MANAGEMENT DISCUSSION AND ANALYSIS REPORT
AN OVERVIEW OF THE ECONOMY
1. Global Economy
Today, the world is more interconnected than ever. Every region is affected by the other. It is crucial to understand this interconnectedness to unlock limitless growth possibilities. Understanding these trends gives us an upper hand in capitalising on opportunities and devising strategies for the future.
Relentless drive to sustain...
The global economy in FY 2024 remained resilient. According to the IMF, it stood at a modest and stagnant growth rate of 3.2%. Advanced economies witnessed slower growth rates due to the tightening of monetary and fiscal policies. Advanced economies grew at a pace of 1.6%, whereas emerging economies grew at 4.3%. This is projected to fall in the coming years due to softening of markets and increased policy tightening.
Inflation was at an all-time high in 2023, with headline inflation touching 6.8%. It is expected to fall in the coming years. IMF projects inflation to fall to 5.9% in 2024 and 4.5% in 2025.
Ongoing geopolitical conflicts and its impact.
The global economic landscape is increasingly affected by geopolitical conflicts across the globe. The ongoing Middle East conflict resulting in the Red Sea crisis impacted the global sea transport and its cost, coupled with the Russia-Ukraine conflict has hurt the global sentiments, leading to energy price hikes, food insecurity and disruption in trade flow. Russias isolation from global trade sets the tone for de-globalisation and isolationism. This can impact many economies deeply, as trade requires healthy intergovernmental relations and cooperation.
Impact on Manufacturing...
Global manufacturing has remained stagnant in 2023 due to the recessionary headwinds in the global economy. United Nations Industrial Development Organisation (UNIDO) observes a 1.5% YoY growth in global production. Global output increased by a mere 0.2%. Year on year also, every region has reported a net reduction in manufacturing except for China, as the country achieved a moderate growth rate of 2.7%.
Outlook for the coming years...
The global economy is expected to stand tough among the recessionary winds across the globe. It is set to grow at a modest 3% - 3.5%. Developing economies of Asia are predicted to grow faster than developed economies. Countries like China and India will be among the biggest beneficiaries if this prediction turns out to be true. Inflation is projected to reduce which will help in easing commodity prices. The outlook for the global economy is projected to be resilient, albeit with moderate growth.
2. Indian Economy
Despite the stagnant global economy, the Indian economy surprised the world with its agile and robust growth. It grew by 8.2% yearly, and economists expect this momentum to continue in the coming years.
This growth helped India hit the US $ 3.5 trillion mark and made it the fastest-growing economy in the world.
The manufacturing sector grew by 9.9% compared to degrowth in FY 2023. Moreover, it is the second-highest growth after FY
2022. Mining and quarrying grew by 7.1%- the fastest in seven years. The construction sector grew at 9.9%. These sectors helped the Indian economy reach new heights.
The agricultural sector took a hit in FY 2024 due to high interest rates and a scanty unpredictable monsoon. It grew at a moderate rate of 1.4%. Despite this, agriculture constituted 18% of Indias GVA in FY 2024.
Tax collection has also been a driving force in GDP growth. Net taxes increased by 19%. This was due to higher tax collections and lower subsidy payout.
Encouragingly, FY 2024 witnessed a significant decline in average annual inflation of 1.3%, settling at 5.4%. The RBI attributed this positive development to factors like easing supply chain pressures, broad-based moderation in core inflation and promising early signs of an above-average southwest monsoon season.
Hence, the Indian economy has remained resilient, turned around the predictions and fostered growth in FY 2024. This shows that India is preparing to become the worlds third- la rgest economy by 2027.
INDUSTRY OVERVIEW
Chemical Industry
The chemical sector is a fundamental pillar of global manufacturing, supplying essential materials for countless industries. Its growth can be attributed to the shift in consumer preferences. People and governments across the globe are seeing the environmental changes caused by fossil fuels and harmful materials. Governments are forming stringent environmental measures and looking for renewable bio-based materials. Due to this, the chemical industry is increasingly focusing on bio-based chemicals.
These chemicals are derived from renewable biological resources, such as plants, algae, and microorganisms, offering a more sustainable alternative to traditional petrochemicals. Adopting bio-based chemicals is driven by their potential to reduce greenhouse gas emissions, lower dependence on fossil fuels, and minimise environmental impact. Currently, the market size is US $17.6 billion and is estimated to grow to US $ 35.3 billion by 2033, growing with a CAGR of 7.2%. This is increasing the demand for various chemicals that can be used for blending.
People are also prioritising their health. Hence, the need for medicines and nutritional supplements is increasing, causing a demand for chemicals.
The key trends in the chemical industry are sustainability, green chemistry and digitisation. On the other hand, the sector faces immense pressure due to the rising cost of raw materials.
The chemical sector in India is thriving due to the heightened
Source - www.factmr.com
Speciality Chemical Industry
The speciality chemicals industry is a critical component of the global chemical sector. It has demonstrated robust growth and resilience in recent years. The global market size for speciality chemicals was valued at US $ 641.5 billion in 2023 and is anticipated to grow at a CAGR of 5.2% from 2024 to 2030. The APAC regions emerging economies have been a major driving force behind these growth projections. Various sectors in these nations, such as construction, cosmetics, plastics, and water treatments, are expected to grow rapidly.This will, in turn, lead to a rise in demand for speciality chemicals.
This sector is characterised by producing high-value chemicals tailored to specific applications. This industry spans diverse markets, including pharmaceuticals, agrochemicals, construction, personal care and performance materials. The Indian speciality chemicals sector is also on the rise. It is projected to be worth more than US $ 60 billion by 2026. It is also projected to grow at a CAGR of 9.3% between 2023-2030.
demand and supportive government policies. Indias chemical sector is ranked the 6th largest globally by output and 3rd in Asia. Contributing a substantial 7% to Indias GDP, the chemical industry is a key supplier to diverse industries. Government initiatives like chemical development schemes, plastic parks, and PLI schemes for semiconductors and pharmaceuticals are fuelling investment opportunities. The Indian chemical industry allows 100% FDI through the automatic route, except for select hazardous chemicals. This attracts a lot of foreign investment in India and drives growth.
The incremental demand in chemicals will be due to urbanisation, manufacturing increase, population, etc. This shows that the hurdles in this sector, especially pricing pressures, are temporary, and it will grow rapidly in the future.
Agrochemicals:This sector was affected by the global destock in agrochemicals. Oversupply from China has kept the prices muted; hence, the dealers destocked and were nervous about buying more stock due to global and domestic concerns. This was a temporary trend as demand for agrochemicals is expected to rebound. If we look at the Indian market, the sector is back on track after a muted performance during the Covid years. Recognising the pivotal role of this industry, the Indian government has identified it as one of the top 12 sectors to attain global leadership, with a projected growth rate of 8-10% through 20251.
Pharmaceuticals: The pharmaceuticals sector is on the rise and is poised to grow due to rising population, health issues, environmental hazards, etc. The Indian Governments PLI scheme will also drive growth in the foreseeable future with more production in India. The growing demand for pharmaceuticals will also hike demand for speciality chemicals.
The speciality chemicals industry is poised for sustained growth, driven by continuous innovation and increasing demand from end-use industries.
Indian Speciality Chemical Industry: India is growing at a fast pace in the speciality chemical market. Growing population, rising disposable income and increasing exports are key factors contributing to the growth. Low-cost manufacturing, process engineering expertise, and sufficient workforce supply have made India a favoured manufacturing destination for global businesses.
Indias specialty chemicals growth rate is 2x faster than compared to the global market, mainly due to the underpenetration of specialty chemicals in India.
Factors Benefiting the Growth of the Indian Speciality Chemical Market
The European energy crisis can have a positive impact on the Indian market. The European energy crisis has increased the already high natural gas prices in the EU since 2022. Energy inflation, production outages, and logistical challenges increase production costs for European speciality chemicals. Moreover, gas shortage across Europe is making the conditions very hostile. Hence, companies are looking to outsource the manufacturing, and India is all set to benefit from it. Indian companies are not dependent on natural gas as it generates energy from coal. Hence, it is not affected by the prices of natural gas. Moreover, the low manufacturing costs and the manufacturing expertise make it a favourable choice for investors.
Currently, China constitutes 20-25% of the market share in the speciality chemical market. However, the rising labour costs, pollution-control measures and withdrawal of subsidies have weakened.
Chinas cost advantage: The relocation of toxic manufacturing plants to dedicated industrial parks and higher operational and capital costs have adversely impacted the operations of Chinese speciality chemical companies, resulting in large supply-chain disruptions. This has led to companies implementing the China+1 strategy to reduce their dependence on China.
These two factors are the underlying currents that will benefit and grow the Indian speciality chemical industry in the coming years.
Nutrition & Health Industry
With increasing consumer awareness, technological advancements and a global emphasis on preventive healthcare and wellness, the health and nutrition industry is experiencing unprecedented growth. This sector encompasses a broad range of products that enhance human health and well-being, including dietary supplements, functional foods, nutraceuticals and vitamins.
The animal nutrition and health market is also on the rise. With increased awareness and demand for animal-specific products. The growing focus on animal welfare, increased demand for animal protein and the growing population are the primary factors driving animal nutrition research and subsequent industry growth.
The Indian Nutrition Industry: Despite being the Pharmacy of the World, the Indian population is experiencing a decline in their health. India has a majority youth population, yet the youth face a declining daily dietary nutrient intake, adversely affecting health. This nutritional deficiency is contributing to the prevalence of diseases such as anaemia and obesity. For example, the National Family Health Survey (NFHS-5) 2019-21 by the Government of India revealed that 57.0% of women and 25.0% of men aged 15 to 49 were anaemic. The increasing health awareness and the inadequacy of nutritional diets are fuelling the growth of the nutritional supplement market in India. Reports suggest the Indian health and wellness market is expected to grow at a steady CAGR of 5.5% between 2023 and 2028.
Besides human health and fitness, concern about animal wellness is also rising. The Indian animal health market is estimated to grow at a CAGR of 9.52% between 2022 and 2027.
Animal Feed: The animal protein market complements the animal feed market. As the market for animal proteins grows it orchestrates a parallel growth in the animal feed sector. This, along with the ever-increasing awareness of food safety and the impact of compounds, has reignited the industry.
The Indian feed additive market is also experiencing substantial growth driven by the rising demand for high- quality animal nutrition solutions. The market encompasses many feed additives, including amino acids, vitamins, enzymes, antioxidants and probiotics. The animal vitamin market is also rising due to the increased vitamin deficiencies of poultry and other livestock.
Increasing livestock production, focusing on animal health and performance, and adopting modern farming practices drive Indias demand for feed additives. The market offers opportunities for both domestic and international manufacturers and suppliers of feed additives.
Cosmetics and Personal Care: The cosmetics and personal care market is a thriving industry encompassing a wide range of products designed to enhance and maintain personal appearance and hygiene. It includes skincare, haircare, makeup, fragrances, toiletries and other beauty and grooming products. The market is driven by evolving consumer preferences, growing awareness of personal well-being and increasing disposable incomes.
Manufacturers in this sector focus on innovation, quality and sustainability to meet consumers diverse needs and preferences worldwide. With a strong emphasis on product efficacy, safety and aesthetics, the cosmetics and personal care market continues to experience steady growth and offers opportunities for established brands and emerging players.
The personal care industry uses various chemicals like Zinc pyrithione and Cetylpyridinium chloride to manufacture cosmetic products and Vitamin B3, which offers numerous health benefits.The global cosmeticand personal care product market is expected to grow at a CAGR of 7.9% between 2018 and 2030. The Indian cosmetics and personal p care market is expected to double in volume by 2030 with growing awareness, rj affluence and accessibility of products.
Chemicals Crucial for Cosmetics and Personal Care Market
Vitamin B3: Vitamin B3, especially niacinamide, is a critical compound widely used across the nutrition industry and in nutraceuticals. It is commonly used as a dietary supplement and in cholesterol control. Its perceived benefits for the skin have also made it a common ingredient among skincare products globally.
Picolinates enhance the absorption and, thus, the bioavailability of minerals in the body. Therefore, they have found wide usage as mineral supplements. Upcoming applications in cosmetics and food fortification are driving the Vitamin B3 industry growth.
Vitamin B4 (Choline Chloride): Choline chloride is a key ingredient used in animal feed to improve health and development, particularly in pigs and chickens. It serves as a source of choline, essential for various physiological activities, such as cell membrane integrity and lipid metabolism. Ongoing trends in the choline chloride market show that demand is rising due to increased animal feed demand, poultry consumption and higher meat, and improved understanding of animal nutrition.
Moreover, increasing uses for choline chloride in human nutrition and clay stabilisers in the oil and gas sectors are driving market expansion. Technological developments in feed production and a trend towards sustainable and efficient animal husbandry techniques are driving demand even higher. Choline Chloride Market was valued at US $ 546 million in 2023 and is estimated to grow at over 7.6% CAGR from 2024 to 2032.
Nutraceutical Products: The nutraceutical product market is a rapidly expanding sector combining elements of nutrition and pharmaceuticals. These products are formulated to provide health benefits beyond basic nutrition, promoting overall well-being and addressing specific health concerns. Nutraceuticals encompass many products, including dietary supplements, functional foods and beverages enriched with bioactive compounds, vitamins, minerals, herbal extracts and other natural ingredients. The market is driven by increasing consumer awareness and interest in preventive healthcare, wellness and natural alternatives to traditional medicine.
