October 02, 2023

What are the major global trends in bio-based chemicals and ethanol sector? 

There is an upcoming trend of renewable chemicals also called the biogenic carbon to meet the needs of our fuels and chemicals. The world is seeking to mitigate climate change and the Government of India has announced an aggressive programme called E20 i.e. 20% ethanol blending goal by 2025. This is a tremendous programme and it would need close to 10-11 billion litres of ethanol by 2025.  

The government estimates to create 15 billion litres capacity, half from grain and half from sugarcane. And, as ethanol has other uses, the 10 to 11 billion litre will go into the blending programme as there is ample demand. This serves three purposes. First, energy security as it supplements India's energy security especially in the current geopolitical situation. Second, it also helps in mitigating the negative impact on climate change and third, it helps assure farmer incomes. These three reasons give the Indian sugar crushing industry an edge as the surplus sugarcane in the country is used to meet the energy needs of the country. So, I think there is a tremendous opportunity for growth. 

As far as chemicals are concerned, the entire world is looking at mitigating climate change, boardroom commitments, customer preferences, regulation, and incentives are all driving companies towards paths to net zero. 

With the path to net zero, companies across the world are looking to partner with companies such as Godavari Biorefineries who use biogenic carbon to make these chemicals. Hence, we have global and local opportunities with respect to biogenic carbon being converted to fuels and materials. 

How has Godavari Biorefineries performed in FY 2022-23? What is your plans for bio-based chemicals, ethanol, and power portfolio for the current financial year? 

Godavari has performed better than the previous year. There were challenges last year, especially the geopolitical situation including the war in Europe that caused disruptions. In our case, we had an increase in energy costs and a reduction in demand with certain chemicals. On the other hand, we witnessed an increase in ethanol capacity and greater demand. Overall, the company has performed better in 2023. Going forward, we continue to look at opportunities to grow ethanol capacity further and also develop new chemicals which we have been working with partners across the globe to meet their path to net zero approach. 

What were the ballpark numbers for revenue in FY 2022-23?  

In the last financial year, we crossed Rs. 2,000 crore in terms of revenue at around an annual growth rate of 10 percent. 

Revenue forecast numbers for the next financial year?  

We will see how that goes, but it will be around the same range as last year. 

In terms of Capex, what was the investment made in FY 2022-23 and what are your plans for FY 2023-24?  

Last year, we grew our ethanol capacity from 400,000 litre to 600,000 litre. We produced 100 million litre in the last financial year. We also expanded our sugarcane crushing capacity by close to 20,000 tonnes per day and are investing in increasing the capacity of some other specialty chemicals. The Capex last year was somewhere between north of Rs. 150 crore. Going forward, we will continue to look at expansion of our ethanol capacity as well as specialty chemicals. 

Do you see the same Capex numbers this financial year as well?  

No, I think the expansions that we are targeting will more or less happen in the following financial year. There is always a lead time as we target expansion and as it comes out.  

For the next two years, what is the Capex plan?  

This is still a work in progress. We have a plan and we will be deciding that and taking it to the Board for approval. We will have a much better idea only after that but the broader direction is that we will continue to increase the capacities in ethanol, renewable chemicals, and more towards specialty and maybe some increase in our co-generation of biomass based power. 

What are Godavari Biorefineries plans for FY 2023-24? 

As mentioned, most of the investments that we are contemplating to make will come on stream in the year after. We are looking at better performance in FY 2023-24 primarily because of two reasons. First, we expect the energy prices have come to a better level compared to the last year. Second, we are seeing some growth in the specialty chemicals that we are making. Third, the ethanol capacity that we brought on stream from 400,000 to 600,00 litre per day which happened towards the end of the last year. So, we will see better numbers in FY 2023-24 than FY 2022-23. 

The company is also looking at setting up grain based ethanol capacity. When it will be operational and how will it help in increasing overall ethanol capacity?  

We just got the environmental clearance for the grain based ethanol plant and we see it as a bolt-on facility, i.e. we will supplement our current capacity of ethanol. Grain is a short duration crop such as maize and also climate resilient. With that, when the sugarcane crushing season ends and we stop using the sugarcane syrups to produce the ethanol, we will combine grains with the molasses at the dual feed facility to optimize ethanol production. 

Once both the current expansion on sugarcane based as well as grain based are operations, what will be your annual ethanol production?  

We will exceed the production of 150 million litre of ethanol per year after the implementation of this project. 

You are talking about specialty chemicals as a focus area and also bio-based chemicals. Please shed some light on how you plan to expand on these fronts?  

There are companies which either through -- board room compulsions, regulations or regulatory incentives or through customer preferences -- are looking to reduce their carbon footprint and have all made commitments to use renewables or a path to net zero or reducing the total carbon footprint.

Our company is known to be innovative and of course, using renewables as a feedstock. Many of these projects involve working with global companies in which you work to either exactly substitute a fossil equivalent, which is often called a drop in, or you might make an equivalent item which may have slightly different properties, and those properties may be superior to what it replaces, or may sometimes be equal to. It is certainly a requirement. We are working with a few companies globally, right now and in time we will be working at pilot level followed by bench scale pilot level, semi commercial and commercial level. We look forward to seeing some of these projects on a commercial level. 

Which are your priority areas on the R&D front currently? 

 On the R&D front, our main focus is on converting renewable biomass feedstock into chemicals and into bio-based products. As a research driven company, we also wanted to think about creating a molecule that addresses an unmet need globally. We have targeted breast cancer, particularly with reference to triple negative breast cancer. We have been working to create such a molecule for more than 13 years. I am happy to say that we have done it through the preclinical stage and currently the molecule is under testing for safety studies. 

Godavari is partnering with Somaiya Vidyavihar University, KJ Institute of Applied Research, and Michigan State University to improve soil carbon and overall soil health. Would you like to explain the decarbonization process? 

The whole point is that it is the carbon that has been depleting. Keeping the whole depletion process in center, we are looking at depletion of gas reserves, oil reserves, coal reserves and even before these trees. However, what we don’t see is the soil carbon. It is the soil carbon that converts itself into carbon in plants. This carbon in plants is what we eat to make ourselves what we are. It is important to regenerate this carbon but unlike the carbon storage of one that is generated in a chimney. 

The other point which we are trying to say is how would you take the CO2 in the atmosphere and find a way to increase soil carbon. The whole earth soil can be used, therefore, to regenerate itself and increase all carbon for mitigating climate change and meeting the biomass leaves that we have.  

Godavari Biorefineries cannot operate on its own. It has been a long time since the KJ Somaiya Institute of Applied Research has been supporting this as an independent research body, looking at various issues relating to agriculture. We are adding a facet to this which is regenerative carbon and working in partnership with Somaiya Vidyavihar University which is here in Mumbai and I am very proud to say that even universities such as Michigan State in the US, some of their faculty are working with us to help take this whole goal forward.  

To put in a perspective, we are a company using renewable carbon to meet needs of food, energy, electricity, and materials. And we are innovating more materials from renewable carbon and renewable biomass. At the same time, when we look at circularity we also want to look at carbon source itself and the whole regenerative carbon is to make sure that while we use atmospheric carbon which comes through the soil, we also have to make sure that that soil carbon is actually improved. 

As our feedstock comes from soil, I often think this is overlooked and it will affect years of food and biomass, and this has to be addressed on a global scale. Our attempt is to do it in an ecosystem that we serve. This is why we brought the University into it is because if it's successful, it can work on a wider ecosystem. We are also working with a University in Kenya.

August 31, 2023

How do you look at the hydrogen opportunity for the company globally? Size of hydrogen market that Alleima is targeting in the next two years? 

We see hydrogen as a megatrend and an important resource for the world, especially with the increasing push to reduce carbon emissions for the last five to ten years. However, it is difficult to put an exact number. Our customers in energy have also shared that hydrogen has gained significant prominence in their processes, and within the industry, hydrogen has become a central theme in conferences focusing on engineering or technology.

Alleima is committed to supporting our customers in their hydrogen transition journey. In the hydrogen market, we have different focus areas. In India, we primarily focus on fuel injection lines for automotives, hydrogen refuelling stations, and specialized industrial equipment using heat exchangers.

Challenges that you foresee with respect to materials technology and hydrogen? 

Hydrogen is a very peculiar molecule that can affect materials in a significant way. Hydrogen embrittlement can happen when a material is exposed to high-pressure hydrogen, which can cause it to lose some of its important properties like ductility and elongation because hydrogen is very difficult to detect and can cause catastrophic failures, its management and impact on materials are very important matters to take note of.

And how do you plan to rectify this?

