Maintaining quality key to success in chemical industry Supportbiz (19/10/2012)
The journey begain in 1983, and today Omkar Speciality Chemicals reports a turnover in excess of Rs. 200 crore. SupportBiz spoke with Pravin Herlekar, CMD, Omkar Speciality Chemicals. Edited excerpts:
Herlekar touched upon the opportunities; and issues faced by the Indian chemical industry. “Globally, the Indian chemical industry has a great reputation. It is time to explore the global horizon and prepare to adhere to international standards, which will take Indian firms to the next level.”
What is the key market focus at Omkar Speciality Chemicals?
We work in the category of special chemicals. Our products are mainly consumed in dying units by pharmaceutical firms; by the agro chemicals, cosmetics, plastics and petro chemicals industries. As a business we have two broad categories -- 70 per cent of our total business comes from our pharmaceuticals customers and the remaining comes from the agro chemicals and other industries. We have been growing 40 to 45 per cent annually over the last few years.
What are the key issues in the chemicals industry?
Environmental commitments are increasingly becoming important for this industry. To a certain extent, SMEs in chemical industry face challenges in running of their operations due to changing and evolving norms. Government agencies are becoming very strict in ensuring that environment norms and standards are being adhered by the industry. This is a positive move for the industry from a long-term perspective..
Government can ease the pressure by introducing industry friendly processes to meet standards and guidelines. For example, in China, the local government empowers the local chemical industry by ensuring their interests are incorporated in the policy framework for environmental standards. We need the same in India. However, we cannot rule out the contributions of the Indian government towards this area. For instance, common effluent treatment facilities are functional in industry clusters.
What is the major driver for your business?
For us, the major driver is our focus and commitment towards R&D. We constantly worked on measuring the exact requirements of our customers in the pharmaceutical segment. And according to their needs, we develop our products and capacities. We have to watch very carefully our target customer’s market. This has had a positive effect on our business.
What are the key challenges you faced as an entrepreneur?
The major challenge I faced is in the area of technology upgradation. Our business demands are such that we constantly need to innovate and grow according to the changing market dynamics, which often requires new technology adoption in production and this becomes a challenge for me as an entrepreneur.
How are you growing. What are the key growth drivers?
In the previous fiscal we generated revenues of Rs. 167 crore. This year we are targeting to achieve Rs. 240 crore. We have registered a year-on-year growth of close to 45 per cent in last few years. As far as such growth is concerned, the reasons behind this success is new customer acquisitions, introduction of new product categories and new business geographies. Also, our exports have doubled over the last few year.
What are your growth expectations?
We will continue to grow at a rate of 45 percent year-on-year. Over the next 12 months we will be investing on scaling up our capacities. We already have five manufacturing units in Thane and Mahad in Maharashtra. We recently began work on a factory in Chiplun district, Maharasthra,, expected to be operational in a few months.
How and why are you successful?
Quality assurance is the major and the only element which can deliver sustainable growth for our kind of business. A company like ours has to be comply with the international norms and standards.