In an exclusive interview with Pravin Prashant, Editor, Indian Chemical News, Narendra Varde, Managing Director, IMCD India & Bangladesh talks about company's achievements, role of Mumbai Technical Centre to Asia-Pacific region, changes in chemical distribution business, partnerships. acquisition strategy, safety and regulatory compliance, sustainability practices, company's growth, and CSR initiatives
Overview of IMCD's journey and growth in India in FY 2022-23? Company's plan for FY 2023-24?
We, as IMCD, a global leader in the distribution and formulation of specialty chemicals and ingredients, provide solutions to our customers and support the smooth and successful delivery of their projects. IMCD in India has a diversified business model catering to industries across advanced materials, beauty & personal care, coatings & construction, food & nutrition, lubricants & energy, and pharmaceuticals. As of today, we serve 5K+ customers in India in approximately 40 end markets across our business segments. We have grown 400% in the past 3 years through organic and inorganic growth in the region.
FY 2022-23 has been a year of price corrections and slowing demand apart from the China competition. While this year was tough on the industrial segment due to price correction and excess availability of inventory, the life sciences segment saw excellent double-digit growth. Robust supply chain setup and agility to adapt helped us meet the growing demands of customers and support our principals.
As we embark on 2024, we continue to deliver on the commitments we’ve made to our customers and principals by going deeper into existing segments and exploring growth markets, expanding our technical capabilities, and reach, and accelerating our talent pipeline.
IMCD operates in a diverse range of industries. Strategies or initiatives that have helped the company's growth and success in the specialty chemicals and ingredients sector in India?
We are a company that has a global vision with empowerment and accountability at the local level to do what’s right for our principals and customers in India. Our goal is to support more and more customers through our technical expertise, state-of-the-art laboratories, and strong feet on the ground. Our application laboratories across beauty & personal care, coatings & construction, and pharma in India are well appreciated for bringing value to our customers by being innovative and agile to specific expectations and requirements. We do not hesitate to invest in new resources and capabilities to stay ahead of industry trends and evolve in the markets we are present in.
Support provided by Mumbai Technical Centre to the Asia-Pacific region? Do you see an increased role for Mumbai Technical Centre going forward?
Certainly, we see an increased role of Mumbai Technical Center as our labs work closely with sales and marketing teams along with our principals and customers to provide the right formulation and dedicated support to our local and global partners. For instance, in our Pharma lab, we have initiated around 80 projects in 2022. The same holds true for our other laboratories across segments.
Chemical distribution industry has undergone significant changes due to factors like digitalization and global events. How has IMCD navigated these changes and capitalized on new opportunities?
Given the virtual world created during COVID-19, we were quick to adopt technology for business transactions. We launched a B2B portal - MyIMCD that allows our customers to place orders through the portal without any manual intervention. We have been at the forefront of updating customers and principals on new market trends through digital media. We have strengthened our internal systems such as strong CRM capabilities, EDI-connected warehouses, and tax compliances in ERP to fully capitalize on newer opportunities.
However, while we see a lot of digitalization happening across industries, in the distribution space, there is minimal adoption and impact seen of these advancements.
Share examples of successful partnerships signed in FY 2022-23 that IMCD has undertaken in India to expand its reach and product portfolio?
We acquired Parkash DyeChem (signed in November 2022) to expand our construction and inks portfolio within our Coating & Construction vertical. Similarly, we acquired TradeImpex (signed in April 2023) to expand our converters and automotive portfolio in our Advanced Materials vertical.
IMCD India has acquired many distributors including Signet, Parkash Dyechem, and Tradeimpex Polymers in the last 2-3 years. How have these acquisitions helped the company? Going forward, what would be your acquisition strategy?
Acquisitions help us to strengthen our existing portfolio and enhance our technical expertise by bringing in complementary products; this helps to support our customers through a one-stop solution for their product value chain needs. IMCD has an increased focus on India and we are on the lookout for the right business partners across segments.
The commitment to safety and compliance is crucial. Could you elaborate on the company's approach in ensuring the highest standards of safety and regulatory compliance?
We have a zero-tolerance policy when it comes to compliance across all policies and regulatory requirements. We set up an elaborate HSEQR function - Health, Safety, Environment, Quality & Regulatory - to make sure we run our business in the right and sustainable manner. We are constantly improving ourselves to get the latest ISO and Eco Vadis certifications. Given our operating principles and transparency, it gives our principals across the globe a lot of confidence in the IMCD way of operation.
Sustainability and environmental concerns are increasingly important. How is IMCD incorporating sustainability practices?
We have been taking voluntary measures to reduce our carbon footprint. Sustainability has become an integral part of financial reporting to ensure independence and transparency. We are committed to offering products and solutions within our portfolio that focus on the health and well-being of our consumers, the environment, and society while responsibly managing our operations. IMCD is dedicated to the safe and reliable handling of chemicals, ensuring its warehouse operations and transport comply with all relevant standards. IMCD safeguards ethical and sustainable sourcing from its suppliers and service providers, to ensure responsible ESG practices.
In an industry that is continually evolving, how do you envision IMCD's evolution, future growth, and its role within the broader specialty chemicals and ingredients industry in the next 5 to 10 years?
IMCD has aggressive growth plans in India. We will continue to grow both organically and inorganically to help us serve our customers better. While we grow rapidly, ensuring that we grow in a sustainable manner is core to the company's ethos. We will focus on recruiting and developing the right people and adopting the right technology that will take IMCD to its next phase of growth.
Could you elaborate on CSR initiatives undertaken by the company in FY 2022-23 and plans for FY 2023-24?
For all of us at IMCD, Corporate Social Responsibility (CSR) is a heartfelt opportunity to make an impact in the communities that we are part of across the globe. At the IMCD India level, we’ve undertaken quite a few projects with the active involvement of our employees. So far in FY 2022-23, we’ve contributed towards the following NGOs and causes: Khushii, an NGO that works towards creating quality and equitable opportunities for children and communities to learn and grow with a view to long-term sustainable change; Udaan India Foundation ensures every child of school-going age is gaining a strong and holistic educational foundation; Goonj which focuses on clothing as a basic but unaddressed need; Force for creating awareness on water conservation; Sparsha which works towards the cause of child education, child rights, safe homes, youth skill development, school development, and early childcare; and Animals Matter to Me (AMTM), an NGO that rescues and cares for animals in need.