Shankar Lal Rampal Dye-Chem Ltd Management Discussions.


Dye-Chemical Industry

India is a strong global dye supplier, accounting for approximately 16% of the world production of dyestuff and dye intermediates. Chemicals industry in India has been de-licensed except for few hazardous chemicals. Chemicals industry in India is highly diversified, covering more than 80,000 commercial products. It is broadly classified into Basic chemicals, Specialty chemicals, and Agrochemicals. Indian chemicals industry (excluding pharmaceutical products) ranks 14th in exports globally. Indian chemical industry employs more than 2 million people. The Indian industry has fared better and company growth rates have been in higher single digits as relatively stronger domestic consumption has ensured that Indian chemical companies enjoyed better growth compared to their global peers. The chemical industry in India is a key constituent of Indian economy, accounting for about 2.11 per cent of the GDP. With just a couple exceptions, outlooks for key chemical markets are equally bright. OPPORTUNITIES & THREATS:

Your Company has been continuously striving to keep its costs to minimum possible to aggressively compete with Indian & global competitors. Moreover, slowly India is getting competitive with respect to global manufacturers, as global environmental rules are becoming stringent like that of India. The lockdowns and restrictions imposed on various business operations due to COVID 19 pandemic have created several obstacles in day to day activities of the company. As stated earlier, retail facilities were shut down entirely during the lockdown phase as the company was not part of Government denominated essential services.

Corporate and regional offices were also shut, but the Company adopted the work from home policy during the entire duration of the lockdown. And In the very initial stage of this pandemic outbreak; the top level management suo-motu decided to make arrangements for sanitization, thermal screening, use of masks, staggered working and lunch schedules for whole staff members and customers. The company also offer specialty performance chemicals to the Sanitization, Textile Dyeing and printing industry. The Trading facility of the company is situated at Bhilwara (Rajasthan), Mumbai (Maharashtra), Delhi. The facility is spread over 3states. The company is an ISO 9001:2015 and ISO 14001:2015 certified company certifying the quality of the product your company manufactures. Beside Trading of numerous types of Dyes and chemical products, Our Company has large number of products and offers an entire range of specialty chemicals used in Sanitization based producs, Textiles & Garments processing.


1. Manufacturing Facility Not available - Although the company is deal in variety of color shades in dyes, but as presently we dont have manufacturing facility. This restricts us to cater wider category of customers and competition. However, going forward our company would intend to expand its portfolio to develop and established manufacturing plant in future.

2. Dependent on third party suppliers - Our company deal in Dye and chemical intermediates from third party producers. It does not have its own manufacturing facility for producing intermediates and hence is largely dependent on third parties. In the past, company has faced cost issues owing to higher prices of intermediates charged by them, we are prone to such threats by them. However, the relationship and the volume of business we generate for them somehow mitigates this weakness of us.

3. Increasing competition - Dye and chemical industry is highly competitive, facing stiff competition from both organized and unorganized player. Our company faces tough competition from them in terms of pricing and customer base. Also, there are always the chances of new players entering this sector since barriers to entry are low. Further, there is contingency on how long benefit accruing due to China may be enjoyed. There may be turnaround in Chinas dye and chemical industry which possess huge threat to Indian market. However, our company has been successful enough to compete with them with increasing market share.

4. Extreme volatility of exchange rate of rupee against US dollar can have significant impact on the Companys operations because company has substantial imports. Any major change in Environment Policy by Government can affect the production on short term basis.

5. Impact of COVID-19 outbreak- The Company is predominantly dependent on trading operations and company also deals with Export orders.

There is subsequent impact seen on sale with a reduction in almost 7% of monthly sale of the products and exports. The sale which was executed during the Lock down period were mostly execution of advance sale orders.

The drop in sales is also expected to impact the profitability in the near term. The exact impact of this pandemic cant be estimated at this point of time but the company expect a substantiate increase in purchase price, material handling, transportation and the same will significantly increase the inventory cost.


In FY 2019-20, around 100% of total sales of the company came from domestic sales of dye and chemical stuff in India. Your Company sold The company mainly got good demand for Sulpher Dyes and Chemicals, Hydrogen Peroxide, Sodium Bi Carbonate, Sodium Meta Bi Sulphite, Soda Ash Light, Linear Alkyl Benzene Sulphonic Acid, etc.


Your Company has progressively leveraged product quality assurance and good trade practices to trade in higher value products, expanding capacities to optimal scale. The Company has placed a greater focus on better value added chemical storage and delivering process. Comparative low labour costs, excellent army of technical manpower, capabilities to scale up technologies, potential to increase share in undeveloped domestic and global markets shall empower your companys Speciality Chemicals growth.

The company has recently issued shares to equity shareholders on preferential basis in March, 2020 just prior to pandemic outbreak; so company is in a comfortable position in view of capital adequacy. Also, Bankers and lenders of the company have provided adequate Bank and O/d limit that will help to meet out working capital requirements.

In view of financial year 2019-20; the company expect a strong position in regards of solvency, liquidity and overall financial outlook of the company.

Several Sanitization chemical in which company and its group firms deal in; will surly provides an opportunity in near quarter and the products will definitely help society and industry to mitigate the risk of virus outburst.

Before the COVID-19 pandemic outbreak, the Company embarked upon a proper online payment facility at all its regional offices. This initiative will help company to reduce customer visit to the business place. Company has also adopted online brochure based promotion; which help customers to choose the ideal product from their home itself.

Company has planned several measures to mitigate risk of increase in inventory cost, material handling charges and for reducing risk of bad debts.

The company is having good solvency position and a viable outlook to pay its long term and short term debts and other finance cost. The company continues a good financial discipline by timely payment of interest and its liabilities.

With the increase of government support and initiatives to promote Micro, Small and Medium Enterprises through investments, tax benefits, subsidies etc. will help the industry to grow over the coming years. In this year your Company came up with Public Issue and utilised the fund to meet the working capital requirement. The Company always strives to cater to the customized demand and main focus is to cater the need of the Textile and Garments Industry, Dyes Industry, Pigments Industry and your company has achieved target revenues with high level of customer satisfaction. With very robust demand for companys products, Company has potential for adding capacities in coming period.


Your Company has sound and adequate internal control systems commensurate with its size and nature of business. We constantly upgrade our systems for incremental improvements. The Audit Committee of the Board periodically reviews these systems. These systems ensure protection of assets and proper recording of transactions and timely reporting. Internal audit is conducted out by an independent professional firm on regular basis. The Audit Committee also regularly reviews the periodic reports of the Statutory Auditors, Internal Auditors and Accounts departments. The Company has trained the staff in order to upgrade with the recent changes in the taxation like GST. Audit Committee constantly tries to add value by evaluating existing systems.


Your Company has grown progressively on year-to-year basis through addition of new products as well as continuous upgradation and optimisation of its trading facilities. The Company has a healthy turnover and profit track record and has a robust outlook for the future. Despite of slow global economic recovery, global issues faced due to pandemic outbreak and nation-wide challenging environment in Dye-chemical and allied Sector, it was only with aggressive strategies on various fronts and with proper utilization of all available facilities by the directors of the company.


Human capital has always been the most important and valuable asset for the Company. Your Company continued its activities during the year in a cordial atmosphere with utmost co-operation amongst employees and the management. As of the date of the report, the total number of the employees of Company is 9. The management is committed to promote safety, occupational health and proper environment in designing, planning, training and completion of all tasks. Trainings are imparted to workmen in various new techniques and systems.

For and on behalf of the Board of Directors of