Sunil Chari, MD and Co-Founder, Rossari Biotech
What are the global trends in Performance Chemicals in 2021 and how will it impact India?
In 2021, Performance Chemicals will increase by 5-10 per cent globally. The impact of COVID-19 will continue in 2021 and as a result travel restriction would reduce travel. There will be fewer one-to-one interactions, digital meeting and wearing a mask is the new normal. In 2021, the raw material price trend shows that this year, the market will be more volatile because of the uncertainty of availability and new norms laid out by the government. It will impact India in the second half of 2021. The increase in raw material prices will impact the price of finished goods and this will lead to inflation. Presently, there is huge volatility in crude oil and hence the crude oil-based raw material price will increase. The focus is on being more sustainable and how it creates more value from every rupee spent on speciality chemicals, in short, we are talking about Chemistry 5.0.
How would you explain the trends in Textile Specialty Chemicals in 2021 and how will it impact India?
The global textile chemicals market size valued at US $ 23.62 billion in 2018 and is expected to grow at a Compound Annual Growth rate (CAGR) of 4.5 per cent from 2019 to 2025. Environmental concerns associated with textile chemicals have shifted the focus of major manufacturing companies toward green (bio-based) chemicals that are eco-friendly. Companies involved in the manufacture of bio-based chemicals offer cost competitiveness owing to the availability of low-cost feedstock.
There is an increasing demand for sports and activewear on account of the use of antimicrobial finishes for manufacturing such products. Textile chemicals help prevent odour and bacterial infection caused by the sweat trapped in clothing such as undergarments, socks, T-shirts, and other sports apparel. The rising demand for customized solutions is expected to significantly boost the overall product application.
In the Indian context, the fluctuating raw material prices of phenols and surfactants are expected to pose a challenge for the market players to achieve profitability and economies of scale. The majority of manufacturers in India have shifted their focus towards investing in product innovation supported by the Make in India scheme of the government.
Key milestones achieved by Rossari Biotech in FY 2020-21 and plans for FY 2021-22?
Few of the major key milestones achieved in the FY 2020-21 include setting up a Centre of Excellence at IIT, Bombay at Powai, commissioning of the Dahej project, tie-up with CSIA, Mumbai Airport, branded dispensers, and supply sanitisers for the use of passengers, foray into E-commerce by listing HPPC products on the Amazon platform.
Our key priority and strategic aim are to grow across all the areas of application in all our four core chemistry areas that we excel in. As we move ahead, we will continue seeding new businesses with the existing assets. We are working intensely on attaining more and more capabilities and building relevant infrastructure to foray into newer areas where we foresee sizable growth. We reaffirm our commitment to sustainable growth and enhanced value creation and remain resolute to work towards building the ‘Rossari’ of tomorrow. This, in popular parlance, is termed as “Ross-Era 2.0” within our organization.
For the HPPC division in 2020-21, we are very much in control of COVID-19 and hence if we can sustain our business then it is the biggest milestone we have achieved. In the case of Rossari, we retain our customers, sustain the ups and downs due to COVID-19, and last but not least grow by approximately 20 per cent as compared to FY 2019-20. We have started our new plant at Dahej and successfully delivered goods from there. For FY2020-21 we have big plans. Apart from the soaps and detergent business this year we will focus more on paints and coatings; pulp and paper; cement and industry; water and wastewater treatment.
This year we plan to grow over 50 per cent this financial year compared to the last and give more time to new developments.
In the textile business, we manufacture over 1,500 products that find applications across the entire textile value chain. The target plan for FY2021 is to enhance focus on Health, Hygiene & Wellness products resonating with the current situation and increase in profitability. Another target is to add more product lines in Dyeing Auxiliary & Weaving Preparatory segments, such as Sizing and Yarn Lubricants. We also aim to expand the existing portfolio of sustainable and green products.
What are your expectations in terms of revenue and profit during FY 2020-21 and FY 2021-22?
Our revenue and gross profit till the period ended in December 2020 were Rs. 491.12 crore and Rs. 179.54 crore respectively. We are projecting 12-15 per cent growth for FY 2020-21. There is an uptick in our TSC and AHN division from Q2 and has started regaining pre-COVID levels. The HPPC segment has been our major growth driver. The revenue from HPPC business for 9 months is 59 per cent which we expect to grow considering the potential in this segment.
