RoDTEP scheme: IOL Chemicals expects pharma to be included

The government, in a bid to give boost to exports, has notified the rates and guidelines for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. Under the RoDTEP, various central and state duties, taxes, levies imposed on input products, among others, are refunded to eligible exporters. The RoDTEP rates notified are in the range of 0.3-4.3 percent. These rates will apply to 8,555 tariff lines. Under the RoDTEP scheme, marine, agriculture, leather, gems/jewellery, etc. are covered. Similar support will be given to apparel and made-up exports under the RoSCTL scheme.

The pharmaceutical and chemical sectors have been left out of this scheme. Sanjay Chaturvedi, CEO of IOL Chemicals and Pharmaceuticals, is positive that the pharma sector will also be included in the scheme. “It is a matter of time before pharma and chemical segment gets taken into the scheme. We are expecting some kind of announcement in the next couple of days or probably by the end of this week,” he said.

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The company reported its earnings for June-ended quarter. “On the pharma side, the revenues are down primarily because of loss of exports. There was a lot of overstocking by the consumers last year and demand was soft. On top of that, the pricing has fallen a little bit. Because of the freight rates going up 2-3 times over the last six months or so, a lot of customers are deferring their orders so our orderbook continues to be strong but customers are essentially delaying the offtake,” he said.

Domestic business for the company continues to be very strong both on the chemicals as well as pharmaceuticals side.

“Normally, we would be about 30-32 percent in exports and the balance would be domestic. However, right now, it is about 20 percent in exports and the balance is domestic,” he said.

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Chemical business continues to show strong performance. “We have enhanced the capacity of ethyl acetate and that should give us about 8-10 percent further bump in terms of volumes. The pricing of ethyl acetate is governed by the raw material prices. So the volatility that we see in acetyl acid worldwide is being reflected in the ethyl acetate prices as well. Acetyl acid prices are up about 20 percent over the last couple of months and we are able to successfully pass on that cost increase to our customers,” he explained.

In terms of Ibuprofen, he mentioned that the prices have come down from the high levels that they were at. “I think the pricing has bottomed out. We don’t expect it to go any lower,” he said.