June 15, 2024

Emerging market scenario for chemical distribution in India? 

The chemical distribution in India is at a crossroad of immense opportunities and soaring challenges. A growing economy, emerging brands, lower per capita consumption, and an increase in R&D spend are driving growth across sectors. A stable political landscape with a favourable push to the manufacturing sector has put India on the priority list of ingredient manufacturers in developed economies. However, the sector, especially industrial, has been fraught with pricing pressures due to overstocking of inventory and continued dumping. The geopolitical disruptions in the Red Sea and Panama Canal have had their own impact on supplies and prices of ingredients. Despite these challenges, the overall outlook is positive for the Indian chemical sector given the healthy annual growth of around 7% in the index of industrial production and a near doubling of the FDI in FY 2022-23 over the previous year. A revival in domestic demand and surging exports is expected to boost domestic manufacturing.  

IMCD India was established in 2008. How has the journey been so far? 

Established in India in 2008, IMCD has grown to cater more than 4,000 ingredients to over 6,000 customers in India and Bangladesh. We are a supplier of Specialty Chemicals across sectors from life sciences (pharmaceuticals, food & nutrition, beauty and personal care) to industrial solutions (advanced materials, lubricants and energy, coatings and construction). IMCD India is the second largest contributor to IMCD Group and has grown four times its size in the last three years. 

IMCD India has been on an expansion/acquisition spree. What is the current status of these acquisitions? 

Over the last two years, IMCD has done five acquisitions - Signet, Parkash DyeChem, TradeImpex, Valuetree and two business lines of CJ Shah & Company. In terms of integration, we believe that finding the right synergies ensures that our acquisitions have been a force multiplier of our human capital which have enabled us to build on each other’s’ strengths. In fact, our Advanced Materials business group is led by the erstwhile Managing Director of TradeImpex. These integrations have not only expanded our size but also enriched the diversity and experience of our teams. Given the focus on acquisitions, IMCD has a structured process that allows the integration of systems, processes and people to happen smoothly with a focus on minimal business disruption.  

How are these acquisitions consolidating IMCD India’s position in the market? 

Diversification and driving consolidation in the distribution space through M&A is a part of IMCD’s growth strategy. Signet, for instance, along with IMCD India excipient business has made us the go-to provider for excipients. We have the number one market position in the excipients space. CJ Shah’s specialty chemical portfolio has helped us fill in select gaps in our portfolio across industrial and life sciences, especially coatings and construction space. Valuetree, the most recent acquisition, has made us the one-stop solution in the beauty & personal care business. With these acquisitions, I am proud of the fact that last year IMCD India imported the highest volume of ingredients into India as a distribution company. 

Key factors that have contributed to IMCD India's success and growth in chemical distribution?

As a chemicals distribution company, our primary asset is our strong network based on long term relationships built with our stakeholders – Customers, principals and employees, the three pillars on whom our success rests. Our endeavour has been to continue to create value and be relevant for all these three pillars for sustainable growth and successful journey.  

Customer centricity remains at the heart of our actions, aimed at improving our offerings, formulations and services. In 2023, we had conducted a customer satisfaction survey with over 100 customers sampled. ‘Trust’ and ‘Ease of doing business’ were stated as top two drivers for working with IMCD, with most customers wanting to not only continue the relationship but also strongly recommending us.  

Our focus on transparency, innovation and sustainability delivered through a dedicated delivery team gives a lot of confidence to our principals. Building strong relationships with our principals ensures a reliable and sustainable value chain with high-quality ingredients. 

Employees are at the heart of everything we do; we strongly believe in entrepreneurship and empowerment. We run many internal programs to support our people both personally and professionally.  

What are the future growth strategies and focus for IMCD India in FY 2024-25? Are you looking at more acquisitions? What is India's investment plan for IMCD? 

APAC market has the largest share of the global Speciality Chemicals pie (Around 45% by value), with India being the second largest dominant region in APAC. Hence, India is a key region for the IMCD group strategically. IMCD’s outlook remains positive, and we target a sustainable growth approach through a mix of organic market penetration and inorganic acquisitions. We continue to identify new areas of growth and fill in gaps in our existing portfolio to provide a holistic offering to our customers. 

With increasing emphasis on sustainability and environmental responsibility, how does IMCD India incorporate these aspects into its operations and solutions? 

At IMCD, sustainability is a top priority for us, and we want to build it into our portfolio of solutions. Moving forward, we expect additions to our existing portfolio that will provide access to sustainable offerings to our customers. This emphasis is also extended to our operations – we recently partnered with a 3PL logistics partner to house our products in a green warehouse which is environmentally friendly as it runs on solar power, is supported by electric vehicles, and has a rainwater harvesting facility. This facility possesses a storage capacity of up to 450 kW of solar energy, generating 6.10 lakh units of energy per year and saving approximately 4,93,000 metric tons of CO2 emissions annually. In addition to this we have gone paperless across most of our internal operations and have made conscious efforts to shift to environment friendlier options on indirect sourcing.  