How has the export revenue been for Rossari Biotech and what are your plans concerning exports?
Our total export revenue forms 10-12 per cent of our total revenue which we expect to continue. The domestic markets for the businesses we are in are very huge and it gives us tremendous opportunities to increase our share therefore the focus would be developing domestic markets by continuing the same levels of exports.
What are the key R&D initiatives that the company is focusing on in 2021?
Our new state-of-the-art certified R&D laboratory at Rossari Centre of Excellence at IIT, Bombay is fully equipped with advanced testing and research equipment. Engaged in innovative and developmental research, our R&D lab will become a game-changer in innovation, optimal efficacy, and indigenous technical prowess. It offers numerous benefits such as fruitful partnership and beneficial projects; facilitating alliances with leaders engaged in sustainability, new materials, and performance chemicals; and leveraging PhD projects to tackle long-term problems. These benefits will help us understand the ever-changing needs in the speciality chemical industry and help us in our long-term strategies.
With the new R&D lab, we aim to set-up a new ecosystem that boosts innovation with new technologies and sharper focus. This will help us in creating both sustainable and commercially viable solutions for our customers. The new infrastructure facilities will help us catalyse the faster commercialisation of innovations.
What is your capex plan?
Our budgeted Capex for the Dahej facility is Rs. 108 crores of which we have already spent approximately 80 per cent to date. Instead of project Capex, there will be only maintenance Capex in FY 2021-22.
How is the company striking a balance between environment-friendly policies and sustainable growth?
With regards to scalable and sustainable growth, we have grown our business sustainably – even in the face of formidable odds – and today we are reputed as a stable, sustainable, and robust organization. In addition to our rigid focus on sustainable chemistry, our enduring business is helping us build a sustainable future and deliver continuous value to all our stakeholders. Our customers, vendors, and employees have been equal participants in the journey we have embarked upon. Our strategy, execution, and agility speak for themselves. As the demand for sustainability rises and contributes to our competitive advantage, we continue to realize the value of our sustainability-minded investments. We move ahead with a clear strategic ambition of focusing on the main value to be generated from sustainability and a commitment to drive change.
How will the digital transformation projects initiated by the company be beneficial in the long run?
We at Rossari, thoroughly believe that the future is digital and we have already taken the steps in this direction. Our presence on prominent social media platforms like Facebook, LinkedIn, Instagram and Twitter can be seen with a good number of followers. This is backed by strong and relevant content which keeps the viewer’s interest high.
What are the key CSR initiatives being undertaken by the company and plans for 2021?
In Surat and Silvassa, we granted rented scholarships for higher education, promoted girl child education, and contributed to educational institutions for the distribution of books and education equipment. We also contributed to the establishment of medical health centres. For relief and rehabilitation in Karnataka, the company contributed towards the rehabilitation of disaster-affected areas. Under community empowerment through pan-India activities, we contributed towards community empowerment projects, like setting up homes and hostels for women and orphans, shelter homes, and educational institutes. As India battled the COVID-19 crisis, we pledged our support to help the nation fight against the virus. To make people adopt stricter COVID protocols like wearing a face mask or washing hands, our Healthcare Heroes went above their call of duty.
We partnered with Lepra Society to deliver sanitisers to Bihar and Andhra Pradesh for leprosy patients. We are also associated with an NGO Salute2doctors to assist the medical personnel fighting the Coronavirus by distributing sanitisers and disinfectants to Tier 2 cities in southern India, including Bengaluru, Hyderabad, and Coimbatore, among others. We distributed sanitisers to various sections with our partner Bhilwara-based Prakash Dyechem. We also reached out to underprivileged children in 40 orphanages, childcare facilities, and observation homes in Mumbai, and supplied them with sanitisers and hand washes.
What is the future business outlook for the company in FY 2021-22?
We are excited about the opportunities that lie ahead of us. Our key priority and strategic aim are to grow across all the areas of application in all our four core chemistry areas that we excel in. Further, as the Dahej plant gets commissioned by the end of the year, our short-term goal will continue to attain higher capacity utilisation. As we move ahead, we will continue seeding new businesses with the existing assets. We are working on attaining additional capabilities and building relevant infrastructure to foray into newer areas as we see a lot of promise.
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