.

Surya Patra: Thanks for followup. In fact just I was looking at the relatively longer term approach the business
model of Camlin I try to understand, now this performance chemicals, which is the industrial
chemical, so that is around 30%, so when all other business are like food ingredient business and
that positioning becoming even stronger with the entry of the ethyl vanillin segment, so if this is
the case, so two to three years down the line how should one really look at the business model of
Camlin Fine, should one consider this is the food ingredient company or food additive company
rather than a true chemical the way it is understood is?

Nirmal Momaya: Yes, so I would say at least 60% to 70% of the business down the line will be as a food
ingredient, food or animal feed additive basically additive business whether it is food or animal
feed I would say that yes it would be predominantly that, of course the performance chemicals

Page 15 of 18
 Camlin Fine Sciences Limited
August 11, 2020

will always remain will always have several projects, we are doing right now expanding
capacities and all of that, so that it is not to going to go away, but it will be more food, if you see
we are closer to almost 70% even today is food ingredients.

Surya Patra: But the value progress that is visible like because of the end-to-end integration and the true
benefit of integration slowing after the integrated activity manufacturing activity at Dahej site
and the value added health and wellness proposition what we are adding and even further
expansion of the Dahej vanilla capacity all that the mix between the industrial product and other
food ingredient product that should improve towards food ingredient area so that mix gets the
kind of understanding, if that is the case then obviously the value or the margin profile what we
are currently seeing we should ideally be looking at the margin profile of other food oriented
ingredient or chemical components right?

Nirmal Momaya: Right.

Surya Patra: Thank you Sir.

Moderator: Thank you. The next question is from the line of Swaraj Singh, Individual Investor. Please go
ahead.

Swaraj Singh: My question is once Dahej is operational in Q3 where should our topline be given we will be
selling out from Italy?

Nirmal Momaya: I think topline over last year we are expecting this year to be in excess of about 20% growth and
overall we will continue to grow at 20% to 25% every year.

Swaraj Singh: Okay and the entire ramping of Dahej should be done by what time, when we start the production
will be at 70%?

Nirmal Momaya: Yes.

Swaraj Singh: So, the optimum utilization of 100% would be by when?

Nirmal Momaya: Three to four months it will take to scale it up.

Swaraj Singh: By then our profile would be up by 25% year-on-year?

Nirmal Momaya: Yes.

Swaraj Singh: Thank you Sir.

Moderator: Thank you. The next question is from the line of Srihari from P.C.S Securities. Please go ahead.

Page 16 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Srihari: Thanks for the opportunity. Firstly on the production ramp up on the aroma front and you could
please state that out at present we are running at around 10000 metric tonnes currently, so for
FY2021-2022 how do you see that ramping up and secondly as far as vanillin is concerned what
is the share of glycol bulk in sales currently, how do you see the sales of vanilla ramping up there
and will the shift to India make up significantly in the context of share of vanilla and if you could
talk about value addition as well, how is the difference for glycol bulk and vanilla?

Nirmal Momaya: Vanilla shifting to India the advantage that we get of course apart from the cost advantage is also
from the market advantage because the US has special duties on Chinese products. Second post
COVID lot of the European companies also want alternative sourcing abilities moving away
from China, so we have been encouraged by all our customers that if we can produce in India and
manufactured in India and Indian product that will give us an advantage over Chinese product, so
clearly capacity utilization and market penetration advantage is significant if we will make the
move to India and start producing in India and a far as margin growth also there is an
improvement in margin not only purely because of capacity utilization and also the cost structure
in India is cheaper, we do see an improvement in margin, which we were to produce in India. As
far as glycol is consumed 1:1 for vanilla so if we are selling 2000 tonnes of vanilla, 2000 tonnes
of glycol, which is produced and shipped from India.

Srihari: Can you tell the current realization for the new products?

Nirmal Momaya: One per kilo realization?

Srihari: Yes, glycol one and vanilla what are the realization currently?

Nirmal Momaya: Glycol will be typically 40% of vanilla and vanilla is about 10.5.

Srihari: About the production ramp up for (inaudible) 55:08 is that likely to happen overall?

Nirmal Momaya: That I have already answered, it will take four months to get to full capacity.

Srihari: That was effectively doubling of your production?

Nirmal Momaya: Yes.

Srihari: By that level does it mean that topline should have?

Nirmal Momaya: Not necessarily the topline will not double, I think you need to understand the business model, on
this call it is too long to explain the whole business.

Srihari: I will take it offline. Thank you.

Moderator: Thank you. Ladies and gentlemen due to time constraint will take that as a last question. I would
now like to hand the conference over to Mr. Ashish Dandekar for closing comments.

Page 17 of 18
 Camlin Fine Sciences Limited
August 11, 2020

Ashish Dandekar: Ladies and gentlemen thank you very much for participating in this investor conference. I hope
we have satisfactorily answered most of your questions and we look forward to interacting with
you at the next occasion. Thank you and good afternoon.

Moderator: Thank you. On behalf of Dolat Capital that concludes this conference. Thank you for joining us
and you may now disconnect your lines.

Page 18 of 18