In the rapidly changing and competitive market landscape, how does IMCD India stay ahead by anticipating customer needs and market trends?

IMCD has the benefit of its reach across regions and applications, which enables it to derive an understanding of market trends and stay ahead of the curve by co-working with customers to deliver products faster to market. Across all our Business Groups, we work very closely with our principals to communicate market trends and leverage technical expertise to build in market applications. Our team of technical experts and our state-of-the-art application centres are at the foundation of our value proposition that propels IMCD as a partner for formulating products that are market-ready. For instance, with a strong focus on electric vehicles and solar sectors, we have been developing the right portfolio to address our customers' challenges and to provide them access supporting them in product development. 

How does IMCD India promote a culture of entrepreneurship and innovation within the organization?

Being a distribution company, people are our key assets, and we strongly believe in investing in our employees. Freedom to act and entrepreneurship are our corporate values, with each employee empowered to think strategically. For example, our in-house leadership development program, IPULSE, selects nominees from IMCD companies across the globe as participants who can bring out their ideas to improve business. An outcome of one IPULSE pitch that was implemented has resulted in the expansion of one of our business verticals. This program allows inputs of ideas from across locations and functions, with a fast-paced and transparent environment conducive to experimentation and implementation. 

Major challenges and opportunities facing the Specialty Chemicals industry and what would be your suggestions to navigate through them?

The volatility experienced globally has caused a spike in shipping costs and raw material prices, as well as adversely impacting delivery timelines. Amongst these challenges, is an opportunity for distribution players to act as mitigators in this disruptive environment, by providing a sustainable supply chain with alternative suppliers located in diverse regions globally, thereby enabling global trade. Inculcating agility and flexibility in the value chain would act as a buffer against the shockwaves in supply and demand. Additionally, the lifecycle of products in the speciality chemicals segment is reducing, and increasingly moving towards commoditization. In such a scenario, investing in innovation becomes imperative for developing potentially market-shaping products that will not fall prey to commoditization. 

How do you ensure highest standards of safety and regulatory compliances in your operations?

Our health, safety, environment, quality and regulatory department is central to our focus on responsible conduct and sustainable development. We have undertaken many programs in our continuous endeavour to augment our compliances for safety and regulatory aspects, and IMCD India adheres to the internationally recognized quality standards of ISO 9001:2015. We assess all our outsourced vendors, including transportation and warehousing, as per our Environmental, Social & Governance (ESG) guidelines in order to ensure adherence to ESG standards across our value chain.  

Additionally, after a thorough evaluation of our processes and premises, IMCD India has been granted the Authorized Economic Operator (AEO) L2 status. The AEO L2 certification enhances our customer servicing ability, through faster customs clearance and shipment release, reduced physical inspection of foods and provides increased security measures and improved risk management.  

How does IMCD plan to leverage digital technologies for optimizing its processes and improving overall operational performance?

IMCD adopted Salesforce (CRM) in 2022 to enable the optimization of internal processes and reporting and since then our digitalization efforts are going up by leaps and bounds. Firstly, the group has launched a global hub for sampling, ordering, product knowledge and documentation – MyIMCD, a full-service platform. This digital portal is available exclusively for our customers round the clock, who can explore our latest product samples, access technical documentation, or place orders with ease. Secondly, we have implemented a new initiative, Customer Care 360, a centralized email address for all routine business inquiries. This will allow our customers to avail benefits of uninterrupted support and faster turnaround. Additionally, we now have a dedicated team focussing on digital marketing initiatives for lead generation to capture the next gen customers who prefer less facetime and more online connection to queries. The aim of digitalization is to improve commercial excellence and to be more effective in customer acquisition.  

Where do you see IMCD India 5 years down the line?

We target to continue our exponential growth to become the go-to distribution partner for our customers across the sectors we cater to. Our aim is to create opportunities for all our stakeholders and continue growing together, while incorporating sustainability, digitalization, and innovation in all that we do. I would personally like IMCD India to be the employer of choice for our growing effervescent workforce in the country.

June 14, 2024

How does Godavari Biorefineries contribute to development and production of sustainable bio based products? 

Biorefinery means conversion of an agricultural biomass into food, energy, biofuels, compressed biogas and even electricity. It also means conversion of biomass into chemicals and materials.  

Godavari has always been pioneering the conversion of biomass into these products. In the 1940s, it was sugarcane cultivation and sugar production.  In the 1950s, it was the conversion of molasses to Ethanol.  In the 1960s, we started small in making chemicals from Ethanol.  In the 1990s, we were one of six projects in the country to be chosen by USAID to show how climate change can be mitigated by greenhouse gas mitigation projects.  We were awarded a grant from the USAID to demonstrate the making of surplus power from bagasse.  In the recent past, we were among the first companies to demonstrate the use of sugarcane juice/syrup as a feedstock for making Ethanol in India.    