Hydrogen is not a new phenomenon, and industries have been handling its applications for several decades. Our experience in hydrogen has allowed us to gain a better understanding and develop materials that perform well under such conditions. We have conducted extensive testing in high-pressure hydrogen environments to prove that some of the alloys from our existing portfolio have excellent hydrogen embrittlement resistance. Additionally, we have produced specific classes of materials, particularly high-performance stainless steels, that have demonstrated excellent resistance. As a result, we have a large portfolio of materials that we are actively introducing to our customers.

Steps that one needs to follow to choose the right materials for hydrogen technology? 

If you look at any application, not just specific to hydrogen, the first step is to always understand its conditions by considering important parameters like temperature, pressure, and operating environment. In the case of pure hydrogen, temperature and pressure are the two primary factors to consider.

The second step is to work closely with our customers, leveraging our expertise and experience in various applications to provide customized material solutions that align with the specific requirements for their applications.

Alleima alloy goes into different aspects of hydrogen manufacturing and transmission so one needs to be careful while choosing the right material. Steps to be taken to choose the right material?

Hydrogen applications can be tricky because of possible hydrogen leakages. Choosing the right material for hydrogen applications requires a thorough and cautious approach, so we conduct rigorous testing in extremely severe conditions to ensure our materials can withstand the challenges. For example, when an application operates at 350 bars of pressure, we subject our materials to even higher pressures during the testing phase to verify their suitability.

The choice of material can also depend on the pressure in the application. Legacy alloys may be suitable for lower pressure and pure hydrogen applications, but for high-pressure applications exceeding 1,000 bars, specialized materials are required.

Bouquet of products from Alleima which form part of the hydrogen ecosystem?

Austenitic steels are known to have good hydrogen embrittlement resistance. Alleima 3R60, positioned at the top end of the ASTM 316L specification, exhibits excellent properties and easily withstands hydrogen exposure, making it an ideal solution for various hydrogen applications. We have observed through our tests that the alloys at the lower end of the ASTM 316 specification do not perform well in terms of hydrogen embrittlement.

Sanicro 35, our latest innovation, is an alloy combining the best features of a super austenitic stainless steel and a nickel alloy. The grade has excellent corrosion resistance, for service in sea-water applications and other highly corrosive environments. It is another material that demonstrates great potential for utilization in refineries that handle hydrogen.

How can Kanthal help Alleima to provide hydrogen solutions?

Industries are increasingly realizing the advantages and competitive edges associated with cleaner heating technologies across sectors such steel, cement, and petrochemicals. Kanthal, an Alleima company, is presently engaged to create an extensive array of high-temperature electric process gas heaters designed to facilitate the transition to electrification and the reduction of carbon-intensive processes. One particularly in-demand technology, Direct Reduction of Iron Ore, requires the heating of substantial amounts of hydrogen gas at elevated pressures and high flow rates. Kanthal is actively developing breakthrough electrical heating solutions tailored for such processes. These solutions offer outstanding efficiency, dependability, and operational stability, along with compatibility and scalability.

How will acquisition of Gerling, a German based precision tube engineering company, strengthen the position of Alleima in the hydrogen refuelling station market? 

Our acquisition of Gerling, now Alleima engineering solutions, will allow us to harness our expertise in materials and combine it with Gerling’s engineering solutions. Together, we have pioneered mobile, digitally connected on-site tubing solutions, enabling precise tube straightening and cutting, reducing the need for material joining and minimizing loss of material due to length requirements. These on-site tubing solutions also facilitate in reducing the number of joints that are required at fuelling stations, streamlining the engineering process and enhancing the efficiency of our solutions.

Clients which have signed Alleima for the hydrogen project with respect to fuel cell technology and onsite high pressure tubing for hydrogen refuelling stations?

In India, I would say that we are partners with most of the automotive companies, working closely with them on fuel cells and hydrogen internal combustion engines. As a result, we extensively supply our materials for the fuel injection lines and hydrogen refuelling stations to all the companies in India working in this area. Today, Alleima stands as the exclusive material solution provider in the hydrogen space.

Outside of India, we have a wide array of global clients in the fuel cell industry. One notable product we offer is the bipolar plates for fuel cell applications. From fuel cells to hydrogen integration into internal combustion engines, we have a growing list of customers domestically and globally.

New developments on the R&D front with respect to the hydrogen ecosystem? How will it be helpful in the long run?

Alleima has very strong roots in R&D and innovation, which have been the backbone of our success for over 160 years. We are constantly on our toes and continuously develop cutting-edge materials for various applications, including hydrogen. We have a very vibrant portfolio of research projects focused on advancing materials for hydrogen, and are introducing more of these products to the market in the coming years.

How is Alleima balancing safety and performance with respect to hydrogen?

Safety is paramount when it comes to handling hydrogen, therefore materials require stringent tests to prove that they are suitable for these applications. However, many of these tests need to be done in highly specialized facilities that may not be readily available everywhere. At Alleima, we conduct extensive testing in international laboratories to validate the suitability of our materials, especially at very high working pressures.

How do you see Alleima moving forward with respect to hydrogen?

It is a very exciting market for Alleima. As the world rapidly embraces hydrogen technology, we are here, ready to support our customers on their journey by providing our existing solutions and continuously innovating to develop new solutions to meet the demands of challenging applications.

August 15, 2023

In an exclusive interview with Pravin Prashant, Editor, Indian Chemical News, Arun Singhal, Founder & CEO, Source.One talks about revenue performance and forecast, network coverage, company's USP, technology differentiation, entering new territories, manpower addition, and international and domestic listing.      

Source.One performance in FY 2022-23 and forecast for FY 2023-24? 

Source.One started in 2018 and in less than five years, we are the single largest company in polyolefins. We are fast growing as far as engineering plastics and elastomers are concerned and we are well on our way to expand to other forms of chemicals, namely bulk chemicals. In 2023, we almost touched Rs. 2,000 crore of topline and we will continue to grow at 25-30% for the next 3-4 years.

How are you planning to achieve 25-30% growth?

First, the industry is pretty fast growing and we are catching up with the industry and are trying to keep ahead of the industry. Second, in the last few years there has been a lot of traction in plastics, polymers, and chemicals. India is a vast country and no matter what we do, there are always areas which have been left out or which have evolved from the last time we visited or the kind of work we do in those areas. We are the only pan-India player that has the largest network of imports in terms of both supplies and demands and still we have not covered 100% of the country. 

What is your network coverage?

On the petrochemical side, we have largely explored a large majority of applications where petrochemicals are used and we have almost touched base a very high fraction of the processors that appear in the industry. In terms of geography, we have covered almost 96% of the pin codes. As and when the new processors came up in the industry we tried to cover them as fast as possible. Four years back, we were covering new processors within six months of their incorporation, two years back we were doing it within two months of their incorporation but the challenge is how do we incorporate the buyer on the day of their incorporation.

As far as applications are concerned, even plastics are witnessing new applications on a daily basis and we have put in place a mix of process and technology where we are able to explore these newer applications. We are probably one of the first people in the industry to reach them first and serve their raw material demand at a super-fast pace.

What's your USP and how do you plan to create differentiation vis a vis your competitors?

There are two USPs. First, is the network. Since day zero and even today, everybody in the company is involved in building networks whether it's a network of processors, stockists, transporters, and producers or different kinds of movement algorithms. Everybody is eventually involved in strengthening and building the network and it would be difficult for someone to replicate that network in the industry.

Second, the US $25 billion industry is undergoing disruption. We were lucky to be a part of this industry at a time when GST had started streamlining a lot of processes and a lot of trade in the industry. We were lucky to be in the industry before the pandemic struck and so we were born in the period between GST and the pandemic. We took our own free time of two years to build a base and since the pandemic, we have witnessed disruption from very close quarters. This experience teaches you a lot of stuff which is not taught in any schools or books. This kind of disruption holds you high for decades because you have seen companies changing behaviours, impossible things getting done, and thousands of people adopting something which they never thought of doing. So this whole experience will always stay with us and it will keep teaching us that everything is possible if your intent is right.

Is technology Source.One's key differentiator and how will this change in future? 

We have a favourite line which we keep repeating within Source.One which is yesterday's technology is today's tradition and anybody working remotely with technology would relate to this because the whole technology itself undergoes disruption after every few years. In 2023, the concept of ChatGPT has caught up with everyone and everybody is coming up with their own version to solve their problem. People are building their products on the back of ChatGPT. This is just one example of how yesterday's technology can be today's tradition. The challenge for us remains the same and that’s how to keep innovating and how to keep coming up with new modes of technology which will help us catch up with the trade.

