In conversation with Aarti Jhunjhunwala, Executive Director, Fineotex Chemical Ltd
There has been a strong domestic demand as well, which is our main business region and we are excited about the opportunities coming all along; asserts Aarti Jhunjhunwala, Executive Director, Fineotex Chemical Ltd
As the chemical industry enters into 2022, strong demand for both commodity and speciality chemicals are expected to keep prices robust throughout the year. According to you, which major trends the chemical companies are expected to adopt in the coming year?
As we have witnessed in the past, there had been an unprecedented shortage in container availability and spiraling freight cost, which led to the shortage of raw materials. Further, some of the important international ports in the Far East are under lockdown, which signals that similar trends might take place in the future thereby, affecting the supply chain. The major trends that the chemical companies are expected to establish include robust supply chains and back-to-back sales order booking to hedge the position just in case raw material prices drop.
In FY22, 42 per cent of Fineotex Chemical's revenue comprised international business while 58 per cent was contributed by domestic business. Does the company plan to increase the international business contribution to the revenue mix?
It depends upon multiple factors like the margin from imports vis-a-vis domestic sales; export opportunities; government policies, etc. We will explore all arbitration opportunities to maximise our bottom line and also, grow our top line to capture the market share to establish our leadership position. There has been a strong domestic demand as well, which is our main business region and we are excited about the opportunities coming all along.
Fineotex Chemical's diversification in the health & hygiene segment has helped the company to gain good traction in the detergent market. Can you throw some light on the company's further plans of diversifying its product portfolio, if any?
For diversification, we evaluate each project on either of the two factors –
- Synergy of operations with the existing setup.
- Our strength in the chemistry to foray into other product categories.
While Biotex operations have the synergy to that of FCL and hence, been able to provide us the R&D capability to strengthen our current crop of textile industry-related products, our entry into the hygiene product line is based on the chemistry being similar to that of cleaning chemistry, which is used in our textile industry range of products. Further, the fungibility gives us the strength of flexibility and capacity enhancement at the shortest intervals of time. We are working with FMCG detergent companies and envisage that this segment will be one of the fastest-growing business verticals.
Can you brief us regarding the earnings outlook for FY23?
In the last three quarters, we have registered a robust growth. In Q2FY22, we grew by 64 per cent, in Q3FY22, by 81 per cent, and in Q4FY22, by 64 per cent. During Q4FY22, our new manufacturing plant at Ambernath (Maharashtra) also started its operations and ramped up quickly. Our volume growth in Q4FY22 is 62 per cent while in the last three quarters, we have been able to achieve an average growth of 70 per cent. Also, globally, India is emerging strongly at the cost of China, which is taking a beating, we are much more optimistic. This national outlook helps the domestic industries to reach out to attractive export markets besides attracting global investment. Further, with the pandemic out of mindspace and business recovering to pre-COVID days, we are confident of growing at a much faster pace than ever before. Hence, looking at the order books and the cost advantages which India has over China for the export businesses, we are confident of registering a strong as well as sustainable growth in the future.