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FY 2022-23 is going to continue to be a tough year

May 24, 2022

FY 2022-23 is going to continue to be a tough year

Companies are looking at India not only to fill the gap in the supply chain but also prioritizing Indian suppliers.

We are progressively looking at reducing our carbon footprint says Rashesh Gogri, Vice Chairman & MD, Aarti Industries Ltd

May 24, 2022

We are progressively looking at reducing our carbon footprint says Rashesh Gogri, Vice Chairman & MD, Aarti Industries Ltd

We are looking at three buckets - Custom manufacturing, import substitutes and green & bio.

Freight rates to remain unstable for now: Dilip Shah, MD, Prakash Chemical

May 24, 2022

Freight rates to remain unstable for now: Dilip Shah, MD, Prakash Chemical

The current trends in the chemical industry is very volatile. There is a very good demand in the country. All the focus is shifted to India for many chemicals. Prices are too high and there are concerns with availability of raw materials. Freight rates have gone up due to congestion on Chinese ports.

We are moving towards green surfactant products manufacturing: Debashish Vanikar, Rossari Biotech

May 24, 2022

We are moving towards green surfactant products manufacturing: Debashish Vanikar, Rossari Biotech

We see lot of demand emerging in India for Silicones.

Our capex target for FY 21-24 is Rs. 4,500-5,000 Cr : Rajendra V. Gogri, CMD, Aarti Industries Limited

May 24, 2022

Our capex target for FY 21-24 is Rs. 4,500-5,000 Cr : Rajendra V. Gogri, CMD, Aarti Industries Limited

Key milestones achieved by Aarti Industries in the chemicals and pharmaceuticals businesses during FY 2021-22? 

AIL's (Aarti Industries Limited) journey was profound and exemplary in FY 2021-22. With our integrated value chain, diversified product mix, strong technical capabilities, and robust track record, the company emerged as a global partner of choice.  

Some major milestones achieved by Aarti Industries during FY 2021-22 are:

- The company was conferred with the FICCI Company of the Era Award for its immense contribution to the chemical Industry in the past 25 years

- The company was conferred with a Gold Award in the 2021 EcoVadis CSR assessment, placing us among the top 5% of the companies assessed by EcoVadis. Our score improved from 60% in 2020 to 68% in 2021

- On the research and development front, we applied for 44 patents and were granted 11, out of which 8 were international patents

- The company was placed at 3rd position in the chemical sector (amongst 15 chemical companies) with an overall ESG score of 56. CRISIL evaluated independently Top 225 companies across 18 sectors based on their ESG assessment framework (as per information available in public domain) in FY21

- The company was awarded with the Responsible Care Logo post successful completion of RC Gap Assessment for self-imposed ethical commitment for better EHS&S performance and responsible management of chemicals throughout their lifecycle

- On the business front, the company successfully raised Rs. 1,200 crore additional share capital via QIP

- To meet growth aspirations, the company onboarded around 1,500 bright talents and created various growth avenues for internal talent, thereby accomplishing 18% internal growth transitions in FY22 from 12% in FY21

- The company also commissioned a speciality intermediate plant at Dahej for which a 20 year contract agreement was signed. The company also launched API intermediates block at pharmaceutical manufacturing unit in Vapi

- The company's CHRO was conferred as the HR Leader of the Year at the Economic Times Human Capital Awards 2021 

The objective behind the company's move to demerge its pharma business to Aarti Pharmalabs. What's a long term strategy to strengthen the company's position in pharma? 

The pharmaceutical division has been growing consistently over the past few years. The revenues for the pharmaceutical business have grown at a CAGR of 20% over a period of 5 years from Rs. 426 crore in FY17 to Rs. 872 crore in FY21. To create an overall value for our shareholders, and also to enable management of the company to focus and adopt the relevant strategies necessary for promoting growth and expansion, the demerger is being carried out. The demerger of pharma undertaking will facilitate a focused approach to the growth opportunities into respective segments, also enabling the segment to take strategic calls to capture these opportunities to grow. 

