Fairchem Organics Ltd · NSE:FAIRCHEMOR
Fairchem Organics — Investor Presentation (June 2024)
42 slides from Fairchem Organics's investor presentation, Jun 29, 2024
Slide 1: Cover letter to stock exchanges
FAIRCHEM ORGANICS LIMITED Regd. Office & Works: 253/P and 312, Village – Chekhala, Sanand – Kadi Highway, Taluka: Sanand, District: Ahmedabad – 382 115, GUJARAT, INDIA Phone (Board Nos.): (02717) 687900, 687901, +91 90163 24095 E-mail : cs@fairchem.in CIN: L24200GJ2019PLC129759 website: www.fairchem
Slide 2: Investor Presentation June 2024
Investor Presentation June 2024
Slide 3: Company at a Glance
Company at a Glance Well entrenched Customer Forward integration to Relationships in make value added products high growth from co-product – industries like Monomer (Monobasic) Long lasting Pan India Paint, Inks, Printing, Promoted by Fairfax Fatty Acid – stream to Raw Material sourcing lubricants,
Slide 4: Company Overview
Company Overview 3
Slide 5: Company Overview
Company Overview • Fairchem Organics Ltd. (Fairchem) is engaged in the business of manufacturing of Oleo Chemicals and Nutraceuticals, since the last 28 years. Revenue & EBITDA Margin (In Mn) • It has a state -of-the-art Manufacturing unit which was set up in 1995 and has over the years 6,432 6,480
Slide 6: Key Milestones
Key Milestones Main focus on reduction of De-Merged from The original project was to manufacturing cost per ton. Fairchem Speciality and process by-product Successfully produced Complete Re- Engineering of its now operating as stream of Rice Bran Oil. Isostearic Acid at the Energy Consumption System
Slide 7: Sequence of Key Events and Growth Trajectory
Sequence of Key Events and Growth Trajectory Upgradation of Annual Revenue (INR Mn) co-products such as Monomer of 2010-22: Focus on increasing yield, quality of by-products, reaction time (de-bottlenecking) and reducing catalyst cost fatty acid stream 2016-22: Doubled the capacity to 90,000 TPA fro
Slide 8: Exceptional Track Record of Growth & Profitability
Exceptional Track Record of Growth & Profitability Raw Material Processing Capacity (in TPA) Annual Revenue (INR Mn) Capacity expansion to 1,20,000 45,000 60,000 72,000 90,000 1,20,000 TPA as on Q1 FY23 Processed Volume (in kt) 31 39 41 48 52 59 57 65 Operating leverage driving margin expansion EBIT
Slide 9: Manufacturing Process Overview
Manufacturing Process Overview Basic Raw Material Process Product Industry Acid Oil Glycerine Pre-treatment (1.25% by-product) Soft Oil Splitting (Soya / Sun / Cotton / Crude Linoleic Paints & Inks, Soaps Canola / Fatty Acid Acid/Palmitic Acid and Animal Feed Rice/ Groundnut) Fractionation Vegetable
Slide 10: Product Overview – Existing Portfolio
Product Overview – Existing Portfolio Raw Materials Output Products End Market Use-cases Linoleic /Soya Paints & inks ▪ Specially designed to produce fast drying protective coating with a lighter color fatty acid Fairchem Organics is also entering new global markets Palmitic acid Soaps, animal feed
Slide 11: Fairchem's Competitive Advantage
Fairchem’s Competitive Advantage Major Player in the Indian Oleo Chemical Market Using Renewable Resources • Processing waste from edible oil refining process to produce high value oleo chemicals giving it price advantage • Enjoy Leadership Position in the industry due to barriers to entry • Focus o
Slide 12: Highly Differentiated “Waste-to-Wealth” Manufacturing Capabilities
Highly Differentiated “Waste-to-Wealth” Manufacturing Capabilities 1 Unique Manufacturing Capabilities ✓ USA Green chemicals are ▪ Processing waste from edible oil refining process the ingredients of to produce high value oleochemicals choice to achieve a ▪ Focus on green manufacturing processes whi
Slide 13: Well Entrenched Long Term Customer Relationships
Well Entrenched Long Term Customer Relationships Customer network - a competitive advantage Long History of Deep Engagement with Customers Key Customers Displaying High Levels of Stickiness Bulk of the top 10 customers have growing, long-term relationships with Fairchem Organics Ensure quality and O
