Praj Industries Limited (PRAJIND) Earnings Call Transcript & Summary

[Audio Gap] Sandip Bhadkamkar.

Good day everyone. We welcome you to this conference call organized to discuss Praj Industries' operating performance and financial results for Q2 and H1 FY '21, which were announced yesterday. On this call, I have with me Mr. Shishir Joshipura, CEO & MD; and Mr. Sachin Raole ,CFO and Director, Finance and Commercial. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Documents relating to our financial performance were e-mailed to you. These documents, along with the quarterly results presentation, have also been posted on our corporate website. I would now like to handover the floor to Mr. Joshipura for his opening remarks.

Good morning, ladies and gentlemen. I welcome you to Praj Industries’ Earnings Call for Q2 and H1 FY '21. Trust all of you had the opportunity to go through our results presentation for the quarter ended 30th September 2020. I hope that you and your family members are safe and healthy. The festival season of Deepawali is fast approaching, and I convey my best wishes to you and your family on the occasion. It’s a pleasure to connect with all of you to cover quarterly business updates and industry developments. Following this, Sachin will take you through the financials. Let me begin by sharing news that ought to make all Indians proud and I am privileged to share the same with you. Washington DC-based Biotechnology Innovation Organization, BIO, awarded our Chairman, Dr. Pramod Chaudhari, with prestigious 2020 George Washington Carver Award for innovation in industrial biotechnology and agriculture. Dr. Chaudhari is the first Indian and only the second Asian recipient of this honor. The recognition is testament to Dr. Chaudhari’s exemplary leadership, pioneering endeavors and his relentless pursuit in building a sustainable ecosystem for the advancement of a bio-based economy. Let me share with you some thoughts on the business environment. After an unprecedented and unparalleled June quarter, the second quarter of the fiscal witnessed gradual return towards normalcy for the business environment across the globe, though at different pace in different economies. The threat of virus has not gone away, and we still need to stay vigilant. A combination of improving macro indicators such as GST collections, E-way bills, auto sales, consumer demand, manufacturing PMI, coupled with healthy and widespread monsoons and rural demand together is now indicating the first sign of recovery in the domestic market. The corporate sentiment also remains fairly upbeat as we see encouraging signs of demand revival and pickup in business activities albeit at differing pace across the economies. The current ethanol blending rate in India has reached a level of 5.1% amounting to 200 crore liters in current year. With the government’s plan to reach 10% by 2022 and 20% by 2030, there is significant capacity that needs to be built to cater to the additional blending requirement by 2022. With a view to achieve blending targets, government is encouraging sugar mills and molasses-based standalone distilleries to enhance their ethanol distillation capacity. A total of 362 distilleries have applied for a soft loan of about INR 18,600 crores. An interest subvention of about INR 4,045 crores is being borne by the government for capacity enhancement and augmentation of ethanol production over the next 5 years. So far loans have been sanctioned to 64 projects, proponents and completion of these projects would increase ethanol distillation capacity by 165 crore liters in another 2 years. Thus, the ethanol distillation capacity in the country would increase from 426 crore liters per annum to about 590 crore liters per annum by 2022. To encourage sugar mills to divert excess sugarcane to produce ethanol for blending with petrol, the government has allowed production of ethanol from B-heavy molasses, sugarcane juice, sugar syrup and sugar and has also fixed the remunerative ex-mill price of ethanol derived from these feedstocks. The state-wise targets for ethanol manufacture have also been fixed. Sugar mills and distilleries have been advised to utilize at least 85% of their existing installed capacity to produce ethanol. Sugar mills having distillation capacity have been advised to divert B-heavy molasses and sugar syrup for producing ethanol to utilize their capacity to maximum extent, and those sugar mills which do not have distillation capacity should produce B-heavy molasses and should tie-up with distilleries which can produce ethanol from B-heavy molasses. States have also been requested to ensure smooth movement of molasses and ethanol. To facilitate financing, the OMCs, sugar mills and banks have agreed to a tripartite financing mechanism in an effort to boost the ethanol investment capacity of sugar mills. Escrow accounts are to be set up so that OMCs pay banks directly without passing through mills, so mills can be secure -- so that mills can secure financing for additional ethanol production. The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Shri Narendra Modi has approved upward revision of ethanol prices up to INR 3.34 per liter. In addition, the government has increased the new FRP for sugarcane at INR 285 per quintal for basic recovery rate of 10% and a premium of INR 2.85 per quintal for every 0.1% increase thereof. For ethanol supply year '22-'21, oil marketing companies have floated EOIs to purchase 430 crore liters of ethanol. They are also planning to purchase about 100 crore liters of ethanol produced