Grasim Industries' VSF business switch focus to exports markets in June quarter

Mumbai: Grasim Industries' textile business, viscose staple fibre reported a total sales of 43 kilo tonne out of which 38% accounted for exports in the June quarter of the current financial year 2021, a rise of 153% yoy, where the company exported around 15% of total sales in the same quarter of FY 20.
“VSF business switched focus to the export market and dedicated few production lines to cater to the export demand of specialty products. The continuous flow of yarn imports and weak demand conditions impacted the domestic spinning industry,” the company said in a statement

The operational and financial performance of the viscose business of Grasim was subdued for the months of April and May 2020 due to lockdown, but witnessed steady improvement in the month of June 2020 and thereafter, with a rise in the capacity utilisation across the plants to around 79% currently. In Q4 of FY20, the company exported 26% of total sales of 136 KT.

The net revenue for the viscose segment stood at Rs 558 crore with a drop in the sales volume. The share of value-added products in the overall sales volume improved to 30% in Q1FY21, up by 6% on a sequential basis, the company said.

Grasim on Thursday reported a 72% year-on-year decline in consolidated net profit of Rs 353 crore in the June quarter of FY21 as against a net profit of Rs 1,294 crore in the same quarter last year.

“The results are to be seen in light of the unprecedented disruption in economic activities due to the Covid-19 induced lockdown,” the company said in a statement on Thursday.

For the current year, the board has approved a capex plan for ₹1,615 crore keeping in mind the temporary disruption in the company’s earnings. The capex includes raising capacities in VSF in FY22, apart from ongoing modernisation capex at various plants.

Grasim’s revenue fell 32% to Rs 13,621 crore for the quarter under review as against Rs 20, 103 crore a year ago. Earnings before interest, tax, depreciation and amortization fell by 41% to Rs 2,613 crore.

To serve the growing demand for anti-bacterial textile range, Grasim’s Liva brand has launched Antimicrobial fibre. The fabric is produced using a special fibre which inherently possesses Antimicrobial properties, and inhibits the growth of microbes (bacteria and viruses) on apparels & home textiles and kills them to the extent of 99%, the company said.

“The company has initiated various measures to optimize operations across plants, reduce its fixed costs and conserve cash as part of its comprehensive business continuity plan,” Grasim said.