Chemical Sector Update: Specialty Chemicals Conference 3.0 By Motilal Oswal Financial Services Ltd
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Key takeaways We hosted an industry expert and 10 companies (Aether Industries, Alkyl Amines, AMI Organics, Fine Organics, Galaxy Surfactants, I G Petrochemicals, Rossari Biotech, Vishnu Chemicals, Yasho Industries and an unlisted surfactant player) in our Specialty Chemicals Conference 3.0 held on 18th August, 2022 at our Motilal Oswal Tower, Mumbai. The key event highlights are furnished below:
Key takeaways from the session with industry expert
* There is an increased focus on cost cutting and movement from batch to continuous process that helps reduce space requirement as well as opex drastically through decline in usage of utilities and waste reduction. Broadly, chemical companies follow two strategies: product and process.
* Under the product strategy, the focus is on product development rather than on cost control or effective process technology. At times, product may not have a ready market – the companies may have to approach consumers and demonstrate the effectiveness of their products towards whatever purposes they are intended for
* They safeguard knowledge about their products through in-house development/ patents/ use of excipients/ lesser attrition. A few examples are Fine Organics, Galaxy Surfactants, Sudarshan Chemicals, NOCIL, and Aether Industries
* Under the process strategy, the focus is on process optimization and continuous cost cutting on existing products. Attributes required are engineering skills and co-operation between R&D and production teams. A few examples of such companies are Eternis, Jayant Agro, UPL, and Laxmi Organics.
* The gap between India and the West in terms of knowledge has narrowed significantly. India has vast resources in terms of chemistry and chemical engineers. Howev er, the risk taking capabilities are not high. Since technology development requires high risk appetite, most of the domestic companies have so far not ventured into that direction.
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