Clariant Chemica Management Discussions

The global economy displayed resilience in 2022, despite facing initial obstacles such as the ongoing Russia-Ukraine geopolitical crisis, disruptions in supply chains, increased energy prices and mounting inflationary pressures. In response, central banks worldwide raised policy interest rates to stimulate economic activities and address inflation concerns. According to April 2023 forecast by the International Monetary Fund (IMF), the global economy grew by 3.4% in 2022, with a projected growth rate of 2.8% in 2023 and 3.0% in 2024. These projections consider the easing of supply chain issues and a decrease in headline inflation due to lower energy and food prices. Whereas the Indian economy has also demonstrated robust growth in FY 2022-23, solidifying its position as one of the worlds fastest-growing economies. This sustained growth trajectory has been driven by the expansion of economic activities, particularly in private sector consumption and the governments emphasis on infrastructure development. According to the Ministry of Statistics and Programme Implementation (MoSPI), the Indian economy achieved a growth rate of 7.2% in FY 2022-23. With increased government spending, along with the growth in private consumption and investment, as announced in the Union Budget 2023-24, there is a strong anticipation of enhanced economic activity and a boost to demand.

Overall, the global and Indian economies are expected to grow at a healthy pace in 2023 and 2024. However, there are some risks to this outlook, such as the ongoing geopolitical crisis in Ukraine and the potential for further supply chain disruptions.


The specialty chemical industry has been experiencing growth on a global scale, driven by increased demand from sectors such as construction, water treatment and electronic chemicals. The sector also benefits from the rising demand for pharmaceuticals, food & feed additives, and flavors & fragrances, among other applications. In India, the specialty chemicals segment is also growing at a handsome pace. This growth can be attributed to a number of factors, including increased demand from various end-user sectors, a growing domestic customer base, and evolving consumer lifestyles. However, its important to note that the current market conditions are characterized by uncertainty in demand. While there are positive factors contributing to the industrys expansion, there are also some headwinds affecting the short-term outlook. The worldwide China+1 strategy has presented India with a unique opportunity to become a viable alternative hub for specialty chemical manufacturing. India offers a number of advantages, such as low-cost operations, availability of feedstock, a skilled labor force, a vast coastline and navigable waterways facilitating trade, favorable government policies, substantial import substitution opportunities, and robust intellectual property protection. The favorable macroeconomic conditions and improvements in the business environment have created a positive ecosystem, attracting foreign specialty chemical manufacturers to invest in India. This presents a significant growth opportunity for India to emerge as a frontrunner in specialty chemical manufacturing. By leveraging its core research and development capabilities, the country is well-positioned to expand its global market share by scaling up production capacity, and adopting efficiency measures to deliver products at competitive costs.


The global pigments market is characterized as dynamic and thriving, catering to diverse sectors like paints and coatings, printing inks, and plastics. Several factors drive this markets growth, including the increasing demand for vibrant colors in consumer goods, technological advancements, and rising disposable incomes worldwide.

Despite short-term challenges, the market is poised for long-term positive growth.

An important development in this industry is the notable surge in demand from key application sectors, namely paints and coatings, construction, and plastic pigments.

India, with its favorable ecosystem and localized value chain, has emerged as a promising destination for pigment manufacturing. Organic pigments make up 58% of the total pigment production in India.


Heubach Colorants India Limited (referred to as ‘HCIL or ‘The Company) boasts an extraordinary portfolio, encompassing organic and inorganic high-performance pigments, and pigment preparations for paints, varnishes, plastics, coatings, printing, non-impact printing, inks, latex, adhesives, and construction materials. With manufacturing facilities strategically located in Roha (Maharashtra), Cuddalore (Tamil Nadu), and Nagda (Madhya Pradesh), the Company has a wide-ranging manufacturing presence throughout the country. The Company stands among the worlds leading producers of high-quality organic and inorganic pigments, as well as in pigment preparation.

With a rich history, the Company has been shaping the world of colors, establishing an extraordinary legacy of excellence. The Company takes pride in its pioneering efforts to develop sustainable color technologies, aiming to create a brighter tomorrow for all. Beyond providing innovative solutions, it strives to assist its customers in achieving their business and sustainability goals.

Embracing the responsibility of driving positive change in the pigments industry, the Company implements industry-leading ESG (Environmental, Social, and Governance) measures. These measures ensure that the Companys operations meet the highest standards in quality and sustainability while upholding ethical business practices.