from surplus rice. This surplus rice has to be necessarily be procured from the Food Corporation of India only. FCI will facilitate in supply of surplus rice based on the LOI or PO quantity issued by the OMCs to the manufacturers. Praj’s technology will enable sugar mills to produce ethanol from B-heavy molasses, juice as well as from food grains in the most optimal manner. Let me now take you through the highlights and the developments for the quarter for our bioenergy business. In quarter 2 FY '21, we witnessed a jump in number of enquiries over quarter 1 of FY '21. There is an increasing traction for B-heavy molasses and bio-syrup to ethanol plants. We have received very positive response to our webinars that we had held with customers over syrup and bio-syrup-based ethanol technologies from across India. After government announcement regarding the use of surplus rice for ethanol production, enquiries for the grain-based ethanol plants are on the rise. On the international front, there has been increasing traction for pharma grade alcohol. We conducted a series of customer webinars on pharma grade alcohol for our customers in Asia Pacific, Africa, US and Europe evoking positive response. In Americas, we are building further on the initial success of the pharma grade alcohol and have bagged 4 more orders in the quarter gone by. We also won 2 significant export orders this quarter, one from Wash To ENA plant in Mexico and another one for Wash To Multi-Product facility in Canada which will include pharma grade alcohol. With this, we are making entry into the Canadian market as well. We expect to continue to build on these entries in both Canadian and Mexican markets and further expand our reach. On the 2G front, project execution is progressing on schedule, and we expect to commission the first plant by the end of next calendar year. In Europe, there has been a slower progress on the 2G opportunity due to lack of long-term certainty of RED-II implementation. Our association with SEKAB is progressing well, and we are currently working on few prospective enquiries. For the CBG business, the Government of India is taking different steps to prioritize production of compressed biogas. The Cabinet Committee on Economic Affairs has approved natural gas marketing reforms, taking another significant step to move towards the gas-based economy. The Government aims to increase the share of natural gas in the country’s energy mix to 15% by 2030 from 6% currently. The government understands that CBG in the long-term is a sustainable solution to the stubble burning problem in the country. Government is gradually building the ecosystem for CBG business by formulating policies such as inclusion of CBG projects under priority sector lending, fertilizer control order for solid bio fertilizers, 10-year clarity on minimum off-take price by OMCs, et cetera. At our demonstration plant at Praj Matrix, process trials are underway for the production of CBG using different types of feedstock, such as rice straw, wheat straw and corn cobs. The commissioning of demo plant has commenced and a formal inauguration ceremony is planned for tomorrow, that is Friday, 6th November 2020. Overall, we are seeing healthy opportunities for our Bioenergy business across both domestic as well as international markets. Let me share update on our Engineering business. The Brewery business, domestic market is still reeling from a lack of demand on account of the pandemic-related curbs. New investments are currently on hold as markets are still in the process of returning to normalcy. With opening up of bars and restaurants across the country, along with reduction of taxes in Delhi, Orissa, West Bengal, J&K, beer sales are expected to pick up in second half of FY '21. On the international business front, we focused on Africa as it is a market with the mirror image business cycle of India. The brewery cycle in Africa is currently at its peak, and we are seeing healthy enquiries from this region. We saw couple of strategic order wins coming from Niger and Kenya for us. On strength of our knowhow in hygienic beverage manufacturing, we have won a very important contract for setting up an Apple-concentrate plant in Himachal Pradesh. On CPES front, we continue to strengthen relationships with select global technology and EPC players. We received the prestigious Best Supplier Award from Baker Hughes, one of our key customers for mitigating COVID-19 impact and delivering first set of block surge vessels with zero defect, zero deviation and zero delay. Our Water and Wastewater business has bagged several repeat orders from our customers, indicating their faith in our technology and execution capabilities. We see momentum building up in the finalization in orders of zero liquid discharge system as we move forward in the year. On the PHS front, we continue to witness good traction in the domestic and international market. We have bagged some very high value repeat orders from leading Pharma players in India as well as abroad. We are building a good momentum on the non-bioenergy business side of our portfolio as well at the back of strong demand from Pharma, Specialty Chemicals, Oil & Gas, Metals and Food & Beverage segment for our solutions that we offer in this space. On the operational front, our sites, factories, R&D facilities are now fully functional, and we are adhering to all the safety norms that are prescribed by the medical community to ensure that our people stay safe. With this, I will now hand over to Sachin for his comments on the financial performance.

