Announcement under Regulation 30 (LODR)-Investor Presentation

Pursuant to Regulation 30 read with Schedule III, Part A, of SEBI (LODR) Regulations 2015, we attach herewith a PDF file containing Corporate Presentation of our Company. Please note that we did not have any Analyst / Institutional Investor Meet and so we have not separately shared this presentation with any one. The Copy of Corporate Presentation is also available at the Website of the Company viz. www.fairchem.in

about 1 month ago

INVESTOR PRESENTATION

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Sentiments detected

Positive 44
  • Well entrenched Customer Long lasting Pan India Relationships in Promoted by Fairfax Company plans to Raw Material sourcing high growth India Holdings and increase its top line by capabilities with industries like backed by experienced 2.5 times of FY21 in 3 diversified vegetable Paint, Inks, Printing Management team years and intends to maintain EBITDA oil refineries growth 25 years of legacy High emphasis on Business Raw material Sustainability and throughput Capacity Forward integration plans to Leading Corporate expansion completed make value added products manufacturer in Governance in Q1-FY23 with India for substantial standards minimal capex part of the overall revenue

  • - It has a state -of-the-art Manufacturing unit which was set up in 1995 and has over the 6,432 years gone through various stages of expansion, backward integration, debottlenecking and technological advancementsto create a one of its kind world class facility.

  • The company increased the raw material throughput capacity of its plant to 120,000 MTPA by Q1-FY23.

  • scheme of arrangement to to 120,000 MTPA company to manufacture Further increased its capacity demerge the aroma Mixed Tocopherol Concentrate to 30,000 MT p.a. in chemicals business of Privi in India and supply to Henkel September 2014.

  • Focus on increasing yield, quality of by-products, reaction time (de-bottlenecking) and reducing catalyst cost value added products 2016-22: Doubled the capacity to 90,000 TPA from 45,000 TPA such as Tocopherols 50%, Sterols 90%, 2015.

  • R&D focus (Biofuel) and Monomer Acid continues, with R&D lab upgradation of co- setup 6,431.8 products such as 2010.

  • Doubled capacity to Monomer of fatty acid 1996.

  • Acid, Iso Stearic Acid producing joined by Tocopherols friends as co- 3,965.7 Capacity expansion to promoters 120,000 TPA as at the 3,065.9 end of Q1 FY23 1985.

  • Exceptional Track Record of Growth & Profitability Raw Material Processing Capacity (in TPA)

  • Capacity expansion to 120,000 45,000 60,000 72,000 90,000 TPA as on Q1 FY23 Processed Volume (in kt) 31 39 41 48 52 59 Operating leverage driving margin EBITDA (%) 14.8% 12.8% 14.3% 14.4% 15.8% 17.3% 16.3% expansion

  • Tocopherols (50%) food and Natural Vitamin E / Sterols Fairchem Organics is constantly improving its Sterols To manufacture Cortico processes to create better quality by-products (90%)

  • 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 on green manufacturing processes which reduces effluents to ensure sustainability Strong Customer and Supplier Relationships - Well entrenched Customer Relationships in high growth industries like Paint, Inks, FMCG - Long lasting customer relationships of more than 15 years with various customers - More than 20 years relationship with key raw material suppliers

  • CompetitivePosition - Low cost of raw material and efficient manufacturing process enables it to be highly cost competitive vis a vis global peers - Leading manufacturer in India for substantial part of the overall revenue - Position to sell most that it produces Experienced senior management - Fairchem is well supported by an esteemed Promoter Institution – Fairfax India Holdings - Strong and experienced management team that have positioned business well for continued growth and development - Strong R&D team focusing on integration and green chemistry Capital Efficiency - Majority of the capacity expansion has been undertaken primarily through internal accruals.

  • - Judicious strategy on capacity expansion by evaluating market demand-supply scenario and working very closely with its customer base Investor Presentation | www.fairchem.in 11

  • Strong moat of Sanand,  Low cost of raw material as Fairchem purchases secure and low-cost Ahmedabad waste products from oil refineries raw material supply  Efficient manufacturing process comparable to enabling Fairchem to global peers enables it to be highly cost be the lowest cost competitive producer  Operational excellence with a strategically globally located facility 3 Valuable Supplier Relationships 

  • Key Suppliers Key Customers Supplier  Fairchem has long and meaningful relationships

  • Supplier 2 Customer 2  Bulk procurement at prices superior to capability enabling alternative disposal options for suppliers - strong purchasing Customer

  • Key Customers Displaying High Levels of Stickiness Bulk of the top 15 customers have growing, long-term relationships with Fairchem Organics 7%

  • Fairchem’ s products are critical for its customer base, evidenced by its track record of near-zero bad debts

  • 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) 

  •  IT systems upgraded to years in the chemical industry support controls environment Independent Directors 

  • The low cost of raw material and efficient manufacturing process enables the company to be highly cost competitive vis-

  • Over the years Fairchem has gone through various stages of expansion, debottlenecking and technological advancementsto create a one of its kind world class facility.

