Fairchem Organics Ltd · NSE:FAIRCHEMOR
Fairchem Organics — Fairchem Speciality — Investor Presentation (July 2017)
33 slides from Fairchem Organics's investor presentation, July 2017
Slide 1: Fairchem Speciality Limited Investor Presentation July 2017
FAIRCHEM SPECIALITY LIMITED* INVESTOR PRESENTATION | JULY 2017 The creation of a Renewable Speciality Chemicals Company from the merger of the businesses of Adi Finechem Ltd And Privi Organics Ltd * Formerly known as “Adi Finechem Limited”. The name of the Company has been changed from Adi Finechem
Slide 2: About Fairchem / Aroma Chemicals / Oleo Chemicals & Nutraceuticals / Financial Overview
About Fairchem Aroma Chemicals Oleo Chemicals & Nutraceuticals Financial Overview 2
Slide 3: Executive Summary
Executive Summary Overview: • Fairchem Specialty Limited (Fairchem) is the unique creation of a specialty chemicals company from the merger of the businesses of Adi Finechem Ltd (manufacturer of oleo chemicals & nutraceuticals) and Privi Organics Ltd (manufacturer of aroma chemicals). • Fairchem lay
Slide 4: Formation of Fairchem Specialty Ltd.
Formation of Fairchem Specialty Ltd. Started commercial Privi Organics Ltd Commenced Turnover crossed Rs.1 production at was incorporated exports bn. (USD 25 million) mark Unit-VI Gujarat 2014 1982 1997 2005 Nov Jul Aug Oct Mar 2015 2016 2016 2016 2017 Fairfax India Holdings Corporation Board of Adi
Slide 5: To Be The Leading Renewable Speciality Chemicals Company
VISION a waste to wealth story Adi Privi processes waste processes waste products from the products from pulp edible oil refining and paper mills process To Be The Leading Renewable Speciality Chemicals Company Adi Privi manufactures oleo chemicals manufactures aroma with end use in adhesives, chemi
Slide 6: Formation of Fairchem Specialty Ltd.
Formation of Fairchem Specialty Ltd. The two drops and a leaf symbol is an artistic representation of a merger of two companies forming a new beautiful green leaf. Which is a main source of agricultural waste products into value added speciality chemicals. Yellow colour is for the sun, blue colour i
Slide 7: Financial Governance Standards
Financial Governance Standards Invest for long term growth / value creation at the cost of short term gains Always be adequately capitalized Not overleverage the balance sheet Not bet the entire company on any one project or acquisition Secure sources of sustainable raw material supply I
Slide 8: Product Portfolio
Product Portfolio AROMA CHEMICALS OLEO CHEMICALS NUTRACEUTICAL Processes waste products from pulp and From waste products generated during processing of soft vegetable oils namely Soya, Source paper mills (pinene products) & Sunflower, Corn and Cotton (SSCC). petrochemicals building blocks Pinene Ba
Slide 9: Key Strengths
Key Strengths Leadership position in the world market for Constant benchmarking of products like- DHMOL, Amber fleur, Terpineol, operations in terms of Dimer Acid, Tocopherol, etc. energy costs and processing yields keeps operating team Ideal balance of entrepreneurship, on their toes professional m
Slide 10: Promoter Directors
Promoter Directors Mr. Utkarsh Shah - Chairman A graduate in Chemistry with vast exposure to the chemical industry. Manages global scale operations in trading and supply of coal, real estate business. Over the past 7 years has been responsible for the metamorphosis of H K Finechem to Adi Finechem an
Slide 11: About Fairchem / Aroma Chemicals / Oleo Chemicals & Nutraceuticals