Our long-term strategy is for enhancing the company's position in the pharmaceutical segment by focusing on adding new chemistries and value added products. We plan to add 50+ new products in the pharma division with a Capex of Rs. 350 - 500 crore. Strengthening our manufacturing capability, we plan to increase our manufacturing capacity by 1,200 KL with installation of 240 reactors under 10 manufacturing blocks in the next 5 years.  

How will the newly operationalised Phase 2 Unit at Dahej SEZ help the company to diversify its agrochemical intermediates business? 

The new chlorination unit at Jhagadia and specialty chemicals manufacturing unit at Dahej SEZ will cater to end use applications of polymer additives, agrochemicals, dyes pigments, and other speciality chemicals. The additional chlorination manufacturing capabilities will lead to growth in the company’s market share in the international market, further strengthening its position as Top 3 manufacturers globally in terms of product range. This will also provide an opportunity for forward integration. The facility will be ramped up over a period of next 3-4 years with a potential to generate an EBITDA of US $15 million. 

For the Phase 2 unit at Dahej SEZ, we have already received proceeds of Rs. 630 crore as per the terms of the original contract. This unit has now been commissioned and we are planning to increase the capacity utilization to 80-90% in the next two years. With this facility, the Phase 2 unit at Dahej SEZ operational, our existing capacity for the intermediate has been expanded by almost 30 times. This chemical intermediate goes into multiple agro-technical applications as a herbicide and biocide. We plan to supply the intermediate to multiple customers involved in the manufacturing of the technical applications. With the incremental sales of this intermediate, we expect an addition of approximately US $40 million to the top line.  

How is Aarti Research and Technology Centre (ARTC) at Navi Mumbai developing new innovations thereby helping create a robust product pipeline? 

Aarti Research and Technology Centre (ARTC) is a state-of-the-art research facility, which has been set up to accelerate the development of new products driving future growth. Our R&D team has 200+ scientists for the chemical segment and has a strong analytical and process safety capabilities to support safe and efficient new product development. We are also working on setting up an engineering lab and an industrial biology lab at ARTC in the coming year. In the past couple of years, a total of 5,304 experiments have been conducted at ARTC. ARTC has been recommended for continued certification for ISO 27001:2013 Standard.  

The objective of this research centre is to develop the most optimal and cost-effective process for a given product, with a primary emphasis on process safety and environmental impact. This has led us to develop some process innovations in the last 2 years and we have filed for provisional patents for some of these innovations. Our strategy is to create chemistry and technology platforms and our value-chain approach has enabled us to create a robust product pipeline to drive growth in future. In addition to ARTC, we have three more Research & Development centres located at Vapi and Dombivali. Our advanced analytical and process safety services offerings are now available for broader industries to specifically facilitate MSMEs. 

What are the focus areas of Aarti's ESG initiatives and its reflection on the company product portfolio? 

The company has conducted its materiality assessment in FY 2020-21 by interacting with its internal and external stakeholders to identify the focus areas. The focus areas are: Energy and carbon emission; water and effluent; occupational health and safety; compliance; human rights; and business ethics. 

ESG has provided us with significant opportunities to optimize and expand our product portfolio. Our product portfolio will gradually increase with the products manufactured from less hazardous processes or green chemistry having minimal impact on the environment.  

On the R&D front, the company is planning 40+ products for chemicals and 50+ products for pharmaceuticals. What’s your R&D plan for FY 2022-23? 

In the chemical segment, our primary focus in FY23 is to develop and scale up products that form a part of our chlorotoluene value chain. We are developing capabilities in new chemistries such as photochlorination, ammoxidation and speciality fluorination. We are also working on some customer-specific projects that may reach the commercial stage in FY 2024-25. We are planning to invest more than Rs. 100 crore for Research & Development in the current financial year. 

New verticals where you are focusing during FY 2022-23 and its impact? 

