About Company
Patel Chem Specialities Limited, incorporated in 2008, is a manufacturer and exporter of specialty cellulose-based Products. These products are critical inputs for a wide range of industries like pharmaceuticals, food, cosmetics, and industrial applications, serving as binders, disintegrants, thickeners, stabilizers, and gelling agents across industries.
Business Model
Patel Chem Specialities Limited operates on a Business-to-Business (B2B). The company’s core function is to convert basic raw materials (like wood pulp and cotton linters pulp) into high-value, specialized cellulose-based excipients and fine chemicals.
Key Raw material
- Wood Pulp: A primary raw material for cellulose-based products like MCC.
- cotton linters pulp:- Used to make Sodium Carboxymethyl Cellulose (Sodium CMC) which is then further used to make CCS (Croscaremellose Sodium) & (CMC)Calcium Carboxymethyl Cellulose
Raw material Sourcing
- Imports: Wood pulp is primarily imported from China, Indonesia, Canada, and Sweden. In FY2024, imports from China alone accounted for 30.42% of total raw material purchases.
- Domestic: Other chemicals are sourced from the local market, with Gujarat (53.65%) being the main source.
Products
Sodium Carboxymethyl Cellulose (Sodium CMC)
- Sodium CMC is a gelling agent
- Contribute 34.8 % in revenue in FY25
- It includes excellent thickening, binding, and emulsifying capabilities,enhance texture, stability, and performance in various formulations
Croscaremellose Sodium (CCS)
- This is the next step after Sodium CMC,and is a super disintegrant for pharmaceutical industries.
- It is known for its ability to rapidly swell and absorb water, allowing it to facilitate the fast breakdown of tablets, thereby ensuring the effective release of active pharmaceutical ingredients (APIs) in the body.
Microcrystalline Cellulose (MCC)
- MCC is a highly purified, fine white powder derived from cellulose,which is commonly extracted from wood pulp.
- MCC is primarily used as a binder and filler in tablet formulations, ensuring consistency and improving the strength of the tablets.
- Used in capsule for fillers as API in capsule is at the micro level.
Product and Revenue Contribution (FY25)
Industry Wise Bifurcation
Geographic Segments:
- Domestic (India): 83% Of Revenue
- International (Exports): 17%of revenue , covering over 15 countries, including the highly regulated markets of the USA, Germany, and Japan.
Manufacturing Capacity & Capex
Existing Facilities & Capacity:
- Unit 1 (Vatva, Ahmedabad): Manufactures SSG, CCS, Calcium CMC, Sodium CMC, and SMCA.
- Unit 2 (Talod, Himmatnagar): Purely engaged in the manufacture of MCC.
Total Installed Capacity (Combined): 3,720 MTPA.
Capacity Utilization (FY2025):
- Manufacturing Unit at Talod (MCC Plant)
- Product: Microcrystalline Cellulose (MCC)
- Total Installed Capacity: 7,20,000 Kgs per annum (720 MTPA)
- Projected Production for FY2025: 6,42,700 Kgs
- Projected Capacity Utilization: 89.26%
- Manufacturing Unit at Vatva (Multiple Products)
- This unit produces SMCA, SSG, CCS, Calcium CMC, and Sodium CMC. The utilization is calculated based on the combined capacity.
- Total Installed Capacity: 30,00,000 Kgs per annum (3,000 MTPA)
- Projected Total Production for FY2025: 29,71,719 Kgs
- Projected Capacity Utilization: 99.05%
Future Capex & Expansion:
- The company is establishing a new facility at Indrad, Mehsana.
- Purpose: To manufacture CCS, SSG, and Calcium CMC to meet rising demand.
- New Capacity Addition: 6,012 MTPA.
- Will be live on FY27(Partial revenue)
Key personal
- All three are family members ( father,Mother,daughter )
Next Leg of growth
- The company is trying to focus on value added products :- supper super disintegrant.
- Talot Facility is already under expansion(4500 MTPA )
Risk
- A large portion of raw material purchases comes from a very small number of suppliers (the top 10 suppliers account for over 66% of purchases in FY24).
- A significant portion of the company’s primary raw material (wood pulp) is imported. Imports from China alone accounted for over 30% of total purchases in FY24. This exposes the company to geopolitical risks, tariffs, international trade disputes, and supply chain disruptions.
- The company is already at 100% capacity.
- High Dependence on the Pharmaceutical Industry
Peers Analysis
1. Accent Microcell Limited:
A well-established manufacturer of high-quality cellulose-based excipients. They have a significant presence in both domestic and international markets.
The company is engaged into manufacturing of Micro Crystalline Cellulose (MCC) & other excipient powders like Croscarmellose Sodium (CCS) and Magnesium Stearate (MS).
Current capacity is 8000 MTPA and it could reach 12000 MTPA POST CAPEX
2. Sigachi Industries Limited
A leading manufacturer of Microcrystalline Cellulose (MCC) and other excipients, with a strong global footprint and a diverse product portfolio.
MCC (75%): The company is a leading Manufacturer of Microcrystalline Cellulose (MCC) in India.
The company has expanded its MCC production capacity by 7,200 MTPA at its Dahej and Jhagadia plants, in Q4 FY24.
The company plans to enter the production of Croscarmellose Sodium (CCS) by setting up a new unit with an estimated CAPEX of Rs. 90 Cr. The initial production capacity will be 1,800 MTPA, scalable to 3,600 MTPA.
Peers Comparison
Note:- pers Mainly focus on mcc & Co- Processed excipient with MCC. while patel main focus is on performance excipient like Croscaremellose Sodium, Carboxymethyl Cellulose Calcium (Calcium CMC), Sodium Starch Glycolate (SSG).
Balance sheet
- CWIP is for Talod plant 45000 MTPA Is going to be added.
Cash Flow From Operation
- They need to maintain the inventory of 45-60 days
- Trade Receivable cycle is around 60-75 days