Thank you, Shishir. The consolidated income from operations stood at INR 260.64 crore in quarter 2 of FY '21 as compared to INR 294.14 crore in Q2 FY '20. PBT was INR 15.67 crore in Q2 FY '21 as compared to INR 17.19 crore in Q2 FY'20. Profit after tax stands at INR 11.39 crore as compared to INR 16.13 crore for the corresponding period. For H1 FY '20 (sic) [ FY '21 ], income from operations was INR 389.79 crore as against INR 505.74 crore in H1 FY '20. PBT stood at INR 1.15 crore in H1 FY '21 as against INR 27.13 crore in H1 FY '20. PAT was INR 89 lakhs in H1 FY '21 as against INR 24.90 crore in H1 FY '20. Export revenues accounted for 28%. On the total revenue, 64% is from the Bioenergy side, 20% from Engineering and 16% is from PHS business. The order intake during the quarter was INR 405 crores, with 57% from domestic market. Of the total order intake, 54% came from Bio-energy, 34% from Engineering and balance 12% from PHS business. The order backlog as of September 2020 is at INR 1,408 crores, comprising of 78% of domestic orders. Cash and cash equivalent in hand as on September 30 was INR 341 crores. With this, I will conclude my remarks. Thank you all for joining. We would now be happy to discuss any questions, comments or suggestions you may have.

[Operator Instructions] The first question is from the line of Sandip Sabharwal from Asksandipsabharwal.com.

Good work on getting new orders and the progress on the 2G plants. I guess, that's still long a way and hopefully that will come up by next year. My question is more about what shareholders are effectively getting from your company rather than how the company is actually performing? So, over the years we have seen that Praj has been a great company for the employees who work for the company, for the customers who get plants built from Praj. But as far as shareholders are concerned, somehow shareholder returns have been subdued because of various reasons, like obviously this COVID factor was something else. But then you did a consultancy -- I think you were not the CEO at that time, but you had hired a consultant to cut down costs substantially, boost operating margins. That seemed to be -- seemed to never play out in the results. And then you have also been adding orders, but then the profitability has not come to the levels which we would have thought 3, 4 years back when the company guided for particular kind of operating profits. So my question is that when will the shareholders be as happy as the employees and the customers of Praj?

Sandip, great question. Very clearly, we follow -- we are following a guideline that for us, all stakeholders’ interest are important and paramount. We cannot afford to serve just one stakeholder and not look after interest of others. So all the effort is in that direction. If you look at the way we are -- even what I was speaking during my commentary that we are -- we have built the first quarter of the year. If you look at it, everybody was trying to come to terms with managing the COVID situation, staying safe, ensuring that we are able to stabilize and protect, not even stabilize, just protect the company from where it was. I think that was true for the whole world. In the next quarter, which is the quarter that we are discussing right now, our focus shifted because as the economy started to open gradually, we started to understand the pandemic better. I think we have moved to a very focused stabilization of the operations to gradually scale them up safely at the level of near 100% towards the end of the quarter and also ensure that the first quarter’s negativity on the bottom line is replaced with the positive number at the bottom line, and I think we have achieved that goal from that perspective. While we were doing this, we were also focused on ensuring that we build it for the coming time as well, not only for these 2 quarters but also for the future. And we have very strongly focused on ensuring a very strong order book in what I would call as rather difficult and unusual times. We have also pushed mix in the right direction because we have made significant gains in the export market. So the whole effort has been to ensure that the company’s performance is not only factored around 1 or 2 quarters but we are also building it for long-term sustainability and that is what I was telling you that we are also seeing a good traction coming forward for our non Bio-energy businesses as we move forward because of the solution space that we have entered and focusing on and they are finding increasing acceptance now from Specialty Chemicals, from Food & Beverages, from Metals. So some of the solutions that we are giving out there, we are ensuring that we build a strong position there as well. On the main stay, Bio-energy business, very clearly, we see that, yes, there has been events in the past in terms of the ecosystem building itself up to the desired level. But I think we clearly seen now a very focused effort from all stakeholders in the ecosystem to make it successful. You would appreciate that in the domestic market we have held on to a very high market share. So we have put forward our best foot to ensure that we are able to convert the opportunity to our business as much as possible. But now we see a concentrated effort from multiple stakeholders to make the whole ecosystem succeed for multiple reasons. And I think all the reasons are correct but the goal is same. And I do hope that as we -- and we are very confident as we well that as we go forward, we will be able to serve all our stakeholders in a good way.