Source - www.gminsights.com
Financial Performance
| Business Segments | Rs. million | ||
| Particulars | FY 2023 | FY 2024 | YOY% |
| Total Revenue from Operations | 47,727 | 41,358 | -13% |
| Speciality Chemicals | 1 7,983 | 15,855 | -12% |
| Nutrition & Health Solutions | 5,512 | 6,800 | 23% |
| Chemical Intermediates | 24,232 | 18,703 | -23% |
| Total Expenditure | 42,256 | 37,147 | -12% |
| Other Income | 334 | 353 | 6% |
| Segment EBITDA | |||
| Speciality Chemicals | 2,841 | 2,476 | -13% |
| Nutrition & Health Solutions | 458 | 617 | 35% |
| Chemical Intermediates | 2,827 | 2,015 | -29% |
| Unallocated Corporate (Expenses)/ Income | -321 | -544 | 70% |
| Reported EBITDA | 5,805 | 4,564 | -21% |
| Depreciation and Amortisation | 1,222 | 1,362 | 11% |
| Finance Cost | 216 | 526 | 144% |
| Profit Before Tax | 4,367 | 2,676 | -39% |
| Tax Expenses (Net) | 1,292 | 847 | -34% |
| Profit AfterTax | 3,075 | 1,829 | -41% |
| EPS - Face Value Rs.1 | 19.3 | 11.6 | -40% |
| Segment EBITDA Margins | |||
| Speciality Chemicals | 15.8% | 15.6% | |
| Nutrition & Health Solutions | 8.3% | 9.1% | |
| Chemical Intermediates | 11.7% | 10.8% | |
| Reported EBITDA Margin | 12.2% | 11% | |
| Net Margin | 6.4% | 4.4% |
Revenue from Operations
• In the Financial Year 2024, the Revenue from Operations was Rs.41,358 million, reflecting a degrowth of-13% compared to the previous years Rs.47,727 million.
• The Speciality Chemicals segment witnessed a -12% year- on-year degrowth, primarily driven by the de-stocking phenomenon in agrochemicals across the globe.
• Although, the Nutrition & Health Solutions faced headwinds with lower volumes but better price realisation and our improved global market share in Feed Grade Niacinamide led toYoY growth of 23%.
• Lower prices of Acetic Acid led to lowering in Acetic Anhydride prices, because of which the Chemical Intermediates segmentsawa -23%YoY revenue de-growth.
Expenditure
In FY 2024, the expenditure from operations amounted to Rs.37,147 million, a significant decrease from Rs.42,256 million in FY 2023. The material cost was reduced to Rs.21,426 million in FY 2024, compared to Rs.25,816 million in FY 2023. Employee benefit expenses reached Rs.3,840 million in FY 2024, slightly higher than Rs.3,435 million in FY 2023. Other expenses saw a significant decrease, amounting to Rs.11,882 million in FY 2024, compared to Rs.13,005 million in FY 2023.
Earnings Before Interest Taxes, Depreciation and Amortisation (EBITDA)
• The reported EBITDA (afterallocation of corporate expenses/ incomes) for FY 2024 reached Rs.4,564 million, reflecting a degrowth of -21% compared to FY 2023. The EBITDA margins for FY 2024 stood at 11%, lower than the 12.2% recorded in FY 2023.
• The EBITDA for the Speciality Chemicals segment fell short by -13% year-on-year, amounting to Rs.2,476 million in FY 2024 compared to Rs.2,841 million in FY 2023. However, the Speciality Chemicals EBITDA margin remained in the range of 15.5% to 16% for both the years.
• In the Nutrition & Health Solutions segment, the EBITDA grew by 35%year-on-year, reaching Rs.617 million in FY 2024 compared to Rs.458 million in FY 2023.
• The Chemical Intermediates also witnessed de-growth in EBITDA, with a 29% dip at Rs.2,015 million in FY 2024 compared to Rs.2,827 million in FY 2023. The margin for this segment was at 11%. The de-growth in Chemical Intermediates EBITDA margin was driven by continued lower utilisations in downstream industries including, Agrochemicals and Pharma (Paracetamol).
Finance Cost and Depreciation
The depreciation and amortisation expense for FY 2024 amounted to Rs.1,362 million, slightly higher than the Rs.1,222 million recorded in FY 2023. In FY 2024, the finance cost significantly increased to Rs.526 million compared to Rs.216 million in FY 2023.
Profit Before Tax
In FY 2024, we registered a Profit Before Tax of -12,676 million, seeing a 39% dip with Rs.4,367 million in FY 2023.
Profit After Tax
In FY 2024, the Profit AfterTax was at Rs.1,829 million, with a 41 % reduction compared to Rs.3,075 million in FY 2023.The Earnings Per Share (EPS) for FY 2024 stood at Rs.11.6 per equity share of Rs.1 each, marking a decrease from Rs.19.3 per equity share in FY
2023.
Business Segments
Speciality Chemicals
These are high-value chemicals that require distinctive technical expertise for production - hence, they are premium products that command higher margins.
We are global leaders in Speciality Chemicals. Our range of specialised building blocks includes Pyridine and Picolines, Cyanopyridines, Piperidine, Diketene derivatives, and other value-added chemicals derived from these building blocks. These essential components are pivotal in producing a wide array of products, spanning agrochemicals, pharmaceuticals, nutrition solutions, fine chemicals, oilfield chemicals, electronic chemicals and solvents. Global leaders are using our products in diverse industries in their business space.
Our Speciality Chemicals business is structured into four key sub-segments.
1. Custom Development and Manufacturing Organisation
(CDMO): This niche, complex and challenging business within our Speciality Chemicals business segment. Over knowledge and expertise in about 35 key chemistries built over decades, our excellent proficiency in synthetic and organic chemistry and manufacturing capabilities has established us as a Partner of Choicefor global pharmaceutical and agrochemical customers.
Pharmaceuticals: Our CDMO team develops customised solutions for the pharmaceutical and agrochemical industries for cGMP and non-GMP products. Our services include route design, process development, process optimisation, scale-up and commercial manufacturing of intermediates starting from a few kilograms to multi-metric tons, positioning us as a one- stop solution for global clients.
The recent commissioning of our cGMP and non-GMP facility at Bharuch marks a significant milestone poised to drive this segments next growth phase. We have eight collaborations on late-phase and launch products with global pharmaceutical and biotech companies and continue to scout for more such opportunities. We have taken validation batches to file DMFs for one intermediate for regulated markets from our GMP facility at Bharuch. Another product validation is in the pipeline for the current year.
These business associations provide medium- to long-term revenue visibility because when the innovators product is approved, we become the sole supplier of the specific intermediate to the innovator throughout the patent life.
Agrochemicals: We are one of the global leaders in manufacturing and selling value-added agro intermediates. Agrochemicals are derived from speciality building blocks of Pyridine, Picoline and Diketene derivatives. This sub-segment includes insecticides, herbicides and fungicides.
Our vertical integration strategy underpins our long-term growth plans to foray into custom synthesis of agroactives & Intermediates. We have invested significantly in a cutting-edge multipurpose facility for producing insecticide and fungicide, has become operational.
Semiconductor Chemicals: Under this vertical through custom synthesis of niche chemicals, we plan to aggressively tap into the global semiconductor chemical market space.
Semiconductors are experiencing robust growth driven by increase in demand for advanced electronic devices, such as smartphones, laptops and loT gadgets, this has led to a surge in semiconductor production.This has further led to the increase in demand for high-quality chemicals and materials used in semiconductor fabrication process.
On the back of the robust demand for semiconductor chemicals, we foresee a significant opportunity in this segment.
We have received several enquiries from at least a dozen semiconductor end use customers and we are in process of supplying samples to them.
2. Fine Chemicals: This sub-segment includes a variety of value-added products based on Pyridine, Picoline and Diketene which include Amino Pyridines, Halo Pyridines, Acetyls of
Pyridine, Carboxaldehydes of Pyridine, Carboxylates of Pyridine, Carboxylic acid of Pyridine, Lutidines & Collidines, metal complexes and other products. Within our Diketene product portfolio, we offer a range of Esters, Amides and speciality Derivatives
These chemicals are primarily used in pharmaceuticals, agrochemicals and personal care. In the pharma industry our products find applications across several therapeutic segments such as anti-ulcerative (Esomeprazole, Lansoprazole and Rabeprazole), anti-diabetic (Alogliptin and Linagliptin), anti-thrombotic (Dabigatran), antihistamine (Fexofenadine), anti-neoplastic (Palbocidib and Ribocidib), anti-idiopathic pulmonary fibrosis (Pirfenidone) and various anti-retroviral drugs, among others.
Our Diketene derivatives have a wide range of applications in pharmaceuticals, agrochemicals, yellow and orange dyes and pigments, polymers, personal care, and flavour and fragrance industries. We have recently expanded our Diketene Derivatives facility and launched additional Speciality Derivatives for multiple applications
Our pipeline includes 10+ products in various stages of development and commercialisation. These products find wide applications in pharma, such as anti-diabetic, personal care dyes and pigments, etc.
3. Microbial Control Solutions: In its Microbial Control Solutions portfolio, Jubilant Ingrevia offers a range of safe
and highly efficacious anti-microbial products for application in paints, coatings, industrial, cosmetic and personal care industries. The Companys capabilities in this segment include the development of next-generation single or multi-component (active) antimicrobial formulations, biocidal combinations and their formulations. Jubilant Ingrevia also offers innovative patented products in this segment.
Under Microbial Control Solutions, the Company has over multiple products in its pipeline, such as forward integration of Ketene, Diketene, and Pyrimidine chemistry for applications in the personal care segment.
4. Bio-Pyridine and Bio-Picolines: This flagship sub-segment forms the foundation for various products across many industries. Products such as Pyridine, Beta Picoline, Alpha Picoline, Gamma Picoline, 3-cyanopyridine, 4-cyanopyridine, Piperidine, Alkyl Pyridine mixtures and Alkyl Pyridine QUAT have been built with over 30 years of experience in this sector.
We are the worlds largest and only non-Chinese scaled player in the Pyridine sector and hold a dominant position in the global market for Pyridine and Picoline.
We focus squarely on expanding our product range. Recently, we launched new products and widened our OFC product basket by introducing Alkyl Pyridine Quat for the Oil & Gas Industry. Alongside, we have taken 90% + share of our competitor which closed down its US facility recently.
KEY DEVELOPMENTS IN FY 2024
• We commissioned the second phase of Diketene Derivatives with addition of 2000 if TPA for multiple products
• We widened our product basket by commercialising five new products - 2 in CDMO if and 3 in Fine Chemicals
We established a foothold for oil field chemicals in the Middle East and North America.
Our geographic expansion in these oil-producing geographies should allow us to B capitalise on essential growth opportunities over the coming years
• We expanded our market reach by expansion in new geographies for Pyridine, Picoline & their derivatives.
Performance in FY 2024
Global volatility and elevated inflation cast a dark shadow on the prospects of speciality chemicals the world over. Robust demand for pharmaceuticals and other user sectors more than covered up for the drop in demand from the agrochemical sector (owing to high inventories). As a result, revenue from the business vertical increased appreciably. Our customer addition also buoyed sales volumes.
Pyridine registered healthy growth in sale volumes over the previous year. However, the demand for Beta Picoline and 3-Cyano Pyridine remained weak due to lesser traction in the Vitamin B3 market.
Outlook
The Speciality Chemicals segment has solidified its position as a global leader, demonstrating a remarkable ability to supply critical intermediates to its customers. We remain dedicated to delivering value by investing in various capacity expansion projects for Fine Chemicals, CDMO, Microbial Control Solutions and Agrochemicals, driven by growing demands in end applications.
Our growth in the coming years will be driven by increased capacity utilisation at our manufacturing facilities, new product offerings and growing CDMO projects across multiple application areas.
We have a comprehensive growth strategy with substantial investment plans for the next fewyears to advance up the value chain.
Nutrition & Health Solutions
Having established our strong presence in animal feed and health solutions spaces, we are investing significantly to expand our portfolio into vitamins for human consumption and cosmetic-grade applications. Our nutrition and health solution segment products have wide end-usage in Human & Animal Nutrition and Personal Care products, and this business is divided into two sub-verticals.
1) Human Nutrition and Health Solutions
We offer diverse food ingredients and premix solutions for the human nutrition, nutraceutical industries, personal care & cosmetics, bakery, beverages, confectionery and. Our portfolio includes a wide range of high-quality products sourced from reputable global partners. Our key products under this vertical are:
Food Grade Niacin and Cosmetic Grade Niacinamide: Being one of the very few companies to achieve complete backward integration across the Niacinamide production chain, we are poised to reduce our carbon footprint holistically by captively procuring raw materials. Our Niacinamide offerings play an important role in energy metabolism and cell health. It also offers benefits related to skin care.
Choline Chloride & Choline Bitartrate: We have nowventured into the human nutrition market of CC (Choline Chloride) &CBT (Choline Bitartrate). They are water-soluble macronutrients that are similar to B vitamins. CC & CBT plays a vital role in various physiological functions in the human body, including Brain Development, Heart & Liver Support and Inflammation management.
