Oriental Aromatics Ltd Management Discussions

GLOBAL ECONOMY

Despite facing significant has demonstrated remarkable tenacity, driven by steady growth and a rapid decrease in inflation. The journey has been marked by events such as post-pandemic supply-chain disruptions, an energy and food crisis triggered by the Russia-Ukraine conflict.

Global growth, which was expected to reach 3.2% in Calender Year(CY) 2023, is forecasted to remain steady through CY 2024 and CY 2025. However, this falls short of the 3.8% historical average, owing to restrained monetary policies, diminished fiscal aid, and sluggish productivity growth. Global headline inflation is expected to moderate considerably, falling from an annual average of 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025. This decline can be attributed to a more front-loaded decrease in inflation in advanced economies, alongside projections indicating a return to pre-pandemic levels sooner than in emerging markets and developing economies. As for the predictions for advanced economies, they are poised for a slight uptick, primarily driven by the recovery of the Euro Zone. Their growth rates are projected to climb from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. In contrast, emerging markets and developing economies are expected to witness stable growth at 4.2% during 2024 and 2025. However, there exist regional disparities in these economies, with growth moderation in Asia counterbalanced by growth in the Middle East, Central Asia, and sub-Saharan Africa.

OUTLOOK

The global economic scenario faces balanced risks, accompanied by persistent uncertainties. Geopolitical tensions, exemplified by conflicts in Ukraine and Gaza, pose the threat of price spikes, potentially heightening interest rate expectations and weakening asset values.

Moreover, the varied rates of disinflation among major economies may induce currency fluctuations, thereby impacting financial sectors. The interest rates, household debt levels, and fixed-rate mortgage adjustments could strain financial stability.

In China, economic growth is at risk owing to the lack of comprehensive solutions for the country?s property sector issues, which could also affect its trading partners. The high levels of Government debt in several economies could necessitate disruptive fiscaladjustments, eroding investorconfidence and impeding climate change mitigation efforts. Geo-economic fragmentation may further impede supply-side dynamics. Conversely, the loosening of fiscal policies could transiently bolster economic activity, but might require more significant adjustments later on. Unexpectedly, the rapid decline in inflation,driven by increased participation from the labour force, could lead central banks to consider easing policies sooner. Advances in artificial intelligence and structural reforms hold the potential to enhance productivity. Central banks are likely to play a crucial role as the global economy transitions toward a soft landing, necessitating careful management of inflation. Moreover, there is a pressing need for a renewed focus on medium-term of high fiscal consolidation to rebuild fiscal space for vital investments and ensure debt sustainability. Tailored policy responses, coupled with supply-enhancing reforms, are vital for addressing inflation, reducing debt levels, fostering higher growth rates, and narrowing income disparities. Additionally, multilateral cooperation is essential to address challenges such as geo-economic fragmentation, climate change, and debt restructuring. It would ultimately help foster a sustainable and inclusive economic recovery, promising a brighter future.

INDIAN ECONOMY

India?s economy has shown exceptional endurance and sustained growth over the past three years, even in the face of global economic challenges. This robust trajectory has been partly supported by a combination of stringent policy and regulatory measures. Another significant factor has been the gradual resurgence of the private sector. Moving ahead, the nation is positioned on the brink of further economic advancement. To that end, there are likely to be substantial investments in emerging sectors, continued Government spending, and efficiency gains driven by upgradation in digitalisation and infrastructure. In FY 2023-24, India?s economic growth narrative has been one of robust expansion, achieving an impressive 7.6% growth rate that has surpassed prior forecasts.

However, as we look to the next fiscal year, a note of caution is sounded, with GDP growth expected to moderate to 7%. This anticipated slowdown reflects the impacts of elevated interest rates and a constrained fiscal

GDP. Despite these headwinds, the vibrancy of India?s economy is reinforced by several factors. These include strengthened consumer purchasing power through disinflation, expected robust agricultural outputs, and a revitalisation in private capital expenditure. Furthermore, the Government has taken initiatives to bolster rural income and enhance infrastructure spending. This proactive approach has helped solidify India?s status as the fastest-growing major economy globally.