In 2018, we started with WhatsApp as a key partner in distribution and WhatsApp was a communications partner. In 2021, we started working on our own mobile app and in 2023, we have a good mass base having adopted mobile apps and it is India's only mobile app where one can do transactions of chemicals. This is not an app only for information or knowledge or only to put bids but it is a whole ecosystem where if you want to consume anything, whether you want information on the product or price or any analytics, this is the app for the whole industry. And that's something we've been building on for the last two years and in 2023 we are going to build further. Other features on this mobile app is to make it a complete ecosystem as well as use a lot of predictive analytics. On this mobile app today we are sitting on a heavy load of data and it is our responsibility to make good use of this data to service the trade in a manner which makes it better.

One can think of monetizing this data, one can think of increasing sales backed up by this data but our intent is to know how to use this data to serve the buyer better and that is a huge responsibility. It looks easier said than done and that cannot be done without technology.

From WhatsApp to mobile app to ChatGPT in due course of time. Is your team working on integrating ChatGPT also for financial transactions?

Yes, we have already integrated. We have already started solving a few problems based on ChatGPT. At the end of the day, ChatGPT is nothing but a large language model where we train the software to make decisions or to give answers based on the past. The kind of data we are sitting on has helped us give answers or solutions based on how it has happened in the past. ChatGPT is already a part of a lot of solutions to the problems that Source.One faces on a daily basis and we are going to make it bigger and better.

Source.One future rests on DE (Square) which is Delivery, Expansion, and Ecosystem. Can you explain this formula?

I will talk about the delivery, expansion, and ecosystem trio one by one and then establish a relationship between the three. On the delivery side, we will always focus on last mile deliveries. We feel that the single largest problem in the whole supply chain ecosystem is the last mile delivery because it is very micro spread across a country like India which does not have a pan-India smooth logistics system and you need to aggregate and correlate multiple stakeholders to make a smooth experience whether it is a shipping line or a container or even a last mile truck. All needs to be on time for the final processor to get the material on time. We're going to expand on this delivery Pan-India as we have already covered close to 73% of pin codes and we will continue to achieve 100% of pin codes.

On the expansion side, we started with polyolefins and over time, we expanded to engineering plastics and elastomers and this year we also expanded to bulk chemicals. The idea is to be all pervasive in the complete chemicals domain. We are going to enter agrichem and speciality chemicals as well.

On the ecosystem part, we do not want to get stuck to being a distribution company or a transaction company. We have already evolved ourselves to disseminate intelligence analytics based on data so that the whole trade can make better decisions rather than intuition based decisions. Within the ecosystem, we also started two years back when we started our packaging division. It is a line of business for us where we are going to aggregate the whole packaging supply chain into one single shop and provide a solution to the consumer of packaging and on the supply side use the ideal inventory or use the idle machinery to be engaged in providing that solution.

Source.One is looking to enter new territories such as bulk chemicals, specialty chemicals, and agrochemicals. How are you planning to move in these verticals?    

I will take the last question first. The logistics framework policy that the government came out early this year has been a great boost but does it solve the whole problem? No, it has been a start and I am sure there will be more participation between the government of the day and private players to start solving many problems and because the problem we have at hand is huge and it cannot be just solved with one policy or one framework. It will be an ongoing dialogue between multiple stakeholders and we plan to participate a lot in that framework.

The second part, are we going to involve multiple partners? Yes, we do not plan to move mountains alone. We are already working with 13 different partners. Few of them work in core technology areas like AI, and a few of them are coming up with cutting edge technologies like ChatGPT. The face of Source.One might be a distribution company or a technology enabled distribution company but the backbone is these partners who have helped us solve some fundamental problems like creating a Pan-India logistics network, making sure that buyers are being replied irrespective of the time of the day; and most competitive stockists get business on a regular basis. These are the technology partners that have helped us achieve these mini goals.

What's your present manpower and how do you see it adding up in the next two years?

Today, we are about 150 people, divided between petrochemicals, bulk chemicals, and packaging business that we have with certain centralized teams like technology and logistics. We have done the bulk of the hiring in the last 12 months and almost hired almost 80 people in the last 12 months. So more than 50% of the company have less than one year in the company and that has been done with a very specific vision of what we want to achieve in the next 3-4 years. Our talent acquisition strategy or hiring strategies is largely from outside of the industry because we find it very difficult to make people unlearn and we find it very easy to make people learn. Coming to the next 2-3 years, there might be 20-30% growth in this whole talent pool every year. But largely, I think we have to build a very strong fundamental base of talent and from here it's only the top line that's going to grow.

Revenue and profit numbers by FY25? Are you looking at funds for future expansion?

We are going to continue growing at a 25-30% CAGR which makes it Rs. 3,000 crore by FY25. As far as funds infusion is concerned, fortunately we are in a business model where we are making reasonably good profits to sustain and fund our growth. We have partnerships with a lot of banks that have stood with us. We have been largely bootstrapped and will continue to remain bootstrapped for the period.

For fund infusion, we will look for strategic partners more than finance partners. Anybody who brings in knowledge of how chemicals are distributed, anybody who has stakes in the Indian chemical industry, and anybody who understands the pulse of Indian MSMEs are welcome. We are keen to join them but we are not looking for partners who only bring capital and do not bring intellect.

Three years down the line are you looking at international or domestic listings?

Value creation is more important for us than valuation. We are not in the game of valuation as we have seen how the valuation chasing sector has shaped up once a bad year comes in. Our trade is beautiful which keeps us humble and engaged in day-to-day activities so valuation, IPO, and any other forms of long term growth take a back seat. We have a very strong relationship with the debt partners and they continue to repose a lot of confidence in us and as long as that remains I don't think we could look at some mega event to justify what we are doing.

August 10, 2023

We are planning to double the size of our facility in Vadodara to cater for increased volume of rotor grinding, pelletizer assembly, pump skid assembly and overhauling of pumps

Describe about MAAG Group and its area of operations?

The MAAG Group is solution provider for customizable systems and integrated solutions in process technology for the Polymers, Chemicals, Petrochemicals, Pharmaceuticals, and Food industries. We offer customized product solutions and services from a single source to maximize your performance and create a competitive advantage. All the components, products, and systems of our product brands AMN, Automatk, Ettlinger, GALA, MAAG, Reduction, Scheer, Witte and Xantec are of the highest quality and deliver outstanding performance in their respective segments. Within the MAAG Group, innovation and cutting-edge technology, paired with comprehensive after-sales service, form the basis for offering outstanding solutions to meet demanding customer requirements in production, processing, and recycling.

Global size of Pumps & Process Solutions in 2023. What are the global trends in Pumps & Process Solutions?

We see the Chemicals market is growing with the CAGR of 9.2% by 2025. Ongoing Petrochemicals and Chemicals plant expansion will increase demand for gear pumps for critical applications. 

Performance of the Indian subsidiary in FY 2022-23 and plans for FY 2023-24?

Maag India team was established in 2015 and since then the company has been continuously growing and providing best services in the India market.

What products/solutions are you manufacturing in India? Verticals which will benefit from this product portfolio and how?

Maag India currently focuses on the aftermarket sales and service with a dedicated well trained service team to cater Indian customers locally. We have a state-of-the Haas CNC machine for rotor grinding which is in line with the highest quality performance provided by Maag globally. We have localized smaller size pelletizers from size 100 mm to 300 mm for compounding and masterbatch industry. We are assembling pump skids for industrial pump and extrusion pump, where pumps are imported from the respective center of excellence and remaining parts are sourced locally.

What are your future expansion plans with respect to Vadodara facility for leveraging polymer, extrusion, industrial line filtration system, pelletizers, and underwater pelletizers? How are you planning to leverage it?

We are planning to double the size of our facility in Vadodara to cater for increased volume of rotor grinding, pelletizer assembly, pump skid assembly and overhauling of pumps. Additional capacity will increase our supply strength and reduce significant lead time. 

How will this expansion plan lead to additional synergy within the MAAG group portfolio and how do you plan to leverage it?

Certainly, this will help all our centers of excellence globally to focus more India centric on the future plans for the India market.

The company also provides downstream solutions for plastic recycling? Solution portfolio which will help in plastic recycling?

Well, recycling plastic is a growing circular economy. MAAG is providing the complete turnkey solution for recycling of plastic. With specialized continuous Ettlinger Filter, Melt Pump, Underwater Pelletizer, Strand Pelletizer & Dryer.

Our expertise in downstream equipment enables us to meet the rigorous demands of the virgin polymer industry. This is why MAAG is also regarded as an important partner to the recycling industry; delivering energy efficiency, productivity and product quality. Our solutions save resources through smart design, compact construction and durability of components.

