Privi Speciality Chemicals Ltd Management Discussions

The global flavours and fragrances market size is estimated at US$ 30.61 Bn in 2023 and is anticipated to register a CAGR of 5.4% from 2024 to 2030 (Source: Grandview Research). The market is anticipated to be driven by rising demand and consumption of processed food, as well as personal care and cosmetic products globally. Rising disposable income in emerging economies like India and China, coupled with population growth, is expected to augment demand for personal care and cosmetic products in the industry. In addition, the busy lifestyle patterns upheld in developing and developed countries are anticipated to augment demand for processed foods and beverages, thereby increasing demand for Flavors.

Fragrances provide strong sensory impressions, often determined when applied via medical products, personal care, cosmetics, and other substances. These products enhance the aesthetic value and overall appeal of consumer goods. The increasing demand for health and wellness products, as well as rapid technological advancements, are expected to further augment industry growth.

Natural fragrances are costly due to their processing and limited resources. Industry players have developed cost- efficient synthetic alternatives. These products have the advantages of regular supply, steady pricing, and lower production costs.

The F&F market is transitioning as businesses are becoming more conscious of their responsibility to deliver consumer products that are not only healthy for consumers but also for our planet and its finite resources (Source: www.Grandviewresearch.com).

AROMA CHEMICALS MARKET

The global aroma chemicals market size is valued at US$ 5.32 Bn in 2023 and is expected to grow to US$ 8.59 Bn by 2033, registering a CAGR of 4.95% from 2024 to 2033. The natural source segment is expected to register a CAGR of 3.8% during 2024 to 2033. The terpenes and terpenoids segment is expected to showcase a CAGR of 4.7% from 2024 to 2033. The natural aroma chemicals market is expected to witness a CAGR of 6.8% from 2024 to 2033 (Source: Precedence Research).

The Asia Pacific aroma chemicals market size reached US$ 1.62 Bn in 2023 and is anticipated to be worth around US$ 2.73 Bn by 2033, poised to witness a CAGR of 5.38% from 2024 to 2033. The aroma chemicals market was dominated by the Asia Pacific region, which had the largest revenue share of about 30.53% in 2023. The market is expected to grow at a CAGR of 5.4% until 2033. There is an increase in the aroma chemicals market in the Asia Pacific region due to increased demand for various flavours and fragrances in countries like China, Japan, and India.

The demand for aroma chemicals is expected to grow in the future due to increased use in organic cosmetics. The steady growth in European and Middle East market will be led by high demand for cosmetic and personal care products, hygiene and applications in soaps, beverages and detergents..

MARKET OVERVIEW

The aroma chemical manufacturers are increasing their focus on developing products that are natural and comply with environmental norms. Aroma chemicals are used in the production of additives for health care and for personal care products. In order to gain a competitive advantage manufacturers are trying to produce natural flavours similar to the synthetic flavouring agents.

SOURCES FOR AROMA CHEMICALS

The synthetic source of aroma chemicals has dominated the market with a 69.20% revenue share in 2023. Synthetically produced aroma chemicals are used in cosmetics and personal care. All of these industries have a good demand for synthetic aroma chemicals. Synthetic aroma chemicals are obtained by using the most updated technologies. They happen to be the highest source to obtain the product. Synthetic aroma chemicals help in reproducing the natural sense of various flavours that could be used in the industries. The terpenes chemical segment is expected to have the largest market share in Aroma chemicals of around 38.7% in 2023. These products are naturally available and has maximum application in pressure sensitive tapes, paints and printing games, chewing gums and rubber adhesives. They also play an important role in flavouring agents and fragrances for various industries.

Terpenes has the largest consumption in food and beverages and the rubber industries. Less availability of terpenes leads to a high cost of extraction and this happens to hamper the market growth. As theres an increased commercial importance of the benefits, this chemical segment is expected to grow. They see applications in cosmetics and personal care products, soaps, detergents, household products and foods and beverages, increasing utility of the business segment is expected to see a growth.

