Driven By Technology - Deepak Nitrite

What kind of strategies are you adopting to enhance your overseas presence?
About a decade ago when the Indian government started reducing import duty in a graded manner, we started concentrating more on exports. Our overall exports revenue was only 7 per cent then. Our exports revenue started increasing steadily and now about 50 per cent of total revenue comes from exports. We also scaled up our production and forward integrated through acquisitions. We set up multi-purpose lines to improve flexibility and meet changing market needs. Today we have a global position in some of our products.

How were you affected by the recent global meltdown?
It helped us in two ways. First, when the situation gets tough the weaker players are forced to shut their shops. This has helped us to enhance our market share both in the domestic and international market. We found niche products that could be exported to growing Chinese markets and our exports to China doubled during meltdown.

What is your revenue mix? What kind of revenue are you targeting for fuel additives in this financial year?
Around 35 per cent of the revenue comes from agro-chemicals, 55 per cent comes from colour intermediates and the remaining 10 per cent comes from a mix of other segments. For any new business vertical that we develop, our aim is to make it at least 15–20 per cent of the total turnover. We expect our fuel additive business to touch a minimum of 10 per cent of the total turnover this year.

You have sizable reserves and surpluses. How are you planning to make the best use of them?
The best use of our reserves and surpluses would be to invest them for the growth of the company. We are looking forward to expanding our capacities in four locations. We are also working on de-bottlenecking and sourcing alternative and cheaper energy. We are also concentrating on our new greenfield project site at Dahej where we are putting a facility to produce globally competitive products. Most of our reserves and surpluses will be diverted to the upgradation of our four facilities and the Dahej project.[PAGE BREAK]

Where do you see Deepak Nitrite in the coming years?
Deepak Nitrite should cross its first benchmark of Rs 1,000 crore in the coming three years. For us the real driver is to create a base with the technologies that we have such as hydrogenation, nitration, etc. We are looking at how to become a big, strong, reliable regional player with technological expertise that enables us to participate in fast-growing Asian market where our main targets are India, China and South East Asia. We are also looking at significant presence in Europe & USA where our quality and service standards are established.

Challenges that lie ahead for the company...
The real challenge is how to continue to develop our people and constantly upgrade our technologies. I firmly believe that technology is the key to the chemical business. If we can master technology we can take on any competition. That is why we are investing on upgradation of our plants on a regular basis. The other challenge is to find resources to match our rapid growth, especially in terms of technically skilled people. Fluctuating forex is another challenge.

How are you creating value for your investors?
Deepak Nitrite has grown from a single product into a multi-products company with a diversified products base within various verticals of the chemical industry. We are working towards making Deepak Nitrite a long-term sustainable company with a solid financial base. I would say to my investors that if they are looking for long-term growth and sustainability, Deepak Nitrite is the best option.