MAAG Group's downstream equipment recycling systems help users to quickly and efficiently remove heavy contaminants such as paper, aluminum and wood to produce reusable pellets. MAAG equipment is the right choice for mechanical, chemical and advanced recycling.

MAAG Downstream Equipment recycling systems are coordinated to each other, and can be operated via our proprietary control system.

Aftermarket services being provided by MAAG Group? Are you planning to expand your team in India to cater to aftermarket services?

We already have a dedicated team for the aftermarket service, and we have plans to add more resources in the current year as well to leverage growing demand in the market.

August 03, 2023

In an exclusive interview with Pravin Prashant, Editor, Indian Chemical News, Rohit Kochar, Founder, Executive Chairman & CEO, Bert Labs shares his views on market size of factory automation, company’s performance, clients signed, funding, IPO listing, manpower addition, ensuring error free plant operations, managing brownfield capacities, and new areas of research.   

How has Bert Labs performed? 

In terms of Bert Labs performance, it is important to evaluate it from the perspective of Bert Platform Solution. For a deep tech company, it becomes not so prudent to just focus on our financial performance. We haven’t audited our results, but I can say that the first nine months of FY 2022-23 was slightly north of Rs. 100 crores on revenue with around 25% EBITDA. More importantly, the Bert Platform Solution has been deployed by 30 clients across sectors. This is creating digital transformation infrastructure and bringing business transformation. We commit numbers in terms of energy efficiency improvement, reduction in carbon footprint, and production efficiency improvement.

We help to improve clients on overall equipment effectiveness and quality improvement. The other way of measuring efficiency improvement is through intellectual property that we are creating since one of the pillars on which we are building Bert Labs is research and innovation. We have Digital Twins built up for the electrolysis unit, HCL synthesis rectifier and on top of these Digital Twins, we have Reinforcement Learning (RL) agents which bring in the optimization. Similarly, in the soda ash manufacturing, we have Digital Twins created for ammonia recovery, ammonia absorption, and carbonization. Again, we have Reinforcement Learning agents for optimization.

What is the number Bert Labs is aiming for in FY 2023-24?

So, in terms of numbers, Rs. 500 crore is what we are aiming for. On a conservative basis, we are reporting Rs. 300 crore but keeping the order book in sight, Rs. 500 crore seems to be very realistic. We will continue to grow at 200% plus year on year and plan to be a US $1 billion company by 2027 and then file for IPO.

Would you talk about your clients?

There is a Rs. 5,000 crore specialty chemicals company which is our client. We have been focusing on caustic chlorine as well as other bulk intermediate products. As per the clauses of agreement signed with them, towards the end, we will be deploying Bert Platform Solutions in their power plant and all the manufacturing plants. Then there are two soda ash manufacturing companies which are our clients. We are focused on ammonia recovery of ammonia absorption and carbonation to begin with. We will look at other integrated unit operations, including power plants. Besides this, we are focused on API manufacturing. So, one of the largest business conglomerates has speciality chemical manufacturing as well as API manufacturing.

Are you adequately funded or are you looking at raising funds in the near term? Are you looking at international or Indian listings?

We are adequately funded and that is what differentiates us from other early-stage companies. From day one, we have been relying on ourselves. Obviously, we started with bootstrapping this company but then we started to focus on revenues and profits. Every programme of ours and every deployment is profitable. That's why in our sixth year of operations, I spoke about profitability, which is around 24-25% at the operating level and this is unheard of when it comes to early-stage companies. So, a lot of internal accruals is what we use not just for working capital requirements, but also for investment in research and innovation. But whenever we have required external funding to fuel our growth as well as our research and innovation, we have brought in funding.

As I speak with you, we are closing a US $10 million fund through family offices. And a year from now, we would close our large global institution round from a company that is one of the largest energy players globally. Along with them we will take this company for a US IPO. So, we are looking at three rounds of funding, US $10 million at the end of August; a large global institutional round which will be for US $25-30 million; and then another round of US $50-70 million.

Would you talk about your setup in India? What's your plan on manpower addition?

One of the biggest assets as well as biggest challenge is human capital. We are currently 50 odd people, growing 3-4 people every week. Ours is a pure product platform play. We're not dependent on people whom we bring on board. By the end of this year, we plan to add 150 plus people. In the next four years leading to the US IPO, reaching 2,000 plus people is our focus. The strength comprises largely research and innovation professionals from computer science, software development, distributed computing, embedded systems, and hardware as well as software. Then there are people from wireless sensor network background. 85 to 90% of our team strength comprises researchers and scientists from premium institutions and many of them are PhDs. Along with them, we have product management leaders. So, ours is not a sales driven go to market strategy but a pure product management driven GTM strategy.

We plan to set up Bert Labs Research in 2024-25 in Bangalore, West Coast, and Germany. Bangalore and West Coast will focus on Artificial Intelligence (AI) and the research team will not have any pressures of client deliverables. Germany Research Centre will focus on everything around the Internet of Things (IoT) like IoT devices and IoT powered wireless sensor networks. This also will be a major part of the 2,000 plus team which we would build globally.

We are starting with presence in APAC, Middle East, US, UK, and Germany this financial year and global expansion will continue. We are in the process of hiring locals in the Middle East and other geographies. That is how we aim to build this team globally.

You have a baseline model and then you build up on it to improve the processes. How do you ensure error free plant operations?

These are highly constrained process environments and if there is any deviation in fact in case of API, it leads to FDA questioning and even cancelling of license. One of the Hyderabad based companies have engaged us just to focus on deviations and bring Rs. 50 crore revenue to them.

For the chemical and speciality chemical manufacturing, we do multiple things. We first understand the underlying physics and chemical engineering principles, we just don't rely on operational data of these unit operations or these equipment operational data from the DCS - PLC network, we also do simulations around physics and chemical engineering. That helps us to understand the unit operations of a particular equipment at the design level and at the component level. Then we integrate that with the historical data on which deep neural network models are trained. So, when we do that, the Digital Twin which gets created, exactly replicates the real plant environment. We hand over these Digital Twins for our clients to play with. The Digital Twins powered dashboard that we provide them can be operated from anywhere. Prediction accuracy is anywhere from 94-95% going up to 99.99% in a few cases.

With our Reinforcement Learning philosophy in action, we first train our Reinforcement Learning agents in an offline environment, and that training goes for millions of runs. Millions of episodes are called and that millions of episodes coincides with training equivalent to the next 10 years. And once these Reinforcement Learning agents start converging, meaning every time action is taken and the output which gets generated is the output which the plant is looking for, at the same time, the energy, the power consumed, the electricity consumed by the electrolysis unit also comes down. That is the time we decide in consensus with the client that the Reinforcement Learning agent is ready to be deployed in the real plant. That's how we make sure that all the operating conditions are met where the Reinforcement Learning agent is deployed to perform with respect to energy efficiency improvement, production efficiency, and quality improvement.

Now you have Digital Twins and a simulator simulation platform but if there is any exigency, how do you manage them? 

Our training happens on historical data and the exigency which the plant has gone through is anywhere from one to five years. Our neural network model or reinforcement minimal learning model has learned and has adequately taken care of meeting those exigencies and yet the Reinforcement Learning agent gets trained on a Digital Twin which has a power to predict at an accuracy going up to 99%.

We have a four-pronged control strategy. AI controls which get executed on  the cloud from a remote server. Then AI control gets executed from an on-premise server and the third level of control is on our edge computing device. So, we have two edge computing devices - Bert Titan and Bert Aksh. AI controls run on these IoT devices and are very close to where the equipment is placed. The fourth level of control is on our controllers, Bert Minnie and Bert MinnieComm, the two controllers were PID control runs. If for some reason, the edge computing device is not able to activate controls through our controllers then the PID control gets executed. For some reason if the premise server is not able to execute controls, then the edge computing device actuation control comes into picture. For some reason, if the cloud-based AI controls don’t get executed then either there is an on-premise server or the edge computing device. So, there's a business continuity which is maintained through these four prong control strategies.

It is easy to manage greenfield operations but how do you manage brownfield facilities?

In a greenfield project, we integrate Bert MinnieComm with thousands IO points, digital analogue, hard and soft IO points. In a chemical plant, we are working with, the IO points are anywhere from 2,500 to 5,000. Now in the brownfield plant, we integrate Bert MinnieComm that either integrates with the Emerson PLC or a DCS or Allen Bradley, Rockwell, Siemens and this way with other PLC and DCS servers and controllers.

