Performance Of Business Units
Headquartered at Vadodara, Gujarat, your Company is a leading chemical manufacturer. It has a diversified portfolio of chemical intermediates that cater to various end-user industries and falls under Strategic Business Units (SBUs) of Basic Chemicals (BC), Fine and Speciality Chemicals (FSC) and Performance Products (PP). Its manufacturing facilities are located at Nandesari and Dahej in Gujarat, Roha and Taloja in Maharashtra, and Hyderabad in Telengana
Today, your Company is acknowledged as a global chemical manufacturer, a dependable and reliable business partner in almost all key products that it manufactures. Over the years, it has significantly expanded its footprint in the export geographies of Europe, USA, Japan, Latin America, South East, and Far-East Asia. Overall, it exports to more than 30 countries. On the domestic front, it has been an undisputed leader with cost leadership across key products. Your Company has a vision of expanding its footprint in high-value intermediates to capitalize and sustain its growth trajectory driven by several levers and strategic initiatives, and it is on the right path to realize that.
Your Company manufactures Nitrites, Nitro Toluidines and Fuel Additives. Possessing cost leadership is one of the foremost competitive advantages required to drive growth and profitability as most of these chemicals are sold in highvolumes with greater price sensitivity. These chemicals are typically manufactured in standard specifications and are subject to availability and pricing of raw materials.
User Industries for Basic Chemicals:
- Rubber chemicals
- Food colors
- Petrol & diesel blending
Basic Chemicals reported sales of ₹ 940 Crores in FY 2019- 20, growing by 5%. Closure of production facilities due to the national lockdown impacted the revenue momentum towards the end of Q4 FY 2019-20. This has, however, recovered post re-starting of the facilities. Overall, your Company will continue to swiftly capitalise the opportunities by diverting capacity towards products that enjoy better demand scenario, and will leverage its cost leadership position to drive market share gains. The EBIT increased by 44% during the FY 2019-2020
Fine & Speciality Chemicals
Under Fine & Speciality Chemicals segment (FSC), your Company manufactures specialised and exclusive products which are developed using your Company's expertise with respect to processes and technical skill sets. These products are specially customized as per the clients' recommendation and are typically manufactured in lower volumes, but they command higher value and profitability. Customers place keen importance to the product quality, stickiness of relationships, sustainable and scalable operations and adherence to global best practices.
User Industries for Fine & Speciality Chemicals:
- Agro chemicals
- Pharmaceuticals and personal wellness
Fine & Speciality Chemicals segment's revenue grew by 9% to ₹ 585 Crores in FY 2019-20. EBIT for this segment grew by 33%. Your Company witnessed increased demand for key products in the export markets which also led to solid realization gains. Performance was also bolstered by benefits accruing from backward integration initiatives and capacity expansion for established products. With strong product portfolio, your Company is on track to deliver stellar performance in the FSC segment in the coming years.
Your Company's Performance Products (PP) segment produces chemicals that are recognized for the specific characteristics they add to the end product. It consists of Optical Brightening Agents (OBA) and DASDA. Your Company is a leading fully integrated manufacturer of OBA which is backward integrated up to the feedstock of Toluene to PNT and further into DASDA and OBA. These products have strict requirements in terms of performance and technical specifications. Over the years, your Company has targeted and built a robust global customer network and has taken conscious efforts to place its products in the right geography.
User Industries for Performance Products:
PP segment reported a stellar performance during the year under review growing robustly by 91% translating to Revenues of ₹ 768 Crores. EBIT also recorded solid growth of 403%. Your Company's efforts of re-orienting its industry mix and geography mix to ensure better product acceptance played a major role in driving the performance. Further, your Company's position as a fully integrated supplier of OBA has strengthened its competitive edge. During the year , your Company witnessed healthy realization gains in DASDA owing to China's temporary disruptions, which bolstered it's overall performance in the PP segment. Performance Products has contributed 34% to your Company's Total Revenues.