About Fairchem Aroma Chemicals Oleo Chemicals & Nutraceuticals Financial Overview 11
Slide 12: Flavor & Fragrance (F&F) Industry Value chain
Flavor &Fragrance (F&F) Industry Value chain Petrochem & Pine based Aroma Chemicals Constitute ~70% Of Global Aroma Chemicals Market Source Raw Material Building Blocks Aroma Chemicals Market Segmentation Formulation - Blending Day to day products Value % Volume % • Naphthalene Floral • Perfume • Cr
Slide 13: Aroma Chemicals in F&F Industry
Aroma Chemicals in F&F Industry Global Flavours and Fragrance - USD 20 Bn Market (Estimated 2016 market size) Aroma Chemicals is the Fastest Growing Segment Within F&F industry, current market size is over USD 4 Bn Aroma Chemicals 1.5 1.6 2.5 3.3 3.8 5.2 Market Size Growth in Middle Class consumptio
Slide 14: Top 40 Aroma Chemicals Form 85% of Market by Volume & 50% by Value
Top 40 Aroma Chemicals Form 85% of Market by Volume & 50% by Value Out of the Top 40 molecules, 11 Molecules are Pine Based & 20 Molecules are Petrochem Based Segment wise Top 40 Molecules Value (USD Mn) Volume (Tns) Value% Volume% Petrochem 977 145,500 50% 50% Terpenes (Pine Based) 831 117,000 43%
Slide 15: Manufacturing Process
Manufacturing Process Tapping Gum Turpentine Oil (GTO) Dihydro- Distillation (10%) DHMOL THMOL myrcene Process Gum Resin (70%) Terpineol Terpineol Acetate Heavy Oil (15%) Alpha Pinene Residue (5%) Isobornyl Camphene Pine Trees Acetate Alpha C Sandal Aldehyde Products Amber Fleur Cutting Beta Pinene
Slide 16: Strong raw materials sourcing capabilities
Strong raw materials sourcing capabilities • The two key routes for making of the building blocks which are used for manufacturing Pinene based aroma chemicals are: CST v/s GTO (15 year price perspective) Tapping a Pine tree to get Gum Turpentine Oil (GTO) 4000 Using the waste from a Pulp and Pa
Slide 17: Business Overview – Aroma Chemicals
Business Overview – Aroma Chemicals Revenue (Rs Mn) EBITDA(Rs Mn) Volume(T) 4,236 5,134 5,465 6,162 6,017 7,000 900 20,000 Export Domestic 800 6,000 855 17,456 1,893 700 802 15,000 16,302 5,000 1,946 735 1,529 1,716 600 14,106 4,000 500 606 1,366 10,000 11,911 3,000 400 498 9,730 2,000 3,605 3,748 4
Slide 18: Aroma Chemicals – Product Range
Aroma Chemicals – Product Range Revenue Contribution (INR Mn) Sales in Qty (T) 7,000 4,236 5,134 5,465 6,162 6,017 20,000 9,730 11,912 14,106 16,303 17,456 6,000 682 724 15,000 3,868 5,000 599 826 3,324 546 992 931 717 2,892 773 1,626 4,000 305 857 1,230 668 1,507 665 1,234 1,361 10,000 2,629 1,488
Slide 19: Manufacturing Facility
Manufacturing Facility Unit-II, Privi • Manufacturing facility comprises 3 state-of-the-art manufacturing plants (Unit-I, II & III) that are located in the MIDC area of Mahad, Raigad district in Maharashtra and 1 manufacturing plant at Jhagadia, near Ankleshwar, Gujarat. • These units together have
Slide 20: About Fairchem / Aroma Chemicals / Oleo Chemicals & Nutraceuticals
About Fairchem Aroma Chemicals Oleo Chemicals & Nutraceuticals Financial Overview 20
Slide 21: Oleo chemicals Industry
Oleo chemicals Industry • The oleo chemicals market is broadly segmented into four key World Production of Leading Oil & Fat, 2015 applications markets: • Pharmaceutical & personal care, • Food & beverages, Others Palm • Soaps & detergents, 28.40% 27.80% • Polymers • Pharmaceutical & personal care i
Slide 22: Oleo chemicals Industry in India
Oleo chemicals Industry in India • Indian Oleo Chemical players are well positioned with abundant raw material supply, lower manpower cost and improving infrastructure which should be the key market drivers for the industry at large. • Fatty acids, Fatty Alcohol and Methyl Ester and Refined Glycerin