The company received a Rs. 15 crore grant from the Department of Science and Technology. Can you please share the details? 

In biorefining, there is a need to have access to biomass and the question that we are trying to ask is how it can be done with reasonable cost which refers to Capex and Opex. Sugarcane processing companies save bagasse (8-9% on cane) and so have abundant feedstocks.  Secondly, the distilleries make Ethanol seasonally.  They have idle capacity.  The idea is to use this idle capacity with a bolt-on facility to make Ethanol from bagasse with the addition of bagasse pre-treatment.  So, there is no need to create a new facility all the way from biomass pre-treatment, collection, pre-treatment, fermentation and purification. We just need the treatment of the biomass to convert to sugar for fermentation. This is the whole concept and we want to try and pioneer and see how it is possible. 

When do you see this finally shaping up?

To be able to demonstrate this in a reasonable manner, a policy environment needs to be in place.  The creation of PPAs (Power Purchase Agreements) enabled sugar mills to install power plants.  Similarly, a mandate for Ethanol blending with a declared price for juice/syrup helped create that investment).  Similarly, a policy framework for 2G Ethanol will help spur investment.  The moment we create a framework and a market, only will then one allow or incubate innovation to make it happen. 

How favourable government policy is accelerating growth of bioenergy, Ethanol and bio-based speciality chemicals? At the G20 Summit, many nations came together to create an association for Ethanol. How will this help companies like you in the long run? 

One is the Indian context and the other is the global context. In India, there is a need to have energy security that supplements and substitutes the energy that the country imports from overseas. India is rich in biomass and the policies have to encourage the conversion of biomass. The government mandates Ethanol blending and is targeting 20% blending in the next couple of years.  Similarly, there is a mandate that is going to come for Compressed Biogas (CBG).

India has to look at it also from an energy security as well as climate change angle. India is committed to achieve net zero by 2070. Moreover, India has a lot of small farmers and their income security is necessary and this is helped by a dual product from sugarcane if it can go to sugar and Ethanol. The infamous sugar cycle that used to have big surpluses and deficits gets insulated because these surpluses can go into the Ethanol. 

Are you also looking at focusing on CBG? How many plants are you planning to set up? 

We will certainly do that and at the moment we are exploring the setting up of a CBG plant. 

How is Godavari contributing to the Government of India's ambition on these fronts? 

As mentioned, we were the first off the post when the policy of Ethanol from sugar cane juicer syrup was announced. 

We increased our Ethanol capacity from 200,000 to 320,000 litres per day. Later, we increased the capacity from 320,000 to 400,000 litres per day and now we have gone from 400,000 to 600,000 litres per day. We are very active in increasing the Ethanol programme. We are looking at grain and maize as a feedstock in the coming future to make this a multi feedstock facility. We are also looking at CBG in the future. 

You are setting up a grain-based Ethanol project. What is the current status of the project and when are you planning to complete it? 

We have already received necessary approval from the government. It will help us as a dual feedstock and lead to risk mitigation. As it is a short-term crop, in case there is a monsoon failure, it also gives us a twin feedstock to run our facilities, enhancing capacity utilization of the distillery. Grain-based plant is being planned for two lakh litres per day.  

What are your plans for bio-based chemicals? 

In addition to making our Ethanol facility, multiple feedstock facilities, we are also looking to add Specialty Chemicals to our portfolio. We believe that the use of bio-based biomass to make chemicals, and in particular Speciality Chemicals, is going to be also an area of future development.  

There is a big thing of looking at biogenic carbon as a feedstock compared to fossil carbon. This is encouraged by either boardroom commitments, regulations or customer preferences. So, Godavari is continuing to work to make Specialty Chemicals that may find application in Pharma Intermediates, Agro Intermediates or in Coatings, Paints and a wide variety of chemical applications.  

We are working with customers closely to see whether we make a drop-in product or it could be a green substitute with slightly better properties so that the substitution may create a better category of product.  Traditionally, these things don't happen overnight. You are not substituting a fossil commodity with a green commodity and that would not work because it has a very different economic base. It takes time to work with customers. Godavari is definitely looking to work on bringing in new products in the next financial year. 

How does biorefinery foster a culture of innovation and how will research and development play in its growth? 

We look at research from four points of view. We look at research on the farm and agriculture site because ultimately biomass is grown on the farm. We have laboratories in Mumbai for lab work. We have pilot plants and research facilities with slightly larger lab facilities in the plants and finally we have some pilot plants where we can do a semi-commercial business before we go to commercial. So, we have a comprehensive culture of innovation. We have many Scientists and Engineers working with us and we also collaborate with people outside. 

