Chinese pharma intermediates may become uncompetitive compared to India: Ashwin Shroff, Excel Industries Ltd

Excel Industries Ltd, which has been a pioneer in the area of crop protection chemicals, has today emerged as one of the leading players in the specialty and performance chemicals catering to various industries such as agrochemicals, plastics, water treatment, additives, catalyst, pharma, etc. Excel is organised into two divisions - chemicals and environment & biotech – with chemicals contributing majorly to its overall turnover. While agro-intermediates still accounts for a major share of its chemicals division’s product portfolio, the company is reportedly planning for a big push in the pharma intermediates space. In this free-wheeling interview with Rakesh Rao, Ashwin Shroff, Chairman & Managing Director, Excel Industries Ltd, elaborates on the company’s future plans and strategy.
 
Of the two divisions, chemicals division has been a major contributor to Excel’s turnover. Do you see a change in this, with environment & biotech division contributing more in future?
I would not be overly worried about percentage; I want both to grow. Of the two, chemical is more matured business. On the other hand, waste management & biotech business is relatively new, and hence offer inherent growth opportunities. In chemicals, we are an established player and have got more credibility. Both the businesses should grow at robust rate. We are not going to put any artificial restriction on them. We see good potential in both.
 
How is the pharmaceutical intermediates market evolving in India? Is China still posing threat to Indian companies?
India is one of leading players in the global pharmaceutical industry with many companies exporting to the developed markets. In last 10-15 years, with imports becoming less costly with lowering of customs duties and other restrictions, intermediates imports from China to manufacture active pharmaceutical intermediates (APIs) have increased. Pharma companies would buy intermediates from China and add value and sell APIs and formulations. Most of the pharma companies sold their formulations in the local market, while exported bulk of APIs.
 
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In last few years, Chinese currency Yuan has appreciated against the dollar. Also, the production cost has been increasing in China with the implementation of stringent regulations and escalating labour cost. Re has also lost against the dollar in recent past. All these factors will result in increase in cost of Chinese intermediates, making them uncompetitive compared with products manufactured in India. This will offer huge business opportunities to Indian companies in the intermediate space. This is where we see big potential market for us, and hence we are working this front.
 
Would you please elaborate on the strategy to tap the pharmaceutical ingredients market?
We have been serving pharmaceutical industry with commoditised intermediates in past. But now, we want to focus on advanced intermediates. We have put up a plant to manufacture these specialty chemicals. Most of our customers are exporters, hence we have to adhere to international standards. Keeping all these thing in mind, we have set up current Good Manufacturing Practices (cGMP) plant. With these specialty products, we are targeting areas such as antiretroviral, veterinary, etc.
 
The plant has been designed is such a way that it should be able to generate Rs 30-40 crore worth of business in foreseeable future. Once, we establish the business in advanced intermediates segment, it should contribute majorly to our turnover.
 
What is your vision for your company?
To be innovative and responsible company. Innovative in terms of new products, applications and processes. All the stakeholders (investors as well as employees, customers, community/society) should get equal treatment. Our vision is to grow at healthy rate with innovative products and be in tune with the requirements of the society and customers.