Highlights form 2019-20 AR - AARTI INDUSTRIES -
-
Company’s motto - Innovation + Sustainability - to discover the newest and the most efficient processes to manufacture customised Chemicals and APIs. Company has 04 R&D centers at Navi Mumbai, 02 at Vapi and Dombivali to innovate on new speciality chemicals and APIs. Have set ambitious tgts of reducing energy and water requirements, reducing health hazards due exposure to chemicals, dust and on site accidents.
-
Revenues - 4641cr down 2 pc yoy, Ebitda - 986 cr up 2 pc, PAT - 536 cr up 9 pc yoy, EBITDA margins- 21.3%
Margin expansion in speciality chemical business due - increased share of high margin products. ( Sp Chem revenues at 75 pc of the total )
Shortage of Nitric acid, largely used in making speciality chemicals impacted the margins.
Pharma revenues up - 4pc. Gross margin expansion - 250 bps.
- Started in 1984 with 02 products and 01 plant. Today makes myriad products used in India and exported to over 60 countries. Company is strong in Benzene based chemistry and has also diversified across other derivative chains.
Total products - 200+
Indian customers - 700+
Global customers - 400 +
Mfg Plants - 17
USFDA approved API plants - 02
Employees - 5200 +
Company’s products are used in Industries like - Agrochemicals, Pharma, Polymers and additives, Fuel additives, FMCG, Dyes and Pigments, Printing Indks, other spl chemicals.
- Company specializes in the following processes ( in organic chemistry ) -
Chlorination - world rank -03
Nitration - world rank -03
Hydrogenation - world rank -02
Ammonolysis - world rank - 02
Helix Chemistry - only player in India
- Inorganic Chemistry-
Sulphuric Acid value chain
SSP ( single super phosphate )
Export grade calcium chloride granules - used for oil exploration and de-icing
Phthalates
Key competitive advantages -
Leadership postns in key products and processes
Integrated ops across the Benzene and Toulene chains
Ability to effectively use co-products and generate value added products
Diversification across - multi products, Industries, Customers, Countries
- APIs -
Anti - Hypertensives
Anti - Asthmatics
Anti - Cancers
Anti - Thalassaemic
APIs for CNS
APIs for Skin Care
Analgesics
De - Congestants
Opthalmologics
Calcimimetics
Company has own backward integrated intermediaries for most of the APIs that it makes. APIs are exported to regulated mkts across the globe like - US, Japan, EU
-
Company aslo has Custom Synthesis division to make pharmaceutical intermediates ( Pre API intermediates ) for various customers. The company makes Intermediates for over 40 APIs
-
Xanthine derivatives -
Xanthine derivatives are synthetic compounds that resemble naturally occuring xanthines like caffine, theobromines etc. They are used for their mild stimulating effects like in treatment of asthma, influenza etc. They also increase the alertness of CNS and stimulate responses. Hence they are aslo added to various beverages and energy drinks.
-
Company aslo has CRO and CMO divisions for APIs and intermediates.
-
Exports breakdown -
North America - 26 pc
China - 8 pc
EU - 28 pc
Japan - 9 pc
RoW- 29 pc
- China, which accounts for 20 pc of global speciality chemical revenues has seen closures of about 50 chemical manufacturing clusters due environmental concerns. COVID, increased labour costs - other problems in China.
Aarti Industries with its scale, vertical integration and process efficiencies is an ideal alternative partner for global players for multiple opportunities.
14 out of 17 mfg plants have achieved zero liquid discharge status.
Hired 140 Enigineering graduates this year.
- Industry wise breakdown of Speciality products made by the company -
25-30 pc - Agrochemicals
25-30 pc - Pharma
15-20 pc - Polymers
15-20 pc - Dyes and pigments
10-20 pc - fmcg and fuel additives
- Specialilty Chemicals Industry -
Spl Chem are high value, low volume chemicals known for their performance enhancing applications.
Total Global chemicals mkt value at $ 3.7 trillion ( in 2017 ) - including basic chemicals, industrial gases, petrochemicals and speciality chemicals. Speciality chemiclas - at aprox $ 850 billion in 2020. Expected to grow to $ 1 trillion by 2023.
Speciality chemicals find the greatest applications in agrochemicals and fertilizers.
Growth drivers -
Urbanization and rising middle class in Asia Pacific
Increased R&D - leading to discovery of better products
Higher import substitution in India
IPR protection in India - India rank at 55 vs 59 for China. In legal terms too, India ranks 71 vs 77 for China
- Company Overview -
One of the most competitive benzene based speciality chemicals company in the world.
Rare company to focus on - process chemistry competence and scaled up engineering competence.
Ranks amongst top 5 globally for 75 pc of its products.
De-risked portfolio of 200 plus products.
Revenue break up - Sp Chems - 84 pc, Pharma - 16 pc
Domestic vs Export sales - 58 pc vs 42 pc
Company is the only manufacturer of Nitro Flouro Aromatics using Halex process and Phlyenediamines ( PDA ) in India
No single product or customer accounts for more than 8pc of revenues
A high level of forward and backward integration helps the company take advantage of global trends of Vendor consolidation
Company pays a lot of attention to R&D to improve processes and to achieve greater integration. Recently comissioned R&D center at Navi Mumbai has dedicated labs for - process safety, effluent treatment, flow chemistry, Kilo lab, high pressure reactors etc
Company has 5 pharma plants, 02 approved by USFDA, 03 by WHO. Company makes - APIs, intermediates and Xanthine derivatives . 02 R&D facilities are dedicated to pharma sector. Company makes intermediates for 35 APIs.
CRAMS division - focusses on intermediates. Its the fastest growing segment
Pharma revenues - 61 pc from APIs, 39 pc from Xanthines. Domestic - 56 pc, rest - exports
Pharma revenues at - 756 cr vs 426 cr in FY 16.
Pharma EBITDA - 18 pc vs 9 pc in FY 16
- Current capex - 1150 cr. Major projects under execution include -
VAPI, KUTCH and TATAPUR - various Spl Chems, APIs, intermediates and de-bottlenecking ops
JAGADIA - Clorination, Nitration, Capex for 3rd long term contract
DAHEJ - Capex for 1st and 2nd long term contract
These capex - to drive growth
Disc : holding.
May add more on dips.
