Aiming expansion and long-term value creation to become leader in the pigment industry: Ishan Raveshia, Managing Director, VOXCO Pigments and Chemicals

VOXCO is committing a significant Capex of approximately Rs. 60 crores towards this expansion endeavour

  • July 04, 2024

What are the key trends/challenges in organic and inorganic pigments in 2024?  

Over the past 150 years, the manufacturing landscape for pigments, both organic and inorganic has undergone significant shifts. Originally concentrated in Europe, the US, and Japan, production has progressively moved to countries like China and India over the last many decades. This trend is expected to continue for the foreseeable future. Simultaneously, there's a growing emphasis on sustainability in pigment manufacturing, with India emerging as a key player in incorporating eco-friendly practices, such as utilizing sustainable materials and promoting energy efficiency.

However, manufacturers are encountering several challenges in this evolving market. Intense competition has led to pigments being commoditized due to large-scale production and vertical integration. Moreover, the presence of unregulated and disorganized markets adds complexity, although this is expected to change, particularly in India, following in the footsteps of China's regulatory adjustments.

The industry is witnessing a shift towards environmentally friendly and high-performance pigment chemistries, with functional innovations extending beyond traditional color and aesthetics. Functional advancements are gaining traction, particularly in coatings and plastics, where pigments are required to meet stringent performance criteria. These include attributes like durability, industrial resilience, decorative appeal, as well as temperature and weather resistance. Given the diverse applications and extreme competitiveness, a one-size-fits-all approach is no longer viable, necessitating a multifaceted application structure to meet varying industry and end consumer needs. 

What strategies India should adopt to become a global manufacturing hub for organic and inorganic pigments? What role do you see for VOXCO in contributing to this goal?  

The 'Make in India' and “China plus One” policy has emerged as a catalyst for various industries, bolstering India's position as a manufacturing hub. The government's initiatives have spurred robust growth, with an impact on sectors like chemicals, intermediates and pigments. As a result, India has positioned itself as a key player for these products in both domestic and global markets.

To capitalize on this momentum, certain key areas demand attention from the Indian industry. Firstly, there's a pressing need for backward integration to ensure a stable supply of raw materials and intermediates. This strategic move can enhance self-sufficiency and reduce dependency on external sources.

Secondly, enhancing production efficiency is crucial for sustainable growth. By adopting world-class production parameters and technologies, companies can optimize their operations and meet global standards. This not only improves competitiveness but also drives value for customers.

VOXCO is pursuing a comprehensive growth strategy. This includes four major stages:

Scaling up Production: Recognizing the need for large-scale production to cater to global demand over the next decade, VOXCO is investing in technologies and infrastructure to establish itself as a leading manufacturer.

Building Expertise: With human resources being a critical factor, VOXCO emphasizes team building based on knowledge and expertise, especially in the specialized field of pigment chemistry. Developing an in-house talent pool ensures the company's capability to innovate and adapt to evolving market trends.

Strengthening Brand Image: VOXCO understands the significance of brand reputation and market presence. By forging strategic partnerships and penetrating key domestic and international markets, the company aims to solidify its brand identity built on values and commitment.

Backward Integration and Sustainability: Recognizing the importance of self-reliance and sustainability, VOXCO is exploring opportunities for backward integration into intermediates and sustainable raw materials. This strategic focus aligns with the company's growth trajectory and ensures long-term viability.

By executing these strategic initiatives, VOXCO is poised to further enhance its position as a leader in the global pigment and chemical industry, leveraging the opportunities presented by India's evolving manufacturing landscape. 

Company's total manufacturing capacity? What's your plan for the next two years? 

VOXCO commenced its journey in 2003 under an exclusive manufacturing partnership with CIBA, a world renowned pigment manufacturing entity. By 2009, the company transitioned to direct sales, marking the beginning of a remarkable trajectory marked by significant achievements.

Currently, VOXCO boasts substantial production capacities across certain pigment categories. Its inorganic production capacity, notably for chrome yellow and molybdate orange, stands impressively at 6,000 tonnes per annum, making it one of the largest in India. Additionally, the company's capacity for anti-corrosive pigments reaches 1,200 tonnes per annum, while organic pigments contribute around 1,500 tonnes. Presently, the inorganic segment dominates, accounting for 70-75% of total sales, with production averaging total capacity utilization of 80-85%.