This integration happens through standard industry communication protocols like OPC UA, OPC DA, BACnet etc. Bert MinnieComm in a brownfield project captures all the data points which we need and from Bert MinnieComm, the data gets transmitted through wireless sensor network to Bert Titan which is a base station of our wireless sensor network. And Bert Titan aggregates data and AI computation gets done on it. Bert Titan also pushes data to the on-premise server and to the cloud server where we have Bert Nova. Our solution works seamlessly, plug and play, both in a brownfield environment as well as in a greenfield environment. Some of the control levers which are manual, some of the control levers which are digitized, both become part of Bert Platform Solution and then compute happens in real time.

What is the market size of factory automation globally and in India?

The size of the market could be US $3-4 trillion, corroborated by McKinsey studies but we don't rely on the size of the market because digital transformation is and should be ahead of physical infrastructure where a chemical or API manufacturing or any other manufacturing plant in any sector should focus today. My advice to all my CEO friends is that if you are laying out a greenfield project, please have the digital transformation strategy executed before you are laying down the physical infrastructure of your plant and all along with it as it is fundamental and therefore critical. The other way of looking at it is sustainability and decarbonization. Today every Chairman, CEO, Managing Director in developed and developing markets, in chemical, pharma, and other sectors like cement have their mandate for zero carbon and carbon neutrality.

Whom do you consider as your competitors?

We come across Allen Bradley, Rockwell, and Siemens. We also come across companies like AspenTech, Star CCM and 1D, 3D, and CFD simulation companies; however, they are more of our collaborators. When I am talking about first principle chemical engineering simulations, our research scientists use AspenTech as a tool and they do all the chemical engineering-based simulations. When they do neural network simulations in parallel, our physics face modelling is done using Star CCM and other tools like GT suite etc. Our competitors are largely hardware companies but they do have software platforms also which are largely around monitoring and which are also largely around rule based control logic or PID control logic. We end up sitting on top of the control logic of Emerson, Siemens, and Yokogawa at our client sites and obviously one control logic has to be actuated. So, it’s Bert Optimus and Bert Geminus Control Logic which gets actuated. It overwrites the existing control logic from these technology companies.

New areas of research that you are working with respect to smart factories?

There are several of them. I am bucketing these into two areas. One is the area of sensing and the second is the ability of the algorithms to find correlations between those thousands of parameters and variables. Bert Platform Solution is at the intersection of these two. So, broadly speaking, our research will focus on how we can improve the capability of Bert Maximus IoT devices and their ability to sense capture data points. We have one image processing device called Bert Aksh which integrates digital camera and thermal camera. Now the processing board is all Bert patented but the thermal camera and the digital camera gets integrated as a third party. So, the future of sensing is non-intrusive and Bert Aksh is enabling it to sense some of the parameters. On the AI side, it is the power of algorithms and neural networks. The Reinforcement Learning that we have created is a combination of two very powerful neural networks. So it is, real time and every second, every split second, it is able to find correlations between thousands of variants. This is where we would focus heavily on research. Just imagine how powerful that algorithm will be.

July 29, 2023

The company focuses on greenfield and brownfield project engineering which includes: Plant Engineering, Facility Master Planning, Engineering (Basic & Detailed), and Project & Construction Management

What is the overall size of Global EPC business in FY 2022-23 and what percentage comes from the Chemicals, Petrochemicals, and Energy sector? Forecast for FY 2023-24?

The global EPC (Engineering, Procurement, and Construction) market is expected to be around US $8,000 billion in FY 2022-23. Favorable government norms towards reduction of carbon emissions and increasing production of renewable energy will boost EPC market growth. With a lot of old infrastructure, the demand for redevelopment projects is expected to be high in future.

Increased government expenditure on infrastructure as well as private Capex would boost the Indian EPC sector and will have an impact on the steep increase in Capex outlay of around 32% from Rs. 7.5 lakh crore to Rs. 10 lakh crore.

Brief about Shiva Engineering Services and the kind of work that the company is undertaking for Chemicals, Petrochemicals, and Energy vertical?

Shiva Engineering Services (SES) is a leading engineering, procurement, and construction management (EPCm) and EPC company that specializes in providing turnkey solutions for various industries, including chemicals, pharma, food processing, petrochemicals, and energy. The company focuses on greenfield and brownfield project engineering which includes: Plant Engineering, Facility Master Planning, Engineering (Basic & Detailed), and Project & Construction Management.

With respect to Plant Digitalization and Management Services, the focus is on Laser Scan, Digital Twin, Drone Survey, Project Management, Architectural, Civil & Structural, LEED, Green Building, Warehouse, Safety Studies, Utility and Offsites, and Fire Protection. EPC segment focuses on Construction & Turnkey and Solar EPC.

In the Chemicals, Petrochemicals, and Energy sector, SES has undertaken several projects and provided services. The company has a team of highly experienced professionals who have expertise in their respective fields. SES uses the latest technologies and innovative solutions to deliver high-quality projects within a given timeline and budget.

Key greenfield and brownfield orders bagged in the Chemicals, Petrochemicals, and Energy sector in FY 2022-23? What's the total order value in these sectors till date?

SES has completed a considerable amount of work in the chemical, specialty chemical, agrochemical, paint, aroma, food processing plants, bromine & its derivatives, and numerous adjacent markets in India and across the globe over the past 13 years. In the fiscal year 2022–23, SES won projects worth more than Rs. 2,500 crore. 

SES Digital focuses on next-gen smart solutions to help industrial business leaders to grow into smart organizations. Technologies where you have gained mastery to deploy smart manufacturing? Services that you are providing to customers?

SES Digital’s next-gen smart solutions focuses on Industry 4.0 and smart manufacturing initiatives with cutting-edge technologies along with our domain expertise in engineering services that helps our customers to build smart organizations. top- notch technologies like 3D laser scanning, drone survey, AR & VR tech for project reviews, helped our customers with reducing various engineering spends as well as decreasing the overall projects timelines. These technologies also helped us by providing us with market wide competitive advantages.

What's the impact of digital transformation technologies on SES? How are you helping your client?

SES is at forefront while adopting digital solutions for quality and quick delivery and helping them to operationalize their capex cycle and investment. Some of the key solutions that we regularly use are Laser Scan and Drone Survey.

Laser Scan – They are very effective for any capacity addition, modification, debottlenecking, or brownfield project requirement. All the data related to existing plant setup can be very accurately captured using a laser scanner. This data can be used for super imposed modelling, where you can see old plants and new recommended modifications together. This helps in construction sequencing, reducing the downtime, and optimization of existing setup. We are focusing on drone survey, construction camera, 3D Modelling and VR (Virtual Reality).

Drone Survey – Contour mapping, topography survey, remote construction progress monitoring, thermography survey, inspection and many applications are associated with drones; Construction Camera – Construction progress, real time update, comparison, contractor mobilization details, security all these applications are associated with construction camera solutions. With app base interface SES helps its clients to monitor their sites remotely; and 3D modelling & VR – Visualization of your plant and immersive walkthrough and training are well known use cases of these solutions.

Are you working on sustainability and EV initiatives?

Shiva Engineering Services is working very closely with leading industrial players to develop sustainable and green infrastructure which includes green industrial building setups, solar infrastructure, recycle material process, and manufacturing plants. For example, SES is working very closely in bromine, bromine derivative manufacturing plants, PVDF films, fluorine chemistry, sustainable packaging plants, and many more.

How is Shiva Engineering Services managing sustainability and growth at the same time?

Creating sustainable value and enhancing market performance has never been more challenging. Being a company with a mission, we've integrated sustainability into our core business strategy with the goal of expanding our firm's circle of responsibility beyond just doing long-term good. Our focus on the needs of the consumer, along with technological advancements, has always given us a competitive advantage.

July 17, 2023

Would you elaborate about the company and services offered from the facility located near Nhava Sheva Port with respect to cleaning facility, tank testing, and tank repair?

Zodiac Tank Container Terminals was commissioned in March 2021, is a Samsara Group company, one of the leading shipping agency and logistics organizations operating since 1996 in India. Zodiac Tank Container Terminals state-of-the-art facility was developed as a 'one-stop-shop' for all ISO tank container cleaning, maintenance & testing, and road tanker cleaning matching with world-class quality standards.

The facility has dedicated exclusive cleaning bays for ISO tank containers as well as for cleaning of road tankers and food grade ISO tanks. The facility is carefully planned and run by a competent workforce using a fully automatic ISO tank container cleaning system with advanced German technology from Weidner. The cleaning facility is strategically located on Mumbai to Pune Highway, about 55 km from Nhava Sheva port with an excellent connectivity through a toll-free road, old Mumbai-Pune highway and also Mumbai-Pune Expressway.

Key milestones achieved by Zodiac Tank Container Terminals in the last two years? What are your expansion plans for FY 2023-24?

