ARCL Organics Management Discussions


Financial Statements are in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards issued by ICAI. Readers are cautioned that this discussion may include "forward-looking statements" that are not historical in nature. Forward looking statements may include statements relating to future results, financial condition, business prospects, plans and objectives. Statements are based on current beliefs, assumptions, expectations, estimates and projections on the business segment in which your company operates. The statements do not guarantee positive performance, exposed to known and unknown uncertainties, many of which are beyond the control of your Company. Uncertainty could cause results to differ from forward-looking statements, which should not be construed as representation of future performance.


The Indian chemical industry plays a pivotal role in contributing to the economy of the country, accounting for approximately 7 per cent of GDP and is expected to reach USD304 billion by 20251, up from USD178 billion in 2021. The industry continues to remain an attractive hub for opportunities for both domestic and multinational manufacturers.

Specialty chemicals segment comprises a significant portion of India‘s chemical industry. With rising demand for value-added products by both domestic consumption and exports, the industry has experienced a significant increase from end-user segments such as the food industry, automobile industry, real estate, clothes and cosmetics, among other industries. Additionally, the Indian specialty chemicals industry is also expected to outpace China, Japan and the rest of the world. From a trading perspective, specialty chemicals account for a significant share of more than 50 per cent of chemical exports.

However, prevailing factors also spurred demand for a few specialty chemical sub-segments because these were identified, as necessary. Consumer demand, for instance, increased for products related to hygiene. The lockdown period also led to supply chain disruptions, which forced manufacturers to de-risk their supply chains and shift their reliance away from crucial manufacturers located in China and toward alternative countries like India.

Moreover, stringent pollution control regulations and high labour costs, along with ‘China plus one? strategy are expected to encourage manufacturers from China and other developed nations to move their manufacturing capabilities to India. Additionally, India‘s strong process engineering capabilities, low-cost manufacturing capabilities and abundant manpower are leading to an array of opportunities for imports and exports of specialty chemicals.

Likewise, government initiatives, such as the Petroleum, chemicals and petrochemicals investment region (PCPIR) policy and production linked incentive (PLI) schemes, are providing reassurance to further develop the potential for domestic manufacturing and specialty chemicals, which are anticipated to benefit from this momentum. While India aims to emerge as a manufacturing hub for the world, there are likely to be a few challenges in the near term. Therefore, the country should also focus on aspects such as research and development, capital investment, acquisitions, economies of scale, and most importantly, expanding domestic demand to sustain the rising growth of the industry.


A. Emerging Markets and Global Expansion: Emerging economies, particularly in Asia-Pacific and Latin America, offer significant growth opportunities for specialty chemical companies. Rapid urbanization, industrialization, and infrastructure development in these regions drive demand for specialty chemicals in construction, automotive, and consumer goods industries.

B. Cross-Industry Collaborations and Partnerships: Collaborations between specialty chemical companies and other industries, such as healthcare, agriculture, and automotive, can lead to innovative product development and market expansion. By leveraging synergies and expertise across different sectors, companies can unlock new growth opportunities and create value for stakeholders.

C. Growing Demand for Customization: Specialty chemicals offer unique properties and functionalities tailored to specific applications. With increasing demand for customized solutions in industries such as pharmaceuticals, agriculture, and electronics, there is a significant opportunity for specialty chemical manufacturers to meet these diverse needs.


A. Regulatory Compliance and Environmental Concerns:

_ Stringent regulatory requirements and environmental standards pose challenges for chemical manufacturers in India. Compliance with regulations related to pollution control, waste management, and occupational health and safety can significantly increase operational costs and regulatory burdens.

B. Global Competition:

_ The chemical industry in India faces stiff competition from global players, particularly from countries with lower production costs and more favorable regulatory environments. Import competition, especially for commodity chemicals, can exert pressure on domestic manufacturers, leading to pricing pressures and margin erosion.

C. Volatility in Raw Material Prices:

_ Fluctuations in the prices of raw materials, such as crude oil, natural gas, and petrochemicals, can impact the cost structure of chemical manufacturing in India. Price volatility makes it challenging for companies to forecast costs accurately and maintain profitability.

D. Supply Chain Disruptions:

_ Disruptions in the global supply chain, such as transportation bottlenecks, logistics challenges, and geopolitical risks, can disrupt the flow of raw materials, intermediates, and finished products. Supply chain disruptions can lead to production delays, inventory shortages, and increased costs for chemical manufacturers.


Your Company is pleased to share a positive outlook as it navigates and excels in the dynamic landscape of the chemical industry. We are delighted to highlight some significant achievements and growth prospects that shape our companys promising future.

First and foremost, Your Company has experienced impressive revenue growth, achieving an approximate 20% increase. This notable achievement reflects the companys unwavering dedication to excellence, innovation, and customer satisfaction, further underscoring its resilience and adaptability to market demands.

Furthermore, it is with great excitement that we announce Your Company?s successful venture into new formaldehyde markets. By expanding its global reach and diversifying its customer base, the company is bolstering its competitiveness and unlocking new avenues for growth. This strategic expansion aligns seamlessly with our overarching goal of establishing ARCL Organics Ltd as a global leader in the chemical industry.

In line with strategic growth initiatives, Your Company has made substantial investments in capital expenditure (CAPEX), amounting to over 50 Crores in the past three years. These strategic investments have fortified the companys production capabilities, enhanced operational efficiency, and positioned it to effectively meet burgeoning market demand. Our state-of-the-art facilities and infrastructure lay a solid foundation for sustainable growth and value creation.

Looking ahead, Your Company is confident that it is poised for exponential growth. With all its plants operating at full capacity, the company is exceptionally positioned to capitalize on emerging opportunities and drive top-line growth. Its steadfast commitment to quality, innovation, and customer satisfaction remains unwavering and continues to be the cornerstone of its success.

As Your Company embarks on this exciting journey of growth and expansion, it extends sincere appreciation to each member of its team for their dedication, hard work, and steadfast commitment to excellence. Together, the team will harness collective strengths, seize opportunities, and chart a course towards a prosperous future for ARCL Organics Ltd.


Internal control system adopted aimed at promoting operational efficiencies and emphasizing adherence to the policies adopted by the Board of Directors.


Statements in the Management Discussion and Analysis describing your Company?s position and expectations may be "forward looking statements" within the meaning of the applicable securities laws and regulations. Results could differ materially from the statements expressed or implied.

Rampur Budge Budge Trunk Road,

Kolkata 700 141

Date: 26.04.2024

For and on behalf of the Board of Directors

(Suraj Ratan Mundhra)

Chairman and Managing Director (DIN No. 00681223)