Manali Petro adopts strategy to accelerate growth, revamps management

Manali Petrochemicals Ltd (Manali Petro), a part of SPIC Group, has chalked out a two-pronged strategy to accelerate growth by increasing revenue from outside India and improving balance the between commodities and value added.

While the company is scouting for acquisitions, it is also focusing on the management team with global expertise and eyeing strategic and product domains, says a senior official of the company.

Speaking to Business Standard, Muthukrishnan Ravi, Managing Director of Manali Petrochemicals, said that to accelerate growth and to support the strategy, the company had acquired Notedome Limited, a System House based in the UK about a year back for around Rs 1.2 billion.

Notedome will help increase the value-added contribution. The company is planning to launch some of the Notedome products by the end of this year and will expand further to other South Asian countries.

Notedome manufactures Neuthane Polyurethane Cast Elastomer and caters to customers across 45 countries.

Currently, the value-added contribution is around 30 per cent and this will increase to 50 per cent in the next 2-3 years, without disturbing commodities contribution.

Value-added gives better margin and sustained margins, while commodities are subject to fluctuations, he said.

As part of MPL’s vision to grow from an indigenous industry pioneer to a global chemical solutions provider, the company has been actively seeking opportunities to enter into new regions, new technologies and new product lines besides strategic acquisitions, said Ravi.

MPL has fully integrated the operations since then and using it as a base for its global play. MPL’s strategy is aimed at increasing its share of the global polyurethane formulations market and also increase the pie for revenue contribution from global sales, he added.

In furtherance of this ambitious growth strategy, MPL has beefed up its leadership team with two key hires. It has inducted Abhishek Krishnan as Head of Strategy and E Venkatasubramanian as Head of Global Marketing.

Krishnan has over a decade of experience in strategy working for several bulge bracket firms in New York and London, and most recently at JP Morgan.

Venkatasubramanian has over 20 years experience in various chemical industries. His most recent assignment was with Bayer/ Covestro, where he worked for over 12 years

Ravi said these inductions will strengthen the management team and expand the product portfolio and the geographical base of clients as also potential acquisitions, which meet the company’s strategic objectives.

“The enhanced management team will also keep MPL in good stead to meet the technical challenges, steep competition, geopolitical risks, market fluctuations, and even price wars with large MNCs who can afford slimmer margins,“ added Ravi.

The company has posted a net profit of Rs 159.5 million during the quarter ended June 30, 2018, as compared to Rs 21.37 million. The total revenue is at Rs 1.78 billion during the quarter, as compared to Rs 1.63 billion during the same quarter of last year, with an increase of 9.20 per cent.