Fine Organics Industries Ltd is launching its IPO of 7,664,994 Equity Shares at Rs 780 to Rs 783 per Equity Share aggregating Rs 598 to Rs 600 crores. The IPO will open on June 20, 2018 and close on June 22, 2018.
Describing FOIL as a unique “Make In India” company, Prakash Kamat, Chairman and Executive Director (FOIL) said that with the company being the largest manufacturer of oleochemical-based additives – used in food, plastic, cosmetics, paint, ink, coatings etc — in India and strong global player, expansion plans are underway from its three production facilities in Ambarnath, Badlapur and Dombivli (all in Maharashtra) to an additional production facility in Ambarnath and another 10,000-tonnes capacity production facility in Leipzeig (Germany).
The company is in preliminary stages of planning development of two additional production facilities in Patalganga, Maharashtra (10,000 tonnes per annum capacity), and in Ambernath for which possession of land is awaited, he said, adding that the company is also planning to diversify and strengthen its business by manufacturing and distributing premixes for bakery and confectionary products and pan release agents through “Fine Zeelandia Private Ltd” – a joint venture company in which it has 50% equity interest — with capacity of 10,000 tonnes yearly and operations commencing 1st quarter of Fiscal 2019.
Recalling the company’s beginning 48 years ago when all chemical special additives had to be imported at that time, Kamat said “The massive cost of setting up manufacturing facilities in foreign countries forced us to set up our own R&D engineering in India at eight times less than the German cost. In 2000, we entered the global market while building 10 plants in 14 years with total 64,000 tonnes capacity and manufacturing 90% of food and polymers with revenue being : exports (65%) and domestic (35%).”
Mukesh Shah, Managing Director, FOIL, said that while the company’s 387 products are distributed to 5,000 end-users in 69 countries, it had also developed additives to increase milk yield from cows and buffaloes, besides having the largest oleo chemical-based additives production in India. “The company is expanding its footprint globally by opening a sales office in Shanghai (China) and new manufacturing facility in Leipzeig (Germany), besides five new proposed facilities expanding to 67,000 tonnes production capacity,” he said.
Manufacturing green additives from base oleochemicals is a highly specialized process and the proprietary technology to manufacture these specialty additives is available with only few global players like FOIL. In CY2016, overall global food emulsifiers market was estimated at US$ 2.8 billion where Europe is the largest consuming region with 33% of global market. CRISIL estimates the global food emulsifiers market to reach US$ 3.4 billion by CY2021 with CAGR growth of 4.1% over CY 2016-CY2021, driven by higher growth in the Asia Pacific region (which accounts for 26% global share) which is expected to reach 4.6% CAGR.
The Indian food emulsifiers market was estimated at Rs 5 to 6 billion in 2016, and CRISIL expects this market size to reach Rs 9 billion by CY 2021 with growth of 10%-12% CAGR, driven by healthy growth in the convenience and packaged food segments, especially the premium food segments. The Indian cosmetics industry – estimated at Rs 24-25 billion in 2016-17 – is expected to grow at 10-12% CAGR over 2016-17 to 2021-22, while global growth is expected at 4-4.5% CAGR over 2017-2022 due to rising incomes, changing lifestyles, and rising demands of skin and suncare products due to varying climatic conditions.