OUTLOOK

Looking ahead, the Indian economy is poised to scale greater heights in the years to come. Projections indicate that the economy will approach the USD 7 trillion milestone by 2031, cementing its position as the world?s third-largest economy. The catalysts of this growth would be capital and productivity enhancements, driven by a holistic integration of digital and physical infrastructure. The manufacturing sector is anticipated to experience a revival, benefiting from global opportunities, domestic policy support, and a focus on green energy transition. The nation?s future is promising of robust growth in capital expenditure, driven by industrial vigour and efficient infrastructure development. This momentum has been supported by a host of factors, including the sound financial health of Indian corporates, consistent revenue growth, and an optimistic commodity price outlook. Furthermore, the Government?s Production Linked Incentive (PLI) scheme aims to elevate India?s manufacturing prowess on the global platform. This initiative is further accentuated by a robust banking sector and innovative financing avenues. On the whole, India?s economic journey is fortified by domestic reforms, competitive advancements, and a commitment to value-added growth. These progressive steps are further strengthened by substantial infrastructure development witnessed across the nation.

GLOBAL CHEMICAL INDUSTRY

The global chemical and advanced materials industry has been resilient and adaptive despite the challenges of inconsistent economic growth, climate crises, and geopolitical conflicts. . In 2023, the industry experienced sluggish demand. This trend was contributed by factors such as a recession in Europe, inflation in the United

States, and slower-than-expected demand rebound from China. However, many companies have responded by focussing on reducing costs and improving efficiencies.

In the United States, the fears of an economic downturn have eased, and signs of a ‘soft landing? are apparent. While economic growth is expected to slow down, there is optimism for a modest rebound in chemical production. The transition from destocking to restocking is expected for many chemicals, but underlying weaknesses in demand and overcapacity may persist. In this market environment, companies are advised to balance short and long-term goals.

The industry is witnessing changes in the competitive framework, with stakeholder pressure and Government policies driving investment in the energy transition. This trend has led to the convergence of sectors related to clean energy, with chemical companies diversifying into areas like lithium processing and battery manufacturing. While presenting new opportunities, this also exposes the industry to competition from sectors with stronger cash flows.

OUTLOOK

The global chemicals industry is navigating challenges such as sluggish demand, overcapacity, and supply chain disruptions. Despite these challenges, the industry is adapting by focussing on reducing costs, improving efficiencies, and capitalising on new opportunities, particularly in the energy transition. Demand drivers like the infrastructure investment in clean energy technologies are expected to drive increased production in 2024. There is a shift in the regional dynamics, resulting in a new competitive outlook. Digitalisation, the circular economy, and sustainability are key focus areas for industry players. Overall, while challenges remain, the industry is well-equipped to adapt and capitalise on emerging trends, positioning it for long-term growth and prosperity.

KEY TRENDS

The shift towards renewable energy is driving a surge in manufacturing, reliant on chemicals and materials for essential support The evolution of regional dynamics is prompting a strategic reassessment among chemical industry players Digitalisation and AI are not just acting as tools for operational improvement in the chemical sector but also helping to utilise data in driving innovation

The circular economy is presenting significant opportunities for chemical industry leaders aiming to stay ahead Trust and prominence in the market can be greatly enhanced by embracing transparency and fostering collaboration within chemical companies

https://www2.deloitte.com/us/en/insights/industry/oil-

Source: and-gas/chemical-industry-outlook.html)

INDIAN CHEMICAL INDUSTRY

The Indian chemical industry is poised to play a pivotal role in India?s ambitious goal of becoming a US$ 30 trillion economy by 2047, aiming to contribute around US$ 1 trillion by 2040. Currently valued at US$ 220 billion, the industry is experiencing a robust growth rate of 9.3% CAGR. As a key enabler of economic growth, India is focussing on creating a competitive landscape for the chemical industry to thrive. Factors such as the China-Plus-One strategy, which aims to establish alternative manufacturing hubs, present India as a prime beneficiary. Additionally, global trends like supply chain diversification, changing geopolitics, trade wars, stringent environmental norms, and rising compliance and labour costs in China are driving the demand for Indian chemicals. The sector is playing a significant of nearly 1,00,000 products across various industries. This contribution highlights its untapped potential and immense growth opportunities in India. All in all, the industry is likely to play an important part in shaping the Government?s vision of an ‘Aatmanirbhar Bharat? (self-reliant India). Ultimately, the nation will be able to achieve its goal of becoming a US$ 30 trillion economy by 2047.

