Apcotex invests Rs. 200 crore+ last year on two expansion projects: Abhiraj Choksey, Managing Director, Apcotex Industries

  • June 21, 2023

2023 global trends in Synthetic Rubber, Synthetic Latex, and Emulsion Polymers and its implication in India? 

The global synthetic rubber market is expected to grow at a CAGR 4.3% over the next 5 years. The synthetic rubber market is mainly driven by the tyre segment which is the largest end-use segment of synthetic rubber, followed by automotive. Some synthetic rubbers with significant strength are replacing metal parts in vehicles. This reduces the weight of the vehicle and helps in increasing fuel efficiency without compromising on the performance. The trend of reducing greenhouse gas emissions in vehicles has also increased the demand for synthetic rubbers in the automotive industry.

In terms of volume and value, the APAC region is anticipated to experience the highest rise in synthetic rubber use. Indian consumption of synthetic rubber is expected to grow at a CAGR of 6% over the next five years and hence India needs additional capacities in future. In addition to this, the demand of Synthetic Rubber also comes from manufacturing of footwear, sports goods, and other various components. With our specialty grades of rubbers, powders and polyblends, Apcotex is well positioned to cater to the growing demand in India and in the region.

Similarly, synthetic latexes like SB latex, Styrene Acrylic, Pure Acrylic, Vinyl Acetate, Nitrile Latex, etc. are also expected to grow at a CAGR of 4-5%. The major applications being paper & paper board coating, carpet backing, construction, gloves, textile, paints and adhesives, etc. In India, the demand growth is expected to be extremely strong at 8-10% due to population growth, consumer trends, and increase in per capita GDP. Apcotex has one of the broadest ranges of specialty synthetic latex and the company is adding newer grades and products every year. We have recently invested in additional capacity for all our emulsion polymers and also entered the Nitrile Latex market for gloves.

Company's financial performance in FY 2022-23 and plans for FY 2023-24? Key achievements in FY 2022-23?

Apcotex has had its most successful year in FY 2022-23 across all its performance metrics. In spite of several challenges, we clocked our highest annual revenue of almost Rs. 1,100 crore in the last financial year. This was possible on the back of several debottlenecking and quality improvement projects undertaken over the last couple of years. We have made a concerted effort to diversify our business over the last few years – We supply to a range of different industries like paper, paperboard, construction, carpet, textiles, tyre cords, auto components, rice rollers, footwear, etc. but the maximum exposure to any one industry is not more than 20%. Also, while we are primarily an India focused company, more than 20% of our sales in the past year have been in export markets. We expect to increase the percentage of our export sales over the next few years.  

Capex invested in FY2022-23 and plans for FY 2023-24?

Apcotex has invested more than Rs. 200 crore in last year on two expansion projects – one for the first Nitrile Latex plant in India at Valia, Gujarat and the other for a multi-purpose emulsions plant in Taloja, Maharashtra. This will add 85,000 MT of emulsions or around Rs. 600-650 crore to our topline over the next couple of years as the production/sales start ramping up. FY 2023-24 will be a year of consolidation and we do not expect major Capex projects to be undertaken in FY 2023-24. In addition to that, keeping in mind ESG goals, we have invested in a Zero Liquid Discharge (ZLD) plant at our Valia facility.

Future expansion plan with respect to Nitrile Rubber capacity to cater to both domestic and export markets?

We have almost tripled NBR sales over the last six years from the same plant. Being the only NBR manufacturer in India, our intention is to increase NBR capacity from 21 KT to 36 KT at our Valia, Gujarat plant. We will continue to manufacture high quality NBR grades for both domestic and international markets. All the necessary statutory approvals have been obtained and currently we are working through the detailed designing of this project. The final decision on the timing of the investment will be taken over the next few months.

On the export front, Apcotex has a strong global presence in South East Asia, Middle East, and Africa and intends to tap the Asian Markets. What's the strategy for tapping the Asian market?

The Apcotex team has done a fantastic job in growing export markets. We have learned that our business is quite unique and technical so each new country and customer comes with its own distinctive challenges. We have successfully and consistently delivered our customers’ requirements over the last few years. The international customers range from small family businesses to large multinational corporations and this has given us the confidence to spread our wings further. Today, we are successfully selling in many Asian countries as well as the rest of the world. Over the next few years, we will be further investing in sales and distribution reach and penetrate many more markets.   

Apcotex has developed a strong R&D base which has enabled them to develop, manufacture, export products, and compete effectively against global players. What are the new innovations that Apcotex is working on and how it will help in increasing market share in different product categories? 

One of Apcotex’s top priorities over the next few years will be to further strengthen our R&D capabilities. New infrastructure, diverse talent, and innovative projects are being initiated in order to ensure a strong product pipeline. For each of the industries we cater to, we continue to increase the breadth and depth of the products we offer. Of course, a big push over the next few years will be to move towards more environmentally-friendly products and sustainable processes. We will also invest in exploring viable options for green chemistry.   

Apcotex is the only manufacturer of NBR, HSR, and Nitrile Latex in India. Are you planning to set up more such exclusive manufacturing facilities in India? If yes, exclusive products that you are planning to manufacture in India?

As mentioned above, additional capacity for NBR is in the works already. We have the option of further expanding some of our latex emulsion products at marginal investments. There are other adjacencies in specialty emulsions that we are evaluating or developing as we speak. We are exploring several organic and inorganic opportunities to add to our unique products.

Key sustainability and CSR initiatives planned for FY 2023-24?

Apcotex believes that moving towards environmentally friendly processes and products is imperative. We have recently embarked on our ESG journey and over the next 10 years set short, medium, and long-term targets on several KPIs such as increasing green energy consumption at our plants, reducing hazardous waste, reducing energy consumption/MT, reducing water consumption/MT, planting 5,000 trees at our plant sites, etc. We will also work with our vendors and customers to try and reduce GHG emissions across the supply chain.  

We have always believed in giving back to society even before CSR became the norm. Over the last 3 years, the company has undertaken a few strategic projects in the areas of healthcare and education around the areas surrounding our factories and offices. The company is working with Edelgive Foundation, Mumbai and NGO Utthan to carry out strategic, long-term CSR activities in areas of water and sanitation around its Valia plant in Gujarat.

In Taloja, Maharashtra, the company has been working with Deepak Foundation for skill development of youths and women in facility management & services. With Catalysts for Social Action, we have adopted three Child Care Institutions (CCI) in Navi Mumbai, Maharashtra under the ‘Adopt a Home & Livelihood & Aftercare Support’ project. With Seva Sadan Society, Mumbai we have committed to support the English Secondary School for underprivileged children. We continue to look for like-minded partners who help us execute high impact projects in Maharashtra and Gujarat.