By instilling peace of mind to its customers, employees, and stakeholders, The Company fosters a harmonious ecosystem which enables sustainable growth.


organic Pigments: Vibrant and eco-friendly, offering intense colors, while covering a wide range, but with limited durability

Inorganic Pigments: Boasts excellent opacity and resistance, but with lower intensity and a narrower color spectrum

Pigment Preparations: Meticulously crafted and expertly blended liquid or solid pigment formulations, catering to customized colors and specialized applications

dyes: Sustainable specialty and aluminum dyes, offering environmentally conscious coloring solutions Key product characteristics

organic Pigments norganic Pigments Pigment Preparations dyes
• High chroma • Lower chroma • Pre-dispersed pigment in liquid & solid form • Specialty Dyes
• High color strength • Lower color strength • Custom color blends • Aluminum Dyes
• Large coverage of color space • Limited color space • Specialized properties for specific use case
• Limited resistance • High opacity
• High resistance/ fastness properties


organic Pigments norganic Pigments Pigment Preparations dyes
• Quinacridone • Bismuth Vanadate • Based on high performance pigments • Polymer soluble dyes
• Dioxazine • Rutile pigments • Customized solutions • Solvent dyes
• Benzimidazolone • Cobalt blue • Water soluble dyes
• DPP • Spinel pigments
• Isoindolinone
• Perylene
• Phthalos



The comprehensive selection of high-performance organic and inorganic pigments, along with pigment preparations, stands as a testament to brilliance and durability. This caters to coatings and paints with utmost effectiveness. Diverse Range of Coating Applications

• Automotive Coatings

• Coil Coatings

• Corrosion Protection

• Exterior Paints & Plasters

• Floor Coatings

• Industrial Coatings

• Interior Decorative Paints

• Powder Coatings

• Road Marking & Traffic Paints

• Wood Coatings


Offering products that adhere to rigorous global benchmarks for environmental, health, and safety excellence, while also conserving energy and minimizing the customers carbon impact.

Diverse Applications of Our Plastic Products

• Automotive Plastics

• Construction & Electrical

• Consumer Goods

• Fiber

• Packaging


Contemporary printing requires adaptable, top-tier solutions. Our pigments and pigment preparations cater to inkjet, toner, offset, flexographic, and gravure packaging needs, excelling with UV, solvent, and water-based inks.

Our Printing Solutions Across industries

• Ink jet

• Printing for Packaging

• Publication

• Specialty Printing

• Toner

special applications

The diverse collection of pigment dispersions and pigments suits a broad array of usages, ranging from vivid textiles to high-end handbags, lightweight aluminum casings to vibrant balloons.

Versatile Applications of Our Solutions

• Home & Fabric Care

• Personal Care

• Seed Coloration & Crop Protection

• Aluminum anodizing dyes and chemicals

• Stationery

• Viscose Coloration

• Latex Coloration

• Leather and Paper Coloration

• Concrete & Plaster


• Introduced LVOC colorants for odorless paints

• Created Lead Free pigments for eco-friendly paints

• Innovated pigments for NTNK packaging inks, replacing hazardous solvents like Toluene and Methyl Ethyl KetoneDelivered high-quality pigments with strong color intensity for resource-efficient solutions. These pigments enhance material longevity in paints and coatings

• Enhanced road marking paints to ensure durability and sustainability, contributing to road safety. Our HEUCOSIN™ products provide resilient solutions

• Prioritized safe handling of pigments, adhering to global regulations and often surpassing them

• Enhanced coatings durability through our HEUCODUR? inorganic pigments, known for exceptional light fastness and weather resistance

• Pioneering in zinc-free alternatives for a decade, our range of orthophosphates and polyphosphates offer effective protection in various applications

• Complying with strict environmental standards, our organic pigments are suitable for coloring biodegradable polymers like PLA, PHA/PBS, and PBAT

• Enabled black polymer identification through Heubachs NIR technology, facilitating recycling of black plastics

• Ensuring compostability through selected products like PV Fast and Graphtol

• Promoting sustainability with Biodegradable, Ok Compost, and recyclable colorant options, prioritizing environmental protection

• Developed water-based pigment preparations for three decades, catering to various applications without solvents for eco-friendliness

• Rigorously monitoring pigment content for hazardous heavy metals and PCBs to ensure compliance and safety


• Rich industry presence

• Commitment to the highest standards in quality, sustainability, and integrity

• Extensive portfolio with comprehensive offerings

• Global network of related companies across 100 countries

• Connected to the customer through associate companies

• Diversified facility capabilities for multiple product portfolio

innovating Products and integrating Sustainability

The Company constantly focuses on innovation to bring new products to its portfolio while integrating sustainability in its products. The Company stays at the forefront of technological advancements with its state-of-the-art technical centers and analytical laboratories.