For FY 2022-23, we are focussed on the development and execution of the chlorotoluene value chain. At the same time, we are working on creating long-term partnerships with global companies to manufacture in India. We plan to do this by leveraging our sustainability track record, value chain & chemistry platforms, and global trends such as the growing relevance of the China + 1 model. We are exploring opportunities in sunrise sectors such as battery and electronic chemicals and planning our foray into industrial biotechnology. 

What is the Capex forecast for FY 2022-23 with respect to Chemicals and Pharmaceuticals? Projects where you are investing? 

Our Capex target for FY 21-24 has been Rs. 4,500 - 5,000 crore of which Rs. 1,200 crore has been utilized in FY 2021-22 and the rest is planned to be spent in the coming couple of years. Some key Capex initiatives for these two years: USFDA capacities expansion at Tarapur for API units; Commencement of manufacturing unit for unit for 3rd long term contract at Jhagadia; Capacity expansion for NCB manufacturing facility at Vapi; and Expansion cum asset upgradation for Acid Unit at Vapi. 

The company is also undertaking several expansions, asset restoration, and sustainability initiatives across existing facilities. The company is also in the process of adding Chlorotoluene range and other value added products (40+ products for chemicals and 50+ products for pharma).  

The company is taking quantum lead on sustainability as the focus is on ‘Right chemistry for better tomorrow’. What are your FY 2022-23 plans for sustainability? 

Our FY 2022-23 plans are focused on climate change issues. Aarti Industries is going for a quantum jump in reduction of its emissions through the use of renewables in its energy mix and other strategic initiatives. We are planning for more dual fired boilers (coal and biofuel). We have signed a contract for 13.5 Megawatts of hybrid renewable (solar and wind) sources of electricity. Through these initiatives, we will substantially reduce our carbon footprint. 

We have planned several initiatives for enhancing the process safety across all our processes to make our operation intrinsically safe. We are also collaborating with business partners to imbibe ESG practices in their operations to ensure a sustainable supply chain.

Note: This interview has also been published on Chemical Industry Outlook 2022 and here's the link to view full version of the annual compendium.

Preventive maintenance and using AI to predict better models for customers is our mission: Lawrence Ng, VP, Sales - APJ, Aspen Technology

May 11, 2022

Preventive maintenance and using AI to predict better models for customers is our mission: Lawrence Ng, VP, Sales - APJ, Aspen Technology

How is Aspen Technology gearing up to help Chemicals and Petrochemicals companies reach new levels of operational excellence and also achieve ambitious sustainability targets? 
As you are aware, the sustainability targets are not easy to reach. In order to achieve breakthroughs, we have been using a lot of new innovations especially in the areas of Artificial Intelligence (AI) and Machine Learning (ML), incorporating more software functionalities, so that the industry can use them. We also have several challenges in order to help our customers gear towards a higher level of operational excellence. 
 
Companies need to also make themselves attractive to new talent or it will be difficult to retain new talent, especially in industries like oil and gas, where the fight is ongoing for talent, as newer technologies can entice them away. In order to make our customers attractive, the company has built AI and ML into its software. 
 
I also feel that we can make contributions to the environment by using technologies from Aspen Technology, customers can optimize processes, reduce wastage, and reduce carbon footprint. Overall, customers also become more efficient as employers. Lastly, with AI and ML, we help our customers to acquire new talent and make them more productive as quickly as possible.
 
We see a lot of DeepTech technologies like AI, ML, Internet of Things (IoT), Robotic Process Automation (RPA), Blockchain, Intelligent Automation (IA), and Cyber Security deployed in AspenTech software. How are companies accelerating and transforming keeping in view DeepTech technologies? 
In this area, the impact is tremendous. There is a huge amount of data available nowadays with companies and 50% of the companies don’t even know where 90% of the data is located. Such technologies help companies to do predictions based on data and do automation of the process. First, is in the area of preventive maintenance where they can predict the health of the equipment. Second, in the area of modelling, AspenTech is pioneering non-linear modelling to help customers to plan and model even accurate simulations. 
 
Taking traditional modelling and using AI to predict better models for our customers thereby making it easier for customers is our mission. These should work longer, safer, and easier.
 
