The manufacturing unit of agrochemicals and pharmaceutical intermediates is considered to be crucial for the overall economic development of the industry, as it runs on three basic pillars of innovation, invention and progress. From creating new products to adding extensions to the old ones to commercialisation of products, investing in a research and development centre that unfurls the company's real potential and reduces its dependency on external mediums is part of the company's growth operations. Spending on one can demand a huge capital investment but adds to the company's growth potential massively.
Astec LifeSciences Limited from the house of Godrej is invested in making a difference in this sector through their strong R&D and manufacturing capabilities, which will aid their clients in cutting down huge production costs. In conversation with Anurag Roy, Chief Executive Officer, Astec LifeSciences Limited, we decode India's chemical landscape, the importance of setting up an R&D centre to contribute to the evolving sector growth and more.
1. A lot has been spoken about India's share tripling in the global chemicals space. What is your take on the same?
Our country has emerged as a leading economy in the world. With domestic consumption expected to grow at a 9%-10% CAGR in the coming years, the role of the manufacturing sector is going to be critical in the role of the Indian economy. And it is herein that Indian chemical manufacturing will be a crucial segment with its roots spread across a wide range of end-use industries.
Rising disposable incomes and a favourable demographic dividend coupled with increasing export demand and enabling Government initiatives are going to be the key growth drivers for the industry. Additionally, the growing diversification of global chemical supply chains due to geopolitical scenarios has put India at the forefront of the global chemicals space. With attractive business opportunities present in different segments, including agrochemicals and speciality chemicals, we believe all these factors will catapult India's share in the global chemicals sector.
2. How do you see the China + 1 strategy impacting R&D and manufacturing in this space in India?
Globally, the chemical sector is a critical component of many industrial processes. While the EU and the US have historically been key global hubs, the focus shifted to China due to cost dynamics and government support. However, the proactive steps taken by the government back home and, at the same time, clamping down on the industries in China have led to innovators looking at the China+1 strategy. That is where we have a good advantage to make India an attractive global hub after China considering we have a growing local marketplace and superior manufacturing skills. Additionally, R&D centres have been instrumental in accelerating economic growth, creating intellectual property and developing sustainable solutions. Hence in a country with high labour availability, a focus on concentrated effort with the right investments in infrastructure, R&D, and production capacity can enable our companies to seize the opportunity and meet both domestic and global demand.
3. How can India become a global manufacturing hub in this space?
For an industry like ours to thrive and make its mark on the global hub, it is imperative to be cognizant of – the easy availability of raw material/feedstock, availability of a good talent pool, cost dynamics, and local policy environment. With 50% of basic chemicals and intermediate used in the manufacturing of chemicals still being imported from China, there is an immediate need to invest in the backward integration of key starting raw materials. And it is herein that the government initiatives to support manufacturing, like the Production-Linked Incentive (PLI) Scheme, to increase the competitiveness of domestic manufacturing and attract investments is a step in the right direction. Now, for better competitiveness in manufacturing, as I mentioned in the earlier question, we need to invest in better infrastructure and R&D. The same can happen if we not only leverage the existing talent pool but also invest in their development. While we have a huge cost advantage not only compared to US and EU but also China, we need to get the right practices in place. Hence it is imperative to invest in R&D centres for the continued growth and competitiveness of the Indian chemical industry in the global market.
4. A company with INR 700 Cr revenue setting up such a huge R&D Center. Why?
As a part of Godrej Group, we continue to foster curiosity and a culture of innovation. Backed with manufacturing capabilities, we have been successful in creating strong relationships with our clients. With our clients and other innovators now looking out for solutions that aid them in cutting down the time to market, we believe that now is the time to enhance our capability by providing end-to-end solutions to our customers – from the R&D stage to development to the commercialisation of products. Slashing the time-to-market for innovative solutions, the new R&D Center will cement us at the right place in the sector at the right time, and we are confident of being partners of choice. The investment in this new R&D Center is a testament to our commitment to offering advanced solutions with a focus on green chemistry and sustainability.
5. What is the infrastructure and talent that you are putting behind this new set-up?
Designed to be a hub of cutting-edge research and development, our new R&D Center is equipped with state-of-the-art infrastructure. It is housed with Synthesis Laboratory – for the synthesis and development of complex molecules, Analytical Laboratory – to aid analytical method development and analysis and Formulation Development Laboratory – to develop new formulations and generate chemistry data for registration and technology transfer. With over 100 chemists and engineers today, the centre also has specialised equipment at Kilo Laboratory to perform scale-up studies and convert traditional batch processes to continuous processes in addition to the Process Safety Laboratory for the scientific evaluation of chemical reaction hazards. Additionally, we also have a Bio-Efficacy Laboratory to study the bio-efficacy of crop protection chemicals against target pest species.
6. What is the importance of the R&D Center in Astec LifeSciences's journey?
Since our inception in 1994, we have been successful in creating a unique identity for ourselves. Manufacturing a wide range of agrochemicals and pharmaceutical intermediates, we cater to the requirements of companies in the domestic as well as international markets. While this has enabled achieve robust and consistent growth over the last many years, in order to tap immense potential in the market today, we have invested in setting up this R&D centre. Augmenting our manufacturing capabilities, this centre will aid us in strengthening and increasing our offering in chemistries and capabilities. Through the R&D Centre, our intent is to embark upon the journey of transformation and innovation focussed on Strategic Partnerships and Collaborations, Operational Excellence and offering Cost Leadership to our customers. The same will not only drive growth for the Company but will also augment the value-creation process.
7. Why should companies explore collaboration with Astec LifeSciences?
From the house of Godrej, a trusted brand across the industry, Astec LifeSciences strives to make a difference in the sector by being an application-agnostic partner for the companies. Our agile and customer-centric approach, backed by strong R&D and manufacturing capabilities, will aid our innovator clients to cut down their time to market, optimise and scale up with process with ease and provide them end-to-end solutions. This smooth and faster scale-up capability, and excellent HSEQ standards, make us a trusted partner for collaboration.
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