The Company ensures on-site support to the customers through its associates spread globally. This allows the Company to offer tailored solutions, quick delivery times, and globally compliant products. Through this approach, it prioritizes customer satisfaction, coupled with a focus on minimizing its environmental footprint.

Utilizing the resources naturally is at the core to the Companys strategy to achieve sustainable growth.. Sustainability is deeply embedded in the Companys core values and serves as the driving force behind its business and innovation.

The Company is unwavering in its determination to be an industry leader. With a resolute approach, the Company is actively striving to become the foremost long-term partner for companies seeking cutting-edge and sustainable products. Sustainability is not merely an option but a fundamental cornerstone of the Companys operations, deeply ingrained in every aspect of the Companys activities. The Company is resolutely committed to leaving a positive and lasting impact on the environment, working tirelessly to create a better, greener future for the planet and for generations yet to come.

Financial Performance

The Company remains dedicated to achieving sustainable growth to cater the expectations of the stakeholders. This commitment is supported by a focused strategic approach, efficient cost management, and the introduction of innovative products. By aligning these key factors, the Company aims to capitalize on market opportunities, enhance its competitive position, and drive its continued success.

The Company ensures compliance with Indian Accounting Standards (Ind AS) for its financial statements in accordance with the Companies Act, 2013. The Companys continued operations recorded sales of ? 76,642.00 Lakhs in FY 2022-23 as compared to ? 83,951.00 Lakhs for FY 2021-22. The exports accounted for 36% of the Companys total sales revenue during the year, demonstrating its global reach and market presence.


( in Lakhs)

Particulars year ended on march 31, 2023 year ended on march 31, 2022
Income from Operations 76,642.00 83,951.00
Operational Profit (EBITDA) 6,147.00 6,165.00
Other Income 542.00 867.00
Profit Before Tax and Exceptional Items 4,627.00 4,950.00
Exceptional Item (630.00) -
Profit Before Tax 3,997.00 4,950.00
Profit After Tax 1,918.00 4,332.00
EPS ( ) 8.30 18.80


Particulars Fy 2022-23 Fy 2021-22
Debtors Turnover ratio 3.9 4.9
Inventory Turnover Ratio 3.4 3.8
Debt to Equity Ratio No Borrowings No Borrowing
Current Ratio 2.1 1.9


Particulars Fy 2022-23 Fy 2021-22
Interest Coverage Ratio 175 106
Return on Net Worth (%) 5% 11%
Return on Capital Employed (ROCE) (%) 9% 12%
Operating Profit Margin (%) 8% 7%
Net Profit Margin (%) 3% 5%


emergence of a potential china + 1 strategy: As global supply chains actively seek alternatives to China to reduce dependency and diversify sourcing, a strategic opportunity arises for India to attract investments and expand its chemicals sector.

The Company can position itself as a reliable and competitive partner for international companies looking to establish manufacturing and supply capabilities in India.

availability of a skilled workforce and competitive labor costs: India takes pride in its abundance of technically skilled professionals and offers cost-effective labor. This winning combination enhances the competitiveness of the Indian chemicals industry, allowing the Company to maintain cost efficiency, while delivering colorants of high-quality.

Fragmented Industry: The pigment chemical industrys fragmentation poses challenges like intense competition but also opens opportunities for companies to differentiate and consolidate.

limited Innovation and application development:

A key attribute that differentiates the Company in the industry is the keen focus on innovation and differentiation. Innovation that marries an "outside in" approach with the key technical competencies of the company.

We work on bringing to our customers solutions that address the ever tightening regulatory environment for e.g. our products address the need to address regulatory requirements on LVOC colorants, lead-free pigments, pigments tailored for NTNK packaging ink.

Additionally, the Company has introduced an array of inorganic pigments part of the HEUCODURR product line.

solution vs. Products: Shifting customer preferences towards comprehensive solutions offers a chance for specialty chemical companies to evolve their business models.