  • - The company uses a judicious strategy on capacity expansion by evaluating market demand-supply scenario and working very closely with its customer base to understand 120,000 their needsand requirements.

  • Fairchem’s last major capex was done from FY14 to FY16 when it enhanced the capacity from 18,000 MTPA to 45,000 MTPA 45,000 - By Q1-

  • FY23 the company completed its capacity expansion program to take the raw material throughput capacity from 45,000 MTPA to 120,000 MTPA.

  • The capacity expansion has the potential to more than double the company’s revenues in the coming years,besides enhancing the return ratios.

  • - The company supplies this product as an import substitute for sale to consumers in Surface Resins Textiles Coating and Printing Ink industry on import parity with added advantage of just-in-time delivery and better quality.

  • As result Fairchem has been preferred supplier for most of its clients and believes it would gradually substitute large part of its client requirement, which are met through import at present.

  • Future Growth Strategies Forward integration of to develop Methyl Ester (Biofuel) and upgrading of a Forward Increasing

  • Enhancing customer base co-product – Monomer Integration of Oleo customer base to serve new industries (Monobasic) of fatty acid Chemicals like specialty inks for stream to make Stearic Acid, flexible packaging Iso Stearic Acid

  • - Growing biochemical product demand in various consumer applications such as personal care, detergents, and food & beverages is expected to remain a key factor driving growth.

  • The global oleochemicals market size was valued at USD 19.46 billion in 2020 and is expected to grow at a compound annualgrowth rate (CAGR) of 7.57% from 2021 to 2028.

  • The Linoleic Acid Market is forecasted to grow at a rate of 4.0% CAGR during the period of 2021-2026.

  • - Dimer acid market will reach an estimated valuation of USD 2.11 Billion by 2027, while registering this growth at a rate of 4.10% for the forecast period of 2020 to 2027.

  • Dimer acid market report analyses the growth, which is currently being growing due to the growing number of construction activities in emerging economies.

  • The region is also expected to witness the fastest growth over the next few years owing to abundant raw material supply and significant developments in the application markets.

  • Oleo Chemicals Industry in India • India oleochemicalsmarket is projected to cross USD 2.6 Bn by 2025.

  • Robust growth in India oleochemicals market can be attributed to the increasing demand for naturally derived raw materials for paints and soaps industry.

  • 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.

  • Track Record of Strongest Operational Efficiency, Growth and Asset Turns Driving

  • Profitability Revenue Growth while Building on the Strong Margin Characteristics of Niche Specialty Chemicals Businesses 5-Year Revenue CAGR (FY17-22)

  • Exceptional Operational Efficiency Creates Strong Balance Sheet Businesses

  • Camlin Fine S.H. Kelkar Oriental Atul Navin Fluorine Galaxy PI Industries Aarti Industries Linde India Vinati Organics SRF Alkyl Amines Fairchem Fine Organic Balaji Amines Clean Science Sciences Aromatics Surfactants Organics Fairchem’ s business model prioritizes margin stability and better return ratios, with favorable industry dynamics driving top-line growth ____________________

Negative 2
  • Large off-take

  • - Near-zero factory accidents since inception (1)

Mentioned Phrases & Organizations

Important keywords detected (20+)

fairchem (71)
presentation (47)
www fairchem (36)
fatty (34)
acid (33)
presentation www (33)
presentation www fairchem (33)
india (31)
raw (28)
products (28)
capacity (26)
material (25)
product (23)
raw material (22)
oil (21)
manufacturing (21)
market (20)
acids (20)
chemicals (19)
oleo (18)

Organizations identified (10+)

Fairchem Organics (6)
Linoleic Acid (4)
Valorem Advisors (4)
Fatty Acids (3)
Oleo Chemicals (3)
Dimer Acid (2)
ADM (2)
Nahoosh (2)
Tocopherols (2)
Paints (2)

Tables extracted (9)

