Fairchem Organics Ltd · NSE:FAIRCHEMOR
Fairchem Organics — Investor Presentation (December 2024)
40 slides from Fairchem Organics's investor presentation, Dec 14, 2024
Slide 1: Investor Presentation
Investor Presentation December 2024
Slide 2: Company at a Glance
Company at a Glance Well entrenched Customer Forward integration to Relationships in high make value added products growth industries like from co-product – Paint, Inks, Printing, Monomer (Monobasic) Long lasting Pan India Promoted by Fairfax Fatty Acid – stream to lubricants, Cosmetics India Holdin
Slide 3: Company Overview
) FAIRCHEM Company Overview
Slide 4: 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 5: 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 6: Sequence of Key Events and Growth Trajectory
Sequence of Key Events and Growth Trajectory Upgradation of co- Annual Revenue (INR Mn) products such as Monomer of fatty 2010-22: Focus on increasing yield, quality of by-products, reaction time (de-bottlenecking) and reducing catalyst cost acid stream to 2016-22: Doubled the capacity to 90,000 TPA
Slide 7: 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 45,000 60,000 72,000 90,000 1,20,000 1,20,000 TPA as on H1 FY23 Processed Volume (in kt) 31 39 41 48 52 59 57 65 Operating leverage driving margin expansion EBIT
Slide 8: 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 9: Product Overview – Existing Portfolio
Product Overview – Existing Portfolio Raw Materials Output P roducts End Market Use-cases Linoleic /Soya ▪ Specially designed to produce fast dry ing protective coating with a lighter Paints & i nks fatty acid color Fairchem Organics is also entering new global markets Pal mitic acid Soaps, ani mal
Slide 10: 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 11: 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 12: 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 13: Strong R&D Focus with an Experienced Team Resulting in a Long History of Innovation
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 14: 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 15: 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 16: Manufacturing Facility – Aerial Site Overview
Manufacturing Facility – Aerial Site Overview Investor Presentation | www.fairchem.in 16
Slide 17: 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 18: Business Overview
) FAIRCHEM Business Overview
Slide 19: Business Segments
Business Segments FAIRCHEM ORGANICS OLEO CHEMICALS NUTRACEUTICAL Investor Presentation | www.fairchem.in 19
Slide 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 26: 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 27: Strategic Overview
) FAIRCHEM Strategic Overview
Slide 28: Future Growth Strategies
Future Growth Strategies Installation of additional Enhance the customer base equipment to boost and reduce customer production of Isostearic Acid Installation of Increasing concentration by acquiring – one of the streams additional customer base new customers for existing obtained from further equi
Slide 29: Internal Projections
Internal Projections Particulars F.Y. 2024-25 F.Y. 2025-26 Projected Total Revenue INR 7,350 Mn INR 9,790 Mn Projected EBITDA INR 1,200 Mn INR 2,330 Mn Projected EBITDA Margin 16.34% 23.80% During the current F.Y., for first 6 months, the Company has reported Total Revenue of INR 3035 Mm, EBITDA of
Slide 30: Industry Overview
) FAIRCHEM Industry Overview
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
) FAIRCHEM Financial Overview
Slide 34: Historical Income Statement
Historical Income Statement PARTICULARS (INR Mn) FY22 FY23 FY24 H1-FY25 Revenue from Operations 6,432 6,480 6,215 3,035 Total Expenses 5,383 5,756 5,545 2,730 EBITDA 1,049 724 670 305 EBITDA Margins (%) 16.31% 11.17% 10.78% 10.05% Other Income 3 7 11 6 Depreciation 71 82 93 52 Finance Cost 69 63 42
Slide 35: Historical Balance Sheet
Historical Balance Sheet ASSETS FY23 FY24 H1-FY25 EQUITY AND LIABILITIES FY23 FY24 H1-FY25 EQUITY Non-Current Assets Equity Share Capital 130 130 130 Property, Plant and Equipment 1,514 1,868 1,866 Instruments entirely equity in nature Capital work-in-progress 349 60 148 Other Equity 2,462 2,769 2,8
Slide 36: Historical Cash Flow Statement
Historical Cash Flow Statement PARTICULARS (INR Mn) FY23 FY24 H1-FY25 Cash and Cash Equivalents at Beginning of the year 0.1 0.1 0.1 Cash Flow From Operating Activities 496 745 (107) Cash Flow from Investing Activities (145) (176) (147) Cash Flow From Financing Activities (351) (569) 254 Net Inc./(D
Slide 37: 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 3,035 484 347 15.79% 17.32% 16.31% 305 179 11.32% 10.72% 10.56% 11.17% 10.78%
Slide 38: Capital Market Data
Capital Market Data Stock Market Performance (As on 30th September, 2024) Dividend Percentage 40% 130.00% 30% 20% 10% 75.00% 75.00% 0% -10% 35.00% 25.00% 15.00% -20% Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Fairchem Organics Sensex FY19 FY20 FY21 FY22 FY23
Slide 39: 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 40: Thank you
Thank you 40
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