OUTLOOK

The Indian chemical industry is poised for noteworthy growth and transformation. The progress is likely to be driven by emerging opportunities aligning with the country?s vision to cater to evolving global demands. The Petroleum, Chemicals and Petrochemical Investment Region (PCPIR) policy is a key driver, aiming to attract investments of US$ 284 billion (C 20 lakh crore) by 2035. This policy, designed strategically in clusters, is set to revolutionise the chemical sector on a large scale. According to the Department of Chemicals & Petrochemicals, the PCPIR policy is expected to create 33.83 million jobs. Over the next two decades, 80% of exports are projected to come from agrochemicals, dyes & pigments, and food additive chemicals. Additionally, 16 specialty chemical segments are expected to perform well, driven by their cost-effectiveness and market demand. This outlook indicates a promising future for the Indian chemical industry, positioning it as a leader in the global market. With a focus on innovation, investment, and strategic policies, India is poised to capitalise on emerging opportunities and drive sustainable growth in the chemical sector.

GLOBAL SPECIALTY CHEMICAL INDUSTRY

The global specialty chemicals market reached a size of US$ 754.6 billion in 2023. Moving ahead, the market is expected to grow to US$ 1,029.3 billion by 2032, exhibiting a CAGR of 3.4% from 2024 to 2032. Specialty chemicals, also known as specialties or effect chemicals, are crucial ingredients in finished products that enhance their manufacturing process. These chemicals, whether single entities or formulations, produce high-value chemicals used in various consumer products. Unlike commodity chemicals, specialty chemicals are produced in lower volumes and find applications across a wide range of industries. These industries include chemicals, agriculture, automotive, aerospace, pharmaceuticals, and food & beverage (F&B).

The growth of the specialty chemicals market has been driven by the increasing demand for high-performance and function-specific chemicals. This demand has been witnessed across industries like oil and gas, pulp and paper, personal care, and cosmetics. Apart from this, environmental concerns have contributed to the rise in demand for user and eco-friendly specialty chemicals. The leading market players are focussing on developing and promoting these environmentally friendly variants to expand their portfolios and enhance sales. Amid such developments, investment in R&D is crucial for providing innovative and customised specialty chemicals for specific applications

OUTLOOK

Looking ahead, the specialty chemicals market is expected to grow significantly, propelled by several factors. These include increased industrial endurance and adaptability, advancements in smart manufacturing and Industry 4.0 practices, the rising demand for specialised performance-driven chemicals, expanding global markets, and a shift towards environment friendly solutions. Notably, the key developments in this period will include innovations in packaging, increased demand in the automotive sector, a focus on water treatment and environmental solutions, advancements in adhesives and coatings, and a surge in demand in consumer goods and personal care segments.

REGIONAL HIGHLIGHTS

ASIA PACIFIC

Asia Pacific emerged as the dominant share of 27.86% inmarket for specialty chemicals, holding the highest revenue share of 49.9% in 2023. This growth was driven by factors such as economic progress, industrialisation, and the growth of major end-use sectors. China and India were significant contributors to the growth in this region. Notably, the demand in the region was influenced by applications in foods and beverages, personal care and cosmetics, and pharmaceuticals.

EUROPE

Europe is another key market for specialty chemicals after Asia Pacific, driven by industrial economies such as the UK, Germany, France, Italy, Spain, and Russia. The region has seen an increase in manufacturers and market suppliers of electronics, cosmetics, and pharmaceutical products, driving the demand for specialty chemicals. The presence of major cosmetic manufacturing units also contributes to the demand for specialty chemicals in Europe.

MIDDLE EAST

The Middle East is experiencing a rise in the demand for specialty chemicals, especially in foods and beverages. This boost is propelled by the food trade reliance and changing consumer preferences. There?s also an increasing need for concrete additives for better strength. Alongside, the region is transitioning towards eco-

. friendly chemicals, with significant

The automotive industry is adopting specialty chemicals for lightweight materials. On the other hand, AI and IoT integration is enhancing production processes, boosting the demand for chemicals in semiconductors and electronics.