Looking ahead, VOXCO is poised for further expansion and long-term value creation. The company's strategic roadmap includes the establishment of new manufacturing facilities every two to three years over the next decade. With its existing manufacturing presence spanning across four production sites in Vapi and Sarigam, VOXCO is strategically advancing its growth trajectory by pursuing both organic and inorganic routes. 

The inorganic growth would entail acquiring middle-level pigment manufacturing companies within the next three to five years, as a strategic move aimed at unlocking synergies and capturing strategic value propositions within the industry landscape. Through these endeavours, VOXCO is poised to consolidate its position as a formidable player in the pigment manufacturing sector, leveraging strategic acquisitions and organic growth initiatives to drive sustained success. 

VOXCO has acquired land in Saykha. Capex investment in the plant and when are you planning to commission it? 

VOXCO's plans for production expansion have been in motion for nearly a decade, with land acquisition in Saykha – Dahej occurring approximately 7 to 8 years ago. The original timeline aimed to commence production at Dahej was FY 2022-23; however, unforeseen circumstances, including the impact of COVID-19 and fluctuations in the market, led to delays.

Nevertheless, VOXCO has in recent years invested and expanded its capacities both in Vapi and Sarigam production sites. The company anticipates launching the first phase of production, featuring a capacity of 2,500 tonnes for specific organic pigment chemistries in the coming year. Following this initial phase, VOXCO plans to progressively expand its capacity over the subsequent three years, adding another 2,500 tonnes. The total production capacity upon completion will reach 5,000 tonnes, leveraging the 25,000 sq. meter property to its full potential.

In terms of investment, VOXCO is committing a significant Capex of approximately Rs. 60 crores towards this expansion endeavour. Phase 1 will absorb an investment of Rs. 40 crores, with the remaining funds allocated to Phase 2. This strategic investment accentuates VOXCO's commitment to growth and its confidence in the future opportunities in the coloured pigment market.

VOXCO is an exclusive distributor of multiple international companies. Please elaborate? 

VOXCO has forged strategic partnerships with five companies, each serving as an exclusive distributor for the Indian market. One such partner is CINIC- China, a renowned manufacturing company for its high-performance organic pigments catering to high-value applications in coatings and plastic masterbatches.

Additionally, VOXCO collaborates with SNCZ - France, a leading global French company specializing in anticorrosive pigments and environmentally friendly pigments, particularly in the realm of functional chemistry for anti-corrosion applications.

Further bolstering its portfolio, VOXCO has partnered with HABICH - Austria, leveraging its strong manufacturing capabilities for their high-performance inorganic chemistries along with heavy metal free hybrid pigments to offer innovative solutions to its clientele.

Another significant collaboration is with PROMINDSA -Spain a world market leader specializing for Inorganic pigments in protective and marine coatings. This partnership enables VOXCO to offer a comprehensive range of coating solutions tailored to the specific needs of its protective and marine strategic customers.

Lastly, VOXCO is associated with CHTI - China, the second-largest manufacturing company for Titanium Dioxide in China, focusing its sales in the western region of India. This partnership aims to deliver enhanced value to customers through a synergistic approach, leveraging CHTI's products with VOXCO's domestic market presence.

Financial performance in FY 2023-24 and what's your plan for FY 2024-25? 

VOXCO's growth trajectory remains robust, with an annual expansion rate ranging between 10-12%. Notably, in the fiscal year 2023-24, the company achieved a growth of 10% by value and an impressive 20% by volume. This uptick in volume growth was facilitated by a decrease in raw material prices during the same period. However, despite the volume growth, the increase in value was limited to 10% due to the same reason.

Looking ahead, VOXCO anticipates sustained growth momentum. In the coming fiscal year, the company forecasts a value growth of 15%, complemented by a volume growth of 20%. This optimistic outlook is buoyed by the strengthening of new production capacities, particularly in the organic segment.

In terms of revenue, VOXCO recorded approximately US $30 million in the fiscal year 2023-24. Building upon this foundation, the company sets its sights on achieving a revenue range of US $36-38 million in the fiscal year 2024-25.