Synthetic aromas are one of the essential ingredients for the production of custom and fine fragrances. Synthetic aromas are widely used in cosmetics for all users such as women, men, and also for children. Owing to easy availability and low cost of production, the demand for synthetic products is projected to grow rapidly.

Natural-identical aromas are chemically defined substances possessing aromatic properties. Natural-identical aromas are obtained by isolation or chemical synthesis using

various chemical reactions such as acetylation and esterification. Raw materials required for the production of natural-identical aromas are chemically identical to natural substances derived from animal or plant sources. At present, a majority of fragrances are formulated chemically. (source: Precedence Research).

APPLICATION

The fragrance application segment had the higher share of revenue of aroma chemicals till 2023, which accounted for 69.70%. The availability of unique ingredients to manufacture Fine Fragrances led to an increase in the demand for these aroma chemicals. The aroma chemicals market is expected to have a great growth in developing economies. Increasing demand for the beverages and processed foods, liking for exotic flavours and increased disposable income are the factors that are helping in the growth of the market.

The demand for unique fragrances and organic perfumes is on high. The trend for the organic perfumes that are completely vegan is in great demand.

The rise of social media and the increasingly global growth of the middle class is leading to ever rising demands for micro-personalisation. This frequently takes the shape of a unique scent that can be championed by a sub-group. Specific products with custom made fragrances for different demographic groups and sub-groups is an angle that has shown deep resonance with consumers. (source: Precedence Research).

MARKET DRIVERS

Rise in demand for aroma chemicals in the fragrance industry

Rising demand for different fragrances and flavours is a key driver for the growth of the aroma chemicals market owing to factors like consumer focus on wellness and personal grooming, changing lifestyle and patters (rise in aromatherapies), rapid urbanisation etc .

Rising disposable incomes and shifting consumer tastes are propelling the fragrance industry forward. Personal care, home care, medicines, and cosmetics are the most common user industries, with huge multinational corporations, domestic companies, and small businesses all participating. The increased demand for natural and organic products creates an opportunity for the fragrance business.

OPPORTUNITY AI in fragrance

AI is gaining popularity in the fragrance sector, with uses ranging from studying customer behaviour in e-commerce transactions to creating AI models for scent design and formulation. This has resulted in a greater willingness to use risk resources to advance the sector. AI integration into fundamental fragrance capabilities includes formula- to-brief recommendations, formulation, sensing, and novel

chemical design. Formula-to-brief recommendation enables fragrance houses to match current formulations to new briefs, which benefits and monetizes non-exclusive formulas. AI formulation, which creates scent formulations and reformulations using software that predicts their perceptual influence, is difficult due to nonlinear arithmetic and the requirement for interdisciplinary knowledge. However, if operational, AI formulation can result in cost reductions and new revenue streams, such as effective malodor control formulae, near-identical odor profile reformulation, and individualised fragrance. From a perfumers standpoint, AI formulation empowers and facilitates through decision support rather than replacing the perfumer.

The rise of social media and the increasingly global growth of the middle class is leading to ever heightening demands for micro-personalisation. This frequently takes the shape of a unique flavour or scent that can be championed by a subgroup. Specific products, with custom flavours or fragrances, for different demographic groups and sub-groups is an angle that has shown deep resonance with consumers. (Source: Precedence Research)

REGIONAL INSIGHTS

Aroma Chemicals Regional Insights

North America has the greatest market for scent chemicals. A robust fragrance sector, high demand for natural and environmentally friendly fragrance ingredients, and technological developments in the synthesis of aroma chemicals are factors promoting regional prosperity. The growth of aroma compounds into several applications and customer demands for customised fragrances further support North Americas industry dominance.