Are the solutions provided by you secure in terms of cyber security?
Yes, our solutions remain secure within the customer’s deployed security solutions.
 
What is the size of asset optimization software in 2022? How do you see the Asia Pacific, Japan and Indian market growth in 2022? 
It is hard to put an exact number to the size, but I can see growth in Asia Pacific, especially in South Korea and Japan. Areas, such as refining, petrochemical, oil & gas, LNG, present good potential as well. For example, it is reported that the Australian government is planning to invest in the industry over the next five years. In India, the government has an ambitious plan for the petrochemicals and oil & gas industry to produce nationally. I am bullish about the mentioned areas in Asia Pacific in the near future.
 
The way AspenTech is moving forward, the company is not far away from providing a completely automated plant where all the functions are getting monitored by sensors and data is stored in computers? Is AspenTech working on such models and when do we see it happening? 
At AspenTech our philosophy is augmenting the human experience. We believe humans and processes should work together and complement each other so in our optimization philosophy there are three parts. One, is the plant utilizes the data to get smarter, increasing accuracy, and sharper prediction. Second, it is self-adapting in real time adaptation to changing conditions and adjust, commit our targets. Finally, it is self-sustaining. So not only will it improve the solution but also can self-optimize. All of these aspects have the human in the centre, so the human, process, and machine work together. That is what our vision is in terms of self-optimization.
 
How bullish are you about India in terms of your software? 
I am very excited about developments in India. Every week, I receive news about initiatives and projects coming up in India. I have read about plastic parks, new refineries being built, so I am very bullish. I think India is definitely on its way to becoming a bigger economy and AspenTech is ready to serve the needs of our clients.
 
Why stepping up digitalization and industrial AI is crucial for efficiency, productivity, and organizational excellence in the Chemicals and Petrochemicals sector? 
It is important to make such technology available to the customers so that they can operate in a safer way. Here they can have sensors that can prevent disruption, for example capturing the data, analysing, and predicting when the next disruption will be such that they can operate safely and save lives. Safety is of paramount interest besides improving the profit margins and extending the life of their assets. 
 
How does AspenTech help in asset management and realizing sustainability and profitability goals? Any study which proves that digitization and asset management help companies? 
We believe that there is tangible value for the customers. Globally, customers have derived US $59 million in value, and this is evident how AspenTech has helped customers achieve tangible value.
 
AspenTech is working on 50 sample models related to end-to-end carbon capture, emission reduction, bio-based feedstock, hydrogen economy, and materials recycling. How will these models help Chemicals and Petrochemicals companies and how flexible are you with these sample models? 
These 50 sample models are the accumulation of our domain expertise over the last 40 years. For example, the hydrogen economy is where we design the keys to innovation, rapidly scale up, and optimize operating strategies. We develop technologies for end-to-end carbon capture -- including carbon dioxide capturing from fuel combustion, cleaner transport, and develop storage options. We integrate the bio-based feedstock with existing production processes. 
 
In areas of emission reduction, we track and reduce emissions across planning, operations, supply chains, and utility sourcing. In the areas of material efficiency recycling, we have bio-simulations and scale up solutions, and supply chain for post-consumer recovery. Sustainability sample models are for our customers to choose and use in these areas. Additional unlocking of values could be done in consultation with our consultants who will understand the requirements of the customers. 
 
We always believe that we have to be problem solvers and we need to understand our customer needs, look at the problems they have and help them using these sample models to achieve optimally what our customers are desiring in a collaborative manner.
 
Since you come from Cisco and Oracle background, you would have heard CIOs looking at reducing their IT costs. AspenTech is considered to be an industrial AI company so how does this tag help your company and how does it help in reducing automation cost for clients? 
When I was in IT companies, often there was a struggle in terms of how we show real values to our customers. In AspenTech, we have established ourselves as trusted advisers to the companies because we have proven 40 years of knowledge and domain expertise. In this aspect, technology has helped us a great deal because of our rich history. Moving forward, we have always established true values in terms of optimization. We are able to pinpoint to our customers how much value they can derive. 
 