Zodiac Tank Container Terminals is the only ISO tank container cleaning & maintenance facility in India with ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certification. It is the only professional facility for cleaning of road tankers carrying edible oil/products and chemicals, which is fully compliant with environment protection regulations. It is the first such facility in India with a roof top solar power plant and our entire facility is running on solar power. The facility is also compliant with Kosher and Halal certification and Welders certified by Bureau Veritas. Recently, we have safely handled the T75 LNG gas tank at our facility. Zodiac is also signatory to Responsible Care.

Can you elaborate on the technology used in the facility – The German made cleaning machinery set-up from Weidner?

We are the first facility in India to have a fully automatic ISO tank container cleaning system with advanced German technology from Weidner. Weidner is a German company with over 40 years of experience in the special cleaning equipment. They have set standards in the cleaning equipment industry due to their innovation power and high quality. The system is user-friendly, high performance, low maintenance, robust and efficient. It has fully automatic cleaning procedures through various cleaning programs which can be done anytime by the operator. The Weidner cleaning plant also comprises a scrubber unit and steam generator.

How has been the response with respect to ISO tank and road tank cleaning facilities? How are you providing quality service?

The response is extremely good from various stakeholders in the trade. We have not only met their expectations but were able to provide world class cleaning, testing, and repair services in India which till date was not available.

Our quality services have prompted various customers to bring their ISO tank container across the globe to our facility in India for repairs and cleaning. This will help bring more business into India. Besides ISO 9001, ISO 14001, and ISO 45001, various reputed chemical manufacturers and global ISO tank operators have audited and approved the facility.

How do you ensure regulatory compliance with respect to achieving Zero Liquid Discharge?

Zodiac Tank Container Terminals is fully compliant with all applicable regulations and best global practices related to health, safety, quality, and environment. The company has an Effluent Treatment Plant (ETP) which has Zero Liquid discharge consisting of aerators, double RO, electrode system & evaporators and issued a Red Category license by Maharashtra Pollution Control Board. Being ISO 9001, ISO 14001, and ISO 45001 standards terminals, periodic audits help us in maintaining our standards.

Environmentally friendly technologies adopted by Zodiac to promote a clean and green environment? Key initiatives by the company to help customers achieve sustainable practices in the shipping and logistics sector?

We have set up the facility with an aim to provide an international standard of cleaning with environment care at its core. The German made tank cleaning equipment from Weidner is most efficient and has measures for noise containment, low energy consumption at high efficiency, use of biodegradable detergents, water and energy saving techniques, etc.

Our facility is fully compliant with all applicable statutory regulations including Maharashtra Pollution Control Board. This facility is first of its kind to operate on solar power in India. Zodiac Tank Container Terminals is an ISO 14001:2015 certified company and promotes and imbibes best practices in the environment. Customers using our facility are indirectly achieving sustainable practices in the logistics industry.

In 2022, the company successfully commissioned a 150 kWp rooftop solar power generation plant at its Khalapur facility. How does this facility help you in terms of providing green and clean energy?

Towards our initiative to promote a clean and green environment, Zodiac Tank Container Terminals has been at the forefront in adopting environmentally friendly technologies to safeguard nature, climate and communities. In 2022, we successfully commissioned a 150 kWp rooftop solar power generation plant at our facility. This initiative is first of its kind in the ISO tank container and road tanker cleaning & repair facility in India. Our depot is entirely consuming electricity generated from solar power plants. It has been recognized by our partner Oorja Solar which is a testimony towards our commitment to promote a cleaner environment and inspire communities to adopt similar methods.

How is the company developing highly customized services in collaboration with its customers? Any examples?

Zodiac has been on the forefront of providing customized services to its customers. Cleaning of road tankers carrying chemicals and edible oil/products in a fully environmentally compliant as per regulations is one such successfully developed service. For ISO tank containers, besides top-class cleaning standards including scrubbing/steam treatments we have created fully in-house capabilities of major repairs which are approved by reputed classification society/certifying authorities.

We will soon be commencing re-furnishment of ISO tank containers. With fully equipped workshops, professional welders/manpower, and world class quality standards, we are creating Zodiac Terminal as a cost effective hub in the region for carrying out extensive repairs of ISO tank containers, placing India on the map for many globally reputed ISO tank operators.

How is the company striking a balance between environment-friendly policies and sustainable growth in future?

It is very important for any chemical cleaning facility to comply with environment related policies applicable rules and regulations being fully implemented. We have been at the forefront in implementing various environment-friendly initiatives as mentioned earlier and we shall continue to do so with support from more chemical customers/ISO tank operators which are adopting such practices across their supply chains, which is a norm today, Zodiac Terminal is confident of achieving long term sustainable growth in this initiative.

July 08, 2023

Global trends in water treatment chemicals and ion exchange resins market?

The global ion exchange resins market, even in its maturity stage, is growing at an impressive CAGR of 4.2% and is projected to reach US $2.2 billion by 2025. The growth trends are already visible in APAC countries and emerging economies such as India, China, and Brazil which offer many untapped and unexplored opportunities.

The trend in growth strategies adopted by companies in this business includes development and launch of new products through sustained research & development initiatives, mergers and acquisitions, and investment in brownfield and greenfield projects. In order to sustain the robust demand from major ion exchange users like thermal power plants, chemical and petrochemical industries, steel, rising number of nuclear power plants, and high purity ion exchange resins for the pharmaceutical and electronic industries.

Expandable markets for ion exchange resins also include life sciences through bio-pharma applications and production of ultrapure water for solar/semiconductor applications.

The global water treatment chemicals market is also growing at a healthy CAGR of 4.4%. The growth can be attributed to growing requirements of utility and process chemicals from sugar and ethanol, petrochemical and refining, steel, alumina, and geothermal power generation, especially in emerging economies.

The global trends also indicate that the major factors for the growth of water treatment chemicals are increasing demand from chemical treatment of wastewater in South-East Asia. Further, it is predicted that the market for water treatment chemicals will grow due to demand for clean water in mining, pulp and paper, chemical process, oil & gas, and power plants. Coagulants and flocculants which dominate the market with largest market share for chemicals will continue to see good growth for use in water treatment in developed economies like North America and Europe.  

Global water treatment chemicals market size is projected to grow from US $39.1 billion in 2021 to US $61.1 billion by 2026 at a CAGR of 9.3% whereas global ion exchange resins market is expected to reach US $2.26 billion by 2026. How are you planning to leverage these opportunities?

The growth momentum in ion exchange resins and specialty water treatment chemicals is quite good despite the slowdown in demand, earlier due to the pandemic and presently because of the geo-political situation in the Eastern part of Europe. This is mainly due to preference of Indian customers for our products and associated services. Our ion exchange resins and water treatment chemicals have good acceptance in global markets where we already have a presence. Robust CAGR, diverse range, customization and consistency in quality, and timely supplies, will help the company to benefit from growth of these products in coming years.

Company's financial performance in FY 2022-23? Forecast for FY 2023-24?

For nine months of FY 2022-23, on a consolidated basis our operating income increased 24% YoY. Profit after tax increased 45% on a YoY basis. We also expect our operating income for the FY ending March 2023 will be in the range of 25-30%. Considering a good backlog of orders we predict our growth in FY 2023-24 should be equally good.

The company has a revenue mix of Engineering (58%), Chemicals (34%), and Consumer Products (8%). Do you see any change in revenue mix in FY 2023-24?

We do not anticipate any appreciable change in the revenue mix in FY 2023-24.

Key achievements of Ion Exchange (India) Limited in FY 2022-23?

The company witnessed steady order flow, both in the domestic and international market for engineering, chemicals, and services. This includes a 40 MLD seawater desalination project for a leading EPC company in North Africa. We also received EPC contracts for desalination and complex waste treatment from one of India’s largest offshore oil exploration units. Other significant orders include complete zero liquid discharge plant at Indian Oil Corporation, Panipat Refinery at a contract value of Rs. 343.36 crores, a turnkey contract from Indian Oil Corporation’s Panipat Refinery capacity expansion at contract value of Rs. 726.13 crores. The scope of work includes supply of water treatment plant including reverse osmosis based demineralization plant, condensate polishing unit, zero liquid discharge plant with comprehensive operation & maintenance for two years and annual maintenance charges for five years. We have also received several EPC contracts for water treatment, recycling and complete zero liquid discharge plants from leading companies in paint, food & beverages, steel, textiles, to name a few. Our Zero B range of home water solutions also had good growth in a highly fragmented market dominated by several regional unorganized players.

In FY 2022-23, the company has also bagged orders from NRL. What are you doing in the NRL?