Central to VOXCO's growth strategy is a steadfast commitment to the 'Make in India' initiative, reflecting the company's dedication to bolstering domestic manufacturing capabilities. This commitment is further underscored by VOXCO's expansive global footprint, with products being sold in over 52 countries.

In terms of market distribution, VOXCO has witnessed robust growth in both domestic and international markets over a period of time. The company is extremely optimistic for its sales in the domestic markets with current 65% revenue from the domestic sales and 35% revenue from the international market. 

The company anticipates a gradual shift in this ratio, projecting a 60:40 distribution between domestic and international revenues as it continues to sustainably grow in near future. 

International markets that you are planning to target to sell your products and how are you planning to target these countries? 

VOXCO's foremost objective is to cater to the evolving needs and delivering value to its strategic Indian customers. This commitment is underscored by the company's strategic expansion plan, which entails increasing production capacities every two years. With domestic customers experiencing steady growth rates of 8-10% annually, VOXCO remains dedicated to meeting their demands and exceeding their expectations.

Looking ahead, VOXCO is poised to extend its footprint beyond Indian shores, targeting key markets in the USA, Mexico, South America, and Europe over the next two years. This strategic initiative aligns with the company's vision to grow its brand image and establish a stronger global presence. 

What new products are you developing at Vapi R&D centre? 

R&D stands as a cornerstone of VOXCO's operations, embodying our commitment to delivering enhanced value to our customers. We keenly observe the evolving landscape of infrastructure and road construction in India, recognizing the growing demand for innovative solutions. Recently, we encountered a challenge in the realm of hot melt road marking products, historically sourced from Canada. 

Moreover, our focus extends to mobility applications, where we have invested significantly in developing high-performance products tailored to meet the stringent demands of this sector. By leveraging and working on technology, we aim to address emerging challenges and capitalize on evolving market trends, positioning ourselves as a trusted partner for mobility solutions.

Additionally, VOXCO places a strong emphasis on functional pigments, recognizing their potential to drive sustainable innovation. Our efforts in this domain include the development of environment-friendly pigments and easily dispersible variants, designed to optimize production processes, reduce energy consumption, and enhance production efficiency. By prioritizing innovation and sustainability, VOXCO would like to remain at the forefront of value creation, continually striving to exceed customer expectations and drive positive change in the industry. 

Initiatives that you have started for enhancing process safety across all facilities and processes to make an operation intrinsically safe? 

VOXCO is dedicated to enhancing value and fostering commitment not just for our esteemed customers but also for our internal team and shareholders. Over the years, we have diligently pursued a comprehensive framework aimed at securing ISO 9000, ISO 14001, and ISO 45000 certifications. Our integrated management systems, coupled with a meticulously structured environment and safety policy, underscore our unwavering focus on safety, health, and environmental concerns. 

Rigorous attention to regulatory compliance further underscores our commitment. We continually prioritize safety, health, and environmental considerations, exemplified by our ongoing coordination of numerous projects across our manufacturing sites. 

Sustainability road map and status of Ecovadis certification in FY23? 

As a Silver Ecovardis certified company, we are committed to advancing our sustainability initiatives. Our goal is to continuously improve our certification grades, striving for higher point scores in the years ahead. 

Operating within the realm of sustainability, we diligently coordinate various process parameters to enhance efficiency within our production systems, thereby reducing manufacturing costs through bringing efficiency in our production and focusing on utilization of renewable resources. 

Environmental sustainability should be important to every human being and in our areas of production we establish annual benchmarks to guide our progress and work towards sustainable practices. 

CSR plans with respect to betterment of rural livelihood and education? Projects implemented in FY 2023-24 and plans for FY 2024-25? 

Our core ethos at VOXCO revolves around enriching lives and fostering unwavering commitment to all stakeholders. In line with this vision, we've established the LRC Trust, generously funded by VOXCO and like-minded individuals. This trust is dedicated to promoting empowerment, sustainable development, and social justice. Our primary focus areas encompass providing access to education, healthcare, and livelihood opportunities.  

Notably, we've been deeply involved in advancing girl child education in rural areas of South Gujarat region, striving to break barriers and create avenues for empowerment. Additionally, our efforts extend to healthcare, exemplified by our cataract operation camp last month, which have positively impacted more than 500 individuals, underscoring our dedication to tangible, impactful initiatives within our communities. 


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