The Indian chemical industry is one of the fastest-growing industries in the world. It is the backbone of India’s life sciences and agricultural industry. The industry's growth is mainly driven by consumption growth and export prospect. The last five years have been very encouraging for Indian chemical manufacturers, with high demand in most of the consumption sectors. Changes in the external environment have propelled this growth.
While the world has been plagued by the pandemic and subsequent lockdown, the impact has been felt by people, businesses, and economies alike. The pandemic highlighted the risks associated with supply economies. Businesses are facing a higher sense of urgency to achieve a balance between outsourcing and self-sufficiency by devising a strong supply chain network strategy. Achieving higher resilience for supply chain is likely to prompt companies to evaluate diversification of their vendor base. However, new supply economy identification and qualification as well as the transition will prove to be a phased time-consuming process.
Supply Chain Diversification And Self-Sufficiency
India’s reliance on imports of key starting materials, intermediates and AIs from China has increased over the course of time, potentially exposing the industry to raw material supply disruptions and pricing volatility. The industry realized the need to diversify the supply chain through alternate sourcing and become largely self-sufficient in raw materials and intermediates. Sameer Hiremath, Joint Managing Director and CEO, Hikal Limited stated, “In line with the commitment to the Government’s “Make in India” and more recently the “Atmanirbhar Bharat” initiative, key players in the industry commenced efforts to derisk the supply chain and make themselves more self-reliant, ensuring quality and security of supply to customers.
The primary objective has been to ensure a secured supply of all Key Starting Materials (KSMs)from India with alternative suppliers in China and Europe as well as exploring strategic manufacturing partners in India to support in all the KSMs. Amid all the disruption, India stands to benefit with global companies reassessing their risk of relying on one country and potentially shifting their supply chains to India. These factors have largely been responsible for why the Indian Specialty Chemicals industry in India is witnessing a strong growth.
Due to these developments crop protection companies have also started increasing their sourcing from India to de risk their supply chain. Supply reliability and environmental sustainability
will be the key expectations from companies. The Crop Protection market has contributed to modern agriculture and its growth, so much so that the present level of output cannot be sustained without it. The companies involved in Crop Protection have been constantly creating and supplying new products to aid such growth and support the cause of resolving the global food security issues. The country’s technologies, skilled manpower, intellectual property protection laws and investment-friendly norms have positioned India as a preferred partner.
Hikal has always been fully committed towards supply reliability and environmental sustainability, which reflects in the long-term relationships Hikal enjoys with its global clients. The company has been growing its crop protection business over the last several decades. Hikal’s crop protection business is expected to grow even faster over the next few years benefiting from the shift in global supply chain.
Faster Implementation Of Projects
Mr. Hiremath further highlighted another important aspect which customers are looking at, that is existing infrastructure and environmental approvals which can ensure faster implementation of projects. Hikal has ready assets on the ground with approvals in place which is an important factor in choosing suppliers for quick implementation of projects. Hikal started off with one site in Mahad, Maharashtra in the year 1988 and now has six sites, out of which three sites are dedicated to the manufacture of crop protection products.
Hikal’s second plant at Taloja, Maharashtra was jointly built in the year 1998 with a multinational agrochemical company and in the year 2000 they acquired the manufacturing site from Sandoz in Panoli, Gujarat. In the year 2009, a state-of-the-art Research & Technology Centre was established in Pune. They also established the Tokyo office in the same year with a view to expand the Japanese business. Hikal has increased its headcount in its Research & Technology center and is investing over Rs. 400 crores to build new assets and to enhance offerings. Hikal also has dedicated teams in charge of environment, safety, and good governance practices.
Hikal has always been fully committed towards supply reliability and environmental sustainability, which reflects in the long-term relationships Hikal enjoys with its global clients
The market is likely to propel forward by a number of climatic as well as demographical factors like increasing population, urbanization, rising global economy, decreasing arable land, growing agricultural production and the rising demand for higher crop yield to counter food scarcity.
There are lots of opportunities and with the track record and strengths Hikal possesses the company is confident of accomplishing this goal.
The Quest For Excellence
Hikal has been associated with top multinational companies for over 30 years, manufacturing active ingredients and advanced intermediates for their global requirements. The key differentiating factor that sets Hikal apart is their quest for excellence and the ability to differentiate through technology. The company aims for excellence in all the aspects of business, be it operations, research & technology, quality, environment, health & safety or customer relationships. Hikal ensures high quality product is delivered to the customer on time, every time.
One of the key contributors providing Hikal with a competitive edge is Hikal’s dedicated workforce that left no stone unturned during the pandemic in putting the needs of the company first and exhibiting self less service to resume operations and keep them going. Continuity of the business as well as the safety of employees has always remained the foremost priorities for the company, during these trying times. Hikal considers human capital as its most important asset. Employee satisfaction and motivation have always been the priority of Hikal, which reflects in the fact that Hikal has been featuring in the top 100 companies to work for since the last three years in the Great Place to work survey.
Mr. Hiremath concluded on a positive note adding, “We see significant tailwinds in our business and are confident that the growth momentum will continue for the next few years. Hikal is in a sweet spot, as we expand our capacities and gear up for the next phase of growth.”
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