NRL (Numaligarh Refinery Ltd.), for Assam location has awarded a contract for design, supply, construction, and erection & commissioning of 4X250 m3/hr resin based DM plant and 2X120 m3/hr for Condensate Polishing Unit. Further, our scope also includes pre-treatment of raw water by 9 X 400 m3/hr Horizontal Dual Media Filters and 2X383 m3/hr Rapid Gravity Sand Filters.

The company has an approximate total order book of Rs. 2,923 crores with more than Rs. 8,405 crores in the bid pipeline as on December 22, 2022. How are you planning to leverage these enquiries?

With the current order backlog and faster conversion of orders from the bid pipeline, we see a strong visibility for sustaining our growth in the next 2-3 years. We are well placed to undertake a significantly increased pace of execution in the coming years, in line with our customers’ expectations.

The company has seven manufacturing and assembly facilities across India and one assembly facility each in UAE, Indonesia, Bangladesh, and Saudi Arabia. Any plans of increasing manufacturing and assembly facilities in FY 2023-24 and Capex investment in greenfield and brownfield expansion?

Consistent with increased demand for ion exchange resins, we have planned a greenfield expansion project for manufacturing world-class ion exchange resins in Roha, Maharashtra. The state-of-the-art manufacturing facility will also be aligned with internal sustainability goals and environment quality management practices.

Exports contribute around 29% of total sales to Africa, Japan, Middle East, Russia, South East Asia, Europe, UK, USA, Canada, and neighbouring countries. Are you looking to enter the South American and Australian market?

For nearly three decades we have built a favourable position as a reliable exporter of quality ion exchange resins, water treatment plants, chemicals, and services. The plan is to further consolidate our position in these geographies and increase business volume with existing and newer products and technologies, all backed by efficient after-sales-service in these regions. In the current year, we have formed a European subsidiary for penetrating the European market as part of our sustainable growth strategy.

R&D activities undertaken in FY 2022-23 and plans for FY 2023-24?

The state-of-the art R&D and technology centres manned by scientists and technologists have been the strength of our company since 1965. Apart from synthesis of new chemistries, polymers, formulations, R&D centres have developed specialty water treatment chemicals using green chemistry thereby offering our customers in India and abroad environment friendly products meeting their sustainability ESG goals.

Our technology centre has developed several engineering products and processes for separation, purification, and concentration using novel membranes, ion exchange resins, adsorbents and thermal evaporation processes benefitting a large number of industries. Some of these exciting commercialized technologies include Zero B Hydrolife range of alkaline water purifier machines, standardized range of state-of-the-art high purity water system for artificial kidney dialysis, the Quencher series of Bottling plant – an innovation that fulfils the processing need to replace plastic with glass bottles for hospitality industry.

Company's future strategy focuses on three pillars: Increasing export volumes for resins; Newer chemistries and formulations; Capacity expansions to meet increased demand in local and international markets and increasing market share in domestic markets with ‘Make in India‘and China + strategy. How are you planning to move in this direction?

We are excited by the success of world-class membranes (UF, RO, and NF) supplied from state-of-the-art manufacturing facilities in Goa to a large cross-section of customers including OEMs. With earlier than planned capacity expansion we are now aiming to further increase our market share in India and to export membranes to geographies where we have local presence. We will also continue to improve operation efficiency and operational throughputs along with various capacity expansion plans to take advantage of the China+ strategy.

CSR projects executed in education, health, and hygiene in FY 2022-23 and plans for FY 2023-24?

Ion Exchange is committed to sustainable development and through its CSR arm – Ion Foundation, has been engaging in various social and community initiatives in the health, water, education, women empowerment, agriculture sectors over the last many years. These initiatives undertaken directly by the company and also through various organisations, are majorly spread across Maharashtra, Telangana, and Gujarat. In FY 2022-23, our activities included providing equitable, inclusive, high-quality and sustainable education through various initiatives focussed on education infrastructure, innovative learning methodologies, supporting NGOs for the Science on Wheels program, providing after-school support and scholarships, to name a few.

On the healthcare front, our CSR initiatives aim at providing quality and affordable healthcare services. We have been supporting the Indian Red Cross Society, a unique humanitarian organization that plays a pivotal role in providing safe blood transfusion services to patients suffering from Thalassemia Major. Last year, we helped support almost 6,000 patients through our initiatives.

We also continued to provide safe drinking water to various schools/residential care units for the underprivileged/disabled people in states of Maharashtra, Gujarat, Tamil Nadu, and Delhi by setting up RO water plants across urban and rural communities. Initiatives planned will focus on Sustainable Development Goal 6 (SDG 6) and include providing adequate access to safe drinking water in high-water-risk communities or households; improved hygiene, and sanitation practices. The key objective will be to benefit close to one lakh people directly and indirectly by March 2024.

When are you planning to achieve net carbon zero and plans for achieving it?

We have definite plans for investments to become net carbon zero by the year 2032. This includes sustained transition from use of fossil fuel to renewable, maximizing use of alternate sources of water.

July 07, 2023

2023 trends in Construction Chemicals, Textile Chemicals, Carpet Chemicals, Leather Chemicals, and Paper Chemicals?

The industry is in sync with India's growth with a country focused on textiles and construction. We expect growth in textiles and construction to be around 12%.

Company's financial performance in FY 2022-23? What's the forecast for FY 2023-24?

In FY23, Jesons Industries Limited has shown a flattish volume growth and forecasts a volume growth of around 25% in FY24.  

Revenue mix within India and outside India for FY 2022-23? What will be the revenue mix in FY 2024-25?

In FY23 exports contributed 26% of overall revenues whereas within India it was 74%. In FY24, the company is planning to increase its share of exports further to touch 28% of overall revenues.  

The company is focused on Specialty Coating Emulsions (SCE) and water-based Pressure Sensitive Adhesives (PSA) in tape and label segments in India. Any new developments on this front?

Our technology centre at Turbhe, Navi Mumbai is churning out new products in the SCE and PSA categories for different applications. We are also in talks with a few global prominent players for collaboration.

Capex investment in FY 2022-23 and projects/facilities where the company has invested? Capex plans for the company in FY 2023-24 and how will this help the company in the long term?

In FY23, the company expanded capacities in Roorkee, Chennai, and Mundra locations. Capex plans for FY24 include a new technology centre in Navi Mumbai and a new manufacturing site at Saykha, Gujarat. With these expansions, we expect to introduce innovative products and show robust growth in the coming years.

The company holds about 30% market share as a specialty coating emulsions (SCE) supplier in the Indian paint sector? How does the company plan to increase it further? Any new product launches in the offing?

Jesons has several new products in the pipeline in the SCE category for various applications and end uses. We are also in talks with several players for joint ventures and collaborations which will help us increase our market share.

The company's portfolio of 170 products are marketed under seven different brands. Have you made any additions to this portfolio in 2022-23 or plan to do so in the near future? 

Yes, it is a continuous process and we have added several new products to the list. Our pipeline remains strong for the coming few years.

What is the total installed capacity across six manufacturing plants and how much additional capacity added during FY 2022-23? What is your current capacity utilization and strategy to improvise it further?

In FY23, the company’s capacity was around 283,000 MTPA with capacity utilization at around 65%.  

What are the key innovations undertaken at the company's DSIR recognized R&D centre? How will these innovations make an impact on the company and society? 

Innovations in Jesons are focused on enhancing customer productivity, delivering parallel innovative solutions, minimising impact on nature, and expanding our product adjacencies. The company is also focusing on minimizing natural resources such as water by developing high polymer content ready to use pressure sensitive adhesive for tapes and labels applications.

Focus is also on products that enhances customer productivity by running at higher speeds on the coater line, safer in-compliance with FDA, and with highest quality standards products for packaging adhesive applications such as lamination, side pasting, etc., CMR free products for furniture adhesive applications; Coating binder which acts as scavenger for carcinogenic emission in the atmosphere; Development of green paint binders with latent crosslinking technology to enhance paints shelf life; Elastomeric coatings using sunlight for crosslinking; Moisture barrier coating for reducing water demand required for concrete curing; and using in-house products as raw materials for formulating competitive high-performance construction chemicals.

The company has received prestigious Responsible Care certification from Indian Chemical Council (ICC). How will this strengthen your commitment towards future sustainability goals?

Jesons Industries Limited is a Responsible Care (RC) Logo Certified organization which is an internationally recognized and global voluntary initiative through ICCA internationally and ICC in India. RC addresses community concern about chemicals and their impact on people and environment during processing, transportation, and use. This helps us to build trust and confidence with stakeholders i.e. employees, community customers, suppliers, contractors, and government.