I was amazed when I joined AspenTech and found that some of our customers could recover the cost of investments within months or even weeks after implementing the solution. This shows the power of Industrial AI companies like us are now helping our clients to grow. I am proud that we are able to establish the very true value that we are able to measure.
 
How can customers drive organizational excellence with AspenTech? 
Technology alone is not responsible for unlocking success. People are an important factor to consider and in order to scale up, business requires the right culture, right competencies, and capabilities. The right skills and capabilities will drive changes in the organization, process and the people. These three pillars - organization, people and sustainability will design the future. 
 
Another important area is that of continuous learning. I tell customers to always keep learning more to unlock their true potential. There are a lot of features of AspenTech products that they need to unlock. Also, in terms of capabilities, how do you sustain the sustained sustenance, there is true learning, succession planning, continuous investment into the organization and people. And all of these when well supported by automation, then journey to digitalization will definitely create an impact for the company.
 
How is Aspen Technology supporting the world with the dual challenge of meeting the needs of an expanding population while also addressing critical sustainability imperatives, such as decarbonization and waste reduction? 
The dual challenge is about meeting the growing demand for resources from a growing population, with increasing standards of living, while also addressing sustainability goals. The dual challenge requires companies and industries to achieve new levels of operational excellence.
 
For example, AspenTech’s customers create about US $59 billion in value every year. The annual value delivered by European refining customers works out to US $4.2 billion of that value every year. With an incremental US $4.2 billion in profitability, these customers also managed to reduce about 2.3 million metric tons of carbon dioxide as a result. Hence, it is possible to achieve both profitability and sustainability. In the longer term, these refiners are working towards Net Zero Carbon goals in the next few decades.
 
Recently, in India, AspenTech was awarded Digital Technology Provider of the Year 2021 by the Federation of Indian Petroleum Industry (FIPI). A landmark Bharat Petroleum Corporation Limited (BPCL) customer case study anchored this win by showcasing how Mumbai Refinery adopted a real-time digital twin, based on the use of AspenTech’s digital twin, and Advanced Process Control (APC) products.
 
The digital twin has been implemented online and integrated with an associated advanced process control (APC) solution such that the optimization engineer uses the digital twin, on an hourly basis to provide information, on adjusting the APC levers for optimum steam use efficiency, and amine utilization effectiveness. This customer had deployed Aspen DMC3 software with a digital twinning approach – to achieve about US $1 million savings in utilities annually. 
 
With an estimated payback of less than six months, the company could effectively reduce energy usage in changing sulphur content in crude state, which had originally resulted in sub-optimal amine regeneration.

Doubling epoxy manufacturing capacity and expanding overseas operations: Jayant V. Dhobley, Business Head & CEO - Global Chemicals, Aditya Birla Group

May 09, 2022

Doubling epoxy manufacturing capacity and expanding overseas operations: Jayant V. Dhobley, Business Head & CEO - Global Chemicals, Aditya Birla Group

What are the growth drivers for India’s specialty chemicals industry vis-à-vis the global market?
The Indian specialty chemicals industry currently comprises a fraction of the global market. We are talking of a domestic industry whose projected size by FY 2025 will be US $64 billion against a trillion-dollar projected global industry. The demand for advanced materials like specialty chemicals tends to grow faster than the GDP, especially in consumption-based economies like ours, a 12% annual growth rate for the sector is not unreasonable if the GDP grows at 7-9%. 
 
Over the past decades, India’s end markets in electronics, industrial farming, and processed foods have not grown very fast, and due to this, the domestic industry largely developed as a vendor supplying molecules and intermediates to global players. However, the current broad-based economic growth creates opportunities for domestic players to go beyond their narrow focus on pharma APIs, agrochemical intermediates, dyes, pigments and coatings, and add new product lines across polymers, specialty materials, nutraceuticals, food & feed additives, etc. 
 
