As a young, third-generation entrepreneur I am often asked how I feel to have come back to India after five years of education abroad, to my family’s business, and to the chemical industry. Most people assume I was coerced into joining the business, and are surprised and perplexed when I cheerfully say that being part of the chemicals industry has probably been the only thing I’ve always been sure of, from as early as I can remember, most likely the age of three!

Just to set the context: Our company, Soujanya Color is a global leader in sustainable colour solutions, in particular liquid preparations of pigments & dyes. The company was founded by my grandfather Late C. J. Bhumkar about 40 years ago. My mother, Priyamvada Bhumkar has led the company to greater heights; our flagship unit in Mumbai, Asia’s largest colour manufacturing plant was set up under her leadership. Today, we are present in 50 countries across 6 continents, and provide colour to various end-use industries including paints & coatings, printing inks, home & personal care, cosmetics, polyurethanes, polymer composites, agro-products (seed coatings, fertilisers, etc.). Indeed, from the time you wake up till the time you go to bed, including the colours of the printed ink of this compendium, we make everything around us colourful.

Through my childhood visiting our factories being carried around them in my grandfather’s arms, and through my education in chemical engineering at UC Berkeley and Cambridge University, I’ve always been fascinated by the chemicals space, I truly believe that the chemicals industry, particularly in India, is going through one of its most exciting phases right now. I would like to dwell on some of the ongoing developments and trends that I believe present tremendous opportunities for the future.

One major trend is the renewed focus on cost consciousness, forcing even some speciality areas to be treated as commodities.

Needless to say, the cost pressures can be most obviously attributed to the COVID-19 pandemic with the numerous issues it caused on the supply side. A large number of raw materials were simply not available for weeks or months together. International freight costs at least doubled and in some cases even tripled, making heavy reliance on imported raw materials almost not an option. With the demand side not slowing down, companies were compelled to respond to these challenges in a variety of innovative ways.

We, at Soujanya, tried to go to the very depth of our core technology of formulating and processing pigment dispersions. We focused on the few things that we could control, and derived cost efficiency from these places. Some of them were more conspicuous – we were able to harmonise some key additives across what we initially thought were vastly different formulations. Some initiatives on the other hand, were more subtle: for example, we started studying in great detail how often-ignored factors such as mixer blade shape, tip speed of a stirrer etc. affect tinting strength of the pigment. We were able to derive remarkable efficiencies just by delving deeper into our expertise and doing what we do best.

While the drive towards cost efficiencies has been extremely strong, the demand for higher and better product performance is ever-increasing too. Seamlessly servicing multiple end-use industries means that companies have to develop a profound understanding of those applications, and the performance of their products in them.

In the colour space, we simultaneously face demands to make some products that are durable for over 15 years and some that are washed off in less than 3 seconds! A yellow pigment used in decorative paints has the natural tendency to fade in sunlight, and has to be treated, stabilised, and formulated accordingly in order for it to with[1]stand UV light and for paint companies to be able to give 10-15 years non-fading guarantees.

On the other hand, a yellow dye used in detergents has the natural tendency to stain the fabric, and therefore must be treated, stabilised, and formulated accordingly so that it does not stain, and is washed off instantly, without affecting any of the cleaning properties of the detergent.

The expanding focus on and relevance of sustainability has equally presented many opportunities. ESG initiatives have become absolutely essential to operate in today’s times. Integrated management system certifications (ISO 9001, 14001, 18001), and audits such as ECOVADIS and Responsible Care have become mandatory to even have a starting conversation with key customers.

On the product side, greener chemistries have taken forefront. We at Soujanya are offering to all our paint industry customers a smooth pour-over transition from conventional colorants for VOC-free drop-in ones across all their point-of-sale tinting machines, at no additional cost. Our VOC-free products for the paint industry are eco-label certified with the GreenPro label from CII.

The paint industry in India has seen many new entrants with many more slated to come in the next few years, and most of these are launching with VOC-free colorants to begin with. The personal care and cosmetics space is even more interesting on this front, with a growing enthusiasm for natural-sourced, bio-based, and biodegradable ingredients.

We are at the moment keenly engaged in R&D to develop stable, scalable and economically viable formulations based on biodegradable and/or natural colorants.

At this time where “disruption” has become a buzzword, and valuations of companies across various sectors are ballooning with “unicorns” becoming more of a norm than a novelty, I see the chemical industry staying put and reaping what I’d like to call “returns on relationships”. All of us in the chemical industry know that it takes years to achieve the status of a primary supplier or even that of an alternative. Moreover, we deal with formulations closely tied to our customers’ unique technologies, sharing which would be a very sensitive matter.

Having endured years of multiple stringent tests and approval processes, and having delivered quality solutions, companies can cherish the position of being the partner of choice at all stages of the customers’ product life cycles.

We, at Soujanya, can now proudly say that we are the go-to partner for all colour-related needs of our customers, be it a new product launch or a concept-level experiment or a technical improvement in an existing product. Moreover, owing to the faith that they have in our ability to execute and deliver, customers now ask us proactively what else other than colour we can offer or how we can help solve a particular non-colour related problem that they face. The case of a few other companies might better illustrate this point. PI Industries, for instance, has built a hugely successful custom synthesis business. They have made bold Capex moves and have seen them through by ensuring flawless execution along the entire long process. The EBITDA margin of their custom synthesis business now stands consistently above 20%.

Another stark trend in recent times has been the lateral movement of players across segments within the chemicals space. Companies well-regarded as experts in one segment (say pigments or pharma or organic chemicals) have entered other spaces (say pharma or agrochemicals) through both inorganic and organic routes.

Companies that are cash-rich with deeper pockets, and those that have strong focus and capabilities in technology/R&D have been able to navigate and enter higher barrier industries. For example, PI industries recently acquired Ind Swift Laboratories’ API (Active Pharmaceutical Ingredients) division giving them access to a wide portfolio of API products as well as to the target’s USFDA-approved facility. On the other hand, Natco Pharma recently made a decision to leverage its R&D capabilities to diversify into the agrochemicals segment, and has already invested a large amount of funds into this initiative.

At Soujanya, we have similarly expanded our horizons by setting up a new division, Soujanya Life Sciences with the aim of being the partner-of-choice for key ingredients in the pharmaceutical and agrochemicals space. The basis of all these changes, I have realised, might lie in the difference between expertise and core competence. We have unmatched expertise in colour because we have done this for forty years, but through it all the core competence we have built is the flawless delivery of complex chemical solutions.

Deeply rooted in our core values, we hope to use our capabilities to make a larger impact and eventually make lives better in a more profound way.

Long-lasting relationships, strengthening expertise, bold yet strategic capex moves, a focus on efficiency, differentiating product and service models through enhanced performance and a genuine commitment to sustainability all make the Indian chemicals industry a golden combination of time-tested stability with infectious dynamism. The time is now, and it is indeed a colourful one!