Chromium Picolinate: We are optimistic about capitalising on this growing market with our products finding use in dietary supplements for glucose metabolism, insulin resistance, appetite control and weight management.
Zinc Picolinate: The nutritional applications of Zinc Picolinate include boosting immunity and sustaining growth. Given the steady growth forecasts in global markets, the segment has substantial potential for scaling.
Riboflavin Phosphate Sodium (RPS): This Vitamin B2 derivative has substantial uses across the food and beverage as well as dietary supplement industries. The market for RPS synthesis is expected to grow exponentially over the next few years.
2) Animal Nutrition and Health Solutions
We offer more than 24 high-quality feed additives used by the poultry, dairy, aqua and pet food industries. The team
has optimised production by manufacturing 100% of its Beta Picoline requirements in-house, which is a key raw material for feed additives. Our key products under this vertical are:
Feed Grade Vitamin B3: We are a leading provider of nutritional solutions for the Poultry, Dairy, Aqua farming & pet food industry. In feed vita mins. Jubilant I ngrevia has a dominant global standing, being the 2nd largest producer of Vitamin B3 (Niacinamide and Niacin)
Vitamin B4:This new line ofVitamin B4, also known as Choline Chloride, is designed to support optimal animal liver health. Our extensive range ofVitamin B4 variants caters to diverse species, including poultry and dairy animals, aquaculture, pigs and pets. With an unwavering commitment to quality, we hold the leading position in the domestic market for Choline Chloride.
Phyto Shield: This plant-based natural offering replaces Choline, Methionine and non-antibiotic growth promoters and helps protect animalslivers.
Pre-Mixes: Within this business segment, we specialise in Animal Nutrition and Health Solutions, offering 18 branded products. Our dedicated in-house team effectively markets these brands through a robust distribution channel and e-commerce platforms. Growing brand awareness generates a positive response to our products, leading to an increase in revenue.
KEY HIGHLIGHTS
• Seven nutrition ingredients and 18+branded solutions
• End uses in pharmaceuticals, personal care and animal feed
• Launched new products range with the introduction of food-grade Choline Chloride and Choline Bitartrate
• Among the top two players in the Vitamin B3 segment globally and a domestic leader Vitamin B4
• 460+ global customers (90+ in cosmetics, 55+ in dietary supplements and 20+ in energy drinks and breakfast cereals)
• -64% export in the North American and European markets, leading to sustainable M growth
Performance in FY 2024
ln FY 2024, revenue and EBITDA experienced a significant jump, on the back of our improved global market share in feed-grade Niacinamide. We also continued with our focus on improving market share from customers in niche segments i.e. cosmetics and food-grade which resulted in increased volume and revenue from the segment.
Outlook
The business will see a boost with the commissioning of a newly approved cGMP-compliant facility by Q3/FY 2025. This plant will produce food & cosmetic-grade Niacinamide. The development work for a new cGMP-compliant capacity for food-grade Vitamin B4 (Choline Chloride and Choline Bitartrate) is also on track.
We have a comprehensive growth strategy with substantial investment plans for the next few years to advance up the value chain.
Chemical Intermediates
We develop and deliver building block ingredients based on Acetyls and Ketene chemistry platforms, with applications in multiple daily-use products for customers worldwide and our speciality chemicals business segment.
We are a global leader in the Acetyls product range and therefore have a razor-sharp focus on developing each product into a profit centre for the Company. Moreover, as our primary business for years, the vertical is an essential cash generator due to its robust volumes.
Product Basket
This business segment of Jubilant Ingrevia comprises Acetyls and derivatives. They are mentioned as follows.
1. Acetic Anhydride: Acetic Anhydride is a versatile compound with numerous applications in the life sciences sector. The demand for this product has remained strong and shows promising growth prospects, driven by emerging applications such as Acetylated Wood.
We are recognised as the preferred partner for leading conglomerates owing to our four manufacturing facilities in India, ensuring a continuous supply. We maintain storage hubs in Europe and Korea, facilitating a seamless global distribution network.
The capacity enhancement in Bharuch has solidified our position as the leading supplier of Acetic Anhydride in the global merchant market. This strategic move enables us to better serve a diverse and high-growth clientele across various sectors, including pharmaceutical APIs, agrochemicals, vitamins, speciality polymers, food ingredients, aromatics, dyes and other industrial applications.
2. Ethyl Acetate: is an environmentally friendly solvent with extensive applications in the pharmaceutical, packaging, coatings and ink industries. We enjoy a strong presence in India and a notable global footprint, positioning us as a leader in the industry. Our teams unwavering commitment to Six Sigma principles has streamlined business operations and improved product quality.
3. Bio Acetic Acid: Our food-grade bioacetic acid, which is higher up in the value chain, is gaining global traction owing to our superior product quality compared to petroleum-based alternatives. Produced in our state-of-the-art facility, Bio Acetic Acid is backed by certifications such as FSSAI, ISO 22000,
Product potential
Acetic Anhydrideis the preferred choice for acety lation across industries and is used as a reagent in organic synthesis, particularly for acetylating compounds in pharmaceuticals, agrochemicals, polymers, nutrition, dyes, aromatics and other organic chemicals. It is a key component in producing cellulose acetate, a versatile material in films, textiles and cigarette filters. It is also used further to prepare acetyl derivatives.
Ethyl Acetate is a green and sustainable solvent with a wide range of applications in industries such as flexible packaging, pharmaceuticals, adhesives, agrochemicals and paints. The market for Ethyl Acetate is experiencing significant growth globally and in India.
Worldwide, the industrial market is projected to grow at a CAGR of 7.5% until 2030, reaching a value of US $ 8.44 billion. Similarly, the Indian market is expected to expand to US $ 500 million at a CAGR of 6.7% between 2022 and 2031.
Kosher, Halal and FCC Codex. Our environmentally conscious manufacturing processes significantly reduce our customers carbon footprints while offering a healthier and safer option for food preservation. The Company also ensures the biogenic nature of its product through C-14 Analysis.
4. Propionic Anhydride: Propionic Anhydride is crucial in producing agrochemicals, particularly herbicides, aromatics, dyes and pharmaceuticals (APIs). Our strategic market presence positions us among the leading merchant suppliers of this product in India. With significant growth in the agrochemical segment driven by increased Clethodim capacity, the demand for Propionic Anhydride is expected to grow robustly. We anticipate strong growth in the various applications of this versatile product, which should generate healthy demand for the product over the coming years.
5. Acetaldehyde: We are the worlds largest producer of Bio Acetaldehyde. Our steadfast focus on sustainability is underpinned by the unique technology that allows us to produce the product with a significantly reduced carbon footprint. This edge allows us to secure global business, which allows us to utilise our infrastructure optimally. When integrated with our bio-ethanol production, this product is a key contributor to the Pyridine Value Chain and finds applications in industries such as alkyd resins, pharmaceuticals, flavours and fragrances. We have established a strong presence in domestic and international markets, catering to the evolving demands of our valued customers.
6. Formaldehyde: As the simplest aldehyde. Formaldehyde is widely manufactured and used in various chemical compounds, including Urea-formaldehyde resin. Phenol formaldehyde resin, Pentaerythritol, Pyridine and Picolines. We supply Formaldehyde as input for Pyridine production and to customers in northern India who value our ability to sustain product quality and consistent supplies.
Performance in FY 2024
The decrease in feedstock prices for Acetic Acid has reduced revenue and price realisation for Acetic Anhydride and Ethyl Acetate, resulting in a lower EBITDA. Despite the challenges, we increased our market share of Acetic Anhydride globally owing to our competitive edge in this business space.
We continue to focus on increasing our sales volume of Ethyl Acetate by targeting niche customers. Our new Acetic Anhydride plant in Bharuch is now operational and performing efficiently.
Outlook
The Chemical Intermediates business has been increasing its market share of Acetic Anhydride globally by placing higher volumes in the global market. The outlook for the Acetic Anhydride market is stable, with continued growth in demand across various end-use segments.
Our new plant is anticipated to ramp up production and generate revenue for us in the coming years.
This business segment serves as a critical facilitator owing to its backward integration with feedstock and forward integration with other value-chain products. Moreover, as our legacy business for years, this servesasan essential cash generatordueto robust volumes.
Business Enablers
At Jubilant Ingrevia our unwavering commitment to long-term growth and success drives our approach despite the short-term volatility in the current market scenario. We believe in the resilience and adaptability of our industry, team, and diverse product portfolio. Embracing change swiftly, seizing opportunities and fostering innovation are at the core of our strategy. Our goal is to establish ourselves as a global leader, recognising that the challenges we face are temporary and surmountable.
Our Approach
We are dedicated to developing cutting-edge solutions that address emerging market needs and contribute to a sustainable and healthier future. Our investments in research and development and strategic partnerships allow us to shape the industry landscape and unlock new growth opportunities. As we look ahead, our key business enablers will propel us to the next level, ensuring continuous evolution and success.
Manufacturing Operations
Jubilant Ingrevias vertically integrated manufacturing approach enhances our core verticals and improves manufacturing efficiency. Our core divisions produce more valuable vertical outputs by maintaining exceptional quality standards. Our zero- tolerance approach to non-compliance, honed over four decades, has transformed our manufacturing facilities. Embracing state- of-the-art technology and top-tier processes, we consistently deliver world-class products to our customers punctually.
| Key Product Platforms | |
| 1. Pyridine & Derivatives | 21 |
| 2. Diketene & Derivatives | 4 |
| 3. Acetyls | 12 |
| 4. Pyrithiones | 2 |
| 5. Niacinamide | 3 |
| 6. Choline & Premixes 7. Piroctone Olamine |
4 1 |
| 8. Multiple CDMO Molecules. | 5 |
| ^Total | 52 |
Commitment to Excellence, Compliance and Sustainability
Our facilities are equipped with utilities like steam, chilled water and brine units with spare capacity to ensure uninterrupted production. In order to maintain zero liquid discharge, we prioritise minimising the environmental impact of our operations, implementing effective waste treatment and management facilities such as ETP, RO, water polishing plants, multi-effect evaporators, incineration facilities and thermal oxidisers with online vent gas monitoring.
Advanced Technological Capabilities
Our advanced capabilities in niche technology stem from extensive research in complex chemistries and process intensification. We have a fully equipped pilot plant capable of handling various reactions at different pressures, temperatures, and construction materials. All products undergo rigorous validation processes in our R&D, ensuring scalability, robustness and end-to-end commercialisation solutions.
Efficient and Compliant Manufacturing Practices
We conduct our manufacturing activities with exceptional efficiency, prioritising the identification and mitigation of any risks that may impact our operations. Regulatory compliance across all aspects of manufacturing, production and quality is a priority. Our robust compliance management system, integrated with real-time monitoring software known as the conformity tool, ensures continuous monitoring and assessment of our systems to meet global environmental, health, safety and security standards. This instils confidence in our customers and enables us to align with regulatory policies and requirements.
Additionally, we are dedicated to business process improvement through automation, timely training of workers, and establishing clear SOPs and process guidelines. These measures lead to reduced cycle time and improved productivity. With a new benchmark of quality and efficiency, some of our FY 2024 highlights include the following points.
• Commissioning of new world-class multipurpose plants
• Commissioning of new agrochemical plants at SEZ Bharuch
• Adding GMP facilities at Bharuch
• Commissioning of 132 KVA for power mix for long-term renewable energy along with synchronisation of CPP
• Operations of power distribution licensee at SEZ Bharuch for power mix and long-term renewable
• Launching of new products and chemistry platforms
• Eliminating capacity bottlenecks to meet business requirements
• A new milestone was achieved in product volume and variable cost
• Developing Digital Manuals for all the manufacturing facilities
• Launched SURGE, the digital transformation journey of Jubilant Ingrevia
• Focused drive on sustainability, multi-skilling and diversity
Certifications: Responsible Care & Integrated
Management System
Jubilant Ingrevia demonstrates its commitmentto environment, health, safety and security by implementing Responsible Care under the ACCs programme. We are certified for RC14001:2015 at our corporate office and manufacturing sites and have received the Responsible Care logo from the ICC.
Jubilant Ingrevia follows comprehensive standards in environmental management, occupational health and safety, product stewardship, security, community outreach and transportation safety. Our manufacturing facilities are certified through inspection management processes for ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. We also adhere to GMP and Quality System standards at our applicable manufacturing locations. Our corporate office and branch offices are certified for ISO 9001:2015, and the corporate office is additionally certified for ISO/IEC 27001:2013 for information security management.
OUR FACILITIES
1. GAJRAULA MANUFACTURING FACILITY
• Certified for the American Chemistry Council Technical Specification standard RC 14001:2015
• Energy Management System (ISO 50001:2018)
• Food Safety System Certification Standard (FSSC 22000 Version 5.1)
• Certification Scheme for Food Safety Management System (ISO 22000:2018) for FSSAI products and GMP
• Quality control laboratory accredited by the National Accreditation Board forTesting and Calibration Laboratories (NABL) for chemical testing in accordance with ISO/IEC 17025:2017
• Kosher and FHalal certifications for several products
2. BHARUCH MANUFACTURING FACILITY
• Certified for the American Chemistry Council Technical Specification standard RC 14001:2015 and Energy Management System (ISO 50001:2018)
• Niacinamide manufacturing facility certified forWFlO GMP
• Food Safety System Certification Standard (FSSC 22000 Version 5.1)
• Achieved USFDA approval for GMP complaint manufacturing facility.