What has been the key growth and expansion milestones for Aditya Birla Chemicals in FY 2021-22? 
As a group, we have a profitable chemical portfolio with a revenue of about US $2 billion today. One of our recent milestones was the launch of our new chlor-alkali site at Balabhadrapuram in Andhra Pradesh. We also announced the doubling of our epoxy manufacturing capacity and expanding our overseas operations in inorganic phosphates and sulphites. We are committed to profitable growth across our business.
 
What are the factors instrumental in Aditya Birla Chemicals’ global leadership across diverse chemical segments?
For one, we got into the business quite early. The Aditya Birla Group was probably the first industrial house to expand outside India, and the setting up of our operations in Thailand was a pioneering step. Incidentally, not many people know that Aditya Birla, was a chemical engineer from MIT, and he was at the forefront of setting up of our businesses in peroxides, sulphites, phosphates, and chlor-alkali.
 
Secondly, we always aimed to develop leadership positions in each of these businesses. We wanted to be – and are – India’s largest chlor-alkali player. Within certain niche segments of phosphates and sulphites, like blends and value-added formulations, we are leaders as well. Our peroxide business enjoys market leadership in Southeast Asia, particularly in high-purity hydrogen peroxides used for electronic manufacturing. We have also continuously invested in products, formulations, and capacity expansion in epoxy business, which is arguably the world’s fifth-largest today. 
 
During COVID-19, ensuring public hygiene was the biggest priority, and we provided a robust platform to authorities and society at large to deal with the pandemic and beyond. 
 
Clean and safe water is a large part of public health and hygiene, and chlorine has a big role to play. With the strong chlor-alkali portfolio, we were able to supply vital chlorine-based products to municipal authorities, government bodies like the Namami Gange Programme team, as well as to private industries to tackle the hygiene challenge. In each of these cases, we didn’t just supply the products; we provided a full solution across the value chain. This is also required because the water quality across sources like rivers and wells varies widely, and hence the solution also varies. 
 
Besides this, some of our customers in the chlorine value chain also developed pharma products for medical use during the pandemic.
 
Did you experience any fluctuation in demand due to COVID-19?
Yes, but the upside has been more than the downside. While there was a demand reduction for chlorine products used in the PVC industry due to the slump in construction, the demand for products related to water and sanitation, pharmaceuticals, and agrochemicals increased. Another area that was positively impacted was consumer electronics, because people were staying at home and using mobile phones and laptops much more, which drove up the demand for epoxy. 
 
How distributed production centres enabled Aditya Birla Group to meet global demand?
Our chlor-alkali market is a domestic one, because it’s not easy to transport caustic soda or chlorine over long distances. Our epoxy portfolio has customers across Asia, and we serve them through manufacturing units in India, Thailand, and Germany. These products find application in industries like wind energy, automotive coatings and composites, etc. The demand for phosphates and sulphites is completely global. We have a nice portfolio of blends and formulations for ‘feed and food’, which are manufactured in Thailand and exported around the world. 
 
In a nutshell, while we play in multiple global value chains, the Indian specialty market is the world’s fastest-growing, and that represents the biggest opportunity for the industry.
 
What is the future of the Indian specialty industry and ABG chemicals’ role in it? 
The small size of the Indian specialty industry creates a huge runway for growth. For instance, Aditya Birla Chemicals is capitalising on the growth potential in the chlor-alkali value chain by adding manufacturing units for epichlorohydrin and chloromethane in Gujarat, and a monochloroacetic acid factory in Andhra Pradesh. 
 
We are bullish on epoxy, because of the growth in sectors like automotive, electronics, and construction. The same goes for the food industry, which will demand more food additives, triggering demand for phosphates and sulphites. We are also evaluating other products and chemistries to get into.
 
How are global sustainability trends affecting your business? 
There are two parts to it. As a business we are shifting gradually to renewable power, because power is a big requirement for us. Whenever we set up a new plant, we also look at how we can minimise our water footprint and move towards zero liquid discharge. 
Simultaneously, we make products more sustainable across value chains. For instance, the strength-to-weight ratio of our epoxies makes them ideal for reducing fuel consumption (in conventional automobiles) and for electric cars.  
 