What sort of approach to waste management and utilization of waste streams in the operations that you do?

I think the first idea is to think of waste as wealth and see how one can find use in all the waste streams that we have. Recycling brings value from it. Around 50-60 years ago, molasses itself was a waste stream and it became Ethanol. Bagasse was a waste stream and it became electricity. We have various streams today. Now, we are looking at finding ways to extract potash out of the ash of the incineration boilers in a distillery. We are making bricks from some of our other ash. We are also working very seriously on recycling streams. 

How does Godavari ensure sustainable sourcing practices and support the local agriculture community?

We are now focusing on research for sustainable sourcing. We often see depletion of oil reserves, gas reserves, trees or coal but we don't observe the depletion of the soil carbon. Ultimately, it is the soil carbon that will convert to biomass, which we can either use for food or energy. The depletion of soil carbon depletes will reduce yields of these products. At the same time, if we can increase this soil carbon, we are going to improve the yields and sequester a lot of carbon in the atmosphere. We are executing a big project on this with Somaiya Vidyavihar University. Agriculture researchers are working on this with a lot of farmers and trying to see whether we can do this on a large scale. 

How do you see Godavari Refineries integrating sustainable practices into its overall operations, including resource consumption and emission reduction? 

Sustainability is part of our DNA. When we work with farmers to improve soil carbon, we also ask them if they can intercrop with nitrogen fixing kinds of crops such as soya to reduce the use of chemical fertilizers. We are working with them to use traditional agro-ecological practices. The success of this will automatically start sequestering more soil carbon and reduce Scope 3 emissions. Secondly, once CBG is in place, one can also work with tractor manufacturers to start using tractors on CBG. This is futuristic thinking but it is doable.  

We are constantly thinking of how we work on energy efficiencies to further reduce Scope 2. We can produce more electricity from the same biomass. When we are continuously innovating to make products from biogenic carbon, we will continue to reduce Scope 3 as we supply.  

For us, sustainability is not just environmental but also social, and we keep educating farmers about soil carbon. Hence, it is the wider definition of sustainability that we work on. When we are able to produce a product that may have a better profile for customers, you have actually achieved a complete win. We are also getting certifications from global bodies such as Bonsucro.  

When are you planning to achieve net carbon zero?

We published our first sustainability report and we will articulate a strategy going forward. We want to build our strategy of converting biomass into biofuels, foods, sugar, electricity and more a whole range of new chemicals. This is not a 12 month exercise but a continuous exercise. We will continue to innovate and the effect will be seen in quarters and also in years. 

Your thoughts on the future of the biofuel programme?  

The Prime Minister at the 90th anniversary of the RBI mentioned about the Ethanol programme. He gave an interview in which he talked about the Ethanol Blending Programme and it finds mention in the BJP manifesto. I believe if India has to maintain its path to net zero and maintain its energy security in the light of current geopolitics, the Biofuel programme will grow.  

Does the company plan to go for the IPO in this financial year?

We are certainly looking at filing DRHP this year. 

June 11, 2024

Rajesh Kamat, Head - Sales and Marketing, Tata Chemicals Limited shares his perptectives on the emerging trends in the chemical industry, his company's overall plans on expansion, R&D, digitalization and sustainability amongst others. 

Industry trends/challenges in Basic Chemistry and Specialty Chemicals in 2024?

India’s economy has been remarkably resilient, weathering the storms of post-pandemic supply disruptions, the war between Russia and Ukraine, and monetary tightening across economies. [1]The International Monetary Fund (IMF) recently raised its growth projection for our GDP for this fiscal to 6.8% reveals the optimism about India’s future. [2]Chemical industry too is showcasing promising trends for 2024, and is projected to hit the $300bn-mark by 2025. The Indian market is fairly balanced, even as the European market continues to face pressure. As for the basic chemicals market, the focus will remain on sustainable and eco-friendly products and services. The area of specialty chemicals, particularly, is experiencing significant growth, notably in sectors such as pharmaceuticals and advanced materials. In the era of digital revolution, companies are lapping up every chance to innovate and expand, creating numerous opportunities for new products and ventures.

As far as challenges are concerned, global economic slowdown could continue to keep the demand for chemicals across industries (especially those dependent on exports) at a low for now. Another important factor to consider is the increasing stringency of environmental regulations. While these regulations are becoming stricter, they are essential. They present an opportunity for us to take the lead in sustainability efforts. In this scenario, industry needs to keep sustainability at the forefront and adopt sustainable practices in production, packaging and distribution – keeping our planet at the heart of our operations. 

Financial performance of Tata Chemicals in FY 2023-24 with respect to revenue and profitability? Plans for FY 2024-25?