Europe Aroma Chemicals market accounts for the second- largest market share. The area economy is fuelled by a thriving fragrance and cosmetics sector, a commitment to using natural and ecological components, and the popularity of personalised perfumes. The strict restrictions in Europe promote the use of legal and safe fragrance compounds, thus fostering industry expansion. Further, the German Aroma Chemicals market held the largest market share, and the UK Aroma Chemicals market was the fastest-growing market in the European region.

The Asia-Pacific Aroma Chemicals Market is expected to grow at the fastest pace from 2023 to 2032. The regions growing population, rising disposable income, and rising consumer interest in fragrance and personal care goods contribute to regional growth. The demand for perfumes, cosmetics, and other consumer goods with scents is rising due to rapid urbanisation and a growing middle class. Moreover, Chinas Aroma Chemicals market held the largest market share, and the Indian Aroma Chemicals market was the fastest-growing market in the Asia-Pacific region. (Source: marketresearch future)

INDIAN INDUSTRY OVERVIEW

The fragrance sector in India is undergoing a dynamic transformation, fuelled by evolving consumer preferences, higher disposable incomes, and a surging demand for personal care and cosmetic products. According to Statista, the Indian fragrances market is expected to expand by 1.49% annually from 2024 to 2028, reaching a market volume of US$ 336.20 Mn by 2028. Moreover, the perfume market in India is anticipated to grow by US$ 1.32 Bn between 2022 and 2027, boasting a projected CAGR of 15.23% during this period.

Several key trends are propelling this growth:

1. Rising Demand for Natural and Organic Products:

Consumers are increasingly gravitating towards natural and organic fragrances, driven by a growing awareness of health and environmental impacts. This shift is pushing brands to innovate with sustainable and ecofriendly ingredients.

2. Personalised and Unisex Fragrances:

The market is witnessing a surge in personalised and unisex fragrances, reflecting a broader trend towards customisation and inclusivity. Consumers are seeking unique and individualised scent experiences that cater to their personal identities and preferences.

3. Influence of Social Media and Celebrity Endorsements: Social media platforms and celebrity endorsements play a significant role in shaping consumer preferences. Influencers and celebrities have a substantial impact on brand perception and consumer choices, driving trends and boosting market growth.

4. Customisation and Inclusivity:

There is a notable shift towards customisation in the fragrance sector, with brands offering tailored scent experiences. Inclusivity is also becoming a key focus, as consumers demand products that cater to diverse preferences and identities.

Overall, the fragrance market in India is set to experience robust growth, driven by these evolving trends and the increasing sophistication of consumer demands. Brands that can innovate and adapt to these changes are poised to thrive in this burgeoning sector.

(Source: [11 https://www.statista.com/outlook/cmo/

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COMPETITIVE ENVIRONMENT

International F&F houses in the last ten years or so have also setup manufacturing and Development facilities and

are active in the Indian market. The Indian F&F market as per estimates is about 500 Mn US$. Similar to the international market, there is almost equal distribution of the total Indian F&F market between flavours and fragrances.

International houses account for about 70% of the organised Indian market while Indian companies cater to 30% of the market.

Some Indian FMCG companies who use fragrances and flavours in their products also make their own fragrance blends, by purchasing individual aroma chemicals and mixing them. Mixing various fragrances purchased from different fragrance houses along with their in-house compounds is also a different way to make finished fragrance blends. Hence, the Indian F&F industry sales figures estimates given above could be 10% to 15% higher. In any case, competition is only likely to intensify with more and more international players expanding their footprints in the country.

SAFETY - RULES & REGULATIONS

Another important factor in the F&F industry is the strict safety norms, restricting the use of many chemicals, either due to governmental regulations or due to self-regulation by the industry itself. For example, some fragrance ingredients are not, permitted for use on grounds of safety, while some others are restricted in their level of use in fragrances, depending on the intended end-use. Products intended to remain on skin viz.; "leave-on" products, such as body, lotions have stricter restrictions than those for products that are, washed off the skin viz., household products (e.g., floor cleaners) for which there are little or no intentional skin contact. IFRA (International Fragrance Association) guides the F&F industry by providing guidelines for fragrance ingredients as defined and published in the IFRA safety standards.

