Balaji Amines: Annual Report 2023 Summary
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Business Overview
Balaji Amines is one of the largest producers of aliphatic amines in India. Making a start with Methyl Amines, the Company went on to manufacture Ethyl Amines and other derivatives of Methyl and Ethyl Amines, leveraging in-house developed technology and processes. The company has over 30+ products in its basket and has a global presence in about 51 countries. Presently, there are 5 manufacturing plants all working between 50% - 80% of their capacity and have over 830 customers worldwide.
Key Clientele includes but is not limited to Sun Pharmaceuticals, Dr Reddy's, Aurobindo Pharma, Jubilant Lifesciences, Teva API, Hetero Drugs, Kores India Limited, Venky's (VH Group), Wanbury, Zydus Cadila, Indian Oil, Hindustan Petroleum.
Product Offering:
Amines:
Constitutes 47% of the Revenue – alongside the derivatives
Products: Mono Methyl Amine, Di-Methyl Amine, Mono-Ethyl Amine, Di-Ethyl Amino Ethanol and related sister compounds are a few of the products produced under the Amines division.
Application: Pharma, Argo, Photographic chemicals, Rocket fuel, Dyestuff intermediaries, Rubber chemicals etc.
Aliphatic Amines find increasing consumption and applications in chemically mature industries such as India, Europe, US, China & Japan
The Aliphatic Amines industry is expected to grow at a CAGR of 5%-7%
The company is among the two major manufacturers of Aliphatic amines and its derivatives in India with a market share of ~50%.
Amine Derivatives
Products: Mono-Methyl Amine Hydrochloride, Mono-Ethyl Amine Hydrochloride, Choline Chloride and Di-Methyl Acetamide are a few examples of the products offered in the Amine derivatives section.
Application: Pharma, Pesticides, Performance chemicals, Specialty Chemicals, Animal/Poultry feed additives.
Amine Derivatives are used to make further salts and other complex chemical intermediates and APIs
In derivatives, Di-Methyl Amine Hydrochloride (DMA HCL) is one of BAL’s key product offerings
Specialty & Other Chemicals
Constitutes 52% of the revenue
Products: Morpholine, Acetonitrile, Dimethylformamide, Gamma Butyrolactone, Pharmapure Povidone, N-Methyl-Pyrrolidone, 2-Pyrrolidone, N-Ethyl-2-Pyrrolidone are the products offered under the specialty chemical division
Application: Production of Water Treatment chemicals and pesticide formulations, Solvents across industries like pharmaceuticals, petrochemicals, dyes, Agro and paint industries.
Albeit a small and fastest growing segment – The single largest produced product within the specialty chemicals division.
Balaji Amines is the sole producer of most of the chemicals listed in the specialty chemicals space. Examples include N-Methyl-Pyrrolidone, Gamma Butyrolactone, 2- P etc.
Hotel Business
Constitutes 1% of the revenue
The company owns Balaji Sarovar Premier, a 5-star hotel in Solapur. It has over 129 rooms with a recorded occupation rate of around 69%.
Industry Overview:
Amines:
Amines are a large class of nitrogen-containing organic compounds derived from Ammonia. Aliphatic amines find usage in chemical, pharmaceutical, rubber, plastics, dyestuff, textiles, cosmetics and metal industries. These chemicals are used as intermediates, solvents, rubber accelerators, catalysts, emulsifiers, synthetic cutting fluids, corrosion inhibitors, flotation agents, etc.
Globally, China is the largest producer and consumer of Amines accounting for about 60% of the market. The growing anti-pollution norms of the Chinese government to tackle the old manufacturing plants and the growing anti-Chinese sentiment across the world is catalysing demand for these products from close competitors like India. The Indian Aliphatic Amines market is expected to grow at a steady CAGR of 3.7%by 2030.
Demand Drivers for Amines in India:
Demand for drugs aimed at curing Chronic diseases
Increasing use of agrochemicals
Rapid growth in the personal care industry
Increasing demand for consumer products where said chemicals are used
Rise in per capita disposable income and urbanization which catalyses the demand for products and services in the economy in general.
