ANALYST MEET H1 / Q2-FY19
Introduction of Speakers 2 2 Ashish Dandekar Nirmal Momaya Santosh Parab Managing Director Non-Executive Director Chief Financial Officer • B.A. in economics and • Qualified CA with over 25 • A commerce graduate and a Management graduate from years of experience in the field CA with over 24 years of Temple University, U.S.A has of finance, taxation, audit and experience in accounting, over 28 years of experience in management consultancy and financial and tax management. the field of Pharmaceuticals has been advising the • He has expertise in Global and Fine chemical products. company on strategic matters Strategic Financial Analysis & since 2009. • Experienced in different Planning, P & L Ownership and business processes like • Founder of Pagoda Advisors, a management planning, information systems, consulting firm providing R&D, product development consultancy services to and marketing. Chemicals, Healthcare, Real Estate, Pharmaceuticals, QSR, FMCG sectors etc.
Introduction of Speakers (Global Business Heads) 3 3 Dr. Massimo Cupello Castagna Jennifer Igou Gautum Sapute Managing Director - CFS Europe General Manager – CFS North Head Operations (Vanillin) – S.p.A America LLC CFS Wanglong Flavours (Ningbo) Co. Ltd Luciano Monteiro Arturo Paulin General Manager – CFS Do General Manager Sales – CFS Brasil (South America) Mexico
Camlin Fine Sciences (CFS) Snapshot 4 4 Financials FY18 (INR Mn) Revenue Over 30 years experience Manufacturing facilities in 7,228 providing innovative Unique producer of fully India, Italy, Brazil, Mexico solutions with a competitive vertically integrated products and China advantage in fine sciences EBITDA 126* World’s leading producer of Serving in more than 80 More than 100 products food antioxidants: TBHQ & countries manufactured BHA Net Worth 4,334 World’s 3 rd largest producer More than 1,000 satisfied customers of Vanillin * Excluding Other Income
5 COMPANY OVERVIEW
Company Overview 6 6 • A vertically integrated company, engaged in research, development, manufacturing, commercialising, and marketing of speciality chemicals and FY18 Operational Revenue Breakup blends which are used in a wide array of: Others Food, feed, Flavours & 1% animal and pet Pharma Agro Chemicals Fragrance nutrition Aroma 15% Performance Dyes and Petro chemicals Polymers Bio Diesel Chemicals Pigments 34% Shelf-life Extension 22% • CFS categorises their business into 3 different verticals based on our product portfolio, namely: Blends 28% Shelf-life Extension Solutions Performance (which include anti-oxidants, its Aroma Chemicals blends and additives • CFS markets its products in Europe, Asia Pacific (including India), North Africa, Middle East, South, Central and North America.
Vision, Mission and Values 7 7 VISION To be the globally preferred, trusted and VALUES integrated provider of reliable and innovative Credible shelf life solutions, aroma ingredients and Passionate performance chemicals. Collaborative MISSION To have an in-depth product Reliable technical know-how, its applications, an intimate Transparent understanding of customer's needs and a wide global reach through superior sourcing, logistics and service.
Key Milestones 8 8 • Camlin Fine Chemical division incorporated in 1993 • Commencement 2015 of production and marketing of Camlin Ltd. to manufacture antioxidants for the antioxidant blends in Brazil through 100% subsidiary ‘CFS global market. do Brasil Ltda ’ . • Ultra-modern manufacturing plant was set up in • Setting up of application laboratories fully supported by a Tarapur, Maharashtra. group of technical team. • Acquired 65% stake in Dresen Quimica S.A.P.I.de C.V., 2016 2006 • Camlin Fine Sciences Limited was formed after Mexico along with its 5 subsidiaries in Mexico, Peru, de-merging (mirror shareholding) the fine Guatemala, Columbia and Dominican Republic to expand chemical business from Camlin Ltd. its market reach in Central & South America along with few parts of Latin America. • Launch of CFS North America, LLC 2011 • Acquired Borregaard Italia SpA, a manufacturing facility in Italy producing Hydroquinone and Catechol. 2017 • Acquired 51% stake through SPA in Ningbo Wanglong • Integrated manufacturer of Diphenols Flavors and Fragrances Company Ltd. and became 3 rd largest producers of Vanillin in the world • Preferred supply agreement with Lockheed Martin 2013 • Introduced extensive range of performance Advanced Energy Storage for manufacturing and supply of chemicals like MEHQ, Vetratrole, Guaiacol etc. a specialty chemical. • Joint Venture with Pahang Pharma Pte. Ltd, Singapore to 2014 • Launched Aroma and Flavoring Compounds - 2018 foray its presence in Animal Nutrition in ASEAN market. Vanillin/Ethyl Vanillin