The "American Fragrance Manufacturing Association established the "Research Institute for Fragrance Materials (RIFM), in 1966 in USA as a non-profit making, independent body whose task is to evaluate the safety of fragrance ingredients. The types of test carried out on behalf of RIFM include oral toxicity, irritation skin sensitisation, and phototoxicity (sensitisation induced by sunlight). Intergovernmental organisations like European Flavour & Fragrance Association, European Council, The Scientific Committee for Food of European Commission (SCF), The Food, and Agriculture Organisation (FAO), and the World Health Organisation (WHO) of the United Nations also conduct independent study group to evaluate the safety of the flavouring substances. Fragrances and Flavour Association of India (FAFAI), and Essential Oil Association of India (EOAI), are similar bodies set up by the Indian Industry. Despite the presence of many international and Indian F&F houses, we can expect more F&F houses will attempt to penetrate the Indian market and get their share of the market. Locally grown private Indian F&F houses too are consolidating and regrouping themselves professionally to measure up to the international houses. With the Indian FMCG market, heating up it is highly unlikely that local Indian F&F companies will lag behind in giving a fair competition to the global giants.

REGULATIONS:

Stricter regulations continue to propel companies to adhere to the guidelines which could affect the markets growth trajectory.

For instance, wastewater discharge during the production of various synthetic aroma chemicals consists of many effluents, which need to meet applicable regulations for such discharge. As regulations are getting more stringent on emissions such as wastewater, air emissions, etc., producers are required to comply with these norms.

Currently, to keep air pollution in check, only ESP (Electrostatic precipitators) were recommended by the regulators at the boiler discharge vents, however, now regulators are asking for the installation of water scrubbers at the discharge of ESP as an additional measure. This indicates that the regulations are going to be more stringent in the coming years for environment protection.

The development, manufacture and sale of our products are subject to various regulatory requirements in each of the countries in which our products are developed, manufactured and sold. In addition, we are subject to product safety and compliance requirements established by governments, non-governmental organisations, including industry or similar oversight bodies, or contractually by our customers, including requirements concerning product safety, quality and efficiancy, environmental impacts (including packaging, energy and water use and waste management) and other sustainability or similar issues.

We use a variety of strategies, methodologies and tools to minimise the likelihood of product or process noncompliance with these regulations and standards by (i) monitoring regulatory developments and current product standards, (ii) assessing relative risks in our supply chain,

(iii) monitoring internal and external performance and (iv) testing raw materials and finished goods.

Your company ensures that all regulatory requirements are met with.

COMPANY OVERVIEW:

Privi Speciality Chemicals Limited (PSCL) incorporated under the provisions of the Companies Act, 1956 is a public company domiciled in India. Privi Speciality Chemicals Limited is Indias leading manufacturer, supplier, and exporter of aroma and fragrance chemicals and a globally trusted partner and supplier of bulk aroma chemicals. Privi started manufacturing aroma chemicals in the year 1992 with only two products, which it gradually expanded to a range of over 75 products today, having a capacity of over 48,000 metric

tons per annum. Privi also develops and produces custom- made aroma chemicals as per specific requirement of the customers. The research specialists at in-house R&D centre continuously thrive to develop new products and processes. Privi has state-of- the-art integrated manufacturing facilities situated at Mahad in Maharashtra and Jhagadia in Gujarat with knowledge, expertise and capacity to perform critical reactions like Hydrogenation, Condensation, Grignard reactions, as well as unit operations like Pyrolysis, Reactive Distillation, High Vacuum Distillation, Continuous Distillation to deliver consistency in odor and prescribed key parameters in an industry driven by stringent olfaction standards. Privi enjoys a competitive edge and economies of scale in its product segments.