NORTH AMERICA

North America held a significant driven by its mature industrial landscape and advanced technological infrastructure. The United States and Canada were key contributors to this growth, with strong demand from industries like automotive,and rapid growth, aerospace, electronics, and healthcare. The region?s focus on R&D encouraged innovation and product diversification in the specialty chemicals sector. Additionally, stringent regulatory standards drove the adoption of eco-friendly formulations and sustainable practices.

https://www.kingsresearch.com/specialty-chemicals-

Source: market-591

LATIN AMERICA

The presence of major manufacturers in Latin America such as Cargill, Incorporated, General Mills, and Kraft Foods is expected to drive the increased demand for specialty chemicals over the forecast period. Industries such as automotive, transportation, chemical processing, and construction are expected to be the key consumers of specialty polymers, coatings, adhesives, sealants, plastic additives, lubricants, and other specialty chemicals.

https://www.grandviewresearch.com/industry-analysis/

Source: specialty-chemicals-market

INDIAN SPECIALTY CHEMICAL INDUSTRY

Indian Specialty Chemicals Market has reached US$ 41.90 billion by 2023 and is anticipated to project robust growth in the forecast period with a CAGR of 3.86% through 2029. The Indian chemical industry is poised for significant anticipated to emerge as the most lucrative segment. This growth can be attributed to the escalating demand from a diverse range of end-use industries, including pharmaceuticals, textiles, and personal care products. India?s robust domestic demand, coupled with its export potential, further reinforces the expansion of this sector. Moreover, India is rapidly establishing itself as a preferred manufacturing hub for specialty chemicals, catering to both domestic and export markets. Notably, approximately 20% of the total exports from the Indian chemical industry comprise specialty chemicals. This growth trajectory has been further bolstered by substantial investments in infrastructure and research and development, elevating the industry?s competitiveness on a global scale. Furthermore, the specialty chemicals sector is witnessing an upsurge in investor interest, fuelled by its strong performance and promising prospects. This influx of investments serves as an additional catalyst for the sector?s growth.

https://www.techsciresearch.com/report/india-specialty-

Source: chemicals-market/4129.html

KEY TRENDS

Increasing Demand and Consumption

Demand for specialty chemicals in India is on the rise due to factors like population growth, urbanisation, and industrialisation. This growing consumption spans various sectors such as pharmaceuticals, agrochemicals, textiles, and automotive industries. The trend indicates significant growth prospects for companies in the specialty chemicals sector, driven by expanding industries? need for specialised chemical products.

Focus on Research and Development

Specialty chemicals companies are investing resources in research and development to innovate and create novel products with enhanced properties and environmental sustainability. Innovation is crucial for maintaining competitiveness in the market, making the creation of cutting-edge specialty chemicals essential for addressing evolving industry needs and establishing leadership in technological advancements.

Environmental and Sustainable Practices

There is a growing emphasis on adopting environmentally friendly and sustainable practices in specialty chemicals production. This reflects increased global awareness about environmental issues and a shift towards eco-friendly solutions. Companies prioritising sustainability and integrating green practices into their operations stand to gain a competitive advantage.

GLOBAL FRAGRANCE & FLAVOUR MARKET

The global Fragrance & Flavour market reached a substantial size of US$ 32.2 billion in 2023. Looking ahead, the market is expected to expand even further, reaching US$ 43.6 billion by 2032, with a CAGR of 3.3% during the forecast period of 2024-2032. Several factors are driving this growth, including the expanding food & beverage industry, rising awareness about personal grooming and hygiene, changing consumer preferences, growing population and urbanisation, and increasing emphasis on natural and organic ingredients.

North America currently holds the largest share in the flavour market, driven by its highly developed and diverse food & beverage industry. The region?s affluent population, coupled with a culture of culinary exploration and innovation, has led to a high demand for a wide in North variety of

America are willing to spend on premium and specialty food & beverage products, further driving market growth.

OUTLOOK

The global Fragrance & Flavour market is poised for noteworthy growth. This is likely to result from growing population and urbanisation, the rising awareness of personal grooming and hygiene, and an increasing demand for natural and organic ingredients. Consumers are seeking healthier and more sustainable options, leading to a rise in the adoption of natural Fragrance

& Flavour. Continuous efforts towards innovation in the food & beverage industry are also contributing to market growth. Additionally, there is a shift in consumer behaviour towards the adoption of natural and clean-label Fragrance & Flavour. This trend is driving the expansion of the personal care industry and the increasing awareness of the harmful effects of synthetic products.

