DCW Limited ("DCW"), India's sole manufacturer of Chlorinated Polyvinyl Chloride (C-PVC), stands out to be the biggest beneficiary of the Government of India's recently announced anti-dumping duty on cheap imports of C-PVC from countries such as China & South Korea.
The Union ministry of commerce and industry announced on 19 February 2020 anti-dumping duty (ADD) on imported C-PVC resin/compound from China and South Korea. This move is followed by provisional anti-dumping duty announced on 26th August 2019.
CPVC is a thermoplastic produced by chlorination of polyvinyl chloride (PVC) resin, which is significantly more fléxible and can withstand higher temperatures than standard PVC. The biggest customers of CPVC in India are the pipe manufacturers as the applications of C-PVC include making of hot and cold water delivery pipes and industrial liquid handling. CPVC is considered to be safe for the transport and use of potable water used for drinking, cooking, and bathing.
C-PVC is a highly specialized product with only 4 players globally which have the requisite technology to manufacture C-PVC. DCW is the only Indian company to have signed the technology license agreement with Arkema (one of the 4 players globally having the technology patent). With this technology tie-up, DCW Limited in the year 2017 set up the C-PVC manufacturing plant with an installed capacity of 12,000 MT/year at their integrated manufacturing complex located at Sahupuram, TamilNadu. DCW is a major supplier to India's all the leading pipe manufacturers.
The total imports of C-PVC (resins + compound) by India for FY 2018-19 stood at about 1,37,019 MT. Out of these imports, the combined share of cheap imports from China and South Korea was at about 50,000 MT or approximately 36% of the total imports). The share of imports from China & South Korea stood at about 33% of the total imports between April-August 2019which was at about 25,100 MT.
Post the provisional ADD affected in August 2019, the share of imports from China and South Korea went down to 6% during September-December 2019. This had a positive impact on DCW as the company witnessed about12% increase in the net realizations for C-PVC, compared to just 2% increase in the landed cost for imports from countries other than China & South Korea.
Commenting on the Government's decision Mr. Vivek Jain, Managing Director - DCW Limited said, "We welcome the Government's step to impose ADD on cheap imports from hina & South Korea. DCW Limited is the biggest beneficiary of anti-dumping duty on C-PVC as it is the sole manufacturer of C-PVC in India. With an installed capacity of 12,000 MT/ year placed at Sahupuram, TamilNadu facility, DCW is well positioned to leverage this opportunity."
Shares of DCW LTD. was last trading in BSE at Rs.16.3 as compared to the previous close of Rs. 13.75. The total number of shares traded during the day was 471502 in over 1073 trades.
The stock hit an intraday high of Rs. 16.5 and intraday low of 13.75. The net turnover during the day was Rs. 7596466.