• Certification Scheme for Food Safety Management System (ISO 22000:2018) for the manufacturing and sale of Niacinamide for food applications
• GMP certification by SGS and compliance with FAMI-QS code (version 6) for the production of relevant food/feed ingredients and other ingredients
• Quality control laboratory accredited by NABL for chemical testing in accordance with ISO/IEC 17025:2017
• Certified by Kosher, FHalal-India, FHalal-Indonesia, and FSSAI
3. NIRA MANUFACTURING FACILITY
• Certified for American Chemistry Council Technical Specification standard RC 14001:2015
• Food Safety System Certification Standard (FSSC 22000 Version 5.1)
• Certification Scheme for Food Safety Management System (ISO 22000:2018) for relevant food applications
• Certified by Kosher, FHalal-India, and FSSAI
4. SAVLI MANUFACTURING FACILITY
• Certified for Feed Safety Management System, including GMP, in compliance with FAMI-QS code (version 6) for the production of speciality feed ingredients
5. AMBERNATH MANUFACTURING FACILITY
• ISO 9001:2015 certified for Quality Management Systems
Business Excellence:
Driving Progress for the Future, Today
At Jubilant Ingrevia, Business Excellence is cultivated to instil a culture of ongoing improvement and empower our workforce to thrive by leveraging analytical expertise in their daily endeavours. We prioritise nurturing critical thinking among employees and offer robust data analysis tools to enrich decision-making processes.
Globally acclaimed tools and Lean Six Sigma methodologies have been institutionalised to elevate processes and systems, bolster capacity and capability, and optimise efficiency across our entire network of facilities. This endeavour is supported by our dedicated Six Sigma Black Belts, Green Belts, Yellow Belts and White Belts, who drive top-tier product quality, on-time delivery, and minimised manufacturing expenses.
Our FY 2024 highlights
• Our mantra, everywhere, everyone, every time, encourages employees to actively participate in the journey of continuous improvement. We have achieved 170 of the highest belt certifications, totalling around 336 certified belts dedicated to solving complex problems and delivering benefits
• In the journey of belt training, we have trained ~54 of our employees in white belt, ~ 94 of our employees in yellow belt and 12 of our employees in green belt categories
• We continued our pursuit of business excellence through various continuous improvement initiatives. These efforts have led to streamlined processes, reduced waste and
increased overall efficiency. Approximately 80 complex business problems/assignments were successfully addressed using the DMAIC and mission-directed crossfunctional team approach, ensuring sustained benefits
• Our investment in new technology has resulted in several groundbreaking innovations that have set new benchmarks in the industry. About five innovative technologies have been scaled up and integrated to enhance operational efficiency and foster sustainability, thereby optimising costs
• The highest-ever number of 6S zones (95 in total) achieved the targeted score of 75% across Jubilant Ingrevias sites
Our future goals include the ones mentioned below.
• Maximise using renewable energy sources to achieve the organisations goal of reducing Net GHG emissions
• Leverage DMAIC and lean methodology to sustain and improve the manufacturing process to support profitable business growth
• Continue to invest in asset reliability, digitalisation, and TPM to maximise manufacturing operations efficiency and ensure reliable operation across Jubilant Ingrevias sites
• The target is to achieve 200 Yellow Belt Certifications by FY 2025
Adapting to Change -
Sustainable and Inclusive Supply Chain
In recent years, a series of unprecedented disruptions have occurred, including the COVID-19 pandemic, geopolitical tensions such as the Ukraine-Russia and Israel-Palestine conflicts,and logistical challenges in the Red Sea.
The year began with lower pricing for all our solvents and fuels, along with reduced ocean freight costs in the first half. However, the emergence of the Middle East crisis and the escalation of war in the region led to an increase in ocean freight costs. The crisis-induced rerouting of vessels increased shipping time from India to Europe and the Americas. Although our deliveries to customers were not affected, the cost of shipments rose significantly.
For raw material and fuel sourcing, we have shifted to monthly or quarterly contracts and adopted feedstock-based formula pricing for longer-duration contracts, covering all major raw materials, utilities, logistics and more. Despite the challenges, we sustained our operations effectively.
In our commitment to inclusivity, we prefer micro, small and medium enterprises (MSME) as our supply chain partners for raw and packing materials. We also prioritise local vendors, especially those who use clean energy sources, recycle their products and reduce their carbon footprint. As a platinum member ofNicer Globe, a Responsible Care initiative of ICC, we uphold safe and sustainable transportation of chemical products.
Our supply chain has fully embraced digitisation to enhance efficiency, transparency and adaptability. Through digital platforms, we have conducted reverse auctions, optimised procurement procedures and achieved cost efficiencies via competitive pricing strategies. The integration of Robotic Process Automation (RPA) BOT has automated invoice processing, reducing manual involvement and enhancing precision and efficiency. These digital innovations have streamlined our operations and empowered us to adapt to evolving market conditions swiftly.
Way Ahead
Despite the likely spillover of the adverse freight costs into FY 2025 due to the Red Sea disruptions, we anticipate normalisation by Q3 FY 2025.
Notwithstanding these challenges, we remain steadfast in our commitment to sustainability, green procurement and compliance. We are exploring greener transportation alternatives, such as CNG-powered trucks, to reduce carbon emissions and mitigate environmental impact.
Additionally, adopting end-to-end logistics solutions in export logistics and e-catalogues for price harmonisation will facilitate greater transparency and accountability in our supply chain practices.
Driving Innovation through Research, Development &Technology
KEY CHEMISTRIES
| 1000 MT | 100 MT | MT |
| • Aromatisation | • Sandmeyer | • Hoffman |
| • Vapour Phase Reactions | • Bromination | • Re-arrangement |
| • Chlorination/Photo chlorination | • Esterification | • Methoxylation |
| • Oxidation | • Hydrogenation | • N-Formylation |
| • Ammoxidation | • Grignard | • De-alkylation |
| • Fermentation | • Methylation | • Bu-Li |
| • Ketene Technology | • Quarternisation | • Reaction |
| • Chichibabin | • lodination | |
| • Fluorination | • Chiral Synthesis | |
| • Thiol Handling | • De-alkylation | |
| • Ethylene Oxide Reaction |
At Jubilant Ingrevia, thorough research and innovation are paramount. Our commitment to research and development (R&D) not only allows us to keep pace with evolving demands but also drives innovation to meet future needs.
As of March 31,2024, we have secured a substantial intellectual property portfolio with 32 granted patents for various technological solutions.
Our state-of-the-art R&D infrastructure is designed to meet the stringent standards of global leaders in pharmaceuticals, agrochemicals, nutrition and more. Equipped with cutting- edge technologies and advanced equipment, our facilities are the backbone of our innovation efforts. We are confident that our R&D capabilities will continue to drive innovative processes, enhance production efficiencies and capitalise on new opportunities in the global market.
Key Achievements in FY 2024
Speciality Chemicals: The Company has developed cost- effective processes for new pyridine & picoline derivatives, and the processes are ready for scale-up. New products for oil field application have also been developed and commercialised. Further, the Company is also working on semiconductor chemicals to stay abreast with the latest technological developments. The Company has introduced & established a flow chemistry process for developing new & existing products. The Company also continue to work on innovative technology for PB process effluent treatment through aeration & biological followed by RO process.
Fine Chemicals: In FY 2024, the Company focused on strengthening its Diketene building blocks portfolio and successfully commercialised the pipeline molecules. Besides this, the Company has also built up an 8-10 product portfolio in advanced stages of development of pyridine, pyrimidine and pyrazine derivatives. The Company is continuously evaluating new heterocyclic chemistries and molecules for development. In order to develop sustainable processes without compromising quality and cost, the Company focused on the conversion of several batch processes to continuous processes.
Agrochemicals: The key highlights of the Agrochemicals business were the successful establishment of a pilot plant and the commissioning of a commercial Plant at Bharuch for agro-actives. The Company successfully launched two new insecticides and is in the process of commissioning a third active.
CDMO:The Company made a huge investment to set up a new lab in Greater Noida to make it competitive and at par with the current market scenario.The Companys vision to delivera wide range of chemistry remained intact as it leveraged its expertise in multi-step synthesis, chiral chemistry. Pinner reaction, Sugar chemistry, Grignard reaction and commercialised number of molecules. In FY 2024, the Company also ventured with new customers, entered into new industry applications and enthusiastically worked on a few molecules, which are expected to be part of the commercial market soon. CDMO remains committed to delivering multiple products every year, including cost reduction, without compromising sustainability, quality, and cost.
Microbial control Solutions (MCS):The Companys MCS business witnessed good momentum through new product launches in the Pyrithiones platform. The Company has also added new actives to its anti-dandruff segment. Linder formulations, Jubithione CZTO, a Non-Diuron and Non-Carbendazim composition, is already developed. The Company has also developed novel patented formulations, i.e., Jubiquat CPO & Jubiquat CLC, as potentiation technologies to strengthen its position under the personal care segment, particularly for scalp care and/or anti-dandruff. Besides this, 4-6 product portfolios in the personal care category are in advanced stages of development and will be under launch soon.
Nutrition & Health Solutions: During FY 2024, Jubilant Ingrevia achieved significant milestones in product development and innovation in the Nutrition and Health Solutions business segment. One notable accomplishment was the successful development of a cost-effective and environmentally friendly continuous process for cosmetic grade Vitamin-B3. This breakthrough process has been successfully scaled up and is now ready for commercialisation, showcasing our commitment to sustainable, high-quality solutions in the cosmetic industry.
In addition, the Company expanded its product portfolio by introducing USP/FCC grade Choline Chloride and Choline Bitartrate, meeting the stringent quality standards required for various applications.The Company also led the development of technologies for food premixes, offering enhanced fortification options for mass consumption. Jubilant Ingrevia also notably facilitated the production of water-soluble encapsulated Sodium bicarbonate, a solution significantly enhancing the leavening effect in bakery and flour applications.
The Company made significant strides in the Animal Nutrition domain by successfully developing and commercialising Choline hydroxide (45-50%), a crucial precursor to produce APIs, food and feed intermediates. The Companys focus extends to expanding its offerings in methionate and proteinates-based organic chelates, which serve as effective delivery vehicles for optimal mineral nutrition. Moreover, the Company has developed alternative water-soluble formulations such as chromium glycinates and propionate-based formulations. Finally, the Company is strengthening its herbal portfolio by developing herbal methionine, offering a cost-effective and bioavailable alternative to synthetic methionine.
To support our ambitious growth strategy, we have added a state-of-the-art R&D facility at Greater Noida, recognised by DSIR.
Human Resources
At Jubilant Ingrevia, our core commitment is to foster an Employee First culture guided by the values of caring, sharing and growing.
To maintain this culture, we consistently engage with our employees at various touchpoints throughout their journey with us. By identifying our strengths and addressing areas of concern, we remain agile and responsive to our workforces evolving needs. Partnering with Willis Tower Watson, we introduced the Jubivoice Employee Experience Survey, which garnered a sustainable engagement score of 94%, demonstrating our dedication to creating a workplace where every individual feels valued and supported.
Employee Wellbeing
We prioritise enhancing the employee experience by addressing the four elements of well-being: physical, mental, social and financial. Through employee assistance programmes delivered by experts, we strive to provide our employees with the tools and resources they need to thrive personally and professionally.
Learning and Leadership Development
Recognising that our talented workforce is our greatest asset for continued business success, we are dedicated to fostering a culture of continuous learning and leadership development. We provide structured classroom training and a cutting-edge digital learning platform, equipping our employees with the skills, mindset and competencies they need to excel. Our focus on sustainable leadership was marked by the graduation of our senior leaders from the Global Leadership Programme, a nine- month journey curated in partnership with INSEAD to prepare them for success in the digital era.
Talent Acquisition and Internal Mobility
Through market mapping and talent acquisition practices, we attract skilled individuals essential for driving business growth. Our Internal Job Posting (UP) platform facilitates career advancement for employees while helping us identify hidden talents within the organisation. Encouraging movement across different areas, functions and geographies has resulted in 25% of vacancies being filled through internal talent. Despite a slightly higher attrition rate, we have maintained a 97% talent availability rate across the organisation.
Performance Management and Recognition
We meticulously craft a high-performance culture within our organisation, starting with our robust performance management process. Through initiatives such as our esteemed Applause programme and the prestigious Chairmens Annual Awards, we celebrate exceptional accomplishments and ingrained a culture of appreciation and recognition. This culture is further strengthened by continuous performance feedback, pay-for-performance and role-based promotions, which unleash the full potential of our employees and drive us towards collective success.
Diversity and Inclusion (D&l)
Diversity and Inclusion (D&l) play a crucial role in our business success. We have made significant strides across three key areas of our D&l strategy: Hiring, Retention and Cultural Inclusivity. Our leadership has embraced an inclusive mindset, welcoming 40+ women this year, bringing overall womens representation to 6%. We are committed to creating gender-intelligent and inclusive people managers and have introduced a Women Buddy Programme to support women in their professional journey. Furthermore, our women apprentices and cadrebuilding programmes aim to develop female employees from early career stages in manufacturing roles, preparing them to take on shift supervisor positions.
