Standard Surfactants Ltd Management Discussions

1. Industry structure, developments and Market Overview:

Your company is primarily engaged in the business of manufacturing of Surface-Active Agents and Consignment Stockiest of Indian Oil Corporation Limited.

Surfactants:

In recent years, the surfactants market has witnessed significant growth. The global surfactants market, valued at USD 47.36 billion in 2024, is projected to reach USD 70.13 billion by 2032, exhibiting a CAGR of 4.9 % during the forecast period 2024-2032.

Several factors are driving the expansion of the market. Asia Pacific dominated the surfactants market with a 40.31% share in 2023, driven by strong demand from home care and personal care sectors in countries like China, India, and Japan. Economic growth, urbanization, and low-cost manufacturing have further supported regional dominance.

Indian chemical industry has numerous opportunities, considering the supply chain disruption in China and the trade conflict among the US, Europe and China. Anti-pollution measures in China will also create opportunities for the Indian chemical industry in specific segments.

The escalating demand for surfactants across diverse sectors, including home care, personal care, textiles, food & beverages, industrial & institutional cleaning, and plastics, catalyzes market growth due to their versatile properties and applications. Surfactants serve as a key ingredient in home care products, such as detergents and cleaners, facilitating the removal of dirt and grease from various surfaces. Their ability to reduce surface tension enables effective wetting and emulsification, enhancing cleaning efficacy.

In personal care products, the product acts as foaming agents, emulsifiers, and solubilizers, contributing to the formulation of shampoos, body washes, and skincare products. Their ability to stabilize formulations and enhance product performance drives their widespread use in the personal care industry. Textile manufacturing relies on the product for processes such as dying, finishing, and fabric softening.

Industrial and institutional cleaning operations utilize products for degreasing, sanitizing, and disinfecting surfaces in commercial settings. Their ability to lower surface tension enhances soil penetration and removal, ensuring thorough cleaning and hygiene. Furthermore, the product plays a crucial role in the plastics industry, serving as dispersants, lubricants, and anti-static agents during polymer processing and compounding. They improve the flow properties of the molten polymers, enhance filler dispersion, and mitigate surface defects in plastic products.

Further, the increasing product demand across these diverse sectors reflects their indispensable role in facilitating numerous manufacturing processes, enhancing product performance, and meeting evolving consumer preferences, thereby driving market growth.

Paraffin wax, Sulfur and Polymer:

The Polymer industry in India is growing rapidly, largely due to the expanding range of industrial uses and strong demand from major sectors. The countrys ongoing urbanization and industrial growth have created a strong need for innovative polymer materials. Contributing factors include the countrys improved manufacturing technologies and a more conscious consumer market, which is playing a vital role in driving this upward trend.

According to 6Wresearch, the India Polymers Market size is anticipated to grow at a CAGR of 6.5% during the forecast period 2025-2031. A major factor behind the growth of Indias polymer market is the strong expansion of industries like construction, automotive, and packaging. The need for materials that are both lightweight and long-lasting has led to greater reliance on polymers nationwide. As urbanization and industrialization continue to reshape the countrys landscape, theres a growing need for advanced polymer-based solutions to cater to increasingly diverse and specialized needs. Indias fast-paced Urbanization and industrial development have heightened the need for advanced polymer solutions, playing a key role in India polymers market growth. Complementing this trend, government efforts to promote local production through initiatives like "Make in India" Are boosting industry prospects.

Global Polymers Market size is forecast to reach around $1,233.6 billion by 2030, after growing at a CAGR of 5.1% during 2024-2030. Polymer is one of the widely used product in almost all the sectors such a medical, aerospace, packaging, automotive, construction, electrical appliances, and medical sector, and consequently, the global polymers market is thriving. Polymers are used widely as a substitute of metal and mineral based products due to its high performance, cost-effectiveness, and low weight. Increase in the retail sector and prospering e-commerce industry is demanding for more packaging material that is influencing the significance of the polymers market. Whereas, the growing interest in renewable feedstock and biopolymers among the consumers have led to the development of several alternatives to traditional plastics that in turn drives the demand for Polymer during the forecast period. Furthermore, growing demand for polymer in the electronic industry for the manufacturing of different electrical parts such as switches and sockets are driving the Polymers Market.

On the other hand, the Indian Paraffin Wax Market size was valued at USD 688.17 million in FY2023 and is estimated to reach USD 1,255.01 million by FY2031. The market is growing at a CAGR of 7.80% for the forecast period between FY 2024 and FY 2031, owing to increasing usage in the manufacturing of industrial coatings, hot melt adhesives, plastic & rubber processing aids, body care products, metal casting, medicines, and electrical insulations.

