Corporate Development

Published: Dec 29, 2021
Updated: Dec 29, 2021

20 MICRONS LTD: Win-win JV with German firm

Globally sought for its ultrafine minerals, which have wide-ranging applications across industries, the company has an in-built advantage over other players with its nine manufacturing facilities across the country and five captive mines. Its recent joint venture with Dorfner of Germany is a win-win for both partners as product sales of both companies will get a boost in India as well as in other Asian and African markets. Crucial to 20 Microns maintaining its leading position in micronised minerals are its R&D facilities in Gujarat and its tie-ups with global tech innovators to acquire the latest technology in its field.

Based in Vadodara, the BSE- and NSElisted 20 Microns is a pioneer in the field of white industrial minerals since 1987. The company, incorporated by the late Chandresh Parikh and now headed by Rajesh Parikh, MD & CEO, is a globally renowned manufacturer of ultrafine industrial minerals and speciality chemicals.

Its products find applications as functional fillers and extenders across a wide range of industries such as paints, plastics, rubber, textiles, cosmetics, ceramics, oil and gas, paper and agrochemicals. The company is considered India’s leading producer of micronised industrial minerals, functional specialities and performance additives. The company’s nine manufacturing facilities are strategically located close to key customer points in Gujarat, Rajasthan, Tamil Nadu and Uttarakhand. Its five captive mines ensure a steady supply of raw materials at a reasonable cost, while simultaneously creating critical entry barriers for new entrants. The company possesses total mining reserves of 148.47 lakh million tonnes.

PROFITABLE TIE-UP

In a recent development, 20 Microns has activated its joint venture with Dorfner Holding GmbH & Co. KG, Germany to market, sell and distribute coloured quartz-related products manufactured by the Dorfner group as well as similar products of its own in India and other high-growth emerging markets of Asia and Africa. Both parties shall evaluate the sales and may at a later stage mutually agree to start local production in India. It is worth mentioning that 20 Microns already works as the exclusive distributor for Dorfner’s hydrous Kaolin products across Europe.

The JV company, named Dorfner-20 Microns Pvt Ltd, will have an initial equity capital of Rs 50 lakh. Dorfner will hold 55% and the remaining 45% will be held by 20 Microns. One of the major strengths of the company is its two state-of-the-art R&D facilities at Waghodia and Vadadla in Gujarat, set up under its subsidiary 20 Nano Microns and having a technical team of over 50. Further, the company regularly collaborates with globally renowned tech companies for easy access to the latest technology and innovations.

The company has achieved revenue of Rs 438 crore in FY21, with an EBITDA of Rs 56.07 crore (12.80% EBITDA margin)and net profit of Rs 22.45 crore, translating into an EPS of Rs 6.36 on its equity share capital of Rs 17.64 crore. With a better operational performance, the company has reduced debt by about Rs 23 crore and improved its debt-equity ratio to 0.44, compared to 0.64 the previous year. Likewise, in the Q1 ended June this year, the company has reported revenue of Rs 118 crore and net profit of Rs 5.79 crore, resulting in an EPS of Rs 1.64.

EXPORT STRENGTH

20 Microns’ exports to more than 65 countries contribute about 15% to its revenue. By consolidating its strategic position in key markets, it has created a strong pipeline of growth opportunities across its different product segments and has also started focusing on sourcing locally and enhancing its domestic manufacturing capabilities.

From waterproofing solutions to ayurvedic supplements and recently introduced organic fertilizers, the company has a presence amongst diverse sectors. It has a comprehensive in-house capacity across the value chain, covering mining, micronising, sub-microns and nano sizing across key product segments. The company is optimistic about the growth of its agriculture and organic farming product portfolio, which addresses the evolving needs of farmers to help them in increasing their productivity by 14-18%, apart from reducing the usage of synthetic fertilizers and pesticides. Its products also enhance soil fertility and encourage organic farming because the products are based on natural minerals.