With the vaccine coming; I was tracking potential beneficiaries who might be having a once-in-a-lifetime opportunity for them (and preferably for us also) in case we are able to scoop them up.
Potential beneficiaries include
Vaccine makers
Glass Vial makers
Syringe Makers
Cold chain storage
Distribution/last mile delivery
PPE kits / disposal kits for vaccinations
A lot of these companies are private limited companies like Serum Institute, Scott Kaisha, Gerresheimer, Hindustan Syringes and Medical Devices.
One major proxy play could be Borosil which makes the glass used for vials (run up from 30 levels to 272 today in less than 10 months) and Piramal (Glass).
Any learned members or expert in this field who has more information and can guide better.
Borosil Renewables is the one you’re referring to that’s run up from 30 to 272 in 10 months. They’re a related company to Borosil Ltd, but only make solar glass for solar modules.
Borosil Limited is probably the 2nd or 3rd largest vial / ampoule manufacturer in India - they acquired a company called Klasspack a few years ago that was doing this. As per their last quarterly call they have nearly sold out their capacity. In their last quarter call CEO said - ‘We have about 300 million vials as annual capacity and about 500 million ampoules as annual capacity and at the present moment Klasspack would be operating close to 55%, 60% capacity utilization. But on the vial side specially, I think we expect that our capacity will get sold out very shortly. In fact, the discussions are on for large volumes.’ They are considering further volume expansion. You can find this at https://www.borosil.com/investors/borosil-glass-works/ under Corporate Announcements and transcript of Nov-20.
While this is all positive for the company I would urge fellow investors to assess for themselves how much of this is already in the price. Please note that Klasspack is part of the Scientific Products division of Borosil (other division is Consumer which sells kitchen appliances, glassware, Larah etc). For FY2020, Klasspack contributed 7% of total revenues and 3.3% of total EBITDA. You could make your own assumptions as to how this might drive upside for the business.
Disc: Am invested and find the business has a lot of prospects beyond just the short term excitement on vials - but am likely to be biased
Below is the brief note based on my interaction with employee working at Biologics E ltd.(This was few months back and I have not cross verified below points)
Most manufacturers have 3 vendors distributed in 70:15:15 for procurement. Most are MNCs. No new supplier or vendor will be included for covid vaccine.
1.Media component: Yeast media. One of the Indian supplier: Hi-media ltd ( Maharashtra)
Cell lines: supplied by MNCs like Thermo fisher BD, Merck ltd.
Filters: Major consumables in the vaccine industry. Again MNCs like Pall ltd(USA),Sartorius ltd(Germany), Millipore ltd( ?Germany)
4.Glassware/vials : Borosil ltd but cost is high, does not have capacity and quality issues. Dupont and Schott Duran( Germany) are major players. ( Eg:Schott duran quality is much better and cost is almost 5-10 times cheaper than Borosil)