There was a net loss of Rs 850 crore in the quarter ended March 31, and revenue from operations fell 21% due to challenges in UK operations and impairment charges. In India, we have adjusted prices for soda ash products several times since April 2023 to remain competitive and responsive to market trends. For FY24-25, demand in India remains stable and we see recovery across various markets globally. We believe that the new capacity additions of Soda Ash would get absorbed. We remain optimistic about the future with newer applications such as solar glass and lithium fueling industry growth.

How has the company performed internationally? Are you focusing on any new geography/product?

We are a global organisation, with a strong presence in Asia, Europe, North America and Africa. Tata Chemicals remains focused on the timely execution of planned expansion projects and efficient cost management across all geographies. We are committed to collaborating with our customers and other stakeholders to advance our sustainability and digitization initiatives. Our efforts will be broadly concentrated on three key areas: Decommoditization, Decarbonization, and Digitalization.

We continue to cater to customers across the globe across all product segments, including solar glass. Going ahead, we are working on increasing the extent of direct relations with our key customers across all our products.

Capex investment made in FY 2023-24 and projects where the company invested? Capex plans for FY 2024-25 and projects where the company is planning to invest? How will these investments help the company in the long run?

[3]We allocated Rs. 8,000 crore for over the next three years capex plan for various projects. We invested in delivering capacity expansion for Soda Ash, Bicarb and Salt. We will increase the soda ash capacity by another 1 million tonne (MT), taking the total global capacity to 5.3 MT. The company’s 380 kilo tonne of salt capacity addition in the UK and Mithapur in India would increase its global capacity to 2.3 MT and that in India to 1.8 MT. The company is also expanding its specialty silica capacities by five times, in a phased manner, to reach 50,000 KT to support the emerging demand of sustainable materials of tyre industry.

On our long-term investments, expanding capacities in core businesses such as soda ash, bicarb and salt will allow us to cater to growing demand and serve our customers across the world. Focusing on specialty products and potentially new ventures will diversify the portfolio and reduce dependence on traditional segments. Investments in green technologies and sustainable solutions will help improve our environmental footprint and potentially attract environmentally conscious customers. Modernisation and capacity expansion can lead to improved operational efficiency and potentially lower production costs.

On the R&D front, the company has initiated work on new sustainable chemistries in bio-based surfactants, conversion of CO2 to value-added materials, applications in Bicarbonate and Soda Ash. What's the update on these fronts?

Innovation would remain a catalyst for the industry, and Tata Chemicals has kept this at the forefront of its operations. We are actively investing in creating environment that encourages innovation. We are committed to developing sustainable world class practices across all our R&D efforts. Our carbon capture plant in UK is now operational, producing high-grade sodium bicarbonate using captured CO2. This not only reduces emissions by 10% but also creates a more circular process. We are working on new sustainable chemistries and bio-based surfactants, and also on bicarbonate for Flu Gas Desulfurisation (FGD) applications. Additionally, our Mithapur Salt Works utilises solar energy, avoiding appx 33.5 MMT of CO2 emissions annually. These initiatives demonstrate our steadfast commitment towards sustainability.

What strategy should India adopt to become a global manufacturing hub for Basic Chemistry and Specialty Chemicals?

India has the potential to be one of the world’s largest chemical manufacturing hubs. Chemical industry is the backbone of the entire manufacturing sector, and therefore, focus needs to be on boosting investments keeping sustainability as a pillar. Driving exports to bridge the trade deficit will be critical to ensure we are able to find markets for the products that we manufacture. [4]As per a recent industry report, the key segment projected to aid India widen its exports could be the specialty chemicals, whose net exports is likely to grow 10X from $2 billion in 2021 to $21 billion by 2040.

However, despite growth projections and reasonably favourable market conditions, India is likely to face tough competition from Saudi Arabia, China, Indonesia, Vietnam, Germany and South Korea. Through the Petroleum Chemicals and Petrochemical Investment Region (PCPIR) policy, India aims to get an investment of $284 billion by 2035, helping create new jobs, in the near term, and boosting exports in agrochem, dyes and pigments, and food additive chemicals, in the long term. 

The chemical industry is witnessing momentum in new areas like Hydrogen, Battery Chemicals, and Green & Sustainable Products. What is Tata Chemicals strategy on these fronts?

The chemical industry has immense potential in developing innovative solutions to enable the shift towards a sustainable and circular economy. [5]Worldwide, there has been a significant push for EVs, and India, too has framed policies encouraging EV adoption and propelling the nation’s green growth. Chemical companies like TCL, thus, have a unique advantage here as soda ash is a key component in making battery chemicals.

[6] Chemical companies across the world have capabilities to tap into the opportunities of the emerging hydrogen economy by utilising green hydrogen as a source of energy. Collaboration will play a role here as organisations can utilise their global assets and knowledge resources to kick-start green economy initiatives, and make the shift to a more sustainable portfolio in a profitable way.