Communication and Labour Relations
Employees are regularly updated on major business decisions and announcements, fostering transparency and trust. As a result, we have experienced no instances of labour unrest or disputes at any of our manufacturing facilities, resulting in Zero production loss. Our long-term wage settlement for Savli has been an enriching experience, fostering cultural change and cost efficiency.
Environment, Health and Safety (EHS)
The Essential Pillars of Business Wellness
Environment
We recognise the evolving business environment, including increased demands for sustainability and environmental regulations. In sync with the Governments commitment towards climate change and carbon neutrality, we aim to protect the environment and the health of our stakeholders. We have taken multiple steps with robust monitoring mechanisms to ensure compliance with environmental legislation and help our vendors and partners enhance their environmental compliance. We recognise that compliance failure may result in fines, penalties or suspension of operations, substantially impacting our financial condition.
Environmental excellence is deeply embedded in our culture and reflected across various facets, including our sustainability policies, responsible care practices and green supply chain initiatives. Likewise, we involve the community, including our employees, in environmental management and continually invest in process and technology advancement to minimise our environmental footprint. We are also working on energy efficiency, waste heat recovery, water conservation, renewable energy integration, rainwater recharge and community participation to enhance our environmental performance. We focus on waste reduction at the source and strive to turn waste into reusable resources.
We understand that sustainability and environmental concerns must be a collaborative effort. We actively engage with the Government, industry forums and academia to contribute to developing responsible regulations. Our commitment to environmental stewardship remains unwavering, and we allocate capital expenditure to ensure continuous improvement in our environmental management practices, which we will continue doing so.
Safety and Health
Safety is part of our core values, and we firmly believe in Zero Harm and 100% compliance. Our commitment to maintaining safe conditions at our plants helps safeguard our assets and minimises business interruptions. We are, thus, dedicated to protecting the health and wellness of the entire ecosystem, including our employees, partners, communities, customers and stakeholders. Our culture of Safety-First is reflected across our day-to-day operations at every site and in every decision.
Highlights of FY 2024
• Jubilant Ingrevia, Nira bagged the National OHS Award by the Indian Chamber of Commerce.
• The Ambernath facility completed more than 1,000 Lost Time Incident Free man-days.
Initiatives launched under the ambit of a Safety
Improvement Plan
• Project Apollo - Safety Improvement Plan to accelerate our Safety Cultural Transformation journey for Zero Harm
• Added more rules to the existing Cardinal rules and made it 12 Lifesaving cardinal rules
• Implemented PSM standards through a Corporate Apex Committee to enhance the safety culture on Company premises. While site teams engage for every element, they are guided and monitored by the individual corporate-level element owners
• Aligned employees and contract workers on safety practices through more than 25,000 man-days of safety drills
• Achieved infrastructure safety by implementing risk assessment study recommendations at the design stage
• Prevented underlying process risks by screening activities through hazard identification and risk assessment and taking preventive measures
• Ensured 100% employee participation towards building a culture of workplace safety by reporting unsafe conditions and activities in the online tool Sanchetna
• All incidents (First aid, Loss time Injuries, Fire Incidents, & Dangerous Occurrences) are recorded in the Incident Reporting and Investigation System (IRIS) - our in-house portal. Incidents are thoroughly investigated by deploying cross-functional teams and identifying root causes by using various tools like 5WH Y, Fishbone analysis, etc. The following hierarchy is adopted for mitigating the hazards: Elimination, Substitution, Isolation, Engineering control, Administrative Control and PPE. For identified root causes, effective CAPA is written following a hierarchy of controls. In addition to this, regular internal and external safety audits are conducted to identify and close the gaps on priority
• Mandated thorough training, supervision and active participation in Sanchetna, toolbox talks and regular safety town-hall meetings for contractual workers to improve safety
• Instituted reward recognition and progressive disciplinary matrix to further bolster the organisational safety culture
• Deployed dedicated emergency response teams and trained firefighting crews across all manufacturing facilities
• Ensured the presence of a well-equipped Occupational Health Centre at every manufacturing facility to deal with any occupational health emergency
• Empowered everyone to stop operation/maintenance if any condition is deemed unsafe
IT - Pioneering Digital Transformation
Over the past year, our unwavering commitment to digital transformation has propelled us forward, enabling us to navigate the changing business environment, exceed customer expectations and harness advanced technologies. Our focus remains on reshaping and improving business processes through digital interventions. The adoption of Industry 4.0 principles at Jubilant Ingrevia has been driving manufacturing & business process digitisation while improving the safety & Quality in our rapidly evolving landscape.
Jubilant Ingrevias pioneering digital transformation journey in the chemical manufacturing industry has been revolutionary over the past 12 months through our first-of-its-kind SURGE Digital Transformation programme. This initiative has not only delivered business value across 20+ molecules and functions such as Manufacturing, Supply Chain and Business but also built a strong digital foundation with robust in- house capabilities and platforms. We have cultivated a culture of innovation, experimentation and agility, enabling swift adaptation to market changes and customer needs. Collaboration, knowledge-sharing, upskilling and reskilling across departments have fostered a continuous improvement mindset.
Achievements in Digital Transformation
• Digital Twin Implementation: Successfully implemented Digital Twin technology across 27+ plants over the cloud, enhancing collaboration and data sharing.
• JUMP - Jubilant Model Plant: Our Bharuch plant, with 40+ digital initiatives implemented, serves as a lighthouse for all other plants across group companies.
• Multiple Digital Platforms: Established platforms such as Prediction Factory using AI/ML to predict events and rates, Model Factory delivering ML-based models for business process optimisation, JIA - Jubilant Ingrevia Automation automating mundane business processes, eProcurement automating end-to-end procurement, and Insight enabling data-driven decision-making.
• Capability Building: Set up an in-house Digital Centre of Excellence (COE) to drive digital technology inception and sustenance, launched RISE to recognise digital initiatives, trained 300+ employees through Digital Training Academies, and collaborated with NASSCOM for the
Digital 101 programme to build digital awareness within the organisation.
• Recognition and Awards: Jubilant Ingrevia has become a leader in digital adoption in the chemical manufacturing industry and is recognised through multiple Industry forums.
Advancing Information Security and Cyber Resilience
On the Information Security front, we made substantial progress in enhancing our cyber resilience and security posture. We established Managed Security Services, including a Security Operations Centre and an independent partner to manage Security Services.
Set up in March 2024, this initiative has increased coverage and monitoring, now operating 24/7 and a heightened focus on compliance. Key security initiatives were executed across Cloud Security, Attack Simulation and Identity threat detection, ensuring our digital and IT assets and operations remain secure and protected. Implementing a Data Loss Prevention (DLP) Desk has proven instrumental in safeguarding sensitive information, resulting in an 80% decrease in security breaches.
Infrastructure Enhancements and IT Service Excellence
We have significantly improved our infrastructure, strengthening asset reliability and performance through realtime monitoring and self-healing capabilities. This has led to a notable 20%+ decrease in end-user tickets by utilising automation and multiple other initiatives to enhance the end-user experience and provide a reliable foundation. These achievements highlight our dedication to innovation, efficiency and security, positioning us for continuous growth and success in the ever-changing Digital and IT landscape.
Sustainability and Social Responsibility
We have consistently incorporated internationally recognised tools into our business processes, striving to maintain operational efficiency and sustainable effectiveness. This institutionalisation of the best practices has significantly contributed to our long-term success. By embedding these strategies into our operations, we have strengthened our resilience and positioned ourselves to achieve our ambitious growth targets while adhering to sustainability principles
• KEY ACHIEVEMENTS
• -20% reduction in overall energy consumption against last year
• -6% reduction in our specific water consumption against last year.
-7% increase in EcoVadis sustainability rating against the previous years performance. Received EcoVadis Gold Rating achieved 95 percentile (Score 73/100)
Sustainability in People Safety
At Jubilant Ingrevia, our top priorities are the well-being and safety of our workforce. Our employees consistently strive to exceed expectations. A safe and comfortable environment is crucial to ensure that. Their happiness is directly proportionate to their productivity. Hence, we strive to do our best for our employees. We foster such an environment by cultivating a workplace and organisational culture positioned for growth and achievement.
Our steadfast commitment to operational health and safety guides our actions at every level. To reinforce this commitment, we have integrated the principles of the Occupational Health and Safety Management System, adhering to the ISO 45001 standard, across our operating sites. This institutionalisation ensures robust safety measures and protocols to protect our employees and effectively mitigate risks.
Our Sustainability Assessment
After making significant strides in our sustainability journey, we have undertaken a comprehensive assessment of our current position to identify areas for further improvement. Our participation in the S&P DJSI Assessment in 2023 yielded excellent results, reinforcing our commitment to sustainability.
Nira team was awarded the Platinum National Level OHS Award from the Indian Chamber of Commerce (ICC) in the Chemical & Petrochemical Sector.
KEY SUSTAINABILITY HIGHLIGHTS FROM THE PAST YEAR INCLUDE:
• EcoVadis Sustainability Ratings: Achieved a gold rating and scored in the 95 percentile in 2023.
• CDP Programs: Participated in the CDP Climate Change and Water Security Program, scoring B and C respectively, with a Supplier Engagement Rating (SER) of B-.
• Environmental Initiatives: Planted approximately 503,275 trees, digitised over 150 schools and achieved zero-liquid discharge at three of our sites.
ESG: Commitment to Sustainable Practices
At Jubilant Ingrevia, we invest significant resources and efforts into developing innovative and sustainable solutions for our customers. Our business model prioritises a balance among economic, environmental, and social factors, guided by the principles of the triple-bottom-line approach. As a pioneer in the Indian market, we have published annual sustainability reports since 2003, adhering to the Global Reporting Initiative (GRI) guidelines and obtaining third-party assurances. Our latest FY 2024 sustainability report also follows GRI Standards, covering all relevant indicators.
Our journey towards cumulative sustainability targets for 2020 began in 2014, focusing on the environment, occupational health and safety, corporate social responsibility (CSR), and corporate governance. Since then, our annual sustainability reports have consistently documented our progress.
This strategic approach enabled us to achieve most of our 2020 targets by 2017. In 2019, we set new targets to be achieved by 2024, aligning them with the United Nations Sustainable Development Goals (SDGs) and national initiatives like Niti Ayog, as detailed in our FY 2020 Sustainability Report.
Beyond annual sustainability reporting, we actively engage in global forums to disclose our performance on global sustainability issues. Some notable initiatives include:
• UN Global Compact (UNGC): Since 2010, we have been a signatory, submitting our Communication on Progress (CoP) annually
• CDP Climate Change Program: Participating since 2010
• Water Security Disclosure Program: Participating since 2019
• Life Cycle-Based Carbon Footprint Study: Conducted voluntarily for key products through third-party assessments
• EcoVadis Evaluation: Consistently receiving a Gold Category rating since 2017
• TfS Sustainability Audits by SGS: Our plants consistently score around 80%
To integrate sustainable practices across our operations, we have established comprehensive policies and codes of conduct covering:
• Environmental stewardship
• Occupational health and safety
• Labourand human rights
• Management and governance
• Community development
• Supply chain sustainability
Over the last three financial years, we have allocated approximately Rs.1,500 million towards environmental, health, and safety initiatives. Our plants are certified under various international standards, including ISO 9001, ISO 14001, ISO 45001/OHSAS 18001, ISO 50001, RC 14001, ISO/FSSC 22000, Halal, and Kosher. Additionally, all our manufacturing locations and corporate offices were recertified for the Responsible Care logo by the Indian Chemical Council (ICC) in September 2023. Our corporate offices information security system is ISO 27001 certified, and we have implemented a robust system for evaluating the sustainability practices of our critical suppliers and external manufacturers.
Through our holistic approach to sustainability, we strive to create a positive impact, promote responsible practices, and contribute to a more sustainable future.
Snapshot of ESG Journey in FY 2024
• DJSI Corporate Sustainability Assessment 2023: Achieved an overall S&P Global ESG Score of 57 and 93 percentiles
•Ecovadis Sustainability Rating 2023: Scored 73/100 (95 percentile) and received a Gold rating
•CDP Climate Change and Water Security Program: Scored B & C respectively, with a Supplier Engagement Rating (SER)ofB-
• Energy Utilisation: Overall energy consumption was reduced
by 20%.
We are fulfilling the reporting requirements mandated by SEBI. Our BRSR report is included as part of our Annual Report. Integrating these internationally recognised tools and frameworks into our business processes ensures operational efficiency and sustainable effectiveness, helping us build resilience and achieve our growth targets.
Lending a helping hand
Corporate Social Responsibility (CSR) is a cornerstone of Jubilant Ingrevias sustainability framework. CSR initiatives at Jubilant Ingrevia align with the provisions of Section 135, which reads with Schedule VII of the Act and are in harmony with the United Nations Sustainable Development Goals (SDGs).