Main ProductApplication
Linoleic Acid / Soya Fatty Acid•Paints and Inks
Dimer Acid•Paints, Inksand Epoxy Hardeners
Monomer Acid•Paints and Inks
Distilled fatty acids•Liquid Soap, Textile Auxi and low Value paints
Palmitic•Amines, Amides, Soap
MainProductApplication
(Natural) Mixed Concentrate Tocopherol• Natural Vitamin E/Food and Cosmetic Industry • Vitamin E • Cosmetic Industry • Food • Pharmaceutical • FMCG • Pet Food
(Natural) ConcentratedSterols•Food •Pharmaceutical (Raw material to manufacture Cortico Steroids)
OilsBy-productFattyAcidsApplication
SSCC, Groundnuts, Rice Bran & RapeseedsAcid OilsPalmitic, Linoleic, Dimer, MonomerInks & Paints, Epoxy hardeners
SSCC, Groundnuts, Rice Bran & RapeseedsDeodorizer DistillateMixed Tocopherol, Distilled Fatty AcidsNatural Vitamin E Low grade resins and Soap’
Palm, Palm Kernel & CoconutDeodorizer DistillateStearic, Lauric , Distilled Fatty AcidsSoap Noodles, Rubber Tyre, Cosmetic
PARTICULARS (INR Mn)FY18FY19FY20FY21FY22Q1-FY23
Revenuefrom Operations2,4282,4993,0653,9666,4322,251
Total Expenses2,0902,1392,5813,2795,3831,851
EBITDA3383604846871,049400
EBITDA Margins (%)13.92%14.41%15.79%17.32%16.31%17.77%
Other Income274366333
Depreciation495460667119
Finance Cost585766686924
PBT258292424556912360
Tax64777713123390
Profit After Tax194215347425679270
PAT Margins (%)7.99%8.60%11.32%10.72%10.56%12.00%
Other Comprehensive Income-(2)(1)(5)11
Total Comprehensive Income194213346420680271
Basic/Diluted EPS (INR per share)4.975.5126.6532.6352.1520.76
ASSETSFY18FY19FY20FY21FY22
Non-Current Assets
Property, Plant and Equipment1,0151,1521,2191,2201,363
Capital work-in-progress34994295420
Right of use assets--434342
Intangible Assets--1--
Intangible Assests Under Development----2
Financial Assets
(i)Loans2----
(ii) Other Financial Assets113-2
Non-current Tax Assets (Net)166141819
Other Non-current Assets1513663020
1,0831,1811,44016061,868
Current Assets
Inventories304340353453700
Financial Assets
(i) Trade receivables320321379468622
(ii) Cash and Bank Balance42242
(iii) Other Financial Assets299---
Other current assets2424155549
6816967499801,373
TOTAL ASSETS1,7641,8772,1892,5863,241
EQUITY AND LIABILITIESFY18FY19FY20FY21FY22
EQUITY
Equity Share Capital376391130130130
Instruments entirely equity in nature15----
Other Equity4826361,1371,5572,191
8731,0271,2671,6872,321
LIABILITIES
Non-Current Liabilities
Financial Liabilities
Borrowings16483163260100
Provisions69121817
Deferred Tax Liabilities (Net)104121116113128
274213291391245
Current Liabilities
Financial Liabilities
(i) Borrowings388405504308520
(ii) Trade Payables731006410991
(iii) Other financial liabilities14211221218
Other current liabilities78294636
Provisions3631010
Current Tax Liabilities (Net)46101410
617637631508675
TOTAL EQUITY AND LIABILITIES1,7641,8772,1892,5863,241
PARTICULARS (INR Mn)FY18FY19FY20FY21FY22
Cash and Cash Equivalents at Beginning of the year30.20.20.30.3
Cash Flow From Operating Activities155342312394405
Cash Flow from Investing Activities(126)(137)(239)(228)(342)
Cash Flow From Financing Activities(32)(205)(73)(166)(63)
Net Inc./(Dec.) in Cash and Cash Equivalent(3)---(0.2)
Cash and Cash Equivalents at End of the year-0.20.20.30.1
Operating Cash Inflow155342312394405
Revenue (In Mn)
5 Year CAGR - 26%2,251 Q1-FY23
3,966 3,065 2,428 2,499 2,251 FY18 FY19 FY20 FY21 FY22 Q1-FY23
Price Data as at 30 th June, 2022INR
Face Value10.0
Market Price1,514.6
52 Week H/L2,290.0/ 1,198.0
Market Cap (Mn)19,720.8
Equity Shares Outstanding (Mn)13.0
1 Year Avg Trading Volume (‘000)46.5

Features are experimental.