 What are the company plans related to digitalization across all its operational facilities? How are you planning to leverage it?

[7]Tata Chemicals embraced technology early in the day to enhance digital capabilities to update processes leveraging industry 4.0 perspective. By leveraging the digital twin tech and prescriptive analysis system, hosted on Azure, we have notably enhanced the soda ash carbonation process. Digital dashboards have been implemented to showcase key performance indicators (KPIs), providing enhanced visibility and facilitating data-driven decision-making across multiple business domains. We have implemented e-logbooks to digitise data capture, in various projects.

Furthermore, our ongoing digital transformation efforts encompass improvements in data, logistics and security systems, infrastructure modernisation, and expansion of our logistics control tower to ensure real-time visibility across transportation modes. This initiative has paved the way for enhanced reliability and efficiency in financial systems through the adoption of robotics process automation (RPA). Additionally, we have initiated business process reengineering (BPR) for harmonization purposes and commenced the implementation of a cloud-based ERP system.

The company is also strengthening cyber security for IT and Operational Technology (OT) systems, which is a priority, ensuring they are secure and protected against cyber threats. Using historical sensor data, the AI-based system provides recommendations for optimal device design, demonstrating improved performance. We plan to devise and use more such controls at other plants.

The company has bagged a lot of awards on sustainability and it is focused on People, Planet, and Profits. What's the strategy for green energy, energy efficiency, water neutrality, zero solid waste and recycling, and conservation and restoration of biodiversity? Sustainability roadmap in FY 2024-25?

Sustainability and green growth are at the core of our strategic framework, guiding our endeavors to create long-term value for all stakeholders by adhering to green chemistry principles. Our decarbonisation strategy comprises four primary pillars: Low Carbon Fuel Switch, Renewable Power, Energy Efficiency, and Carbon Capture and Utilisation. Renewable energy will play a crucial role in the circular economy by facilitating the adoption of circular business models. [8]

Tata Chemicals has ambitious plans for 2030, including a 30% cut in carbon emissions and water neutrality and zero waste into landfills. Going forward in terms of environmental concerns, we will continue with biodiversity preservation and sustainability, as integral parts of our plans’ roadmap for 2024-2025. We also aim to initiate the commercialisation of RHA Green Technology for highly dispersible silica production. Additionally, our Mithapur manufacturing complex is already operating as freshwater neutral. At the same time, a high-performing green portfolio of products is being developed by our Innovation Centers in Pune and Bengaluru, leveraging green fermentation technology to enhance our nutrition offerings.[9]

Looking towards the future, what are the key strategic priorities and growth plans for Tata Chemicals?

Our key strategic priorities are to focus on growing the core, protecting margin across geographies, generating cash and deleveraging. Our priority for Indian market is to deliver consistent performance through customer engagement and further delivering capacity expansions on soda ash, bicarb and salt.

[10]We are also looking at increasing our investment in marketing, manufacturing and digitization capabilities to build differentiation.

On the international front, for the USA market, we are looking at maximising volumes through customer engagement, increasing our focus on cost management and generating cash and. For UK, we are ensuring operations are in line with market dynamics, by focusing on value added products like pharma salt and premium grade bicarb. In Kenya, we want to sustain volume delivery to customers through customer engagement and continue focus on cost.[11]

Anything you would like to add from your side...?

The Indian chemical industry is poised for significant growth, and Tata Chemicals is well-positioned to capitalize on this momentum. By focusing on volume expansion and strategic pricing, we aim to further contribute to the industry's success. TCL is committed to embedding sustainability and innovation into our core.  We are actively pursuing climate positivity, embracing the circular economy, and fostering biodiversity.  Through these efforts, we believe we can play a leading role in building a greener future for the Indian chemical industry and the planet.

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June 10, 2024

Industry trends with respect to digital transformation solutions?

In the last few years, Industry 4.0 revolution has been taking place and there are a lot of digital technologies that have been spawned from this revolution. There have been a lot of new software and analytical tools, all of which has been made possible because of higher computational and storage capabilities and communication speed. 

Early adopters have found out that just adoption of technology is not going to really provide them value unless there is proper monetization and utilization of these technologies to actually solve business problems. With learning from failures by early adopters, a lot of companies are now focusing more on getting value out of these technologies. 

Both globally and in India, we are beginning to see companies realizing that people and processes are equally important in addition to technology. Involving the right people with industry domain expertise is necessary, to restructure work processes to harness these technologies, to improve efficiency, safety, reliability, ease of working, etc. 

Percentage of companies opting for new digital technologies? 

When we first started deploying these digital solutions, there were very few MNCs who were willing but today, almost everyone in this industry wants to do something and explore. Globally, they are in different phases at various levels of advancement but almost everyone is looking at it positively. Here in India, industry players including refiners are exploring and trying to see what they can do in this area. More than 80% of the people are at least trying to put some sort of digital element in place while just 10-15% have actually set up some real applications. At the same time, one would see a higher percentage of adoption in the western world and in the Middle East. 