Slide 14: Strong R&D Focus with an Experienced Team
Strong R&D Focus with an Experienced Team Resulting in a Long History of Innovation Continued Investment in Fairchem’s state-of-the-art R&D Lab R&D and Innovation ▪ Highly skilled employee base with strong engineering focus and deep experience (average experience of 10 years in the firm) ▪ Building
Slide 15: Experienced and Professional Management with Strong Governance Framework
Experienced and Professional Management with Strong Governance Framework High profile Board put in place by Parent which has taken several initiatives to improve the corporate governance framework Executive / Non-executive directors ◼ Rigorous adoption of risk framework by audit ◼ Served as MD of Fa
Slide 16: Manufacturing Facility
Manufacturing Facility • The company’s State -of-the-Art Manufacturing unit is located in Sanand, Ahmedabad and is one of the largest processing capacities for Natural Soft Oil based Fatty acids in India. • In 2018, the Company set up state of the art R&D laboratory with ~ 400 Sq. Meters area and cu
Slide 17: Manufacturing Facility – Aerial Site Overview
Manufacturing Facility – Aerial Site Overview Investor Presentation | www.fairchem.in 16
Slide 18: ESG Initiatives
ESG Initiatives ENVIRONMENT SOCIAL GOVERNANCE Effluent Method of Disposal CSR Activities • Always be adequately capitalized • Contribution towards ‘Project Dialysis” of Zero Liquid Discharge by Multi around INR 9.2 Mn • Not overleverage the balance sheet Water Effect Evaporator and Agitated Discharg
Slide 19: Business Overview
@) FAIRCHEM Business Overview
Slide 20: Business Segments
Business Segments FAIRCHEM ORGANICS OLEO CHEMICALS NUTRACEUTICAL Investor Presentation | www.fairchem.in 19
Slide 21: Oleo Chemicals
Oleo Chemicals Oleo Chemicals are chemicals derived from Plant and Animal Fats. They Main Product Application are analogous to petrochemicals derived from petroleum. The formation Isostrearic acid • Cosmetics and Lubricants of basic oleochemical substances like Fatty Acids, Fatty Acid Methyl Esters
Slide 22: Linoleic Acid
Linoleic Acid Applications Paints Inks Linoleic Acid is designed especially to produce fast drying protective coating having lighter color. It is an unsaturated fatty acid and is a liquid at room temperature. Purpose of Use: • Linoleic Acid is designed especially to produce fast drying protective co
Slide 23: Dimer Acid
Dimer Acid Dimer Acid also known as dimerized fatty acids are prepared from unsaturated fatty acids obtained from vegetable oil. It is a light yellow or yellow viscous transparent liquid. It is non-toxic. Applications Purpose of Use: Paints Inks • Offers improved bonding. • Used as curing agents for
Slide 24: Monomer Acid & Isostearic Acid
Monomer Acid & Isostearic Acid Applications Fairchem is one of the leading producers of Monomer and Other distilled fatty acids with significantly lower raw material costs Monomer Acid Monomer Acid: Paints Soaps Detergents • Monomer Acids are non-petroleum, non-animal based products that can be used
Slide 25: Distilled fatty acids & Stearic Acid
Distilled fatty acids & Stearic Acid Applications Fairchem is one of the leading producers of Monomer and Other distilled fatty acids with significantly lower raw material costs Distilled fatty acids Distilled fatty acids: Lubricants Soaps Detergents • Fatty acids are obtained from hydrolysing fats
Slide 26: Nutraceuticals
Nutraceuticals • Nutraceutical, a portmanteau of the words “nutrition” and “pharmaceutical” Revenue Contribution (INR Mn) applied to products that range from isolated nutrients, dietary supplements and herbal products, specific diets, genetically modified food, and processed foods 349 such as cereal
Slide 27: Mixed Tocopherol Concentrate
