S F Vakil
Chairperson and Managing Director, Dai-Ichi Karkaria Limited
These are challenging times. Not only is the world in turmoil, there are several disruptive issues in the country impacting the economy and the sentiments towards the economy. All sectors are showing a slowdown, some more than the others.
Being in the specialty chemicals auxiliary business we are both cushioned and impacted by the slowdown. Cushioned, where in the oil field sector there is a gradual turn around and business is starting to recover. Impacted in most other sectors from Paints to Agriculture, where most of our customers are delaying purchases or reducing requirements as they continue to hold stocks.
Though our country, with its burgeoning population and potential consumption patterns has the capability of major growth, there seems to be a mood of caution all around.
Entrepreneurs are no longer taking risks. There is very little innovation taking place. R&D spending is low, resulting in poor technology development. With the growing demand for crude oil in the country and a fall in domestic production, oil import is rising dependence.
With the rising price of crude, there will be some impact on the economy.
For companies servicing the oil sector there will be a considerable upside.
If the government spending on infrastructure improves, it will lend considerable thrust to all industries and will give a boost to the economy. We see 2020 as a year of cautionary optimism and are hopeful of improving the company’s prospects especially for the oil sector. India has as huge potential for specialty chemicals and the decade promises substantial growth in this area.
If the government focuses on improving infrastructure reducing the procedural hurdles (that are often costly), opens up to global opportunities, and focuses more on the economy, there is no reason to believe the situation won’t improve.
Companies that understand the value of R&D are sensitive to their role in the environment and follow safety norms in their chemical processes, will certainly be successful and sustainable.
DIK values its presence in the market for over 60 years and will continue to work towards maintaining its reputation and legacy. The fact that the company has invested close to 180 cr, at a challenging time, speaks loud and clear of its belief in the market and its ability to sustain in the next decade & beyond.
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