KEY TRENDS

An Expanding Personal Care Industry Driving Market Growth

The expanding personal care industry is a significant driver of the Fragrance & Flavour market. As consumers are focussing more on self-care and grooming, there is a growing demand for personal care products such as skincare, haircare, and cosmetics. Fragrances are essential components of these products, contributing to the overall sensory experience and creating a positive association with the brand. They serve multiple purposes, which include enhancing the product?s appeal, evoking emotions, and masking any potential unpleasant odours.

Continuous Innovations in the Food & Beverage Industry

Ongoing innovations in the food & beverage industry are propelling the Fragrance & Flavour market. Manufacturers in this sector are constantly striving to meet evolving consumer preferences and expectations, creating unique and memorable sensory experiences. This drive for innovation is directly influencing for Fragrance & Flavour. A major factor propelling the bolstered demand is the rising number of health-conscious consumers, which is giving rise to healthier alternatives and functional food products.

Rising Awareness of Personal Grooming and Hygiene

The increasing awareness about personal grooming and hygiene is another key driver of the Fragrance & Flavour market. As individuals are becoming more conscious of their appearance, there is a growing demand for products that can enhance personal care routines. Fragrances play a crucial role in personal grooming products, providing pleasant scents that mask unpleasant odours and impart a clean and appealing scent. These attributes make such products more enjoyable to use and help enhance the overall grooming process. Moreover, fragrances contribute to personal identity and self-expression, which drives the demand for diverse variants that cater to individual preferences and lifestyles.

Source: https://www.imarcgroup.com/flavors-fragrances-market

INDIAN FRAGRANCE & FLAVOUR MARKET

FLAVOURS

The India flavours market size reached C 4,287 crore in 2023. Looking forward, IMARC Group expects the market to reach C 8,100 crore by 2032, exhibiting a CAGR of 7.1% during 2024-2032. This growth is likely to be driven by increasing consumer preferences for natural flavours and clean-label products. Additionally, factors such as rising disposable incomes, changing lifestyles, and high consumption of processed food items are contributing to the market expansion.

OUTLOOK

The Indian flavours market is benefiting from the growth of the food & beverage industry, apart from the increasing demand for convenience food items. The market is further propelled by the rising popularity of functional food items and beverages, gourmet and specialty food items, and the pharmaceutical industry?s demand for flavours. The progress has also been observed due to advancements in flavour technology, including encapsulation and delivery systems, and the increasing usage of flavours in the e-cigarette and vaping industry. Overall, the outlook for the Indian flavours market is promising, with a favourable environment for continued growth and innovation. vours. Thesefla

KEY TRENDS

Expansion of Food Processing Industry

The increasing demand for packaged, ready-to-eat food items and beverages is primarily driving the flavours market in India.

Rising Utilisation in Various Food Categories

Flavouring ingredients are being increasingly used in bakery and confectionery items, ice creams, smoothies, energy drinks, and other food categories, contributing to market growth.

Urbanisation and Western Food Trends

The growing urban population and the adoption of western food trends are fuelling the demand for flavouring agents in the country.

Popularity of Processed and Shelf-Stable Food Products

Processed food products like noodles, soups, cake mix, RTD tea and coffee, and juices are gaining popularity, especially among millennials, driving the market for flavours.

Stringent Norms by FSSAI

The introduction of stringent norms by the Food Safety and Standards Authority of India (FSSAI) regarding the quality of flavours used in processed food products is majorly propelling growth in the market.

Rise of Quick-Service Restaurants (QSRs) and Caf? Culture

The increasing number of QSRs and the emergence of a ‘cafe culture? are boosting the demand for flavours in

India.

Shift Towards Natural and Organic Flavours

Rising consumer concerns about the health impact of chemical-based flavouring agents are leading to a shift towards natural ingredients-based flavours.

Emergence of Healthier Product Variants

The market is witnessing the emergence of various healthier product variants, including vegan and organic are made from 100% plant-based derivatives, which are expected to drive market growth in the future.

fla -market Source: https://www.imarcgroup.com/india-

FRAGRANCES

The fragrance sector in India is experiencing a significant transformation. This upheaval is propelled by evolving consumer preferences, increased disposable income, and a growing demand for personal care and cosmetic products. According to Statista, the fragrances market in India is projected to grow by 1.49% from 2024 to 2028, reaching a market volume of US$ 336.20 million in 2028.