A total production capacity of - 48,000 TPA spread across Amber fleur, Acetates, Dihydromyrcenol, Ionones, Nitriles, Sandal wood derivatives and Specialty chemicals and a Crude Sulphate Turpentine (CST) / Gum Turpentine Oil (GTO) capacity of - 37,000 TPA (Backward integration for captive a & p Pinenes).

Privi is ISO 9001:2015 certified and also ISO 14001:2015 certified for its Environmental Management System (EMS) and has a ISO 45001:2018 standard Certification Accredited by Bureau Veritas (Occupational Health & Safety Management System (OHSMS) for all its manufacturing units in Mahad from Bureau Veritas.

Privi is now a Gold Certified Manufacturer Supplier certified by ECOVADIS, With a Gold Certification Privi falls under the 5% category of Gold Certified Manufacturer/supplier in the world.

The commercial production of PRIGIV which is a joint venture with the leading F &F house in the world is slated to start in the last quarter of the Financial year 2024-25, The site is currently in the erection and commissioning stage. Privi Speciality Chemicals Limited (PSCL)) is a distinguished entity within the global F&F sector, renowned for its unwavering commitment to sustainable practices and responsible stewardship. With a rich heritage built on a legacy of excellence, innovation and societal welfare PSCL stands as a stalwart in the F&F industry.

BUILDING BARRIERS TO ENTRY / COMPETITION RISK:

Your Company is engaged in supplying aroma chemicals to global companies since over two decades and has significant in-house expertise and knowledge of the olfactive requirements of various global and regional customers. Further, your Company has applied backward integration to use waste generated from pulp mills - CST as it has significant visibility of pricing and availability of raw materials. These factors provide distinct competitive advantage to your Company, against the new entrants or existing aroma chemical manufacturers. Your Company has done research on various components of the CST & is

working on making value-added products from these inputs which can be supplied to the Flavour & Fragrance industry.

It is used as a Lifestyle Product

Fragrance products varies from individuals style, preference, values, social status etc. and are considered as lifestyle products

Capex Intensive Industry

High startup cost, stringent regulations and other hurdles keeps the high entry barriers Complex Chemistry

The involvement of complex chemistries in the manufacture of the Products, which is difficult to commercialise on a large scale

Regulatory Norms

To comply all regulatory norms and filings with various agencies

Technical Know-how

Handling Aroma chemicals requires a high degree of technical skill and expertise and operations

Long Gestation Period

Customer acquisition involves a long gestation period, resulting in a very few players being involved in manufacturing of the products Stringent Purity Measure

All processes and products are subject to, and measured against, high quality standards and stringent impurity specifications

High Replacement Cost

Any change in the vendor of the product may require significant time and cost for the customer to replace the same composition

Customer Olfactive

Olfactive acceptance most important in addition to purity as it differs from customer to customer

RISK MANAGEMENT:

Foreign exchange rate risk :

Fluctuations in exchange rates including the exchange rate between the Indian Rupee and the U.S. Dollar due to adverse global developments may impact the operations of your Company.

While your Company depends on over 60% of the raw materials by imports, it also exports over 70% of the finished goods. Therefore, your Company continues to have a natural hedge against the depreciation of the Indian Rupee against the US dollar, after accounting for some of the borrowings which are denominated in dollars.

Pricing and availability of raw materials:

The pricing of key raw materials also varies considerably during the year, and, moreover, the recent uncertainties continue to pose further challenges.

Your Company, as a strategy, continues to enter into half yearly or annual contracts for raw materials and finished products to mitigate the risks.

Market risk :

Your Company continues to enhance capacities of key products as well as installed new capacities for certain niche specialty aroma chemicals to stay ahead of competition. Your Company continues to be a leading producer globally in three flagship products: Dihydromyrcenol, Amber Fleur, and Pine Oil. All these products are developed in fully integrated manufacturing facilities of your Company, starting from the CST to the finished products and are essential ingredients in the manufacture of fragrances Your Company continues to be the largest single CST processing site in Asia, which has enabled it to mitigate the volatility in prices and availability of raw materials. CST also allows it to be self-sufficient in key raw materials.