The CSR initiatives are being implemented through Jubilant Bhartia Foundation, the not-for-profit arm of the Jubilant Bhartia Group, dedicated to conceptualising and implementing CSR activities across all group companies of the Jubilant Bhartia Group. The Companys CSR efforts are focused on empowering communities through sustainable social interventions. Our commitment is to build a strong community connection and recognise communities as prime stakeholders. Operating on the Public-Private-People Partnership (4P) model. Jubilant Bhartia Foundations key focus areas include basic healthcare, elementary education, livelihood creation and rural development.
The CSR initiatives at Jubilant Ingrevia focus on the following areas
• Driving progressive social change through strategic multistakeholder partnerships
• Fostering social transformation by promoting knowledge generation and sharing, experiential learning, and developing an entrepreneurial ecosystem
Jubilant Bhartia Foundations detailed activities are available on its website, www.jubilantbhartiafoundation.com.
The brief information on CSR activities carried out by the Company is stated below.
CSR Activities in FY 2023-24
1) HEALTHCARE INITIATIVES
Project Aarogya- Affordable Basic & Preventive Healthcare Basic Healthcare Services
We provide affordable healthcare through mobile and static clinics at project locations, which is enabled with the JUBICARE application. Additionally, need-based health awareness camps are organised for communities around our manufacturing units.
Combating Malnutrition
Our intervention programme aims to improve nutrition among students and community members, promoting healthier communities with lower rates of chronic diseases. This programme focuses on raising awareness about adequate nutrition through expert guidance.
Ending Tuberculosis (TB)
In support of government initiatives to combat TB, Jubilant Bhartia Foundation has developed an Automated Interactive Voice Call Response (IVRS) system, which sends daily calls to patients to check on their medication intake and specific requirements.
2) EDUCATION INITIATIVES
Project Muskaan: Supporting Rural Education
We aim to support rural government education to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
Khushiyon Ki Pathshala
Teachers act as facilitators, fostering a supportive learning environment. Hence, their training is essential. This childcentric programme entails training teachers to create an inclusive and child-friendly school environment.
Micro Science Lab
We enhance the scientific acumen of students from rural backgrounds by providing hands-on science experiments through micro-science labs set up in schools.
Career Counselling
Our comprehensive career counselling programme helps rural students make informed career choices. It includes a career counselling wall, skill test, career handbook, physical and digital career counselling sessions, and a telephone helpline for select students.
3) COMMUNITY BUILDING INITIATIVES
Sustainable Livelihood Programmes Nayee Disha
This skill development programme is conducted at vocational centres across a II project locations, enhancing the employability of youths and women.
Empowering Women
We promote entrepreneurial ventures and sustainable income generation through locally nurtured businesses. The neem pulverisation project under Samriddhi is operational in Gujarat.
JubiFarm
This initiative promotes agri-business in remote areas as a source of livelihood.
Grameen Samriddhi Kendra
Established in Gajraula.this centre promotes entrepreneurship with an initial focus on dairy farming.
Didi ki Dukaan
This project aims to create 25 women entrepreneurs through training and sustained supply chain linkage. It caters to community needs, especially for women, by supplying various products like groceries, health and wellness items, and cosmetics.
4) RURAL DEVELOPMENT
To strengthen rural services, we implemented the following programmes:
Jansuvidha Kendra
This programme increases community awareness and provides easy access to government social welfare schemes.
Jansanchetna Programme
This initiative prepares villages for emergencies by establishing Emergency Response Teams (ERTs).
Internal Control & its Adequacy
Our internal control systems are effective and robust, ensuring that there is efficient use and protection of resources and compliance with policies, procedures, financial reporting and statutory requirements. There are well-documented guidelines, procedures, and processes that are integral to our overall governance, laws, and regulations.
INTERNAL FINANCIAL CONTROL FRAMEWORK
Section 134(5) (e) of the Companies Act, 2013 requires a company to lay down Internal Financial Controls (IFC) system and ensure that it is adequate and operating effectively. Our IFC system has been established with policies and procedures that incorporate all the following five elements:
1. Orderly and efficient conduct of business
2. Safeguarding of assets
3. Adherence to our Company policies
4. Prevention and detection of frauds and errors
5. Accuracy and completeness of the accounting records and timely preparation of reliable financial information
We have an adequate Internal Financial Controls framework in place. It has laid down certain guidelines, policies, processes and structures, which are commensurate with the nature, size and complexity of operations and business processes followed by us.
IMPLEMENTATION OF INTERNAL FINANCIAL CONTROLS
Our internal controls are commensurate with the size and operations of the Company. They have been designed to provide reasonable assurance with respect to all the above- stated IFC elements. To ensure a robust Internal Financial Controls framework, we have worked on three lines of defence strategy:
First Line of Defence: Building internal controls into operating processes: To this end, we have ensured that detailed Delegation of Authority and Standard Operating Procedures (SOPs) for the processes are followed, financial decisionmaking is done through committees, IT controls are built into processes, segregation of duties is clear, strong budgetary control framework exists, accounting policies and manuals,
period-end closing checklist, basis of accounting estimates and the entity level controls including Code of Conduct, Ombudsperson office, etc. are established.
For better governance, these operational controls have been implemented through Enterprise Resource Planning (ERP) and other IT applications.
To improve controls over operations, we have established, for each line of business, the concept of financial decision making through operational committees like the Purchase Committee, Capex Committee and Credit Committee. In these committees, the decisions on purchasing capital expenditure and credit control are made jointly by the committee members.
Second Line of Defence: Createan efficient review mechanism: We created a review mechanism under which all the businesses are reviewed for performance once a month and functions are reviewed on a monthly/quarterly basis by the Chief Executive Officer & Managing Director (CEO & MD). Additionally, a robust quarterly controls self-assessment (CSA) process is in place, which enables process owners to perform self-assessment against the Risk and Control Matrices (RACM). The CSA process enables us to monitor the adequacy and effectiveness of the internal control environment.
Further Statutory compliances are monitored through the online tool Conformity. Modifications or new requirements are also updated on a regular basis in the tool for effective tracking and adherence. This reinforces our commitment to adopt the best corporate governance practices.
Third Line of Defence: Independent assurance: We have appointed a Big Four firm as internal auditors to perform a systematic independent audit of every aspect of the business to provide independent assurance on the effectiveness of the internal controls and highlight the gaps for continuous improvement. The Audit Committee reviews observations reported by Internal Auditors and the implementation status of audit recommendations & improvements.
Additionally, the statutory auditors audit the financial statements of the Company included in this Annual Reportand have issued an Independent report on our internal control over financial reporting (as defined in Section 143 of the Companies
Act, 2013). The Audit Committee acts as a governing body to monitor the effectiveness of the Internal Financial Controls framework. Further, we carry out regular ISO audits as per the requirement of ISO certifications.
We believe that Internal Control is a necessary part of the principle of Governance. It remains committed to ensuring an effective Internal Control environment that provides assurance to the Board of Directors, Audit Committee and Management thatthereisa structured system established in our organisation.
Risk Management
Our Vision for Risk Management
Our vision for risk management is to empower our organisation to achieve its strategic objectives by embedding a proactive and comprehensive risk management culture that anticipates, identifies, and mitigates risks, ensuring sustainable growth and protecting stakeholder value.
Risk Management Strategy and Structure
The Board of Directors constituted a Risk Management Committee (RMC) to formulate a detailed risk management policy and oversee risk management processes and systems. The RMC acts as a governing body to ensure that appropriate methodology, processes, and systems are in place and to monitor the effectiveness of the risk management framework.
Our Risk Management structure comprises the Board of Directors and the Risk Management Committee at the apex level, supported by the Enterprise Risk Management (ERM) Council. The ERM Council comprises the CEO & MD, Co-CEO, Chief Financial Officer, Head of Business, President Operations, Chief of Manufacturing, Chief of Supply Chain, Head-HR, Head- CSR Head-Corporate Affairs, Chief Sustainability Officer, Head - Risk & Management Assurance, Chief Digital & Information Officer, Head - IT Security etc. The Head - Risk & Management
Assurance acts as an enabler to the ERM Council and reports to the CEO & MD on risk management activities.
The ERM Council establishes enterprise risk management objectives, strategies, and guiding principles, setting the overall tone for a risk minimisation culture. The Council ensures the identification and prioritisation of key risks through sensitivity analysis and stress testing, including identifying more extreme or uncommon types of risks. Risks and mitigation plans are discussed at various review forums chaired by the CEO & MD, with progress periodically monitored.
Risk Governance
Clear roles and responsibilities are defined in the Risk Management Policy for risk owners and mitigation plan owner (first line of ownership), the ERM Council, RMC, and Board (second line of ownership for setting standards and overseeing risk management activities), and the Head of Internal Audit (third line of ownership to provide independent assurance on the effectiveness of risk management activities).
The internal audit function serves as an independent reviewer, providing objective assessments of the Companys internal controls, risk management processes, and adherence to operational procedures, internal policies, and regulatory requirements across the organisation.
Risk Management Processes Risk Review
We have a strong risk management framework for identifying risks (including emerging risks), prioritising, mitigating, monitoring, assessing, and reporting potential internal or external risks. We have established processes, guidelines, and a strong overview and monitoring system at the Board, RMC, and ERM Council levels. As an organisation, we promote strong ethical values and high levels of integrity in all our activities, which by itself significantly mitigates risks.
Risk management is a continuous process in which new and emerging risks are identified, and existing risks are modified in the Risk Library. The risks undergo evaluation to determine their exposure levels, considering both potential impact and likelihood of occurrence. This assessment is conducted using a risk assessment scale, and risks are categorised based on their overall assessment score.
Risk Exposure
The ERM Council reviews the risk management activities at least twice a year, defines new mitigation plans and improvements in existing ones, and reviews the progress. This proactive approach ensures we stay informed about the evolving risk landscape and maintain our resilience.
The Risk Management Committee reviews the Companys overall risk assessment at least twice a year and advises the Board on the Companys overall risk tolerance and strategy.
Risk Management Process Audit
An external consultant periodically reviews the risk management process to assess the maturity level. Risk management is also integrated with internal audit reviews conducted by the Internal Auditor, ensuring ongoing effectiveness of the risk management process.
Risk Culture
We have strategies to promote an effective risk culture throughout the organisation. During the year, a Risk Culture Survey confirmed that employees understand the risk management process and that the framework works effectively.
Training modules focusing on risk management are provided to employees across the organisation. Additionally, risk management education is provided to the Risk Management Committee (Non-Executive Directors) periodically.
To strengthen our risk mitigation plans and overall framework, employee performance appraisals also consider risk management alongside other factors, linking financial incentives and encouraging effective risk management practices.
Managements Assessment of Risk
The Company identifies and evaluates risks (including emerging risks) through various brainstorming sessions with the ERM Council, and appropriate mitigation plans are created to address these risks. Some of the key risks and their mitigation plans are detailed below:
ENVIRONMENT, HEALTH, AND SAFETY (EHS) RISK
We are aware of the rapid changes in the business environment, such as more rigorous customer and societal demands, rapidly changing EHS regulations, and extensive investor expectations. Our priority is to face these challenges and achieve excellence in Environment, Health, and Safety while remaining cost- competitive. We require numerous statutory and regulatory permits and approvals to operate our business. Any failure to secure, renew, or maintain the required permits or approvals or inability to ensure compliance with EHS requirements may result in substantial fines, penalties, and clean-up costs. It may also result in claims for personal injury or property damage and restrictions on or suspension of our operations. We prioritise ensuring the continuity of permits, approvals, and compliance with all requirements.
Mitigation Plan
• EHS Excellence Promotion: Over the years, EHS excellence has been promoted as part of our culture, reflected in our sustainability, EHS, responsible care, climate change, and green supply chain policies. We comply with laws and acts related to our industry and take appropriate steps to preserve and protect employees, the community, the environment, and natural resources
•Zero Harm and Compliance: Ensuring Zero Harm, 100% compliance, and minimal environmental footprint is integral to our EHS philosophy. We adopt a top- down approach, making EHS initiatives a line-function responsibility through active employee participation
• Environmental Care: Caring for the environment is a core corporate promise, and we allocate resources to reduce our environmental footprint through 5R principles of waste management and root cause elimination of EHS issues. Digital technologies for measurement and monitoring, zero liquid discharge, rainwater harvesting, solar and hybrid energy sourcing, renewable fuel sourcing, and green belt development are some approaches towards sustainability
• Process Safety Investments: Investments are regularly made to upgrade process safety and enhance process controls. A dedicated Head of Environment Health Safety and Sustainability (EHS&S) leads EHS&S and Compliance initiatives. We have launched a safety cultural transformation program for a proactive approach to safety measures. Process Safety studies are conducted before initiating new processes, and Hazard Identification and Risk Assessment is performed for existing processes with a proper change management system. Safe behaviour, such as compulsory usage of Personal Protective Equipment (PPEs), is actively promoted
• Employee Participation: Sanchetna encourages
identification and 360-degree correction of unsafe acts and conditions. Incident Reporting and Investigation System (IRIS) and regular refresher training for employees and contractual workers spread safety awareness and prevent accidents. Emergency Response Teams and regular mock drills are in place
•Safety Improvement Plan:
A safety improvement plan, including contractor safety, workplace safety, and process safety, is prepared and implemented. Corporate governance and site PSM teams are implementing Process Safety Management (PSM). Central guidelines are prepared and implemented horizontally
•Cultural Transformation: In-house implementation of cultural transformation regarding safety behaviour at all levels through safety culture surveys, strengthening safety practices, recommending procedures, and engaging employees and contract workers in safety initiatives
• Occupational Health: Manufacturing facilities are equipped with Occupational Health Centres (OHC) with qualified doctors and paramedical staff, running comprehensive health assessment programs
• Regulatory Engagement: The Company engages with government and industry forums to support responsible EHS regulations. A full-fledged EHS team conducts periodic safety audits and training programs to address environmental safeguards continuously
LOSS OF MARKET & COMPETITIVENESS RISK
A significant share of our business comes from exports, and we face stiff competition in domestic and international markets. Manufacturers in China who gain from economies of scale, favourable policies, and lower costs may adversely affect our ability to maintain market leadership, achieve planned growth, and generate planned margins.