OUTLOOK

Overall, the fragrance sector in India is witnessing a remarkable growth trajectory, driven by changing consumer preferences and a growing demand for personalised and natural products. The market is expected to continue evolving, with a strong emphasis on Customisation, inclusivity, and product diversification to cater to varied customer needs.

KEY TRENDS

Demand for Natural and Organic Products

There is a rising preference for natural and organic fragrances as consumers are becoming more conscious of the ingredients used in their personal care products.

Rise of Personalised and Unisex Fragrances

Consumers are currently seeking unique and personalised fragrance experiences. This shift in preferences is leading to the popularity of customisable and unisex fragrances that cater to individual tastes and preferences.

Influence of Social Media and Celebrity Endorsements Social media and celebrity endorsements are majorly shaping consumer preferences. As such, there is an increase in the demand for specific fragrances endorsed by influencers and celebrities.

Shift towards Customisation and Inclusivity

There is a growing trend towards Customisation and inclusivity in the fragrance sector, with brands offering a wide range of options to cater to diverse consumer preferences and needs.

Focus on Unique and Individualised Scent Experiences

Brands are increasingly focussing on developing unique and individualised scent experiences. This move is targeted towards differentiating their market identity and meeting the demands of the discerning consumer base.

https://medium.com/@ekayacorp/flavours-fragrance-

Source: industry-india-trend-analysis-0ee36ee7321e

GLOBAL AROMA CHEMICALS MARKET

The global aroma chemicals industry plays a pivotal role in the Fragrance & Flavour market. The industry offers synthetic and natural compounds that enhance scents and flavours market size is estimated at US$ 5.56 billion and is projected to grow to US$ 8.59 billion by 2033, indicating a CAGR of 4.95%. The key drivers of this market include increasing consumer awareness, changing lifestyles, expanding R&D initiatives, and technological advancements.

The industry encompasses the production, distribution, and sale of aroma chemicals used primarily for their scent or flavouring properties. These chemicals are highly volatile and can easily diffuse, ultimately giving rise to long-lasting fragrances. Natural aroma chemicals are extracted from plant parts and purified through fermentation and separation processes. On the other hand, synthetic aroma chemicals are developed in laboratories, which provides them with a clearer aromatic signature and chemical ingredient-base.

OUTLOOK

AI is being utlised in various aspects of the fragrance creation process, from studying customer behaviour in e-commerce transactions to designing and formulating scents. AI integration enables fragrance houses to match formulations to new briefs, create scent formulations and reformulations, and develop personalised fragrances. Notably, there are certain challenges in implementing AI in fragrance creation, such as non-linear arithmetic and interdisciplinary knowledge requirements. However, there are substantial benefits as well, which include cost reductions, new revenue streams, and enhanced decision support for perfumers.

KEY TRENDS

Rise in Demand for Aroma Chemicals

The increasing demand for different Fragrance & Flavour is a key driver for market growth.

AI Integration in Fragrance

AI is gaining popularity in the fragrance sector, from studying customer behaviour to creating AI models for scent design and formulation, leading to cost reductions and new revenue streams.

Natural and Organic Products

The increased demand for natural and organic products is creating opportunities for the Fragrance & Flavour business. As such, the aroma chemicals market is being driven towards sustainable and environmentally friendly practices.

Multinational and Domestic Players

The market includes multinational corporations, domestic companies, and small businesses, all of which contribute to the growth and competitiveness of the industry.

Innovation and Product Development

There are continuous efforts for innovation in fragrance formulation and development. These efforts are driven by the necessity to meet evolving consumer preferences and industry demands.

INDIAN AROMA CHEMICALS MARKET

The Indian aroma chemicals industry is poised for significant

US$ 265.15 million by the end of 2024 and US$ 346.21 million in 2029. Notably, this translates to a projected CAGR of 5.48% during the forecast period.

A major driver of the market is the growing demand for Fragrance & Flavour in the food & beverage sector. This demand is being fuelled by the rising consumption of packaged and convenience food items. Despite such positive developments, the industry faces challenges such as high costs of research and development. However, technological advancements in the extraction of aroma chemicals are expected to create various growth opportunities for the market in the coming years.