As a follow up, in terms of like first 2 quarters is good in terms of order inflows, strength and processing quantities, so how is the built in terms of pipeline looking for you?

I'm not able to hear you very well, Sandip.

My question was that the first 2 quarters have been good for order inflows, so how is the pipeline looking for the next 2 quarters?

Yes. So as I was mentioning that -- 2 things, we will continue to build on this pipeline in a very focused way that we don’t want to just look at 1 or 2 quarters but build it for a longer-term kind of a visibility on the order book because that is very critical for our kind of business. As I had also mentioned that in the Bio-energy, which is the core business of the company, we clearly see a significant effort from multiple stakeholders now to make the whole system and the environment and the opportunity crystallize, and I think -- and we are playing our role in it. So we clearly see very -- you have seen the fact that there has been a significant shift in terms of the feedstock limitations that have been removed in terms of definition of feedstock that is now -- the whole portfolio has been increased. The demand from oil marketing companies have now been projected for 5 years through that. The prices have been rationalized. So there is a clear move to -- by the government to tell the sugar mills that over the next 3 years period, they will start to reduce the quota for export and gradually bring it to zero over the next 3 years and all of that surplus should get diverted to ethanol production. So we are clearly seeing some very concentrated key steps being taken. The tripartite agreement for -- between the banks, OMCs and the ethanol producers. So I think the whole ecosystem is now recognizing that we need to take steps in different dimensions and that’s one dimension. Even on the other hand, if you look at the 2G technology, yes, it’s a new technology. We will need to prove it on the ground, and we are very confident of that. And time is the only thing that stands between us and success as I see it. Over the next 14 to 15 months, we will be able to -- when we speak, hopefully next time this year, we will be able to showcase to you a much improved picture on the 2G technologies, commissioning schedule of the project as well. On the CBG front, we see clearly development of an ecosystem which will be very, very positive for setting up the capacities. We have seen some activities happening in this space over the last 3 weeks as well, which gives us confidence that as we move forward in the year, we will start to see this opportunity crystallize there. On the non-Bio-energy side of our business, as I mentioned, we see clear traction coming out on the zero liquid discharge systems. On the brewery, there is still some challenge because no new brewery capacities are being set up in India, but our team has taken a resolve and therefore we have moved into different market where this challenge is not being faced, and I was mentioning we already have 2 breweries that we are setting up in Africa. The PHS business, which is serving the very important pharma segment, already because of the -- an uptick in the pharma segment itself, plus the success of the -- and the durability of the solutions that we have built over a period of time, is now leading us to a situation where customers are saying -- are looking at a very -- from a very different perspective on PHS' ability to provide solutions. So all in all, I expect the whole ecosystem to be very positively oriented to build on the order book performance that we have given in the first half.

Lastly, the company had initially, I think, announced a buyback, then I think fairly decided to conserve cash and -- what’s the thinking on that? And what's the cash plus investment on the balance sheet right now?

So the cash on balance sheet is almost INR 341 crores. And yes, we had announced the buyback but that was pre-COVID days and because of the uncertainty which was forced to us because of this pandemic, the Board took a conscious call that we should hold on to the buyback right now, conserve the cash and see through this difficult period and then talk about buybacks or any other mechanism. So right now, we are in that mode. We have not yet touched upon this issue. And at the opportune time, we will consider all the options which are available to us.

[Operator Instructions] The next question is from the line of Sunil Kothari from Unique Investment.

