Atul Ltd 2019-20

Management Discussion and Analysis 51 The products falling under these product groups are used by customers belongingtoPharmaceutical industry for various therapeutic categories, such as anti-depressant, anti-diabetic, anti-infective, anti-fungal, anti-retroviral and cardiovascular. The product groups comprise about 76 products. Dapsone, fluconazole and metoprolol salts are some of the active pharmaceutical ingredients and carbonates, chloroformates and amino acid derivatives are some of the key intermediates. During 2019-20, sales decreased by 12% from ` 526 cr to ` 462 cr. Sales in India decreased by 3% from ` 293 cr to ` 283 cr. Sales outside India decreased by 23% from ` 233 cr to ` 179 cr and formed 39% of the total. Degrowth on account of volume was (12)%. Sales of Atul Bioscience Ltd, a 100% subsidiary company, remained almost unchanged at ` 105 cr because of regulatory issues with a key customer and delay in statutory clearances for the newly acquired facility at Ambernath. The Company completed one project while one project is under implementation. PHARMACEUTICALS AND AROMATICS – I Product groups: API intermediates, Active Pharmaceutical Ingredients, Others The size of the world Pharmaceutical industry is estimated at US$ 1.75 tn, of which the conventional pharmaceutical segment is estimated to be US$ 1.3 tn. Of this, the size of the world API industry is estimated to be US$ 160 bn. Biologics is estimated to contribute about 52% of sales of top 100 products by 2022 while Oncology will remain the largest therapy area with sales growing at about 12.7% CAGR. Worldwide Pharmaceutical R&D spend is estimated to grow by 2.4% CAGR to about US$ 181 bn in 2022. There are about 20 major companies which dominate the world marketplace. The main user industry, namely, Pharmaceutical, is doing well because of increasing awareness about diseases and health. The Company along with ABL will participate in this growth by i) widening its market reach, ii) increasing its manufacturing efficiencies, iii) debottlenecking and adding capacities, iv) introducing new products and v) forming long-term strategic alliances with other companies. The prices of some products may vary widely over the short-term. Fluctuations in foreign exchange may impact sales realisations. Agribusiness is estimated at around US$ 5 tn. If the current trend continues, caloric demand will increase by about 70% and crop demand for human consumption and animal feed will nearly double by 2050. This necessitates increased use of Crop Protection chemicals. The Company will participate in this growth by – i) focusing on providing its customers with the best quality products, ii) expanding the product portfolio, iii) promoting its brand sales iv) securing access through more registrations and v) improving internal efficiencies and working capital management. Floods or famines may adversely affect the demand. Fluctuations in foreign exchange may impact sales realisations. Given that some of these chemicals can be hazardous, it is essential to take due care in their manufacture and use. Registration costs are high in certain countries.