RC covers process safety, employee health and safety, pollution prevention, emergency response and communication, distribution, product stewardship, and security. RC logo is a symbol of commitment towards EHS excellence and thus helps us to strengthen a move towards sustainability.

Level of automation and digitalization projects carried out in FY 2022-23? How do you plan to move ahead on this front both on brownfield and greenfield projects? 

We are currently at 75% automation in our plants and wish to enhance it to 90% by 2027.

CSR projects undertaken in FY 2022-23 and plans for FY 2023-24? 

We have undertaken several CSR projects for promotion of education and healthcare. We have also carried out CSR activities towards the Prime Minister Relief Fund (PMRF).

How is the company striking a balance between environment-friendly policies and business growth? Key sustainability initiatives of the company across various segments?

In the energy sector, the company has installed 60 kw solar panels at Mundra; In water management, the company has developed a water harvesting system at 8 kl/hr at Mundra; In waste management, the company is opting for paperless work procedures at Mundra; Reuse of drums; In biodiversity we are increasing green belt with plantation of 1,588 trees at Mundra; In supply chain, the company is deploying nicer globe tracking system into transported vehicles; and Journey Risk assessment of transportation. Compliances with national environment compliances. Prepared & implemented QEHS (Quality, Environment, Health and Safety) policy & its goal and third party certification for our system like ISO and Responsible Care. The company is going to implement the EcoVadis and ESG certification process.

When is Jesons Industries planning to achieve Net Carbon Zero? What are the different milestones set up by the company to achieve it? 

We have appointed PwC as our ESG implementation partner and the milestones are under development.

July 05, 2023

How would you rate the company's financial performance in FY 2022-23? What's the forecast for FY 2023-24?

Our performance for FY22-23 was as per our projections and aspirations. In FY23, we celebrated crossing the milestone of Rs. 3,000 crore topline with 23% EBITDA. Our FY23 topline is 65% more than the previous year. The continuous growth and success of our business is cemented on our robust, sustainable business model, powered by the innovation and quality of our products, and commitment of our team.

Performance of the company in different segments - Aluminum, carbon black, construction chemicals, specialty chemicals, wood preservatives, coal chemicals, tyres, mechanical rubber goods, and masterbatches in FY 2022-23. What is the future roadmap?

In FY23, we became the major exporter of solid CT Pitch globally. 40% of the Aluminum segment in India consumes our products, we integrate operations, provide uninterrupted supplies, ensure superior quality, and adhere to best industry practices for manufacturing, supply chain management, and sustainability. Our commitment to quality, stringent safety protocols and standards, ethical governance principles, and industry certified processes sets us apart in the industry.

With the projected expansion of the aluminum business as well as reduced CT Pitch availability from China, we have an opportunity for organic growth. We are installing a 500 KTPA Coal Tar distillation plant at our second site in India and with state-of-the-art specialty chemicals complex of import substitution products to cater several industrial applications other than Aluminum industry.

Capex investment in FY 2022-23 and projects/facilities where the company invested? Capex plans for the company in FY 2023-24 and how will these investments help the company in the long term?

In FY23, we invested strategically in various projects, with Capex exceeding Rs. 525 crores, to expand our current production capacities and development of a township for our employees and their families.

For the upcoming FY24, we plan to invest more than Rs. 1,200 crores in projects like – setting up a new carbon derivative complex in Jharsuguda, Odisha; to increase the capacity of our carbon black, captive power plant at Vijayanagar; construct another new township and many more. These investments will help double our topline by FY26.

By when Rs. 550 crore projects for adding 1,15,000 - 2,15,000 tonne capacity in Karnataka will get completed? How will this project enhance the overall capacity, market share, and overall revenue of the company?

We're making good progress on our project in Karnataka, and it is projected to be completed by the first half of 2024. This will almost double our Carbon Black capacity, giving us a major share of the domestic market, and further enabling us to compete in the international market. We anticipate this project will generate revenue of approximately Rs. 900 - 1,000 crore annually. This plant will produce niche grades for high performance automobile tyres.

The company has collaborated with edible oil refiner Sri Anagha Refineries to construct molten pitch storage tanks with capacity of 10,000 metric tons at Mangalore port. Expected completion date and long-term outcomes in terms of scaling up coal tar pitch production?

Currently, we are focusing on creating India’s first ‘liquid CT Pitch port’ for exports. The facility will be ready before the end of Q1 FY24. This port will enable us to expand our reach in international markets for our products. By leveraging the utilization of this facility, we anticipate an estimated 3 lakh MT of exports in the next five years and adding over Rs. 2,000 crores to the top line.

What are the key R&D projects under progress by the company? How will these innovations make an impact on the company's revenues?

We are innovating new grades of Coal Tar Pitch and of Carbon Black. We are continuously working to produce high quality Carbon derivative products, such as Naphthalene, Indene, Anthracene, Phenols and Cresols. These products will substitute imports in India and have the potential to significantly increase our current business revenue.

Level of automation and digitalization projects conducted in FY 2022-23? How do you plan to move ahead on this front both on brownfield and greenfield projects?

Currently, our plants are automated using DCS systems, and we have complemented this with digital solutions for greater process efficiency. We are now driving an overall organizational digitization program, in collaboration with one of the top consultants, which will enhance our existing operations and future projects and further upgrade us to Industry 4.0 level within the next 2-3 years.

CSR projects undertaken in FY 2022-23 and plans for FY 2023-24?

In FY23, we strengthened our Corporate Social Responsibility (CSR) projects in sectors like healthcare, education, sports, and infrastructure development. These initiatives have positively impacted over 3 lakh people. We plan to continue our efforts of strengthening educational infrastructure by providing basic educational amenities, drinking water facilities and digital classrooms. We are further prioritizing preventive healthcare through the Mobile Health Clinic initiative, which has impacted 32,000 individuals in 8 villages. In the coming years, we intend to extend our support to women’s Self-Help Groups in the villages through livelihood interventions within the vicinity.

How is the company striking a balance between environmentally friendly policies and business growth? Key sustainability initiatives of the company across various segments?

We constantly integrate sustainability into our design & operations and the concept of circularity has been designed to ensure minimum wastage and emissions across the manufacturing facility.

Our second sustainability report was published in December of 2022 based on the Global Reporting Initiative (GRI) Standard. We have planted 47,500 trees to help minimize air pollution. We are continuously optimizing our operations and usage of non-renewable utilities like water and power which is prioritized in our consumption trends of utilities per metric ton on a year-on-year basis. 

Our company is committed to sustainable business growth, providing a secure source of captive raw materials and long-term contracts. Additionally, our manufacturing methods reduce emissions by using cleaner fuels, low Sulphur feedstocks, and zero discharge.

The residue gases produced during our process is used to generate steam and electricity in our captive power plant. This helps us to reduce our carbon footprint significantly, to the extent that our product Carbon Black has nearly 20% less footprint compared to our domestic peer industries. Also, our value-added product which is a synthetic graphite for Anode material has nearly 77% less CO2 footprint compared to peers. 

Our CSR and CER goals are aligned with the United Nations' SDGs for Good Health & Wellbeing, and economic growth, zero hunger, quality education, sustainable cities and communities, clean water and sanitation, and gender equality. We have contributed to supporting the elderly, Covid-19 care, and especially abled people, as well as hospitals. Over 4 lakh lives have been benefited in the last 4 years. Quality education is another goal we are actively supporting; we have upgraded teaching & learning facilities in 4 Direct Impact Zone villages and developed model libraries which have helped more than five thousand students.

We are also working to support animal welfare trusts and restore ecological balance through afforestation and wildlife conservation. We have contributed to women empowerment, sports development, village street lighting, livelihood programs, relief funds, solid waste management programs, and many other initiatives. Our efforts towards sustainability are well recognized by many rating agencies. We are a Responsible Care logo holder and EcoVadis -Silver Rated company.

We upgraded our ISO certifications of – 9001 for QMS, 14001 for EMS, 45001 for OH&SMS, 50001 for Energy Management System. Also, we are certified by IATF 16949:2016 – Automotive QMS, ISO/IEC 17025:2017, ISO 27001:2013 - Information Security Management System, ISO 28000: 2022 – Supply Chain Security Management which highlights our approach to data credibility and integrity. We are now preparing for SA 8000 certification, which is an international certification standard that encourages organizations to develop, maintain and apply socially acceptable practices in the workplace.

When is Epsilon Carbon planning to achieve Net Carbon Zero and what are the different milestones set up by the company?

We are continuously working through various initiatives to reduce our environmental load and carbon footprint. These efforts are gauged, and monitored by doing life cycle assessment through recognized third-party experts. Currently, we are in discussion with one of the top consultants to design a long term ESG roadmap for the organization and charter a time bound milestone plan.