Slide 23: Company Overview – Oleochemicals & Nutraceuticals
Company Overview – Oleochemicals & Nutraceuticals Revenue (Rs Mn) EBITDA(Rs Mn) Volume (T) 2,000 1,235 1,524 1,513 1,525 1,856 Domestic Export 400 35,000 359 1,500 350 30,000 384 302 1,497 300 337 30,702 549 25,000 330 250 25,387 1,000 1,116 1,200 255 20,000 23,374 200 233 231 15,000 905 969 19,411
Slide 24: Manufacturing Process
Manufacturing Process Basic Raw Material Acid Oil Pretreatment Product Process Glycerine Industry Soya, Sunflower, Corn, Cotton (SSCC) Refining Splitting SSCC* seeds Linoleic/Palmitic Amines, Amides, Soap Decanter Fractionation Separator Crude Dimer Ink, Paint Dimerising Deodorization Paints, Inks,
Slide 25: Oleo Chemicals
Oleo Chemicals Revenue Contribution (INR Mn) Product wise % Revenue Breakup Volume (T) Other Fatty Acids 2,000 Linoleic Acid 40,000 10% 22% 30,000 1,500 Distilled Fatty 1,521 20,000 28,799 Acids 21,686 23,790 1,000 1,201 1,113 23% 10,000 15,318 17,907 891 956 500 Dimer Monom 0 38% er FY13 FY14 FY15
Slide 26: Nutraceuticals
Nutraceuticals • Nutraceutical, a portmanteau of the words “nutrition” and “pharmaceutical”. -The term is 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 such
Slide 27: Manufacturing Facility
Manufacturing Facility • Adi has a State -of-the-Art Manufacturing unit which was set up in 1995 in Sanand, Ahmedabad. • It has one of the largest processing capacities for Natural Soft Oil based Fatty acids in India. • Adi has currently has a staff strength of more than 177 employees. • The Install
Slide 28: Leadership in Renewable Speciality Chemicals
Leadership in Renewable Speciality Chemicals R&D focus to backward integrate and develop green chemistry Develop processes to add value to various by-products formed in manufacturing process leading to FOCUS ON RESEARCH further expansion in operating margin AND DEVELOPMENT Develop and expand w
Slide 29: About Fairchem / Aroma Chemicals / Oleo Chemicals & Nutraceuticals
About Fairchem Aroma Chemicals Oleo Chemicals & Nutraceuticals Financial Overview 29
Slide 30: Historical Financial Statement – Aroma Chemicals
Historical Financial Statement – Aroma Chemicals Rs in Mm, Year Ended_______ Mar121 Mar131 Mar141 Mar151 Mar161 Mar 172 Income Statement Revenue 3,837 4,295 5,142 5,493 6,276 6,090 Growth (%) 5.7% 11.9% 19.7% 6.8% 14.6% -2.96% EBITDA 468 553 714 771 855 802 Margin (%) 12.2% 12.9% 13.9% 14.0% 13.2% 1
Slide 31: Historical Financial Statement – Oleochemicals & Nutraceuticals
Historical Financial Statement – Oleochemicals & Nutraceuticals Rs In Mm Mar12 Mar13 Mar14 Mar15 Mar16 Mar 17(S) Income Statement Sales 974 1,235 1,524 1,513 1,525 1,857 Growth (%) 68.1% 26.8% 23.4% -0.7% 0.8% 21.8% EBITDA 149 176 336 255 235 231 Margin (%) 15.3% 14.3% 22.0% 16.9% 15.4% 12.4% Net In
Slide 32: Consolidated Financial Statement – Fairchem
Consolidated Financial Statement – Fairchem Rs In Mm Mar17* Total Debt to Equity Ratio Income Statement Revenue Growth (%) 5,974 NA 0.67 x EBITDA 808 Margin (%) 13.5% ROE # Net Income 214 Margin (%) 3.6% 5.76 % Balance Sheet Net Fixed Assets 4,116 ROCE# Cash 307 Other Assets Total Assets Shareholder
Slide 33: Disclaimer
Disclaimer This presentation does not constitute a prospectus, offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe for or purchase any securities of Fair
Fairchem Speciality — Investor Presentation (July 2017) on 6ix