Likewise, for sulfur the emerging applications of sulfur are estimated to create gainful growth prospects for the major companies functioning in the global sulfur market. Sulfur is multifunctional in nature and used in its elemental form the production of range of end-use products like match sticks, fungicides, insecticides, detergents, batteries, and black gunpowder in both developed as well as emerging economies. Sulfur possesses great resistance to the heat and electricity along with ideal chemical properties. Commercial sectors including fertilizer, rubber, and pharmaceutical are widely ad optioning sulfur to get competitive edge in the global market. Also, emerging countries across the globe are focusing on increasing sulfur production in order to cater the increasing global demand of the sulfur. This trend is expected to continue and will enhance growth of the global industry in the near future. The Asia Pacific sulfur market size was valued at USD 4.00 billion in 2022 and is estimated to reach around USD 5.51 billion by 2032, growing at a CAGR of 3.30% from 2023 to 2032.

Polyvinyl Chloride (PVC) resin:

The Polyvinyl Chloride (PVC) Resin Market size is estimated to reach US$86.2 billion by 2027, after growing at an estimated CAGR of 4.7% during the forecast period 2022-2027. Polyvinyl Chloride (PVC) resin is a thermoplastic resin manufactured by polymerization of vinyl chloride monomers. It is extensively used over polypropylene, polyethylene terephthalate and polyethylene owing to its superior impact strength and stiffness. The PVC resin has major utilization in the building and construction sector due to superior features such as strength, preference over metal materials, lightweight, durability and non-toxicity, thereby driving the polyvinyl chloride (PVC) resin market. In addition, the rise in medical and healthcare projects is fueling its demand for a wide range of applicability in blood transfusion sets, emergency burns treatment, bedding covers and others, thereby offering growth in the polyvinyl chloride (PVC) resin industry.

2. Vision:

Our Company aims to be recognized as the best organization, measured by customer satisfaction, employee pride and shareholders value.

Our aim is to be a dependable source of quality surfactants for home care, personal care, oral care, oil & gas, Agro, and other industries. We strive to develop trustworthy relationships with our customers, employees, and stakeholders for sustainable growth in the global market. We also strive to be ahead in the market by providing competitive prices with consistent quality and timely deliveries.

3. Opportunities and Threats:

In India, with increasing demand, defending the Companys market position is a prime focus area. The Company is pursuing the execution of its capacity addition plans for key products. The Companys value driven growth opportunity in the specialty segments will ensure scale and consolidation.

The company has proposed to expand through diversification in the existing Business line and including new products and expand its market presence. On the other side, logistics, market coverage, sales monitoring, and channel management becomes challenging and will play crucial role for the sustained viability and continuing success of the Companys businesses.

4. Segment wise or Product wise information:

The Company operates in two primary business segments viz. Manufacturing of Surface-Active Agents and Consignment Stockiest of Indian Oil Corporation Limited, for High Density Polyethylene, Linear Low-Density Polyethylene, Poly Propylene, Paraffin wax and other petroleum products. Further, segment wise or product wise performance are self-explanatory under the Financial Statements which forms a part of the Annual Report and need no further comments.

5. Outlook: The global surface-active market is expected to grow considerably owing to its vast applications in sectors such as home care, Agro industries and other connected fields. Surfactants reduce the surface tension of the liquid and remain stable in solutions containing relatively high concentration of electrolytes. Owing to these characteristics, the surface-active agents are being used as hard surface cleaners, in textile scouring, and as metal cleansers. Further, in developing countries such as India demand for personal care products is increasing due to expanding middle-class consumer base and rising disposable income of general populace, which in turn is driving the market.

6. Risk and Concerns:

The risks that may affect the functioning of the Company include, but are not limited to :

Economic conditions;

Increasing cost of raw materials and logistics;

Volatile forex fluctuations;

Competitive market conditions;

Your Company has a defined risk management strategy with senior management identifying potential risk, evolving mitigation responses and monitoring the occurrence of risk. The risks are identified on a regular basis, across functions and business segments and the Company strives to link each risk with mitigation step to ensure business continuity.

7. Internal Control System:

The Companys Internal Financial Control framework is commensurate with the size and the nature of its operations. These have been designed to provide reasonable assurance about recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of Corporate Policies.

8. Financial and Operational Performance:

The Directors report has specifically dealt with subject matter in heading ‘Operational Review.

9. Human Resources:

Human capital is pivotal for the growth and success of the Organization. Your Company strives to foster a safe, congenial, and inclusive work environment and promotes trust, transparency, and a sense of teamwork through comprehensive and well-documented HR policies. During the year, your Company maintained a harmonious relationship with its worker.

10.Significant changes in Key Financial Ratios:

There was change of more than 25% in the following ratios during the year under review:

Return on capital employed: Due to decrease in profit.

11.Cautionary Statement

The statements made in this report describe the companys objectives and projections that may be forward looking statement within the meaning of applicable laws and regulations. The actual result might differ materially from those expressed or implied depending on the economic conditions, government policies, tax regime and other incidental factors, price conditions, domestic and international markets which are beyond the control of the company. Finally, we would like to express our deepest gratitude to our shareholders, business partners, bankers, suppliers, customers, and, most importantly, our talented employees for their unstinted trust and support. With enhanced strengths and capabilities, we are quite confident of rising to the challenges and driving a stronger and prosperous future.

By Order of the Board of Directors of STANDARD SURFACTANTS LIMITED