Indofil Industries

Company Background:

In 1962, Indofil chemicals was incorporated as a subsidiary of Rohm & Haas Co, USA.  In 1985, the company was merged into a listed corporate named Modipon Limited. In 2007, it was separated and transferred as Indofil Organic Industries. In 2010, it was renamed as Indofil Industries.

Indofil is engaged in manufacturing, distributing and marketing of Agro- Chemicals and Specialty Performance Chemicals (SPCD). The Company’s products are certified with international quality standards such as ISO 9001 and ISO 14001. Indofil has over 100 product brands in its product profile. The company has 3 manufacturing units in Dahej, Gujarat. The company is present in over 100 countries. Indofil has 6300+ Distributors across India and 400+ Distributors abroad.

Financial performance:

Revenues of Indofil have increased at a CAGR of 7.6% over past two years. Domestic sales in India witnessed challenge but the volume growth was quite strong, especially in Brazil, which saw volumes surging four times compared to FY18. Due to the overall demand-supply situation for Mancozeb, pricing pressures have been quite strong over the last two years. It will continue to remain so in the current year. The company launched eight new co-marketing products, these should gain further traction in the next few years. EBITDA margins have been declining due to increase in cost prices of the raw materials and the pricing pressures globally. The profit after tax too declined as a result.

A brief financial snapshot is given below: (Amounts in Rs. Crores)

For detailed financial performance and notes, please click here

Future Prospects:

Given the focus of the company to move from B2B to B2C, there will be better margins and sales growth. Additionally, investments in few companies for market access and technology upgradations are paving way for future growth. Some highlights of the actions taken by the company are given below:

1. Indofil is gearing up to capture greater share in Europe. In FY19, Indofil invested extensively in developing the necessary infrastructure, go-to market strategy for direct operations, resource development, etc. France, Italy and Spain are the key focus regions of the Company, which it intends to capitalize during the initial 1-2 years. Indofil  completed the acquisition of 80% stake in an Italian distribution company called Agrowin Biosciences S.R.L. This acquisition will give access to Indofil for itsB2C operations in Italy.
2. Brazil has emerged as one of the biggest Agrochemical markets. Indofil’s brazil entity is closely working on its go-to market strategy for B2C which will commence from 2019-20.
3. Indofil Bangladesh Industries Pvt. Ltd. commenced the construction of Indofil’s first manufacturing facility (re-packing unit) outside India. The construction of the facility is expected to complete by Q3 of 2019-20. Indofil is in the process of creating the necessary distribution infrastructure for its B2C operations.
4. Indofil Philippines Inc. commenced commercial operations from May 2018 and achieved a positive surplus in the first year of its operations. Additionally, Indofil Philippines Inc. has also expanded its product portfolio through in-licensed products from several large agrochemical companies.
5. Indofil partnered with Grace Breeding Technologies Limited, an Israeli research firm engaged in the development of Nitrogen Fixation Technology.
6. Indofil entered into a joint venture with Italy-based Reagens the world’s leading Polyvinyl Chloride (PVC) heat stabilisers additives manufacturing company. Indo-Reagens has started offering specialty additives from Reagens’ Europe units from April 1, 2019. The joint venture will set up a new state-of-the-art technology plant in GIDC, Dahej in 2020-21 to offer all-green polymer additives to the Indian polymer processing industry.

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