How do you see deployment of AI based engineering solutions?

AI is a key component of value generating digital solutions.  I would call such digital technology based solutions relevant to our industry as Applied AI solutions. Applied AI helps in achieving more objectives, faster and better and in automating mundane tasks. It provides augmented intelligence, for making better decisions, maybe more optimally. It also enables faster learning, ability to create new revenue streams, better collaboration, better user experience and enhanced efficiency, safety, reliability and all this in a more sustainable manner. 

Do you see new technologies like ChatGPT being incorporated for industrial applications?

Ever since it was introduced in the market last year, ChatGPT has helped to bring a lot of focus on digital and more specifically AI. In our industry too, there is a lot of merit and value being created to utilize some of the Machine Learning tools for analysis and ChatGPT for information generation. Companies are trying to figure out how they can utilize ChatGPT to find easier ways to interact with the machine. 

Earlier one had to type something and do things physically but here you are able to sit back, ask questions, maybe voice questions or just a prompt or series of prompts to get the answers. It's the next level of being able to interact with the machine and extract value. 

ChatGPT has helped this whole area and the applications are still evolving. There are all types of applications where ChatGPT can be used in a modified way. It can be done using retrieval and augmented generation. We have to remember that it is one portion of bigger set of AI technology applications. 

Ingenero has been promoting IngeneroX (Ingenero’s digital solutions). Do you see solutions catering to sustainability, innovation, supply chain, process, and manufacturing? 

IngeneroX is a suite of Applied AI based solutions that help us to make better decisions in the supply chain and Manufacturing. It includes data collection and handling, analysis and intelligence generation, communication through more intuitive visualization of results, prescribed actions and implementation of actions.  We have been deploying IngeneroX solutions for almost eight years.  

The solution helps in making better plans and reacts quicker to changes that happen in the marketplace through optimal planning. In terms of innovation, one is able to build a model for the manufacturing process, supply chain process or any of the other business processes using a digital twin, which helps speed up the innovation process 

The digital twin traditionally was based on purely fundamental models but today a hybrid of fundamental models and data-driven models are possible with machine learning. Hence with this digital twin, one is able to be more innovative. It offers a clearer picture of what is happening in terms of level of emissions, for example, and helping us to make appropriate changes to lowering them.

 How will Ingenero solutions help companies with respect to digital transformation?

We work with process manufacturers and provide a combination of software as well as associated services for achieving operational excellence. There is a lot of generic foundational software that is available in Artificial Intelligence or Machine Learning but one has to combine it with people and process. Our focus is to provide a solution that will actually help in certain areas like safety, reliability, sustainability and efficiency. It is more proactive and it is a lot safer to operate these facilities. If something is going wrong it will be able to fix it. In terms of production, one can do remote tracking, guiding of production reliability, better yields with its efficiency, better recoveries, better conversions, cost efficiency, energy efficiency, and much better sustainability. 

Solutions provided by Ingenero? 

Broadly, I can divide solutions we provide into three verticals for the process industry. These are: design engineering, operations engineering, digital solutions for both design and operations engineering that includes Efficiency, Reliability, Safety and Sustainability.  

On design engineering, we get involved right from the conceptual stage to processing engineering skills and then going into the early decision phase followed by taking it all the way through construction commissioning. So, while we are involved in each of these stages but our core strength is conceptual design and operations engineering. 

Ingenero has been providing complete systems with validation and mitigation services to ensure that clients are safe and compliant with all API and OSHA regulations. Solutions under this category?

In whole area of process safety, each country has its own regulatory body. OSHA in the US took a lead and it became a template for others to follow. The US was the first to make a lot of things mandatory including process safety management. It has a set of 14 elements and with time it has evolved. The Centre for Chemical Process Safety which is part of the American Institute of Chemical Engineers is again emulated by regulatory bodies across the globe. They have come up with a little more practical risk based approach with 20 elements. 

We really provide services to make sure these elements can be followed. For example, we do safety audits, management of change, pressure relief system adequacy checks, flare load adequacy, anomaly detection, SIL, LOPA among other services. 

In the next 2 years, Ingenero will be celebrating its 25th year. What's your target for this special occasion?

We have been actually deploying automated digital solutions in the past ten years. Earlier, we were providing a lot of operations support, but today we have automated software using applied AI doing end to end things. In the first year, we started conceptualizing and putting digital solutions in place. And in the next nine years, we deployed our solutions at 50 plus sites. We have about 500 plus use cases in five different regions including the US, Middle East, India, and Asia Pacific. We have worked with refineries, petrochemicals, and midstream. The type of use cases that were covered include profitability, reliability, safety, efficiencies, energy sustainability, waste management, and water management. 