Chinese manufacturers may initiate price wars with Indian manufacturers, and new entrants often resort to low pricing to capture market share. Major areas impacting competitiveness include sourcing of materials, innovation, efficiency of operations, new technology, and cost leadership. Additionally, new entrants in the market can lead to oversupply, cost increases impacting pricing, and changes in regulatory frameworks such as trade barriers may affect our competitive positioning.
Mitigation Plan
To combat the risk of rising competition and to ensure that cost competitiveness is maintained, we continue to explore all options, including:
* Focus on High-Value Products: We have continued our focus on commercialising high-value speciality intermediates and ingredients such as Niacinamide for a cosmetic grade. Advanced Diketene Derivatives, forward integration of existing Pyridine and Picoline-based derivatives & development of new platforms to enhance competitive edge
* Portfolio Optimisation: We are optimising our product portfolio mix by developing & launching new products in the nutrition category, including Herbal vitamin-mineral premix and, improving existing products in multiple categories and, extending the product portfolio to other species category & working on the product category expansion at different price ladders
* Geographical Expansion: Increasing penetration in other geographical regions by penetrating uncharted geographies/ customers through an exploratory approach.
We are strengthening our relationship and enhancing the engagement level with our strategic customers through Key Account Management initiatives with competitive offerings to achieve a higher share of the wallet of customers business
Wherever feasible, we enter into long-term contracts along with volume commitments. To mitigate risks, we also try to ensure that pricing is linked to key input material prices and foreign exchange rate variations.
• Flexible Pricing: Maximise market share by adopting a flexible pricing strategy and supply period based on primary and secondary market intelligence related to product demand, supply, and changes in application areas
? Manufacturing Optimisation: We have focused on maintaining multi-purpose plants which can be quickly modified to service alternate products if existing products are out of demand and improve the product offering. Continuous investment for capacity expansion and efforts towards debottlenecking our existing capacities to maintain our market share and expand our global reach of key products
Cost optimisation initiatives and manufacturing efficiency improvement plans at plants are undertaken by undertaking projects under the Business Excellence programme and applying many tools and techniques, e.g.. Lean, SURGE, Six Sigma, and Total Productive Maintenance
• Strong Supplier Network: Developing new suppliers to mitigate the risk of higher input prices and non-availability of raw materials. Micro-level planning is also done to optimise inventory
• We are evaluating new growth & M&A opportunities and building a Strategic Partnership. We have also created a Transformation Management Office (TMO) to drive the growth agenda and initiatives
DELAY IN GROWTH PROJECTS/CAPEX RISK
New technology always comes with the risk of failures/ hiccups/troubleshooting before it is stabilised. Any setback on new technology and its effectiveness may impact launch timelines, cost-effectiveness, and loss of opportunities. Delays in implementing large growth projects may also affect revenue growth and sales projections.
Mitigation Plan
We have taken the following initiatives to combat this:
• Technology Cell: Setting up a Technology Cell led by technology experts driving end-to-end new product delivery from concept to commissioning
• Design & Engineering Team: Strengthened the Design & Engineering team by empanelling high-quality consultants, standardising work processes, and enhancing efficiency
• Project and Construction Management: Strengthened project and construction management with proactive contractor resource planning, civil and structure work on a turnkey basis, maintaining minimum inventory of project items, using digital platforms for project monitoring, and weekly reviews with the management team
• Project Commissioning SOP: Defined SOPs for project commissioning with checklists, procedures, and responsibility matrices, involving site heads and critical members in the early stages and conducting daily reviews with cross-functional teams
• Specialised Engineers: Invested in intellectual capabilities with specialised chemical and process engineers/Process Engineers associated right from the R&D stage to piloting to commercial scale-up to take advantage of the blend of new technology and discovery chemistry
• Material and Resource Planning: Monitor supply/demand gaps for key materials like steel and PVDF, identify alternative materials, and conduct periodic reviews by the steering committee
• Project Implementation: Adopted a structured approach with PMC companies for timely project implementation. We also identified scale-up specialists to ensure key steps of the processes are piloted well so that back on new technology or new processes are minimised
• Project Safety: We have also defined measures related to project safety and its implementation plans, such as a Safety manual containing norms and guidelines, deployment of safety engineers, training, etc
• Alternative Suppliers: Identified alternate suppliers and resources in advance, implemented bonus clauses for early delivery, and engaged design firms for quality monitoring throughout the project lifecycle to avoid possible redo/ repeat works. These design firms will inspect and give their observations/reports periodically
GEO-ECONOMIC, GEO-POLITICAL AND MACRO- ECONOMIC INSTABILITY RISK (EMERGING RISK)
The volatility of input commodity prices, coupled with a high dependence on the Chinese market and reliance on single sources for raw materials, can lead to increased costs and significant disruptions in our supply chain.
Unforeseen events, such as the Red Sea crisis, can impact the global movement of goods and result in supplier delays, adversely affecting our business operations.
Trade disputes, restrictions, epidemics or pandemics, sudden changes in customs duties, terrorist activities, political instability, armed conflicts, and adverse economic conditions in the market can restrict growth opportunities and make goods more expensive.
Mitigation Plan
• Developing Alternate Vendors: Our focus on developing alternate vendors for all single-source materials remains intact. This initiative will continue until we completely secure all our inputs. The Company also focuses on localisation and external manufacturing within India for all products currently sourced from China, which will help reduce costs
• Digital Projects for Supply Chain Visibility: We have invested in digital projects to improve the visibility of our finished goods and inputs at all supply chain stages. This has helped us serve our customers better, even during major supply chain disruptions
• Sales & Operations Planning (S&OP): To anticipate and react quickly, we conduct weekly S&OP meetings. This allows us to adjust our procurement plans dynamically based on the evolving situation, ensuring continuous supply to our plants and external manufacturing facilities. We have also increased inventories at subsidiary locations and distributor points
• Commodity Price Volatility Management: We optimise inventory levels, review raw material costs through a Power Bl dashboard, track and monitor inventory prices, and review key raw material trends in the Executive Committee
• Contractual Adjustments: We have restricted pricing to monthly or quarterly contracts and implemented feedstock-based formula pricing for longer-duration contracts covering major raw materials, utilities, and logistics. We have extended agreements with major shipping lines
• Supplier Relationships: We maintain close relationships with all material suppliers through regular virtual meetings to ensure timely delivery at the right price. We actively work with raw material and packing material suppliers as well as logistic service providers to create a smooth supply chain
• Response to Red Sea Crises: To minimise the adverse impact, we entered long-term contracts with the top three shipping lines, engaged insurers for recovery, and readjusted the shipping plan
HUMAN RESOURCE - ACQUIRING AND RETAINING SKILLED TALENT RISK
The success of an organisation is heavily reliant on the quality and performance of its workforce, making human resources a critical and risk-prone function. As we aim for sustainable growth, our targets have become more ambitious than ever, necessitating a proactive approach to managing risks associated with an ever-changing business environment.
The inability to redefine and maintain our HR processes, such as talent acquisition, talent management, labour management, compliance, and learning & development, in line with these dynamic business needs can pose significant challenges to operational excellence, organisational capability, and business continuity.
Mitigation Plan
• We have established a strategic talent and succession management framework and are progressing towards the end-to-end digitisation of our core HR processes
• Despite market and business challenges, we have committed substantial resources and strategies to acquire, retain, and develop talent
• We have implemented targeted retention and capabilitybuilding interventions as part of our commitment to nurturing high-potential talent
• We invest in early talent programs through Graduate Engineer Trainees (GETs) and Management Trainees (MTs program), which are designed to hire fresh talent and prepare them for higher positions
• We have been working towards the inclusive growth of the Company to ensure talent continuity, for which we have a focused approach to improving gender diversity and facilitating talent rotations for multiskilling
• Our compensation and benefits packages are kept simple and comprehensive, with reward programs linking performance to pay, ensuring that rewards are based on performance and contributions to business goals
• We ensure improvement in gender diversity and internalisation of skilled manpower
• We provide growth opportunities for our employees through blended learning programs and specific functional skill programs targeting areas like sales & marketing, supply chain, and operations. Our Learning Management System promotes upskilling and reskilling
• We develop managers for their role in building an inclusive workplace to promote gender equality in all aspects. We have created a supportive network where women can connect with one another to provide mentorship and encouragement and foster a sense of solidarity
COMPLIANCE AND REGULATORY RISK
Our business operates in a highly regulated environment where regulatory obligations and new requirements continuously increase. Globalisation has further heightened the responsibilities regarding regulatory readiness, especially in regions like the US, Europe, and Japan. Compliance with laws related to Pharma, Agro, Food, Health & Nutritional Products, and Biocide for manufacturing, storing, and selling our products is essential for the domestic market.
Also, domestic consumption of some of our products and raw materials is subject to mandatory standards set by the Bureau of Indian Standards (BIS). Any changes in regulations, statutes, legal interpretations, or policies could adversely impact our business by increasing costs, delaying product sales, or preventing the sales of our products altogether. Delays in obtaining required approvals could also hinder the commercialisation of new products.
Failure to comply with regulatory requirements or accusations of non-compliance may lead to substantial fines and penalties, negatively affecting our operations. Furthermore, not obtaining regulatory approvals for new products could adversely impact our business.
Mitigation Plan
• Compliance Management System: We have devised a compliance management system. This is to ensure adherence to all applicable laws and regulations. Any amendments in regulatory and compliance requirements are updated in the system, and compliances of all our facilities and offices are monitored to meet and take corrective actions on compliance commitment proactively. Further regular interaction with regulations, key customers, and the business team take place to assess regulatory requirements and adherence to applicable compliances & regulations
Complying with regulations: We have adopted measures to address these stringent regulations by increasing the efficiency of our Research Development and Technology (RDT) process, reducing the impact of extended testing, timely submission of information and ensuring timely product availability. We proactively follow up with regulatory authorities regarding pending approvals and promptly address queries raised by authorities. Further, we regularly review the end-use product application and its growth and impact. We also continuously look for alternative products that can be produced in our plants to replace the existing products (if any)
CYBER THREATS RISK (EMERGING RISK)
• Information Technology is the backbone of any business, and our Company has developed a robust IT strategy that ensures adequate IT infrastructure, data integrity, confidentiality, and availability to meet our business objectives. However, unforeseen threats to information technology systems could negatively impact data availability and continuity of business operations. Cyber threats, including intellectual property theft, operational technology (Of) attacks, phishing, SMS-based phishing, PDF scams, malware, ransomware, database exposure, credential stuffing,and accidental data sharing, can disrupt IT systems and pose significant risks to our business
Mitigation Plan
• Information Security Systems and Compliance:
The Company is dedicated to safeguarding business information, including the personal data of customers, employees, and business partners, while it is collected, processed, consumed, and stored in various internal and external systems. This is to be done through robust information systems and processes. Our IT processes are ISO 27001 certified, adhering to the National Institute of Standards and Technology (NIST) Cyber Security framework to ensure compliance with international standards. Annual audits cover various IT components like networks, operating systems, firewalls, and software license compliance, with corrective and preventive actions based on findings. A well-defined organisation-wide information security governance structure, led by an information security steering committee, directs resources and manages the Companys information security
• Incident Management and Cyber Defence:
Our incident management process ensures that all IT security events impacting critical infrastructure are logged and monitored 24/7 by our Cyber Defence Centre (CDC). The Company has implemented a Cyber Security Governance Structure operating model. Cyber Working Groups (CWG), integrated information security compliance framework, updated policies and procedures, and new process documentation per the Integrated Information Security Compliance Framework (IISCF)
• Employee Awareness and Training:
Recognising the importance of employee awareness in managing information security risk, we provide structured training through internal and external programs. Various initiatives are undertaken to create awareness among employees about current cyber risks
• Advanced Cybersecurity Technologies:
We conduct periodic Red Teaming and Penetration Testing. We have invested extensively in advanced cybersecurity technologies, such as Multi-Factor Authentication (MFA), Endpoint Detection and Response (EDR), Web Application Firewall (WAF), and the highest level of detection and response capability with the Manage Detect & Response (MDR) solution
• Disaster Recovery (DR) Process: Our well-defined Disaster Recovery (DR) process ensures that mission- critical applications remain available and responsive during disruptions. This process is designed to accommodate our global operations and business presence
• Cloud First Strategy: Adopting a Cloud First Strategy has reduced turnaround time, enabled rapid business expansion, and embraced mobility without concerns about downtime and data loss while maintaining global compliance. Rapid cloud adoption has also enhanced environmental resiliency
• New-age ERP Platform: We have implemented a new-age ERP platform that improves productivity, decision-making, and resilience. This digital-ready ERP features API-based integration capabilities for communication with other digital platforms
• Digital Transformation and Data Lakes:
Our digital journey involves identifying and automating manual processes to optimise resource use. We have established Data Lakes, a centralised information repository from various data sources, for online monitoring through a secured channel. Augmented with Artificial Intelligence (Al) and Machine Learning (ML) technologies. Data Lakes are used for predictive and prescriptive analytics to enhance operational efficiency
• Customer Relationship Management (CRM) Tool:
A cloud-based customer relationship management (CRM) tool has been deployed for effective customer management. This tool captures customer needs, identifies business opportunities, and serves our current customer base, adapting to dynamic business environments
• Collaboration Tools and Project Management:
We have invested in state-of-the-art collaboration tools and technologies to manage business operations efficiently. A project management tool has also been deployed for effective project management across the organisation, ensuring seamless collaboration and productivity even during the COVID-19 pandemic
• Third-Party Risk Management: We assess third-party risk intelligence by identifying and classifying third parties into Critical, High, Medium, and Low-Risk vendors as per the Vendor Risk Management Procedure. We conducted third- party risk assessments for all IT vendors
ESG RATING RISK
ESG performance has become crucial for investors, customers, and other stakeholders when making investments, product or service agreements, acquisitions, mergers, employment, and licensing decisions. Failing to meet benchmarked ESG performance standards can negatively impact competitiveness and demand for products and services and lead to reputational risks.
