Atul Ltd 2019-20

Management Discussion and Analysis 53 The Company undertook two projects for implementation. The world market for Resorcinol (a key product ) is estimated at US$ 564 mn and is growing at about 2.5%. The size of the world Tyre industry is estimated at US$ 237 bn and is growing at about 3.7%. The size of the world Chlor-alkali industry is estimated at US$ 46 bn and is growing at about 3.2%. The Tyre industry is projected to grow backed by strong growth in the Asia Pacific market region. The captive consumption of bulk chemicals is expected to grow as the Company expands manufacturing capacities of its various products. The Company will participate in this growth by i) widening its market reach, ii) increasing its manufacturing efficiencies, iii) debottlenecking and adding capacities and iv) introducing downstream products. The demand and price of bulk chemicals arecyclical innature. Fluctuations inforeign exchange and slowdown in automobile industry may impact sales realisations. The product groups comprise about 620 products. The products are used by customers belonging to Textile, Paint and Coatings and Paper industries. Pigment Red 168, Sulphur Black 1 and Vat Green 1 are some of the key products. During 2019-20, sales increased by 14% (of which volume increase was 3%) from ` 547 cr to ` 626 cr. Sales in India increased by 16% from ` 285 cr to ` 332 cr. Sales outside India increased by 12% from ` 262 cr to ` 294 cr and formed 47% of the total sales. Rudolf Atul Chemicals Ltd (RACL), a joint venture company formed in 2011-12, provides a complete range of textile chemicals in Indian market; its sales decreased by 2% from ` 83 cr to ` 81 cr, primarily because of volume. The size of the world Dyestuff industry is estimated at US$ 6.1 bn and is growing at about 2%. China continues to be the largest manufacturer of dyes followed COLORS Product groups: Dyestuffs, Pigments, Dye-intermediates, Textile chemicals, Others by India. The world market for high performance pigments is estimated at US$ 5.0 bn (constitutes both organic and inorganic pigments) and is expected to grow at about 4% in the coming years. The main user industries, namely, Textile, Paper, Paint and Coatings will continue to grow because of increasing demands from middle class population and increase in discretionary spending. The Company along with RACL will participate in this growth by i) broadening its market reach in new geographies, ii) investing in newer capacities of existing and new products, iii) increasing its manufacturing and working capital efficiencies and iv) introducing new dyes, pigments, textile chemicals and products for non-textile applications. Fluctuations in foreign exchange and availability of raw materials may impact sales realisations. Treatment costs are expected to remain high because of stricter regulatory norms and increasing demand for cleaner and greener products from user industries.