India is the second largest contributor to IMCD Group: Narendra Varde, Managing Director, IMCD India & Bangladesh

We believe that finding the right synergies ensures that our acquisitions have been a force multiplier of our human capital

  • June 15, 2024

Emerging market scenario for chemical distribution in India? 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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