The Company believes products are a vehicle to bring to customers solutions that matter to them. We often ask the customers about their toughest problems and how we can bring solutions to solve those issues. As an example in response to the feedback to increase the recyclability of plastics, the Company launched a black colorant which possess the capacity to facilitate polymer identification through employment with near-infrared technology sorting devices—thus presenting a solution for the recycling of plastics.

sustainability: Increasing focus on sustainability presents a significant opportunity. Embracing eco-friendly practices and offering green alternatives can give companies a competitive edge.

The water-based pigment preparations championed by the Company are characterized by their solvent-free composition, thereby making them eco-friendly.

The Company has invested in renewable energy sources to meet the majority of energy needs at its production sites. The adoption of biofuels for boilers, for steam generation in the production process, is yet another example of walking the talk.


slowing demand in global markets and higher raw material costs: The expansion of domestic capacities for export-oriented specialty chemicals, coupled with slowing demand in global markets, impacts product margins. Additionally, the increasing costs of key raw material due to inflation pose additional challenges

need for differentiation and evolving as a solution provider: In the chemical industry, achieving differentiation is crucial for success. To stay competitive, the Company must evolve and shift its focus towards becoming a solution provider to meet the evolving needs of customers


With a strong commitment to ethical and sustainable business practices, the Company leads by the principles of ESG, Responsible Care, and its code of ethics. The Company proactively sets aspirational and realistic goals to address carbon emissions, and it has charted a roadmap to achieve these goals.

Sustainability plays a pivotal role in the Companys growth strategy, enabling it to create value through innovative and sustainable solutions. The Company has ingrained sustainability into its work culture, guiding its identified goals, market positioning, differentiation strategy, stakeholder value creation, brand reputation, and risk management practices. The sustainability focus is evident in the development of new products/applications which differentiates as a solution provider to its customers. Corporate Social Responsibility (CSR) is deeply ingrained in the Companys corporate philosophy. The Companys CSR Policy is in strict alignment with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company takes great pride in making substantial contributions to vital areas, including childrens education, safety, healthcare, and community support. These efforts aim to create a positive and meaningful impact on society and the communities in which the Company operates. At the Company, the CSR strategy is guided by the belief in sustainable business practices, a core value that drives the initiatives to create a positive impact on the communities and environment in which the Company operates. The Company focuses on achieving results that bring clear change to the target beneficiaries, while also reinforcing the commitment to innovation and sustainable business practices for both internal and external stakeholders. By collaborating with Government agencies and co-creating CSR projects with organizations, the Company ensures to make a meaningful difference, positioning the Company as a responsible employer with a strong presence in the region. Moreover, the employee engagement programs foster a culture of giving back, with opportunities for volunteering and active participation in CSR endeavors. The Company has developed a robust CSR policy and process that aligns with the values of the new the Company, emphasizing ethical behavior, risk management, reporting, transparency, and clear accountability, which further enhances the goodwill and credibility in the community.


Recognizing the importance of effective risk management, the Company prioritizes safeguarding its business operations and ensuring sustainable growth. The Company has implemented a comprehensive risk management framework that encompasses the identification, assessment, mitigation, and consistent monitoring of potential risks across all facets of its operations.

risk theme risks mitigation approach
Growth Industry structure change leads to oversupply and competition from small players with varying costs and quality Focusing on product innovation, operational efficiency, and maintaining a strong reputation for consistent quality
Challenges in tapping business opportunities due to lack of innovation and customer engagement/ partnerships Overcoming challenges in seizing business opportunities by prioritizing innovation and fostering active customer engagement and strategic partnerships.
Failure to plan for fluctuating costs affecting profitable growth Implementation of dynamic cost management strategy that includes regular cost analysis, strategic sourcing, and contingency planning.
Sustainability Inability to develop green, sustainable products through Research and Development Employing a dedicated R&D team that focuses on innovation and eco-friendly practices to overcome challenges in creating green and sustainable products.
Risk of not reducing carbon emissions and adapting to a Net ZERO economy Investing in innovative technologies to transition towards a Net Zero economy, thereby mitigating environmental risks and ensuring long-term viability.
Operations and supply chain Low production capacity utilization affecting efficiency Implementation of a comprehensive production optimization plan to address low capacity utilization and enhance operational efficiency.
Inadequate demand, supply, and logistics planning leading to higher costs Implementation of demand forecasting, optimizing supply chain operations, and enhancing logistics coordination to minimize costs and improve overall efficiency.
People Difficulty in attracting and retaining talent across the business Creating a dynamic and inclusive work environment, offering competitive compensation packages, professional development opportunities, and clear career progression paths
Absence of a strong leadership succession plan at critical levels Identifying high-potential individuals, providing targeted development opportunities, and fostering a culture of mentorship to ensure seamless transitions and continuity of leadership.