OUTLOOK

The market is experiencing positive developments, particularly due to the increased demand for soaps and detergents. Moreover, there are lucrative opportunities for market growth due to the rising demand for natural aroma chemicals in cosmetics and toiletries. Another contributing factor towards the potential growth is the increasing demand for aroma chemicals in the food & beverages industry. Key players in the market are focussing on developing innovative products to capitalise on these opportunities and cater to evolving consumer preferences. Overall, the Indian aroma chemicals industry is poised for substantial growth in the coming years.

KEY TRENDS

Rising Demand for Natural Aroma Chemicals

There is a growing preference for natural growth patterns in the ingredients in cosmetics and toiletries, leading to increased demand for natural aroma chemicals derived from plant sources.

Increased Usage in Food & beverage

Aroma chemicals are being widely used in the food & beverage industry to enhance Fragrance & Flavour. The growing consumption of packaged food & beverage is driving the demand for aroma chemicals in this sector.

Expansion of Overseas Fragrance & Flavour Manufacturers

Overseas manufacturers are expanding their presence in fluctuations

India due to positive demand patterns and the availability of raw materials. This expansion is expected to further boost the market for aroma chemicals in India.

Focus on Innovation

Key players in the market are focussing on developing innovative products to cater to evolving consumer preferences. This includes creating exotic and innovative flavours for the food & beverage industry and natural alternatives for cosmetics and toiletries.

Medicinal Properties of Terpenes

Terpenes, a type of aroma chemical, are known for their medicinal properties such as anti-carcinogenic, antiseptic, and antimicrobial effects. This has led to increased use of terpenes in fragrances, alternative medicine, essential oils, and the food & beverage industry.

Growth in the Food & beverage Industry

India?s food & beverage industry is one of the largest and fastest-growing industries in the world. With expectations of continued growth therein, aroma chemicals are likely to witness an increased demand, especially for fruit juices, energy drinks, and carbonated beverages.

GLOBAL CAMPHOR MARKET

The global camphor market is expected to exhibit largelyfluctuating influenced by factors contributing to sluggish growth in

2023. However, a rebound in demand is likely in the latter half of 2024 due to improvements in the economy and alleviation of supply chain concerns.

OUTLOOK

With an anticipated economic downturn, the camphor industry faces several key challenges during the short- and medium-term forecast. These include shifting consumer preferences and the need for industrial policy amendments to align with growing environmental costsconcerns, significant due to geopolitical tensions, and expected subdued economic growth.

Despite the anticipated challenges, the camphor industry can leverage valuable opportunities by prioritising resilience and innovation. This entails maintaining investment discipline, actively engaging in business ecosystems, and demonstrating a strong commitment to sustainability. Altogether, these efforts underscore the chemicals industry?s pivotal role in driving sustainable solutions.

KEY TRENDS

Investments in acquiring new technologies and enhancing product portfolios

Securing raw materials through efficient procurement and inventory management

Regional-specific strategies due to varying economic and social challenges.

Emphasis on cost consciousness and operational efficiency

Adaptations in supply chain dynamics and growing emphasis on sustainable practices

https://www.researchandmarkets.com/report/camphor

Source: https://markwideresearch.com/camphor-market/

INDIAN CAMPHOR MARKET

India ranks as the worlds second-largest importer of camphor, mainly sourcing the product from China, Germany, and the United Kingdom. Natural camphor is derived from the wood of camphor trees primarily found in Japan, Taiwan, and Vietnam. In contrast, synthetic camphor is produced from pine trees, making this variant more cost-effective and scalable. However, despite Indias abundance of pine trees, the country?s output of camphor only accounts for 17%, with 80% of it sourced from imports. This underscores the necessity for camphor companies to import Turpentine.

