Clariant India has clearly emerged as the global outsourcing hub for its parent company. The speciality chemicals major is further positioning itself to maintain and enhance its leadership position in the domestic market.

Prakash Rastogi, managing director, Clariant (India), spoke to Rumi Dutta on the current industry scenario and the company's corporate focus.

Could you throw some light on the demand-supply scenario in the speciality chemicals industry in India? How is the industry positioned against China and South Korea? What are the growth expectations of Clariant (India) in this segment?

The domestic demand for speciality chemicals itself offers a huge potential to the industry. As more people are picking up western fashion trends, the demand situation certainly would improve, particularly for performance chemicals and fashion shades in dyestuffs.

One can certainly not ignore China and Korea. But realigning business strategies towards the country's advantage would help the industry perform better. China is certainly strong in the disperse dyestuffs area, while in reactives, India scores over as on date.

Also, one needs to focus on the strengths of our industry. As India has excellent technical human resources, we should focus on the high value speciality/performance chemicals.

What are the growth prospectives in the dyestuffs industry and how is the company positioned compared with other players? What is the kind of growth the company expects in the years to come?

The domestic dyestuffs industry, in spite of various problems, has managed to grow at around 10 per cent during the last decade. It also stood second in the Asian region. The growth will largely depend on the user segment. One can expect a growth of around 5-7 per cent per annum in the years to come.

Clariant (India) is the market leader in the textile chemicals and leather dyestuffs segments, where we shall strive to maintain our leadership and increase the market share.

The specific segments where we are present include technical textiles -- water and stain repellent products, silicons -- finishing ranges, ETP chemicals -- for textile & non-textile segments. Our growth in the high-end paper industry has also been appreciable in the last three years. We expect to certainly post a double-digit growth in that segment in the future.

All these growth avenues are based on the customer service concept rather than just product sales.

What is your view on the export market for dyestuffs? What are the growth expectations?

India's share in the dyestuffs business in the global market is estimated at around six per cent. With its potentials, it can certainly aim to realise around 10 per cent of the world market share.

Clariant (India) is one of the global sourcing centres of the Clariant group for the TLP division, others being China and Japan. The exports business of Clariant (India) has performed quite satisfactorily. It has posted a compounded annual growth rate of around 12.3 per cent in the last three years.

We expect to grow at around 8-10 per cent per annum in the future. Excellent resources in terms of technical expertise, manufacturing facilities and lower manpower costs make India a good manufacturing base.

Could you highlight some of the company's core corporate strategies?

New product introduction is our corporate strategy. We have set a target of 15 per cent sales from new products, which are not more than 24 months old.

In the past we have been realising this target and expect to do so in the future too.

As far as our outsourcing strategy is concerned, it is based on "make or buy" and we outsource certain products. The core strength of Clariant (India) is marketing and servicing its customers. As ours are industrial products, servicing becomes more important than anything else as the customer realising the value from our product is more relevant to us.

How has been the financial performance of the company? What are your expectations for this fiscal?

The company has been able to sustain its overall performance with regards the topline and the bottomline.

It is our corporate strategy to grow by at least two per cent over the industry growth rate in which we operate.

What are the research and development initiatives of the company? Do you have any capex plans?

The government of India has approved the company's R&D facilities. New products take birth either through local development projects or through transfer of technology from the parent company. The company, during fiscal 2002-03, has invested around 1.3 per cent of sales in R&D.

The company at present does not have any major capex plans. However, annually we budget around Rs 4-6 crore (Rs 40-60 million) primarily for upgradation of facilities and balancing equipment for capacity enhancements.

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