Mitigation Plan
Training and Competency Building:
We are enhancing the capabilities and competencies of our personnel on ESG through various training programs. Requirements of different ESG ratings are shared with relevant departments, and systems are implemented to meet these requirements
• ESG Initiatives:
We have undertaken multiple ESG initiatives, including reducing specific C02 emissions, securing renewable energy sources, obtaining necessary approvals for sustainability initiatives, closing the SLOP boiler, and upgrading the effluent treatment system
• Performance Recognition:
The effectiveness of our mitigation plan is reflected in recent corporate sustainability assessments:
1. S&P Global (for DJSI): Jubilant Ingrevia is placed among the top 93% percentile of companies assessed globally
2. EcoVadis: Received Gold Rating, placing Jubilant Ingrevia among the top 95% percentile of companies assessed by EcoVadis
3. CDP Climate Change and Water Security Program:
Achieved scores of B & C respectively, with a Supplier Engagement Rating (SER) of B-
INDIVIDUAL & GROUP ACTIVISM RISK
Enhanced vigilance and activism by NGOs and motivated individuals against environmental issues around industrial operations may result in complaints to the Government, Regulators, and the National Green Tribunal (NGT). This can pressure authorities to take action against the Company, potentially resulting in substantial fines, penalties, and operational disruptions.
Mitigation Plan
Stakeholder Engagement: We regularly dialogue with stakeholders (community) through social projects under Corporate Social Responsibility (CSR) initiatives
Addressing Community Concerns: Community concerns and needs are addressed through yearly community interface meetings at each location
Social Projects: The Company implements social projects in the health, education, and livelihood sectors to engage with stakeholders and understand their needs and requirements
Perception Study: We conduct perception studies to gauge the effectiveness of our communication with important stakeholders
Standard Operating Procedures (SOPs): The Company has formulated SOPs to handle activism-related incidents and has assigned specific responsibilities for managing such situations
RESEARCH DEVELOPMENT & TECHNOLOGY (RDT) / NEW PRODUCT DEVELOPMENT RISK
The objective of RDT is to provide innovative and cost-effective products with desirable quality; if not, it may result in the non-achievement of top-line or bottom-line goals. An RDT function that does not meet business expectations, such as target product costs and minimising cost deviations between RDT and operational phases, will impair our ability to launch products competitively. This will reduce market penetration and market share
Moreover, emerging new, advanced, cost-effective methods for producing our core products could pose a competitive risk. Failure to develop products compliant with accepted standards can significantly damage the Companys reputation and cause financial losses from failed launches. Critical factors for success include discovery and development of product candidates, process innovation, speed-to-market, and maintaining a robust, diverse product pipeline
Mitigation Plan
Continuous New Product Development: Our RDT team focuses on developing new products. The Speciality Chemicals Business unit actively works on product innovation. Our dedicated team for new product development collaborates closely with sales, RDT, and plant teams to quickly bring new products to market. Currently, 10-15 new products are continuously underdevelopment
• Proactive Product Introduction: The RDT team proactively introduces new products in Pyridine and non-
Pyridine chemistry using cost-effective and differentiated technological platforms and capabilities
• Alignment with Marketing Strategy: Experienced and talented RDT teams align with the marketing strategy to develop new, cost-effective processes and products
• Cost Competitiveness and Environmental Impact:
To maintain cost competitiveness with minimal environmental impact, RDT works on improving existing processes, exploring cost-saving opportunities, and enhancing the quality, carbon efficiency, and atom economy of existing products
Green Process Development:
Initiatives include developing alternative green processes that involve fewer manufacturing steps, reduced utility consumption, and increased manufacturing efficiency. A dedicated team works on Homogenous and Heterogeneous Catalysis to intensify processes and reduce synthetic steps
Focus on Green Chemistry: RDT focuses on green chemistry-based products to provide carbon-neutral solutions for various industries
Timely Process Development:
The emphasis is on timely process development at optimum costs with effective scalability. We have institutionalised robust Quality by Design (QbD) processes and proven RDT methodologies to ensure successful product commercialisation, avoiding surprises during scale-up. The RDT function stays updated with regulations, technological changes, and trends, aligning proactively with industry best practices and pharmacopoeia methods. An agile development process addresses commercial requests rapidly, capturing new opportunities. Tools, including stage gates, monitor the progress and robustness of programs
DIGITALISATION RISK
Failure to adopt digital technologies such as Artificial Intelligence, Data Science, the Internet of Things, Block Chain, Robotics, etc., may impact the Companys growth, yield, efficiency, productivity, procurement processes, and customer experiences.
Mitigation Plan
Jubilant Ingrevias SURGE is a groundbreaking digital transformation program in the Chemical Manufacturing
Industry. Through over 60 initiatives across the value chain, SURGE has revolutionised Manufacturing, Sales, and Supply Chain processes.
Achievements in Digital Transformation:
• Digital Twin Implementation: Successfully implemented Digital Twin technology across 27+ plants over the cloud, enhancing collaboration and data sharing
• JUMP - Jubilant Model Plant: Our Bharuch plant, with 40+ digital initiatives implemented, serves as a lighthouse for all other plants across group companies
• Multiple Digital Platforms: Established platforms such as Prediction Factory using AI/ML to predict events and rates, Model Factory delivering ML-based models for business process optimisation, JIA - Jubilant Ingrevia Automation automating mundane business processes, eProcurement automating end-to-end procurement, and Insight enabling data-driven decision-making
• Capability Building: Set up an in-house Digital Centre of Excellence (COE) to drive digital technology inception and sustenance, launched RISE to recognise digital initiatives, trained 300+ employees through Digital Training Academies, and collaborated with NASSCOM for the Digital 101 programme to build digital awareness within the organisation
• Recognition and Awards: Jubilant Ingrevia has become a leader in digital adoption in the chemical manufacturing industry and is recognised through multiple Industry forums
• Deployment of Digital Platforms: Several digital platforms have been deployed
J ubilant Ingrevia aims to Pioneer in the adoption of 4IR digita I technology in the Chemical Manufacturing Industry while delivering clear business value
CLIMATE CHANGE RISK
According to the latest IPCC report and analyses from climate modelling software such as Think Hazard and the World Resources Institute, global temperatures have risen significantly since pre-industrial times. This increase has led to more frequent and severe extreme weather events, altered precipitation patterns, unpredictable weather fluctuations, and rising sea levels, all posing substantial business risks.
Mitigation Plan
Our approach focuses on adopting renewable energy sources, suchassolarand biomass.alongside investments in energy and resource efficiency, green chemistry, low-carbon technologies, and circular economy practices.
We are actively integrating biomass as a blend with coal in select plants, with two facilities already operating 100% on biomass. To reduce dependency on coal, we are diversifying energy sources through initiatives like Waste Heat Recovery and increasing renewable energy usage. We have set annual targets for reducing greenhouse gas emissions to track our progress effectively.
DEPENDENCE ON CERTAIN KEY PRODUCTS AND CUSTOMERS RISK
We depend on certain key products and customers for a significant portion of total revenue, cash flows and earnings. Any events that adversely affect the markets for key products or contracts may adversely affect the Companys financial condition, operations, and profitability. If the volume or pricing of our largest selling products declines in the future or the Company cannot satisfy market demand for these products, its financial condition, results of operations and profitability could also be adversely affected.
Any event that adversely affects any of these products or their markets could have a material and adverse effect on our business, financial condition, and results of operations. While we are not dependent on any single customer and have a broad and diversified customer base across businesses, if any of our long-term customers terminate their contracts, delay payments or breach payment obligations, reduce the volume of business we receive under the contracts, do not renew such contracts on favourable terms or at all, our revenues and profitability may be adversely affected.
Mitigation Plan
We have a strong pipeline of new products underdevelopment and a launch plan with the help of RDT resources with forward and backward integration. This helps us manage risks related to product lifecycle changes. Further, our RDT also keeps working on improvement and new cost-effective processes for existing products to help us manage competition and maintain or increase our market share.
We may also change our product mix appropriately. We are also working on continuous business development efforts to increase the customer base in terms of application and wider geographies. We also conduct continuous market research through primary and secondary sources to identify new product opportunities and customers.
FOREIGN CURRENCY AND INTEREST RATE EXPOSURE RISK
There has been significant movement in exchange rates over several years. We have foreign currency exposures due to our Exports and Imports and may also be exposed to credit risks in some markets. The imposition of price controls or restrictions on the conversion of foreign currencies could also have a material adverse effect on our financial results.
Moreover, borrowing funds from banks and financial institutions at institutions to meet the long-term and short-term funding requirements for operations and growth initiatives at fixed and floating interest rates and an increase in borrowing cost may also adversely impact profitability. Any increase in interest rates may increase the cost of any floating- rate debt we incur.
Mitigation Plan
Our overall foreign currency risk exposure is naturally hedged. Hence, during this year, the need to use hedging tools did not arise as we evaluated that our foreign currency rate variation risk on net foreign exchange exposure was not very significant. We engage with external experts and consultants to constantly monitor the risk in this area.
CAPACITY PLANNING AND OPTIMISATION RISK
Aligning production capacity with market demand is critical to maintaining competitiveness. Insufficient capacity can lead to missed opportunities, while excess capacity may impact profit margins.
Mitigation Strategy
We ensure that capacities are well planned and optimised to respond to market realities in the following ways:
We have robust processes to continuously monitor plant capacities and utilisation, drive improvements aligned with good manufacturing practices such as preventive maintenance schedules, and modify plant designs in case of repeated breakdowns
We periodically undertake de-bottlenecking and other initiatives to improve efficiency in terms of throughput and cost reduction and to also build additional capacities without committing significant capital outlay, thereby generating a better return on investment
We have developed a dedicated external manufacturing team that can help outsource some capacities and capabilities to respond quicker to sudden market demand
To mitigate an excess capacity situation or lower asset utilisation, we continuously evaluate the manufacturing of new intermediates using existing assets, making the plants multi-purpose and improving flexibility
Multi-plant and multi-site production facilities have been developed to mitigate the fluctuating demand
MANUFACTURING OPERATIONS COMPLIANCE RISK
Due to the nature of our business, we need to comply with multiple domestic and international regulations across our manufacturing units.
Mitigation Strategy
Our core focus is transforming manufacturing for operational excellence and sustainability, with zero tolerance for non- compliance. We employ world-class manufacturing processes to ensure unmatched quality and timely delivery of products through innovation and cutting-edge technology.
Our manufacturing units are certified by various third- party agencies, which aids in reducing risk assessment. Our commitment to business excellence also mitigates operational and execution risks. We continuously implement Six Sigma and Lean initiatives, driven by certified Six Sigma Black Belt experts, to enhance capacity, capabilities, and efficiency across all our facilities. These efforts ensure the delivery of high-quality products on time.
CHANGES IN TAX LEGISLATION RISK
The Companys activities are subject to tax at various rates in different countries, which are computed following local legislation and practice. Actions by governments to increase tax rates or to impose additional taxes may reduce our profitability.
Mitigation Plan
We have a dedicated team of tax professionals whose primary task is to ensure that the tax liabilities are correctly computed and any revision in the tax legislation is monitored continuously.
LABOUR UNIONS RISK
If the Company experiences labour union issues, our production capacity and overall profitability could be adversely affected. Although we generally enjoy cordial relations with our employees, the Company may experience a strike over wages and other matters.
Mitigation Plan
This is resolved amicably through a voluntary negotiation and mediation process with the labour unions. In addition, regular discussions and the unions involvement in various joint decision-making processes help us maintain cordial relations and mitigate this risk very substantially.
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