Sir, you really very well explained all the long-term efforts we are taking to grow the organization during this -- answering to the first person’s question. Sir, my question -- I have 2 questions. Basically, we have increased our gross block during last 3 -- last 10 years almost 3 times, from INR 175 crore to roughly INR 566 crore by March ‘20. So just wanted to understand that during this year we have done almost plus/minus INR 100 crore, INR 1,000 crore is our revenue. So what is our revenue generating or execution capability looking at the opportunity which you are talking about in terms of -- because of environment, because of this ethanol opportunity, 2G opportunity. So if you can broadly tell us, not in terms of maybe timing but potential revenue generating capability or execution capability? That is my first question.

So, Sunil, very, very good question. I think what we are looking at is, so there are 2 or 3 dimensions. One is the unfolding opportunity that we see in front of us. Are we capable of addressing this? And I think as you know that a very major fulcrum of our offering is the technology offerings itself. So -- and on that -- we are not capacity constraint, If I can use that word. We have -- over a period of time, the company has invested significantly into R&D and continues to do so. And I think all those investments will help us to actually put on the forefront our technology offerings, which is the first decision-making criteria for any customer when they are selecting solutions in our space. The second comes to, can we -- do we have the engineering capability in terms of designing, in terms of project execution, et cetera. And I think that’s where we are blessed. We have a very, very strong team with us and that’s also -- we are very, very lucky that we are in a country where engineers are available easily compared to some European countries for example, and we will be able to build on that base as we move forward if should the need arise. Right now, we are very consciously aware of 2 things that we need to continuously augment our engineering capabilities and not necessarily in terms of just number of people but also use the modern technology to drive higher productivity and replicability of engineering efforts so that we can go back to our customers faster with solutions. The third comes to then is around what I would call as the capability to reach the customers in terms of different parts of the world. We have started conscious -- we have been a very strong global footprint company. As you know, there are about 750 references in 75 countries across the 5 continents. Very few companies out of India would be able to make a claim like that. And this is something that we have built over a period of time. And we continue to further strengthen our reach in those markets by really working very closely in a collaborative mode. We do recognize the value of collaboration. And you would have seen that over last and for many years, this company has always gone and collaborated wherever there is a need for a complementary skill. So we have done that, and we continue to do that. For example Dedini, Brazil that we reached, just to give an illustration. And fourth is around our production capabilities, and the good news there is that we are able to expand our production capabilities with practically every business all but one business where we don’t need to do too much of capital investment. We are very conscious about it as to how we put our capital to its best use by developing a very dedicated vendor base for us and that’s the exercise that we are undertaking on a continuous basis. In fact, even before the pandemic set in, we had already set in an exercise to increase the capacity over a period of time by 40%, 50% without much of a capital investment from our end. So -- and the only capital that we want to put from our end in manner speaking on the production, on the manufacturing side is to upgrade our manufacturing systems with more -- higher degree of automation on the shop floor, et cetera, to improve the productivity dimensions on the shop floor. And all of this, we are tying up through a large digitalization effort that we have launched in our Company to integrate all the systems on a digital platform so that information flow become seamless and it drives higher productivity.

So sir, can this ability creation can take us to INR 2,000 crore revenue capability whenever it is possible, whenever you have orders. But is it possible to have those type of revenue whenever you receive order?

Yes, very much.

Okay. And sir, second question is, we are innovator, we are R&D Company, we are in lot of the things, we are first or second. But if you look at our operating margins, it was double-digit during 2008 and ‘09 only and then never we came back to those margins. So some comments on those things will be really helpful.

So over a period of time, obviously, there is different competitive intensity that we are enquiring different markets. No question around it that competitive intensity does play its own role. We also recognized that there could be a product mix or a market mix change in terms of domestic versus export, so that comes into play and another one. And of course, we have to -- I think -- I don’t know maybe 7, 8 calls ago, I had probably mentioned this, that in many ways we have to -- when we develop a resource within our own team, whether it's on the technology development side or on the engineering side or the process engineering side, there are not many companies like us in India that we can say all right if and when I need to augment my people I will go and poach it from them. I will have to develop my own people and hold onto them. So sometimes the business cycles, maybe we have to -- and we are very clear about it, we are very conscious about it that we need to make sure that we develop the right kind of resources, but also that we keep them with us and then, of course, leverage them in a good way going forward. And as I was mentioning in my earlier answers, we strongly believe that we are probably at that point from where we will start to build on this dimension as well.

The next question is from the line of [ Nimit Seth ] from GD Advisory.