The Company has implemented internal control systems that align with the size and nature of its business.

These systems include corporate policies, management information, and reporting systems for critical operational areas, serving as essential components of the overall control mechanisms. To enhance the effectiveness of the internal control process, the Company has engaged independent firms of professionals as auditors, authorized by the Audit Committee, to assess the adequacy and compliance of the internal control process. These auditors provide comprehensive reports that include their observations and recommendations.

The Audit Committee of the Company plays a crucial role in ensuring strong internal controls. It approves the annual internal audit plan, which encompasses all business operations and support function activities. On a quarterly basis, the audit results and the recommended management actions, are presented to the Audit Committee.

The Company has established a robust system of internal financial controls in compliance with the Companies Act, 2013, and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. These controls are designed to ensure the adequacy and operating effectiveness of financial reporting. They provide reasonable assurance across various aspects, including adherence to the Companys policies and procedures, safeguarding of assets, prevention and detection of fraud and errors, reliability and completeness of accounts, and timely reporting of both financial and non-financial information, both internally and externally.

The internal financial controls and governance processes underwent a thorough review by an independent chartered accountant to assess their adequacy and effectiveness.

Based on the evaluation, the Audit Committee concluded that as of March 31, 2023, the internal financial controls were operating effectively and were adequate.


The Company believes that fostering a culture of innovation, execution excellence, collaboration, and capability building is crucial for ensuring sustainable business growth and creating a future-ready organization. The Company places significant emphasis on effective workforce management, recognizing its people as the most valuable resource. In this endeavor, the Human Resources (HR) department plays a pivotal role in nurturing the Companys organizational values and leadership behaviors. By encouraging a culture of continuous learning and development, the Company strives to empower its employees to excel and drive the organization forward.

To streamline HR processes and enhance operational efficiency, the Company has implemented digital platforms such as SAP Success Factors, an Automated Leave Management module, and the ADP payroll tool. These platforms have been provided to employees to automate various HR operations, resulting in smoother and more efficient workflows.

In terms of learning and development, the Company focuses on enhancing communication and digital skills among employees. The Company conducts programs on Effective Listening, Excel skills, and SAP skills to ensure holistic growth and equip employees with the abilities necessary to adapt to the evolving business landscape. Effective communication plays a significant role in employees engaged and connected. The Company organizes periodic town halls and various communication forums like HR Open House to facilitate transparent and effective communication channels. These platforms allow the Company to share updates, gather feedback, and foster connections with employees at all levels.

The Company understands that performance management is a key driver of employee engagement and an integral part of the individual development cycle. It ensures the translation of strategic business objectives into employees day-to-day actions, enabling continuous growth and promoting innovation. To facilitate this, the Company follows a structured Performance Management Cycle.

Typically, at the beginning of the year, eligible employees and their line managers align their goals and enter them in Success Factors within the specified deadlines. During the goal-setting process, employees and supervisors collaborate to ensure goals are set SMART (Specific, Measurable, Attainable, Relevant, Timely) and include at least one goal related to the Cultural Agenda. This process promotes clarity, accountability, and alignment between individual and organizational objectives.

FY 2022-23 was a period of significant transformation for the Company, as there were challenges that required continuous efforts from the leadership team to maintain employee motivation and build confidence.

Employee engagement initiatives, including performance management, increments, and investment in learning and development, played a crucial role in this process.

By fostering a supportive and growth-oriented work environment, the Company aimed to rebuild employee confidence and inspire them to achieve their full potential. As of March 31, 2023, the Company had 494 employees.


Certain statements under ‘Management Discussion

& Analysis that describe the Companys objectives, projections, estimates, expectations, or predictions may constitute as ‘forward-looking statements within the meaning of applicable securities law and regulations. While these expectations are based on reasonable assumptions, the actual results may materially differ from those expressed or implied due to various external and internal factors that are beyond the Companys control. The Company does not assume any obligation to publicly amend, modify, or revise any ‘forward-looking statements based on subsequent developments, information, or events.


ravi kapoor bharath r. sesha
Chairman Managing Director
DIN (01761752) DIN (01983066)

Navi Mumbai, July 25, 2023