Key Clients 9 9
Global Presence 10 10 Denmark Ravenna, Italy Tarapur Iowa, USA Yuyao, Khopoli Cuba Zhejiang, China Mexico city Mahad Guatemala Mumbai Colombia Peru Indaiatuba, Brazil Chile Owned Plants Argentina Outsourced Manufacturing Blending Facility R&D/ Food Labs Marketing offices
Current Entity Structure 11 11 Camlin Fine Sciences Ltd. 100% 100% 100% 100% 100% 100% 51% CFS do Brasil Indústria, CFS Antioxidantes CFS International CFCL Mauritius Pvt. Comércio, Importação Solentus North CFS Pahang Asia Pte. CFS North America De Mexico S.A. De Trading (Shanghai) Ltd. (Mauritius- E Exportação De America Inc. Ltd. LLC. (U.S.A.) C.V Ltd. Holdco.) Aditivos Alimentícios (Canada) (Singapore) (China) (Mexico - Hold Co.) Ltd. (Brazil) 100% 65% 100% 94.08% 95% Dresen Quimica Chemolutions 5% CFS Europe SPA. CFS Argentina SA. CFS Chile Chemicals Ltd. S.A.P.l. de (Italy) (Argentina) (Chile) (India) C.V. (Mexico) 51% 100% 100% 100% 100% 100% CFS Wanglong Industrias Nuvel, S.A.C Britec, S.A lnovel, S.A.S. Grinel, S.A Flavours (Ningbo) Petrotec de Mexico, (Peru) (Guatemala) (Columbia) (Dominican Republic) Co. Ltd. (China) S.A. de C.V. (Mexico) Subsidiaries / Step-down subsidiaries pursuant Subsidiary w.e.f. July 12, 2017 – Parent company Step-down subsidiaries to Mexico acquisition CFSL acquired 7.65% stake & CFSE 43.35%
R&D and Application Labs across geographies 12 12 Application Labs R&D Labs • Developing customized • Development of new blends for various products and value applications additions to existing Ravenna, Italy • Technical assistance and products Iowa, USA • Product and process development support to customers improvements Mumbai, India Mexico • Testing of defined • Catalyst application & Tarapur, India city performance development • Focusing on developing parameters • Conducts stability derivatives of HQ and studies for shelf life of Indaiatuba, Brazil Catechol various products Pilot plant • Ability to run small batch sizes and stabilize the process before commercial scale Local demands insightful solutions customised product manufacturing global service • Process improvements Asia and the rest of the Central America, Andean Latin America North America World States and Caribbean Islands
Key Strengths 13 13 Global player in shelf-life solutions across food, feed, pet-food and Bio Diesel 1 Preferred Partner for manufacturing Local presence in global markets 2 8 customized products Advanced R&D facilities & Application Experienced promoters and 3 7 Labs professional management team 4 6 Proven ability to acquire and improve business Diversified customer base performance 5 Vertically integrated across the value chain
Growth Strategy 14 14 Shift in focus from anti-oxidant ingredients Continue to grow the Vanillin business to anti-oxidant blends and additives Capacity expansion through new plant at Increase revenue contribution from Performance Chemicals business Dahej SEZ Integrate the strategic acquisitions Improving market share and new product launches for long term value growth
15 BUSINESS OVERVIEW
Business Mix 16 16 Shelf-Life Solutions Performance Chemicals Aroma Chemicals (50%) (34%) (15%) Food Pet food Pharma intermediates Agrochemicals Feed & food Consumer goods Animal Nutrition Rendering Dyes and colours Petrochemicals Flavours & Fragrances Incense Sticks Aqua Culture Bio-fuels Pharmaceuticals
Fully integrated across the value chain 17 17 Key Raw Material Commodity Phenol chemical Diphenols Hydroquinone Catechol Performance Shelf Life Solutions Aroma Chemicals Ascorbyl Palmitate 1 TBHQ MEHQ Guaiacol Guethol Other derivatives of BHA Veratrole Vanillin HQ Blends Other derivatives Ethyl Vanillin of Catechol Fully integrated from diphenols to step down derivatives, antioxidant blends and Vanillin thereby reducing risk of supply chain disruptions 1 Ascorbyl Palmitate is not a part of HQ/ Catechol value-chain and is manufactured from ascorbic acid
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