Jubilant Ingervia Reported a 23% Fall in Revenue from the Chemical Intermediates Business due to Lower Prices of Acetic Anhydride and Ethyl Acetate

Jubilant Ingervia Reported a 23% Fall

In the next three years, Jubilant Ingrevia, a provider of integrated life science products and creative solutions, plans to invest INR 900 crores for various industries, including specialty chemicals, health solutions, and life sciences chemicals.

For FY22, a cash outflow of around INR 350 crores is anticipated for capex. In the next three years, the business plans to invest a total of INR 550 crores in its Speciality Chemicals division, INR 100 crore in Nutrition & Health Solutions, and INR 250 crore in Life Sciences Chemicals.

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The investment is in a new facility for the Speciality Chemicals division to introduce 6 Diketene derivatives and then 8 value-added Diketene derivatives. Focus on building world-class multi-product facilities for pesticides and investment in GMP and Non-GMP multi-product facilities for pharmaceutical and crop protection customers.

Quashed Trajectory Of Intermediate Chemicals

In Q3 FY23, revenue from chemical intermediates decreased by 23% Year on year to Rs 559 crore, mostly due to reduced feedstock (acetic acid) prices that resulted in fewer sales of finished goods (acetic anhydride and ethyl acetate). The company has increased its market share and acetic anhydride volume in the EU region year on year.

Key Investment Strategies Of Jubilant Ingrevia

According to the plan, Diketene Capex will be operational from October to December 2021.

The CDMO GMP Facility in Bharuch is anticipated to begin operations in the fourth quarter of 2022. Two Speciality Chemicals multipurpose facilities are anticipated to begin operating in the April to June 2022 quarter.

Food Grade Acetic Acid Is Anticipated to Start Production in the April to June 2022 Quarter. The plant to produce acetic anhydride is anticipated to begin operating in the quarter from January to March 2023.

Phase 1 of Agro Actives is anticipated to begin operations in the quarter from January to March 2023.  Growing consumer demand and moving crop protection products up the value chain: Agro Active Plant. Niacinamide production capacity growth - geographic expansion and progress toward value addition.

To offer various value-added grades of vitamin B3 and increase vitamin B3 production capacity from the present 13,000 MT/year by around 20%, investments will be made in the Nutrition & Health Solutions business. Additionally, the facility will be modified to comply with US DMF and European CEP requirements, enter the regulated niacinamide pharmaceutical market, strengthen its range with value-added premixes, and invest in a premix plant expansion.

In order to boost capacity by about 35% and further solidify its position as a global leader, the business intends to invest in another acetic anhydride unit under the Life Sciences Chemicals division. To support the bio route acetyls chain, investment is also planned in a green acetic acid production facility.

At full capacity, these investments are anticipated to produce an additional 900 crore rupees in annual revenue.

Jubilant Ingrevia is a provider of innovative, cost-effective, and customised products and solutions for the life sciences industry that serves customers in the pharmaceutical, nutrition, agrochemical, consumer goods, and industrial sectors. The business has a large selection of premium ingredients that are used in numerous sectors. The company's portfolio also includes specialised custom research and manufacturing for customers in the pharmaceutical and agrochemical industries.

About the Company

With a strong backward integration and a dominant market position, Jubilant Ingrevia is present in the following three segments: Speciality Chemicals (33% of sales), Nutrition and Health Solutions (18% of revenue), and Life Science Chemicals (49% of revenue). The internal consumption of about 25% of Life Science Chemicals (LSC) volumes and 45% of pyridine and picolines (speciality chemicals) results in improved profit retention throughout the value chain.

About 54% of the company's revenue during FY21 came from exports and considered exports. With a diverse customer base, the company generates 20–25% of its overall revenue from its top 10 clients. Across all of its business segments, Jubilant has over 60 products in development. It has 32 in the Speciality Chemicals category, 24 in the Nutrition & Health Solutions category, and 7 in the Life Science Chemicals category.

As per Procurement Resource, Jubilant Ingrevia, a producer of integrated life science goods and innovative solutions, intends to invest INR 900 crore over the next three years. A cash outflow for a capex of about INR 350 crore is planned for FY22.

The company intends to invest a combined INR 550 crore in its Speciality Chemicals segment over the next three years, along with Rs. 100 crore in Nutrition & Health Solutions and INR250 crore in Life Sciences Chemicals. Moreover, Jubilant Ingrevia witnessed a major debacle in terms of its intermediate chemicals division on the back of enervated acetic anhydride prices.

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