It's good to note that business is stabilizing and the outlook is improving. I just have 2 questions, they're both linked. I would like to know if we have the engineering capability to manufacture a 320 KLPD ethanol plant which uses cane juice as the feedstock and can also produce some grain in the off-season? Do we have such capability? And if we do have, have we ever produced such -- have we ever done such a project, maybe not of this scale but of a smaller scale? Anywhere, it could not be in India, it could be outside India also.

So let me tell you. Just in pure scale terms, if we're talking, we have built much larger plant than 320 KLPD project. We have built 1,200 KLPD project, so scale is not a problem at all. Many, many plants that we have built in higher capacity range, so no problem at all. In terms of syrup-based plants, you probably would recollect that we had mentioned that we had built 7 plants in Columbia about 10 years ago. All of them are on juice. So we have very rich experience. So in South America and Brazil, in these markets, juice is used by many companies as one of the feedstock, and we have built a plant around that. So very rich experience on juice, and I think I mentioned that in -- good that you asked this question. When you make ethanol from syrup, you could imagine that if you take the juice out from sugarcane but sugarcane is available only for maybe 4 months, in some markets maybe for 5 months. What do you do for next 7 months then? Because 5 months you will extract all the juice and you cannot store it. The syrup that comes, you cannot store it because it degrades. So there is a technology from Praj that makes it possible, and that’s what we call it Bio-syrup. So Bio-syrup is the form of syrup that can be stored for 1 full year without any degradation in the quality. And then that allows you to run the distillery for 1 full year on the basis of Bio-syrup. That’s the technology that we have perfected, we have with us and I am very proud to say that we believe that nobody in India has got that technology apart from us. So we will be able to bring that to our customers. We are already in dialogue. We are already setting up 3 plants -- 3 demonstration plants because, obviously, the industry also wants to learn how to go about doing the syrup to ethanol conversions. But I expect that this is the activity that will pick up speed as we move through the year.

So you have not received any such order to date for such a plant?

Of course, I told you we built...

No, no, no. I am talking of the current order book, like your INR 405 crores that you booked say in quarter 2 does not include any such plant?

Yes. As of now, we are in discussions with customers, several of them market leaders to set up the plant for them but -- and we have received orders but not exactly the capacity that you mentioned.

Okay. So I have just follow-up question on this. You said that you have a technology which allows this juice which degrades to remain stable throughout the year and can be used as a feedstock. Is there a way that the plant can also be used -- can also use some other feedstock, like grain or something in the off-season? Is that something that you can design?

So there is just sugarcane-based roots which can be molasses B, C, syrup, Bio-syrup, all of these, yes? And then there could be grain, and we can design a plant to utilize multiple feedstocks. No problem at all.

Okay. The reason for this question, I will be more specific, is that one of the leading sugar companies announced their results yesterday and announced the setting up of a 320 KLPD cane juice plant which would use grain in the off-season.

Yes, so that combination you can use, absolutely. No problem.

The next question is from the line of Chandra Mouli, individual investor.

Sir, is there any CBG order...

Sir, sorry to interrupt. May I please request you to speak a bit louder. Your audio is not audible.

Hello? Now is it clear?

Yes, sir.

Yes.

Hello? Hello?

Yes, please go ahead.

Hello? Can you?

Sir, we can hear you. Please go ahead with your question. Mr. Chandra Mouli, your...

Hello? Can you hear me?

Yes, sir, we can hear you. Please go ahead with your question.

Sir, is there any CBG order right now? Can we expect any of these projects start contributing to our pipeline?

Are you asking about CBG order?

Yes.

Sorry, could you please repeat your question, sir?

Sir, is there any CBG order, right now do we have?

We are executing, yes. We are building a CBG system for -- in North of India as well as South of India.

Okay. Okay. So it’s already maybe in executing orders. And sir, the other one is, I just came across something that Assam Bio Refinery Private Limited, the joint venture is somehow going for a produce cellulosic ethanol from bamboo biomass. Are we doing this project?

No. As you would probably recall that Government of India under its Advanced Biofuel Program, had awarded 6 projects, 4 of which were awarded to us. ABRPL was awarded to a Swedish company which was setting up a bamboo base chemical complex. Part -- one of the products of that complex is going to be cellulosic ethanol. That project is not being done by us.