India holds an advantage over China in producing speciality chemicals and with “the whole world wanting to buy from India” the country has the potential to grow at least 30 times, says Deepak Birewar, Chairman, Inventys Research Company. 

“A huge growth is possible in this speciality chemicals segment, which provides input chemicals for pharmaceuticals and crop rotation. It has a lot of technology components. It is not easy to make these chemicals.“

“There is a lot of research component. There is a lot of engineering component… These are very specialised sort of cases. India has an advantage over China in this segment,” Birewar told businessline in an online interview. 

‘Growth is happening’

Established in 2005, Inventys Research Company is a chemicals custom manufacturing services company producing for various sizeable global supply chains in the life sciences area, including crop protection and pharmaceuticals. 

“A huge growth is happening in India as we speak.  Of course, there is much more to come. The industry has started putting lot of new capacity, which is very expensive,” the Inventys Chairman said.

There is demand for such speciality chemicals from Western and Japanese companies which want to move away from China. “If not to move away completely, at least they don’t want to be fully dependent on China.  In my calculation, over $300 billion worth of chemicals manufacturing should come to India, even if the world decides to give us only 20 per cent of the demand,” Birewar said.

Flowing capital

Given the speciality chemical sector’s perspective, it has potential to grow 30 times if that 20 per cent comes to India. “It is a big opportunity for the Indian industry.  A lot of capital has started flowing into this industry. It’s only a beginning,” the Inventys Chairman said.

To bring $300 billion worth business, the industry needs to invest $200 billion. “That’s a lot of money. I don’t think even 10 per cent of it is being invested now. It will take time but the growth has started. It is going to be a very large one,” Birewar said. 

Inventys produces key raw material for chemical pesticide or fungicide and pharmaceutical companies. For example, it supplies such a raw material to Bayer Corporation for a fungicide that tackles black fungus on potatoes. 

New-gen chemicals’ advantage

“These are new generation chemicals which do not harm species other than the ones they are targeted at. This particular fungicide is supposed to kill fungi on potato. They are very specific, so they work at the DNA level, and they impact only the fungi of that particular plant and don’t kill everything else. 

“This means that these chemicals, called advanced intermediaries, are very complex because if you use a simple chemical it will kill everything. If you want to make it specific for very specific organism, then it has to be very complex.” Birewar said.

In fact, the company got the order to do the chemical after the Chinese failed to ensure consistent quality. “Not a single batch of ours has failed the quality tests,” he said. 

‘Critically’ relying on China

Inventys, which began production in 2008, made a study on Indian chemical companies’ dependence on China. It found that at least 70 per cent of pharmaceuticals output was “critically” dependent on China.

About five years ago, the Centre carried out a study on the same issue. It revealed that for many chemical components, there was no supplier other than China. This left the industry wondering, “what if China decides to stop production?” 

This is where Inventys decided that if there is a chemical input that no one manufactures in India and only Chinese make it, then the company would produce it. “That strategy helped us during Covid times,” he said.  

Due to the pandemic, a lot of global supplies got disrupted and China stopped supplying. “We made the raw materials and emerged a trusted and reliable member of global supply chains,” Birewar said. 

Part of global supply chain

Today, Inventys is part of 23 such global supply chains. “Out of this, 19 are companies whose revenue is larger than $1 billion per year,” he said.  

One-third of employees of Inventys, which has 330 staff besides contract labour, focus on new products, research and development. It helps the company to develop new products continuously and compete with China. “Our mission is to reduce dependence on China, apart being part of these global supply chains,” the Inventys Chairman said. Within the country, the company serves at least 125 pharmaceutical firms. 

Features of production

There are two features of Inventys production process. One, all its plants are automated, managed through DCs control system. “It helps us to maintain consistent quality that had drawn praise from all our customers,” he said. 

The other feature of Inventys, which earns 80 per cent of its revenue from Japan, the US and Germany, practices circular economy. “We are environmentally, very responsible. For example, in our boilers, we do not use coal. We do not use furnace oil or natural gas. We use waste biomass from farmers,” Birewar said.

Inventys is a “green chemistry” company which means it prevent even generation of effluents using advanced catalyst or equipment. In November 2022, the company got FICCI award for having “the green process” among  medium scale industries.

 Toll manufacturing

 The Mumbai-based firm does “toll manufacturing” of chemicals too, which means a lot of research component is involved while custom manufacturing. “When we do custom manufacturing, only 20 per cent of the customers give us the technology. For the rest 80 per cent, we have to perform largescale research,” he said.

Customers give the name of the chemical they want and Inventys figures out how to produce it at a competitive cost with respect to even countries like China. “So that’s where the research part of our name comes in. There’s a large amount of research component,” Birewar said. 

Expansion plans

Inventys is entering the contract manufacturing, research and development sector, which can help companies to develop new chemicals. The company has lined up an investment of ₹1,200 crore for expansion.

“It should give us an additional revenue of ₹2,000 crore and we will be building plants for making active or technical (chemical) for the crop protection industry. We will be making advanced intermediates so that we don’t have to depend on China. In addition, we will make some speciality chemicals either for the Indian market or the world market,” the Inventys Chairman said.

The expansion will happen in the same industrial area in Nagpur, Maharashtra, where it currently has its other plants.