In India, we face huge farm-to-table food wastages due to inefficient transport and storage. Additives that improve shelf-life extension form an important part of a sustainable future. Ditto for water. In a water-scarce country like India, maximising water potability through better treatment is very important in the global warming context.
 
What are your current priorities on the R&D and product innovation front?
We have some exciting products in the customer trial stage. The first is Recyclamine, a patented technology that allows epoxy thermosets which are non-recyclable to now be recovered, reused, and repurposed. Through this technology, we can facilitate end-of-life recycling and zero waste manufacturing thus moving closer towards a circular economy. This provides a paradigm shift in many industries that use epoxy based composites, minimizing ecological, environmental, and societal impacts of composite waste. 
 
Second, we are creating the next generation of long-chain chlorinated paraffin wax plasticisers that have a better sustainability and toxicity profile. These are just a couple of recent examples.
 
What are the growth areas you are targeting in 2022 and beyond?
Our growth areas essentially align with the growth of the industry. India is seeing strong demand growth more or less across all sectors of the economy, which means that the growth is very broad based and independent of any particular end market or customer. That’s good news for us and the entire industry. 
 
Note: This interview has also been published on Chemical Industry Outlook 2022 and here's the link to view full version of the annual compendium.

Interview with Gaurav Bawa, Sr. Vice President, WIKA India Group

April 27, 2022

Interview with Gaurav Bawa, Sr. Vice President, WIKA India Group

WIKA Instruments India Pvt. Ltd, established on September 2, 1997, is a wholly-owned subsidiary of WIKA Alexander Wiegand SE & Co. KG, Germany, a global market leader in pressure, temperature and level measurement technology. WIKA Instruments India has established and operates a quality and environment management system according to requirements of international standard (ISO 9001, ISO 14001).

We have seen a very good recovery in demand in H2 2021: Vikas Kulkarni, MD, Bostik India

December 26, 2021

We have seen a very good recovery in demand in H2 2021: Vikas Kulkarni, MD, Bostik India

Vikas Kulkarni, MD, Bostik India has over 25 years of experience and focuses on transforming the culture and performance of the organization through building organizational capability, robust strategies, and market access through strategic partnership & acquisition.

Kulkarni spoke exclusively to Pravin Prashant, Editor, Indian Chemical News on global trends and size of adhesives solutions segment, market size globally and India, Bostik market share, size of building & construction segment, size of industrial solution, size of disposable hygiene, new innovations and products, and 2022 plans.         

What are the global trends in the adhesive solutions segment and how do you compare it with India?

The global growth in the adhesive solutions segment is 3 - 4% while in India it is in double digits. This high growth market means there are many opportunities for us to expand our presence, especially surfing on global trends such as: Construction Market - Energy efficiency, premium and performing solution, increase of DIY activities in emerging regions; and Industrial Adhesives - lightweight equipment and increase durability and sustainability, higher demand in electronics and batteries.

As the adhesive solutions segment of Arkema, we are in a unique position to stay connected to emerging trends in a variety of sectors and seize the emerging opportunities. In all those markets, we have strengthened our technologies and offerings in the past years and we are well positioned in all of them to keep growing, in India and around the world.

What is the size of the adhesive solutions market globally in 2021 and forecast for 2022?

The global adhesives solutions market in 2021 is €60 billion and the forecast is that it will reach €63 billion in 2022. We expect growth for all segments, with particularly strong drive for the Durable Goods and Construction segments, and promising prospects for the Packaging and Hygiene industries.

What is the size of the Indian adhesive solutions market in 2021 and forecast for 2022? What is the market share of Bostik in India and how do you plan to increase your market share?

Market size in India for adhesives & sealants is estimated at Rs. 15,000 crore. Bostik is the third top global player in the adhesives industry. In India, we are comparatively smaller since we do not currently participate in many market segments. However, in segments in which Bostik participates, we are among the top three players. 

