"Our Unique And Innovative Products Help Us To Meet Competition"
Hemant Kumar Ruia Chairman and Managing Director, Amines & Plasticisers Ltd.
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.