In interaction with Surendrakumar Tibrewala, Founder and Chairman of Fineotex Chemical Limited
The chemical sector is only expanding, and the array of products is growing. Globally, companies are finding a substitute for China, more so in chemicals and textiles.
Surendrakumar Tibrewala, Founder & Chairman of Fineotex Chemical Limited is a visionary, who has invested three decades in the chemical space. He speaks to Dalal Street Investment Journal about his company’s plans and breaks the silence on their upcoming Ambernath plant (near Mumbai) that has beaten its deadline and will be powered up in September 2021. Read the detailed interview here:
What is your outlook on the chemical sector in India? What are the global opportunities for the sector?
Look around, chemicals are a part of the life cycle of almost everything we consume. While our group is known for our textile specialities, which of course is a lion’s share of our business, we offer speciality chemicals for other sectors too i.e. health & hygiene as well as drilling specialities for the upstream oil & gas sector. The chemical sector is only expanding, and the array of products is growing. Globally, companies are finding a substitute for China, more so in chemicals and textiles. To date, China is one of the key destinations for textile manufacturing but there has been a shift in the outlook and international companies are looking at diversifying into countries like India, Bangladesh, Vietnam and Pakistan along with other cost-effective manufacturing destinations for textiles. Many European & American companies are looking at us with a strategic plan for tie-ups and to enter into joint ventures. The idea is to have a manufacturing base in India as Asian headquarters. India will lead the growth of home textiles and over the next four years, producers are likely to double their production capacity and that trend is likely to amplify. The big wave is here and that will provide exciting opportunities and ample scope for the expansion of our business.
Your company has recently forayed into home care, hygiene and drilling speciality chemicals; how will non-textile segments drive volume and value growth for your company in the coming years?
Chemistry is in our DNA. We have been working on chemistries for so many decades, and continuously trying to find newer avenues for it in our research facilities. We are infusing more value in the existing line. However, in addition to performance chemicals for the textile industry, which is our mainstay, we also supply specialities to the healthcare & hygiene sector and drilling fluids for the upstream oil & gas sector.
There are many chemicals that can be applied to cleaning and hygiene polymers. There are about 40 new products that we have launched for housekeeping & kitchen and have started selling them through our newly established network of distributors as well as the marketing team. Last year, we received FDA certification from Maharashtra for the cleaning & hygiene business, which is a milestone for us. In the home care segment, we offer polymers for detergents, which is again one of the key areas for our future growth. We have partnered with Johnson Diversey for R&D and started this activity aggressively. We also offer drilling specialities for building viscosity for the oil field drilling chemicals. We see huge potential in all these markets.
Your company deployed Rs 270 million in FY21 for a new brownfield facility at Ambernath. How do you plan to leverage the additional manufacturing capacity and development expertise into new high growth areas?
Our facility, which was scheduled to be ready in 2022, has beaten its deadline and will be up and running this September. Our facility in Ambernath is at a central location to reach our customers from textiles as well as for other industrial applications that are in that industrial belt. Like all our other manufacturing units, this capacity is very fungible and can be utilised to manufacture customised products for various applications as per the market demand. We have made this investment in line with our future plans to scale up our capacity and also, offer other new products in health & hygiene. For this facility, there have been no borrowings from the bank.
Could you throw light on the synergy developed between Fineotex and Biotex over the last decade?
Biotex Malaysia was founded and is co-owned by Germans, who have extensive experience and domain knowledge through their work in Thor & Henkel, which are market leaders in the field of textile specialities and were based in Malaysia since 1998. After the currency devaluation in Indonesia & Singapore, the company decided to shut down its operations in Southeast Asia and decided to start its manufacturing facility in 2002. In 2009 and 2010, we came across them when they were also in the same business cycle chain as we initially were, supplying to European specialities manufacturers and not directly to the customers under their brand name. When we got into the business with Biotex, we started buying the products from each other to expand our product portfolios and to offer our customers and later, got into synergistic technology partnerships with them. As we know that Asians have a strong approach to cost-effectiveness & bottom-lines while European companies are very good at quality control and setting product standards. Our partnership with them has been a strong turning point in our journey as Biotex is spearheading our R&D drive very strongly, which has enabled us to turn around the company from a debt-ridden to a cash-rich company. Going forward, Biotex has developed many alternate solutions that we have been bringing to the market and are able to reach our customers across the globe and in India through our strong network of over 100 distributors located in all the textile hubs in the country. Biotex follows the highest standard of ethos and holds Bluesign certification.
How do you plan to shift/evolve from synthetic to lower carbon footprint products?
We understand that effluents are undoubtedly one of the biggest challenges for textile manufacturers and as the environmental norms are getting stricter, they are now compelled to switch to sustainable chemistries and adopt cleaner processes & reduce water consumption. Biotex has been at the forefront of developing green products that can enable this industry to realise sustainability goals. A few years back, we offered Chenab Textile Mills, a leading fibre dyeing facility, a solution that could help them replace 3-4 products used at the pre-treatment stage with a single product. This product enabled them to reduce COD, BOD, processing and labour cost as well as to improve the quality and tensile strength of yarn because of the reduction in the temperature of a process that could be carried out at 70 degrees Celsius instead of 95 degrees Celsius. After getting these results, this case study was a point of reference, and we could easily sell this product to other customers in this domain. Fineotex is aggressively moving in the global markets with all available sustainable technologies for textile chemicals and health & hygiene range.
What are your top three strategic priorities at this point in time?
As our organisations expand into newer markets & countries, our aim is to make sure we balance growth with sustainability. We want to always be a conscious company that equally places profits with people and the planet. Based on market capitalisation as of March 2021, Fineotex ranked 828 amongst companies listed on NSE. It moved up 130 points. We now are a family of 50,000 investors. We remain confident in the underlying health of our organisation, and our existing user retention activity remains consistent with historical trends. We proudly always state that we have never lost a customer. Our new facility, several new joint ventures, new product lines and the added momentum we will witness after the Covid-19 pandemic will see us enter a stage of hyper growth//With our new facility, several new joint ventures, new product lines and the added momentum, witnessed after the COVID-19 pandemic will see us enter a stage of hyper-growth.