Informist, Tuesday, Nov 16, 2021

By Apoorva Choubey 

MUMBAI – Anupam Rasayan India Ltd expects to soon move to a system of semi-annual pricing from a yearly one currently for long-term contracts with its key customers, Chief Financial Officer Afzal Malkani told Informist in an interaction.

The company is in the mid of negotiating a new pricing strategy and intends to roll this out by mid-December as a more frequent revision in product prices will help the company better absorb the impact of volatility in raw material prices and lower the need for high level of inventory of key ingredients, he said.

The company manufactures specialty chemicals that find use in the production of agrochemicals, personal care products, pharmaceuticals and, pigment and dyes. UPL Ltd, Sumitomo Chemical India Ltd, and The Syngenta Group are among its top five customers by revenues.

Anupam Rasayan has three or five-year contracts with its top corporate customers. Top five clients account for around a third of its sales while over 75% of revenues come from the 10 largest clients.

The chemical-maker was forced to maintain an unusually high level of inventories during Apr-Sep as raw material prices were on the rise, supply chain disruptions and shipment delays were persistent, and the threat of another wave of COVID-19 existed. This also led to the working capital cycle going up to 225 days for Apr-Sep from 200 days in the last financial year.

The company hopes to reduce it to 180-190 days by March-end, with the help of lower inventory, stabilising freight and input costs and strong demand. 

As its own raw material suppliers are not able to commit to one rate for more than a month, Anupam Rasayan decided to approach customers to allow product prices to be revised twice a year.

The company is confident of moving to a semi-annual pricing revision as three-four customers, which belong to both agrochemical and home and personal care segments, seem to have acquiesced to the company's requests informally. 

As the pricing for supplies from Jan 1 needs to be renegotiated, the company expects clients, especially from regions like Europe, to agree to the revision in pricing strategy before start of Christmas holidays. 

Anupam Rasayan has planned a capital expenditure of 2 bln rupees over next two years for three projects, of which two are focussed on crop protection product segment and one on pharmaceuticals. 

The company also intends to launch four new products this financial year, after commercialising four in Apr-Sep. Around 70% of Anupam Rasayan's sales come from the agrochemicals segment, 13% from personal care products, and 7% from pharmaceuticals.

At 1000 IST, shares of Anupam Rasayan India were up 0.2% at 828.50 rupees on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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