COMPETITIVE STRENGTHS

Established Global Supplier to Major FMCG Brands with Demonstrated Track Record
Company’s robust product portfolio and expanded geographical footprint enable them to provide integrated solutions to a wide array of customers, whether they be established multinationals or emerging players in local markets. They have classified their customers based on certain key characteristics, including scale of operations, geographical footprint, technical demands and propensity for growth. In Fiscal 2017, 52%, 8% and 40% of the total revenues from operations were derived from multinational customers, regional customers and local customers, respectively.

Almost all of their customers operate within the consumer-centric personal care and home care segments, and thus, their purchasing decisions are driven primarily by product performance, advanced chemistry and the need for customized and competitive solutions. Their customer base currently comprises a host of multinational, regional and local FMCG companies, including, inter alia, Cavinkare, Colgate-Palmolive (India), Dabur, Henkel, Himalaya, L’ORÉAL, Procter & Gamble Home Products, Reckitt Benckiser and Unilever. The company enjoys relationships in excess of 5 years with each of their top ten customers. Many of their key customers have audited and approved their facilities and manufacturing processes.

Robust Product Portfolio Addressing Diverse Customer Needs
Galaxy Surfactants has continuously diversified their product profile to address the needs of a diverse range of customers and applications. Their Performance Surfactants range includes anionic surfactants and non-ionic surfactants, and comprises over 45 product grades. Their Speciality Care Products range comprises over 155 product grades, and includes amphoteric surfactants, cationic surfactants, UV filters, preservatives, preservative blends and surfactant blends, speciality ingredients such as mild surfactants, syndet and transparent bathing bars and proteins, fatty alkanolamides and fatty acid esters, and other care products. In aggregate, their product portfolio currently comprises over 200 product grades.

Both of their product ranges, namely Performance Surfactants and Speciality Care Products, find application in the personal care and home care industries. They are utilized as raw materials for a host of consumer-centric personal care and home care products, including, inter alia, shampoos, conditioners, body wash formulations, soap bars, liquid soaps, toothpastes, laundry detergents and dishwashing products. While their Performance Surfactants often serve as substantive raw materials in their customers’ end products, the Speciality Care Products are characterized by the unique functionality that they add to their customers’ end-products.

Company’s products find applications in products designed for end-users in the entire spectrum of ‘mass’, ‘masstige’ and ‘prestige’ socio-economic segments. The diversity in their product portfolio enables the company to provide customized solutions to multinational FMCGs that market a host of products across diverse geographies.

Their Performance Surfactants products are primarily utilized as raw materials for endproducts that can be considered as ‘consumer staples’. On the other hand, a large number of their Speciality Care Products find applications in end-products designed for the ‘prestige’ socio-economic segment, where purchasing decisions are often driven by the functionality of the end-product.

Proven R&D Capabilities with Dedicated Focus on Innovation
Company’s dedicated and experienced in-house R&D team, which comprised 63 employees as of September 30, 2017, focuses on the development of high-performance products and formulations for the consumer-centric personal care and home care segments. This team includes a number of doctorates, chemists and engineers, and primarily operates from their well-equipped R&D Centre, which is located at Navi Mumbai. They have also set-up 1 pilot plant at Tarapur, Maharashtra. The R&D Centre and pilot-plant are both recognized by the Department of Science and Technology, GoI. They have also set-up a product applications centre for proteins at Denville, USA, which is operated by Tri-K Industries Inc. In Fiscals 2015, 2016 and 2017, they spent Rs.10.28 Cr, Rs.12.10 Cr and Rs.13.19 Cr respectively, on R&D activities.

For instance, one of their key innovations was the development of a patented commercial manufacturing process for mild surfactants, being acyl-amino acid based surfactants that include acyl glycinates, sarcosinates, taurates and glutamates. This process satisfies all twelve principles of ‘green chemistry’. It utilizes a ‘green catalyst’ and is in the nature ‘closed loop’ chemistry, where by-products of one process are used to manufacture another class of surfactants. As a result of the foregoing, the company is able to achieve 100% ‘atom economy’, which translates into energy-efficiency and the elimination of effluents and waste. As a result of the aforesaid process, the company is uniquely positioned to address the growing need for mild surfactants in a sustainable manner.