We are investing to grow our position in the market by strengthening our technologies, especially in the wake of the Fixatti and Ashland acquisitions to support our growth. In addition to this, acquisitions made by Bostik in the engineering adhesives space, positions us very well with technologies required in electronics and automotive segments. We have a clear plan to foray into these segments as also into consumer adhesives in 2022.

We have some hero products in each of these segments that we will bring into India. We will continue to invest in our talent, as we have done in the last two years to get the best in class people available to the industry. We will continue to invest in capital/assets as needed to expand our capacities and build new ones to support business growth. We also continue to look out for inorganic growth and strategic alliances to accelerate our growth.

Size of Indian adhesive solutions market for:

Building & construction segment

Tile Adhesives Tiling market is estimated to be around Rs. 1,200 crore. Market is at a very nascent stage of growth as almost 90% of the market is still using traditional sand, cement, mortar methods of application. However, we are witnessing a shift and expect the market to grow at a CAGR at 13% as a result of penetration conversion from traditional methods to bagged tile adhesives. Apart from this, the other solutions we offer to the B&C segments are WP, Repair Products & Sealants. Each of these markets is quite large and poised to continue to grow at 8-10%.

Industrial Solutions

The Indian adhesive market is estimated at around Rs. 9,000 crore, expected to grow at 11% per annum. The growth will vary across different segments. We see faster growth in Paper & Packaging, Hygiene, Automotive, and Energy and slightly lower growth in mature markets like Footwear and Construction. The Make in India campaign should give impetus to sectors like aerospace, defense, and electronics. Consumer adhesives is a huge market and it will continue to grow, benefiting from India’s demographics.

We have started seeing a trend towards sustainability with many customers looking for recyclable, biodegradable, low VOC and solvent free products. We, at Bostik, are gearing ourselves up to be ready with solutions that will be needed by the customer in the future.

Disposable hygiene segment

The market size is about Rs. 500 crore. It will grow in double digits in next few years, through penetration as disposable incomes go up in both urban and rural India. Industry is moving towards thin substrates to make end-products lighter. Bostik continues to innovate to meet changing needs for our customers. 

What are the new innovations that the company is working on in global R&D labs? Please elaborate?

As the adhesive solutions segment of Arkema, we focus on creating innovative specialty adhesive solutions that contribute to a sustainable world. This means both: More sustainable adhesives, e.g. made out of recycled/bio sourced materials, which are themselves recyclable/compostable, which use less resources while they are produced, etc.; and smart adhesive solutions that help our customers reach their own sustainability goals, for instance by contributing to producing lighter and smaller objects, allowing better insulation to lower the carbon footprint of building, creating safer products, both for construction and hygiene; and enabling recyclability or composability of packaging.

This, and more, is what our global R&D labs are working on, alongside our business teams, clients and partners – Bostik’s culture of innovation is very much collaborative, even R&D at our lab is the result of a highly collaborative process.

How has the performance of Bostik India been in 2021 and what are your plans for 2022?

We have seen a very good recovery in demand in the second half of 2021 across all our business units. Raw material inflation has been a big challenge for the industry. The global supply chain disruption was another challenge to contend with. Overall, Bostik has been able to navigate these challenges quite well and continued to serve our customers.

We expect demand to continue to grow and some of the supply chain challenges to abate in 2022. Our plans for 2022 include expanding our footprint into some new segments like electronics, technical textile, and consumer. We will continue to innovate to meet changing customer requirements & bring the products that are sustainable to meet our own and customer’s sustainability goals.

Bostik has introduced a new series of GCR adhesive and sealant solutions called Silane-modified Sealant Products (SMPs) for the transport industry. Are you planning to launch these products in India?

We have launched the new GCR range to complement our existing top line products - SMP. The market is growing in India. SMP has low VOC and no Isocyanate making it environment friendly.

We cater to various applications in bus, metro and rail segments. As we launch the new Global Core range of products, we bring in the technology to address various other applications such as glazing, sheet metal bonding, and structural bonding. We have core experience on working with various OEMs across the globe and synergies will help us replicate here in India as well. With our wide range of sealants, we are also aiming at markets beyond transportation such as appliances and elevators.

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