"Our Unique And In­no­va­tive Prod­ucts Help Us To Meet Com­pe­ti­tion"

He­mant Ku­mar Ruia Chair­man and Man­ag­ing Di­rec­tor, Amines & Plas­ti­cis­ers Ltd.

Dalal Street Investment Journal - - COMMUNICATION FEATURE -

How is your com­pany tack­ling the slow­down in petro­chem­i­cals in­dus­try?

The com­pany has a di­ver­si­fied range of prod­ucts which is not only re­stricted to petro­chem­i­cal in­dus­try, but it has a large end-user base. The com­pany also caters to oil, gas, fer­til­iz­ers, pharma, cos­metic in­dus­tries, tex­tiles etc. Due to a di­ver­si­fied range of prod­ucts, our com­pany is not much af­fected by the slow­down in the petro­chem­i­cal sec­tor. The com­pany has reg­u­lar cus­tomers such as re­finer­ies and gas plants in the coun­try. The com­pany sup­plies tai­lor­made prod­ucts for some of its clients after car­ry­ing out spe­cial sim­u­la­tions, and th­ese clients will con­tinue to buy from the com­pany.

Methyl Di­ethonalamine (MDEA) and N Methyl Mor­pho­line Ox­ide (NMMO) are your main prod­ucts which are used in petro­chem­i­cals and oil re­finer­ies. How are your earn­ings cor­re­lated to crude oil prices?

Methyl Di­ethanolamine (MDEA) and some other re­lated prod­ucts are used in petro­chem­i­cals and in all ex­ist­ing and new re­finer­ies as raw ma­te­rial. The fluc­tu­a­tions in crude prices do not af­fect con­sump­tion. As far as N Methyl Mor­pho­line Ox­ide (NMMO) is con­cerned, it is a “eco-friendly sol­vent” for mak­ing new gen­er­a­tion vis­cose fi­bres which is widely used in North Amer­ica, Europe, China and Tai­wan.

What is the out­look on In­dian econ­omy and on your in­dus­try?

The In­dian econ­omy, de­spite var­i­ous fac­tors, con­tin­ued to re­main the fastest grow­ing econ­omy in the world in fis­cal 2016-17 and the out­look for the cur­rent fis­cal con­tin­ues to re­main pos­i­tive. The In­dian econ­omy is ex­pected to grow at 6.5-7.0% in the fis­cal 2017-18 with var­i­ous re­forms in­tro­duced by the gov­ern­ment, in­clud­ing Goods and Ser­vice Tax, bud­getary pro­vi­sions and pol­icy flex­i­bil­ity. As re­gards chem­i­cal in­dus­try, there is spur in de­mand in spe­cialty chem­i­cals and all com­pa­nies deal­ing in chem­i­cals are ex­pected to do well.

What are your in­ter­nal growth tar­gets for the com­ing year?

As dis­cussed in point no. 3 above, chem­i­cal sec­tor is do­ing well. Poli­cies are favourable and ex­port is pick­ing up. We ex­pect to grow 12% to 15% dur­ing fis­cal 2017-18.

What is your prod­uct mix strat­egy to op­ti­mise rev­enues?

The com­pany has multi-plant, mul­ti­prod­uct fa­cil­i­ties and has adopted var­i­ous mea­sures which have re­sulted in higher plant pro­duc­tion at lower en­ergy con­sump­tion lev­els. This has re­sulted in our prod­ucts be­ing very com­pet­i­tive in the mar­ket and thus earn bet­ter re­al­iza­tion, es­pe­cially in ex­ports. Also, con­tin­u­ous ef­forts to de­velop new range of prod­ucts, such as Ethoxy­late and Propaxy­late have added value to prod­uct range. There is a con­tin­ual growth in spe­cialty prod­ucts/for­mu­la­tions for gas plant, nat­u­ral gas, fer­til­iz­ers and am­mo­nia plant and lo­cal power plants for CO2 re­cov­ery. Thus, as there is op­ti­mum uti­liza­tion of the re­sources and con­ser­va­tion of en­ergy, the com­pany had over­all growth in terms of pro­duc­tion, prof­itabil­ity and rev­enue. The com­pany shall con­tinue to con­cen­trate on spe­cialty prod­ucts, which re­sults in higher prof­itabil­ity as that strat­egy has paid off.

What are the key chal­lenges faced by your in­dus­try and how do you plan to change your strat­egy to grow con­sis­tently?

The com­pany has few chal­lenges from multi­na­tional com­pa­nies, volatil­ity in the dol­lar and raw ma­te­rial prices. How­ever, the com­pany op­er­ates in a high en­try bar­rier in­dus­try which has been in this seg­ment for more than four decades and has now through its con­stant ef­forts in re­search and de­vel­op­ment has es­tab­lished its brand name. The com­pany has over a pe­riod of time de­vel­oped var­i­ous new prod­ucts, sim­u­la­tions, pro­cesses and has en­gaged in the de­vel­op­ment of ex­ist­ing ones. The unique and in­no­va­tive prod­ucts de­vel­oped by the com­pany help to meet com­pe­ti­tion in the in­dus­try. The com­pany has a team of ex­perts/ pro­fes­sion­als in the field who look after the de­vel­op­ment of new prod­ucts, cus­tomiza­tion of ex­ist­ing prod­uct range and proper han­dling and stor­ing of volatile prod­ucts. We plan to pro­vide more tech­ni­cal and an­a­lyt­i­cal ser­vices as many of the new prod­ucts are per­for­mance-ori­ented. More em­pha­sis is be­ing given to de­vel­op­ing new prod­ucts and pro­cesses.

We have been fol­low­ing th­ese prac­tices for long and will con­tinue to fol­low them so that con­sis­tent growth is re­al­ized year after year. The com­pany has been tak­ing ev­ery pos­si­ble step in or­der to mit­i­gate the ef­fects of un­sta­ble global con­di­tions by reach­ing out to new cus­tomers, ex­plor­ing new mar­kets and con­stant upgra­da­tion of its R&D team. The forex fluc­tu­a­tions get largely mit­i­gated by its im­port bills and shift­ing to euro pay­ment.

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