Global Footprint Supporting Local Reach
Over the years, Galaxy Surfactants has successfully diversified both their product profile and geographical footprint by way of organic growth and inorganic expansions.

The acquisition of Tri-K Industries Inc. in USA in Fiscal 2010, significantly enhanced their product portfolio of Specialty Care Products and their technological capabilities whilst also extending their reach in the developed markets of USA. In Fiscal 2012, they completed the development of their strategically-located manufacturing facility in Jhagadia, Gujarat. An EOU with an installed capacity of 79,500 MTPA as of September 30, 2017, this facility has significantly bolstered their manufacturing capabilities and ability to meet export demands. Further, their manufacturing facility in Suez, Egypt, with an aggregate installed capacity of 82,600 MTPA as of September 30, 2017 has enabled them to service the demands of a number of their existing multinational FMCG customers in the emerging AMET region.

Currently, Galaxy Surfactants market their products to more than 1,700 customers in over 70 countries. They have set-up sales offices in India, Egypt and USA, and representative offices in Netherlands and Turkey. Their diversified footprint, in both mature and emerging geographies, enables them to observe, analyse and adapt to evolving consumer preferences.

Their global network of manufacturing, sales and representative facilities helps in reducing their dependence on any single product or geography and helps in mitigating the effect of economic and industry-specific cycles

Strong Presence in High Growth Markets of India and AMET Region
The market for personal care products in India was USD 11.36 Billion in Fiscal 2015, and is expected to grow at a CAGR of 7.9%, to touch USD 22.52 Billion by 2024. Further, the market for home care products in India was USD 2.31 Billion in Fiscal 2015, and is expected to grow at a CAGR of 7.2%, to touch USD 4.32 Billion by 2024. (Source: “Global Surfactant Market – Custom Research for Galaxy Surfactants Limited” by Acmite Market Intelligence). The company is well positioned to capitalize on the opportunity offered by the expected growth in the Indian market on account of their strong manufacturing capabilities, long-standing customer relationships, ability to monitor and anticipate changes in end user preferences and their continued focus on R&D.

The aggregate market for personal care and home care products in Africa and the Middle East was USD 22.04 Billion in Fiscal 2015, and is expected to grow at a CAGR of 4.43%, to touch USD 31.19 Billion by 2024. (Source: “Global Surfactant Market – Custom Research for Galaxy Surfactants Limited” by Acmite Market Intelligence).

The manufacturing facility in Suez, Egypt, which is owned and operated by Galaxy Chemicals (Egypt) S.A.E., had an installed capacity of 82,600 MTPA as of September 30, 2016. It produces both Performance Surfactants and Speciality Care Products and service the demands of a number of their existing multinational FMCG customers such as L’ORÉAL, Procter & Gamble Home Products and Unilever in the emerging AMET region. Between Fiscals 2014 and 2017, the total revenues of Galaxy Chemicals (Egypt) S.A.E. have grown at a CAGR of 22.31%, which reflects the growth in their market presence in the AMET region. Further, as the facility is located in the Attaqa Public Free Zone, it benefits from a concessional tax regime, and is exempt from all direct and indirect taxes.

Professional and Experienced Management Team
Company’s management culture is collaborative and function-oriented, and this to be critical to their competitive advantage. Their Promoters, namely Unnathan Shekhar, Gopalkrishnan Ramakrishnan, Shashikant Shanbhag and Sudhir Dattaram Patil, have been associated with the Company since its incorporation in 1986, and have played a significant role in the development of their business. The Promoters have an average experience of over 35 years, out of which an average of over 30 years have been with the company. Moreover, their senior management consists of experienced and qualified professionals with experience across various sectors. Their management team’s collective experience and capabilities enable the company to understand and anticipate market trends, manage their business operations and growth, leverage customer relationships and respond to changes in customer preferences.