Your Company has installed two new plants to manufacture Galaxmusk (Galaxoalide) Both these plants have begun commercial production and currently running to capacity . Along with this, your Company has started the commercial production and sale of Prionyl (Evernyl), which is the first solid product used in F&F applications produced by your Company.

Keeping in view the need to grow the business , your company has started the commercial production of Indomeran ( Cashmeran), Floravone ( Koavone) & Amber Extreme these are speciality products and will add to overall growth. These products are being produced in UNIT no 6 at Jhagadia.

In addition to the above-mentioned large volume flagship products, your Company also manufactures a number of specialty aroma chemicals - some of which are made from the side streams generated during manufacturing. Your Company believes in promoting a "Waste to Wealth" philosophy.

Thus, apart from consolidating the market share in the large volume products, your Company is also working on increasing customer share by supplying other aroma chemicals.

Climate Risk

Being a chemical company, we realise that we have a greater responsibility of conserving our environment and working towards mitigating climate change. We have established an integrated risk management system to ensure business sustainability by promptly identifying, assessing, and mitigating risks. Furthermore, we adopted a precautionary approach to identifying and managing climate change- related risks and opportunities affecting our organisation. We are also working on incorporation.

We have committed to setting science-based Target under Science Based Target initiative (SBTi). Furthermore, we are in the process of setting climate-related targets and are also exploring climate-related financial opportunities.

The study showed that Climate change thus poses three types of challenges to the Flavour and Fregnaunce sector. First, and the obvious, challenge is the threat to the future of industry itself due to the need for mitigation of greenhouse gas emissions. Second, is the risks to the infrastructure and operations, particularly due to extreme weather events. Third is the improved transparency in accounting of greenhouse gas emissions.

Technology initiatives:

Your Company continues to invest in modern and sustainable technologies such as implementing biotechnology in order to facilitate its expansion into other industry segments. Through the implementation of biotechnology, products that are churned from this business vertical through biodegradable and renewable sources will pose a challenge to the industry which largely uses conventional technology. Your Company continues to engage in research and development in respect of technology & process improvement. This will result in improved, cleaner processes for existing as well as new products. The following initiatives were implemented during the year under review:

Green chemistry & effluent free process developed till plant scale for several products.

Continuous reaction process for the intermediate related to the production of Amber fleur & DHMOL thus enhancing capacity which will enhance revenue and profitability. Implemented sustainable solutions at plant scale for units 1, 2 and 3 for Zero Liquid Discharge (ZLD).

Green technology for purification of product Prionyl using resins by adsorption/desorption technique along with membrane filtration for solute concentration.

Continuous process established for the epoxidation of Terpinolene at pilot scale for the product Terpinen-4-ol. Enzymatic Cracking of non-edible oils developed at RND scale.

Your Company is a member of the Carbon Disclosure Project (CDP). It not only discloses its carbon emission data but also works on specific projects to lower the carbon emissions from its operational activities. Your Company has now started encouraging its suppliers to opt for sustainable development practices and has also initiated buying the forest-based raw materials from FSC (Forest Stewardship Council) certified Pulp & Paper mills.

As part of its strategy for sustainable development, PRIVI commenced benchmarking its performance on global sustainability platforms/indices like Carbon Disclosure Project (CDP).

Your company has benchmarked its performance on CDP platform of sustainability and climate change which represents the Companys transition towards environmental

stewardship, improving its rating from Awareness to Management Level, which is the best amongst F&F companies and is at par with international peers.

Companies are assessed across four consecutive levels which represent the steps a company takes, as it progresses towards environmental stewardship. The levels are:

1) Disclosure; 2) Awareness; 3) Management; 4) Leadership. These ongoing evaluations and benchmarking initiatives are intrinsic to PRIVIs strategy for continual improvement, solidifying its leadership position in sustainability. Your Company scores for CDP stands at B grade and for Ecovadis stands at Gold which is considered to be very effective according to world standards. However, your Company strives to work towards achieving an A in CDP and a Platinum in Eovadis ratings.