Specialty Chemicals:
Specialty chemicals can be a single chemical or formulation of multiple chemicals whose compositions can influence the performance of the products in which they are used. In market terms, specialty chemicals are low-volume, high-value products used in agrochemical, dyes, food & beverages, fragrances sectors and many more.
The Indian specialty chemicals industry has expanded exponentially in recent years. It represents 22% of India’s overall chemicals and petrochemicals market and is valued at US$32 billion. The segment accounts for more than 50% of chemical exports. Sectors such as dyes, pigments, Bulk Drugs, Pharma and Active pharmaceutical ingredients (APIs) remain dominant in driving export potential.
The domestic market reported moderate performance in FY23 growing at about 18% from the previous year. But margins came under pressure due to inflationary headwinds and the rise in input cost, energy prices and logistic rates.
Globally, China is the largest player in the Specialty chemicals division but with the pollution control norms and the China+1 offshoring strategy that the Global manufacturers have started to adopt, the demand for is rising in India.
The Indian specialty chemical market is expected to grow at ~12% CAGR to US$120 billion, which will presumably double its share in the global market from 3-4% to 6% in the next 2-3 years to come. Investments cumulating to Rs. 17,500 crores are reportedly lined up for FY24, indicating Rs. 27,500 crores peak revenue potential.
Business Analysis
The firm commissioned the construction of new plants. The plant comprises of production capacity of 15,000 tons of Di-methyl Carbonate (DMC)/ Propylene Carbonate (PC) and 15,000 tons of Propylene Glycol (PG).
Phase 1
The company commissioned Phase 1 of the 90-acre Greenfield Project (Unit IV) comprising the 15,000-tonne Dimethyl Carbonate (DMC)/Propylene Carbonate (PC) plant and the 15,000-tonne Propylene Glycol (PG) plant.
The capacity utilisation in the plants lies between 50% to 70%. Currently, the annual domestic demand for Dimethyl Carbonate (DMC) is about 8,000 to 9,000 tons, with primary usage in Pharma and others; Propylene Glycol (PG) is about 170,000 to 180,000 tons & Propylene Carbonate (PC) is about 3,000 to 4,000 tons which are entirely met by imports.
Phase 2
The company outlined our capex plans for the next 2-3 years with an outlay of RS. 4000-5000 million. Out of the above capital expenditures, the Company has also begun construction on the N Butylamines Methyl amines plant, which is anticipated to be commissioned during the second half of FY24.
Methyl Amines: Balaji Amines is the market leader in Methyl Amines products in India with a capacity of 48,000 MTPA; it consumes about 80% of its production for value-added products. To meet the increasing captive demand, the Company has planned to set up a new plant with a capacity of 40,000 MTPA, which is expected to come on stream in the second half of FY24. The Company has received the environmental clearance for this plant.
N-Butylamines: India’s domestic demand for N-Butyl Amines is 8,000 MTPA. It is mainly used in APIs, pesticides and emulsifiers. So far, the domestic demand is met through imports. Balaji Amines is setting up a manufacturing facility for 15,000 MTPA of this product. The production facility of N-Butyl Amines in India will commence operations towards the 3rd Quarter of FY24.
Acetonitrile: The Company has obtained the environmental clearance for the capacity of 16,000 MTPA.
Balaji Amines has a subsidiary, which is a fast-growing specialty chemicals business through its subsidiary BSCL in which it holds 55% stake as of 31st March 2023. BSCL’s product portfolio comprises five niche chemicals catering to a diverse range of end user industries, including specialty chemicals, agrochemicals and pharmaceuticals across multiple applications.
It is the sole manufacturer in India of niche chemicals such as Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines and Amino Ethyl Piperazine, using the Monoethanol Amine (“MEA”) process.
The Company’s Ethylenediamine, and Diethylenetriamine products are REACH certified, which enable it to export these products to the European Union. It has 180+ customers in India and across the globe. A significant portion of its revenue accrues from repeat orders.
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