The Indian camphor market is witnessing notable growth due to the increasing use of camphor in natural products, medical applications, religious rituals, and agriculture. Camphor is also utilised in skincare products to reduce acne and pimples. In the pharmaceutical industry, camphor tablets are extensively used to alleviate pain, swelling, congestion, and coughs. Additionally, camphor tablets are applied in agriculture as a repellent to ward off insects and reptiles. The use of camphor in religious rituals in India has also contributed to market growth. The camphor market in India is highly competitive, with numerous smaller players present in the industry. Synthetic camphor, which is more affordable and widely available, has a higher demand than natural camphor, which is at least three times more expensive. In India, camphor is mainly used for religious purposes, and for preparing pharmaceuticals, tire, paints, Fragrance & Flavour, and cosmetics.

https://www.volza.com/p/camphor/import/import-in-india/ Source: https://www.myinvestmentdiary.com/post/connecting-the- dots-indian-camphor-industry)

COMPANY OVERVIEW

Oriental Aromatics (referred to as ‘The Company?) has emerged as one of the few fully-integrated players in the global Fragrance & Flavour industry. The Company?s decades of experience encompass the Fragrance & Flavour, camphor, terpene chemicals, and specialty aroma chemical ingredient industries. It stands as one of the largest domestic manufacturers of these chemicals. The Company maintains a culture that is rooted in creativity, passion, and innovation, all aimed at furnishing differentiated solutions to enhance consumer experiences.

Oriental Aromatics product portfolio includes synthetic camphor, terpineol, pine oils, astromusk, and other specialty aroma chemicals. The Company also manufactureschemicalsappliedinvariousotherindustries such as Fragrance & Flavour, pharmaceuticals, soaps and cosmetics, and paints and varnishes. Its Fragrance & Flavour are used in numerous daily-use products from renowned FMCG brands. Notably, the categories of the brands include fine fragrances, personal hygiene, home care, beauty, and cosmetics. All in all, Oriental Aromatics has established itself as a key industry player, utilising its strong domestic presence and high-performing exports to several countries across Asia, Europe, Africa, North, and South America. The Company has a network of well-established R&D centres and manufacturing facilities in India. This efficient infrastructure enables it to develop unique combinations of specialty aroma chemicals, Fragrance & Flavour. Oriental Aromatics products are sold to 2,000 customers across 35 countries worldwide, reflecting the Company?s global reach and influence in the Fragrance & Flavour market.

MANUFACTURING FACILITIES

Oriental Aromatics has achieved backward integration with regard to its manufacturing procedures. This initiative has helped the Company establish a stronghold in the niche Fragrance & Flavour industry. Moreover, it has adopted efficient and sustainable raw material sourcing policies to mitigate external risks. Currently, the Company manufactures over 150 specialty aromatic ingredients using 28 different chemical procedures in its integrated and fully automated chemical manufacturing facilities. These ingredients are then used in-house for creating Fragrance & Flavour for various applications.

BAREILLY, UTTAR PRADESH	VADODARA, GUJARAT	AMBERNATH, MAHARASHTRA
Established in 1964, the first Synthetic Camphor plant in India was equipped with technology designed by DuPont from the US.	A state-of-the-art manufacturing facility for aroma chemicals was established in Vadodara, Gujarat, in 1999, with a new multi-purpose plant facility added in 2018.	Commencing operations in 2014, this top-of-the-line manufacturing facility, has a capacity of approximately 6,000 metric tonnes per annum (MTPA) of Fragrance & Flavour.
This plant has a production capacity exceeding 7,900 metric tonnes per annum (MTPA) of pine-based chemicals and other related products.	These facilities boasted an end- product manufacturing capacity of approximately 6,200 metric tonnes per annum (MTPA).	It is a highly versatile facility capable of producing both Fragrance & Flavour. Additionally, this facility is equipped with cutting-edge infrastructure for research and assurance (QA).
It is equipped to manage various chemical operations, such as fractionation, esterification, saponification, hydrogenation, dehydrogenation, oxidation, peroxidation, and pyrolysis, among others.	This plant adheres to international standards for all the products it manufactures, with 75% of the annual production being exported development (R&D) and quality worldwide.
The plant holds a Pharma Grade accreditation, along with WHO- GMPandUSFDAcertifications It primarily focusses on the manufacturing of camphor and specialty aroma ingredients derived from Alpha Pinene.	It specialises in producing a wide range of generic specialty aroma ingredients sourced from Pinene, Petrochem, and other sources of raw materials.
	This plant is utilised for various chemical operations, which include epoxidation, peroxidation, hydrogenation, aldol condensation, cyclisation, esterification, and bromination, among others.