QUALITY:

Your Company continues to maintain the industry best standards with respect to the quality of its products and has received appreciation from its customers for supplying quality products, timely response to queries on regulatory and other specific requirements. All the units of your Company are certified under the latest ISO-9001 -2015 standard.

Our state-of-the-art quality assurance laboratories, set up at Mahad unit, hailing the concept of "Once Tested Globally Accepted". Sample testing and monitoring is done through industry-leading Lab Information Management Systems software.

Your Company enjoys a 100% quality index with all the major customers and continues to be the leading supplier to the top 10 flavours & fragrance houses in the world due to its consistent quality standards.

STATUS OF YOUR COMPANY TOWARDS INTERNATIONAL CHEMICAL REGULATIONS:

EU / EEA - Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH):

Requirements: To place any product in European Economic Area in qty > 1 MTPA, the product is required to be registered within REACH Regulation (EC Regulation 1907/2006).

Your Companys status: So far, your Company has registered 28 products under EU REACH Regulation, through its Sweden-based representative. This will allow your Companys EU/EEA customers and its Netherlands office to import the products into EU/EEA.

Key Post-Registration Obligations: After the European Chemical Agency (ECHA) evaluates the registration dossier, additional animal or product test data to be provided or corrections to make if ECHA finds any information missing or incorrect.

TURKEY REACH:

Requirements: To place any product in Turkey in qty > 1 MTPA after calendar year 2020, the product is required to be pre-registered under Turkey REACH Regulation (KKDIK regulation) by December 2026.

Your Companys Status: So far, your Company has preregistered 26 products under KKDIK, as a result of which it has got extension of the registration deadline up to December 2026. This will allow your Companys turkish customers to import the products into Turkey without any registration until December 2026.

IFRA STANDARDS COMPLIANCE

The International Fragrance Association (IFRA) is the global representative body of the fragrance industry. The IFRA Standards form the basis for the globally accepted and recognised risk management system for the safe use of fragrance ingredients and are part of the IFRA Code of Practice. This is the self-regulating system of the industry, based on risk assessments carried out by an independent expert panel. Your Company ensures that the products it supplies to its customers adhere to IFRA standards. Your Companys supporting membership with IFRA further underpins its commitment to continuously comply with IFRA standards and adds a seal of quality and credibility to its products.

OTHER PRODUCT AND MANAGEMENT SYSTEM CERTIFICATIONS

Most of your Companys manufacturing facilities are ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 certified, Kosher and Halal certified. The ISO certifications have been issued by a globally renowned certification body Bureau Veritas whose certification process involves stringent audits.

OUTLOOK

Your Company is expected to capture the huge demand opportunities in aroma chemicals and drive significant growth in the future. Your Company plans to expand its product range and is working on aggressive plans to offer a much larger bouquet of materials to its valued customers globally

Your Company is looking to embark upon new growth opportunities in new products developed by its in house R & D and Pilot facility and also increase the capacities of its major products to keep up with the market share.

Your Company is making further inroads into the developing markets (Nigeria, Egypt, UAE, South Africa) by adding more customers as well as additional market share through existing customers.

HIGHLIGHTS:

With the existence of your Companys 100% subsidiary in the USA, its market share continues to grow year on year. The USA business however ended up in the red in the current Financial Year due to Inventory being held at higher cost and price volatility.

Your Company has a global presence with an office in the Netherlands. This is important from a strategic point of view to drive market share.

Your Company continues to see growth coming from key accounts in emerging and developing countries, supported by its ability to provide a wide range of products.

Your Company continues to sell value-added products from backward integrated feedstocks which is contributing to its revenue.

Your Company continues to establish strategic long-term business relations with global leading companies in the F&F and also in FMCG space.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis may be forward-looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply, price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors such as Force Majeure Contributors.