Mixed Tocopherol Concentrate Applications Vitamin E Food • Tocopherol is used as raw material to manufacture natural Vitamin E. Natural Vitamin E is almost 3-4 times more expensive than synthetic Vitamin E. Developed markets like US and Europe are the key consumers due to the high value of the produ
Slide 28: Strategic Overview
Strategic Overview 27
Slide 29: Future Growth Strategies
Future Growth Strategies Enhance the customer base Installation of additional and reduce customer equipment to boost Installation of Increasing concentration by acquiring production of Isostearic Acid additional customer base new customers for existing – one of the streams obtained equipment applica
Slide 30: Industry Overview
Industry Overview 29
Slide 31: Oleo Chemicals Industry
Oleo Chemicals Industry • The oleo chemicals market is broadly segmented into four key applications markets: • Pharmaceutical & personal care, • Food & beverages, • Soaps & detergents, • Polymers • Pharmaceutical & personal care is the largest application market for oleo chemicals accounting for maj
Slide 32: Oleo Chemicals Industry in India
Oleo Chemicals Industry in India • India oleochemicals market is projected to cross USD 2.6 Bn by 2025. • India oleochemicals market has been segmented into five categories namely - fatty acids, fatty alcohols, glycerin, fatty acid methyl esters and fatty amines. Robust growth in India oleochemicals
Slide 33: Financial Overview
Financial Overview 32
Slide 34: Quarterly Financial Performance
Quarterly Financial Performance PARTICULARS (INR Mn)` Q4-FY24 Q4-FY23 Y-O-Y Q3-FY24 Q-O-Q Revenue from Operations 1,606 1,519 5.7% 1,481 8.4% Total Expenses 1,418 1,327 6.9% 1,283 10.5% EBITDA 188 192 (2.1)% 198 (5.1)% EBITDA Margins (%) 11.71% 12.64% (93) bps 13.37% (166) bps Other Income 3 2 50.0%
Slide 35: Annual Financial Performance
Annual Financial Performance PARTICULARS (INR Mn) FY24 FY23 Y-O-Y Revenue from Operations 6,215 6,480 (4.1)% Total Expenses 5,545 5,756 (3.7)% EBITDA 670 724 (7.5)% EBITDA Margins (%) 10.78% 11.17% (39) bps Other Income 11 7 57.1% Depreciation 93 82 13.4% Finance Cost 42 63 (33.3)% PBT 546 586 (6.8)
Slide 36: Historical Income Statement
Historical Income Statement PARTICULARS (INR Mn) FY21 FY22 FY23 FY24 Revenue from Operations 3,966 6,432 6,480 6,215 Total Expenses 3,279 5,383 5,756 5,545 EBITDA 687 1,049 724 670 EBITDA Margins (%) 17.32% 16.31% 11.17% 10.78% Other Income 3 3 7 11 Depreciation 66 71 82 93 Finance Cost 68 69 63 42
Slide 37: Historical Balance Sheet
Historical Balance Sheet ASSETS FY22 FY23 FY24 EQUITY AND LIABILITIES FY22 FY23 FY24 Non-Current Assets EQUITY Property, Plant and Equipment 1,363 1,514 1,868 Equity Share Capital 130 130 130 Instruments entirely equity in nature Capital work-in-progress 420 349 60 Other Equity 2,191 2,462 2,769 Rig
Slide 38: Historical Cash Flow Statement
Historical Cash Flow Statement PARTICULARS (INR Mn) FY22 FY23 FY24 Cash and Cash Equivalents at Beginning of the year 0.3 0.1 0.1 Cash Flow From Operating Activities 405 496 745 Cash Flow from Investing Activities (342) (145) (176) Cash Flow From Financing Activities (63) (351) (569) Net Inc./(Dec.)
Slide 39: Key Financial Highlights
Key Financial Highlights Revenue (In Mn) EBITDA (In Mn) & EBITDA Margin (%) PAT (In Mn) & PAT Margin (%) 5 Year CAGR - 20% 5 Year CAGR - 13% 5 Year CAGR - 14% 6,432 6,480 6,215 1,049 679 724 687 670 435 405 3,966 425 3,065 484 347 2,499 361 215 15.79% 17.32% 16.31% 11.32% 10.72% 10.56% 14.44% 10.78%
Slide 40: Capital Market Data
Capital Market Data Stock Market Performance (As on 31st March, 2024) Dividend Percentage 50% 130.00% 40% 30% 75.00% 75.00% 20% 10% 35.00% 0% 25.00% 15.00% -10% Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Fairchem Organics Sensex FY19 FY20 FY21 FY22 FY23 FY24
Slide 41: Disclaimer
Disclaimer Fairchem Organics Limited Disclaimer: The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that al
Slide 42: Thank you
Thank you 41
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