Orders bagged and executed in FY 2023-24 both in Chemical and Petrochemical?

In addition to proof of concept and pilots, last year we covered about 30 sites.  That’s the volume of digital business we are doing and it is continuously growing, in addition to the work we do in design engineering and operations support, including safety. 

Company’s performance in FY 2023-24? Growth that you foresee in FY 2024-25?

Being a privately held company, we don't reveal revenue and profit numbers, I would like to mention that we bagged orders worth Rs. 200 crore in digital solutions last year. Last year, we saw a 60% growth and we have been growing at almost 20% to 25% consistently. At the same time, we have been flowing back a significant portion of our profits back into the company for development and that's why we've been able to really come up with a lot of these solutions. 

Given the current visibility, we continue to see the type of growth today that we have seen in the last couple of years and expect good growth in the next year or two. We are very bullish about things in all three categories but digital has really taken the lead. At the same time we also see a good amount of growth in engineering as well as safety. We have been doing a lot of sustainability engineering work with several customers. We are seeing new projects and interestingly, these are happening in the Middle East, even more than the West. 

Manpower recruitment plan for the next two years?

When we first started and built our company, our core strength was all kinds of specialized process engineering type of work. A lot of our people had operations experience and it was a very unique combination of people with operations shop floor experience as well as design engineering, and technical, analytical, and software. Comparatively, the group has evolved now with 50 percent of this core team involved with digital solutions. It is a diverse team with domain experts with experience in process, operations, process modelling, and software architecture. Another 25 percent is in the more traditional engineering both Process and multidisciplinary engineering. Remaining 25 percent is focuses on safety and sustainability. 

We have a very active hiring process and anticipate 40-50 percent growth in manpower. We expect to be adding 100 to 200 resources in India itself. 

Ingenero has been perfecting robust and reliable Machine Learning models. How many of these models you have perfected?

There are a lot of generic foundation models and ML algorithms in the market and a lot of people think that they can just use them easily for various applications but that is far from the truth. There is a lot of specialized engineering that is required to sustainably monetize these.  Over time we have built a lot of modules which require lesser specialized engineering even for more complex unit operations like distillation columns, reactors, and furnaces. However, specialized engineering is still an important piece in any applied AI implementation in our industry. 

Any modules for enhancing process manufacturing applications?

Our digital twins don’t just update us on the current scenario but also have the ability to go back into history and run scenarios from the past. This is made available to people at the plant or anywhere else. That's the beauty of the Internet of Things (IoT) and ability to remotely access. 

Today a lot of it is driven either through dynamic dashboards or even voice activated chatbots. But over time, we are trying to evolve it into being like an agent where the machine will go do searching, computations and present the possible solutions for the complications. 

We have done dynamic benchmarking for the entire facility, whether it's an individual asset or the entire plant, or even for the asset level, we have now specialised modules for optimizing the control systems that are already there and improving  asset health for furnaces, distillation columns, compressors, pumps, heat exchangers. We have been fairly unique in being able to modularize it and actually being able to deploy them.  Some examples of modularized Apps we have successfully deployed are: 

APCPro (Optimize underperforming APC controllers for improved performance and efficiency).

OptimaX (Dynamically identify best operating condition and close the gap).

ActionX (Real time identification of process deviations and prescriptions to rectify).

AgentX (GenAI based conversational application with the digital solution for proactive interactions). 

Partners for providing complete AI based solutions?

While some of the software solutions that we build by and large are proprietary to us, we also have partnered with Honeywell, AspenTech, IIT Bombay, Gent University, and others. Wherever necessary we partner with others as we don't want to really reinvent the wheel in certain areas. But when providing proprietary solutions, we package it around open algorithms. 

How do you see competitive landscape?

In Applied AI, there's a lot of noise around the foundational models and generic models. However, we are focused on value addition beyond these models and are very specialized. We provide a comprehensive Applied AI solution where we have actually deployed the technologies and have been fairly unique. In terms of competition, we have a subset of the end to end Applied AI technology areas being addressed by a few companies, providing simulators hardware data platforms, Business Intelligence software, making this a very confusing space for a lot of customers. We have fairly unique set of offerings that ensures value generation and have taken a good lead with a lot of very good applications. 

In the design engineering space, there are a lot of engineering companies. So our claim to fame there is more strength in process.  

In process safety again, there are very few players in India and we have a unique edge having been part of the safety reviews and audits of almost every refinery in the US over the last 15 years, in one way or the other. We have tremendous experience and are now trying to combine it with digital solutions. 

On sustainability, we have been actively supporting clients with digital solutions to do the best they can with existing assets.  We have also been supporting decarbonization technology companies with design engineering.  We are also in the process of partnering with some of the CSIR facilities and some of the institutes where some very good work is happening. We are trying to work jointly on a few of these technologies and ultimately take these to our customers.

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