Entering a billion-club & growing faster
After some years of trading in chemicals, Rakesh Shah entered into the manufacturing of speciality chemicals. In 1996, in a major break-through, he bought a small chemical unit, to which incidentally he was doing jobworks then. Rakesh Shah was only 25 year then. Today the company’s annual turnover is around ₹100 crore. With the ensuing expansion and diversification plans, the size will move up manifold.
It is through the company’s expertise in waterborne emulsions, it makes eco-friendly products in areas where solvent-borne emulsions have a big demand. Water-based latexes can be designed to perform a similar task to solventbased systems, without the environment ramification. The efforts of R&D enable the company to consistently improve the quality of
products in the competitive market.
Rakesh was in the fourth standard when his father retired from service. Father’s retirement meant a decline in family income if another one in the service-class family hadn’t yet started earning to compensate for the post-retirement salary loss of the bread-earner. That brought a compulsion on Rakesh Shah to find whatever job available at an early
age, first as an office boy. In 1988, he became a trader of pigment emulsions on a very small scale. In 1991, he started manufacturing textile design screens. In 1996, a breakthrough happened in his business. He took over the small company, Ambani Organics, to which he was doing job works then. Rakesh Shah was only 25 year then. The manufacturing unit is located at Boisar, Palgar district in Maharashtra. At the time of the takeover, he paid ₹ 20 lakh that had a manufacturing capacity of 20 tonnes a month. That was the first major turning point in his entrepreneurial career.
After his takeover of the company, its production capacity has gone up manifold to reach 1700 tonnes a month. In February 2015, a major fire gutted the unit following a shortcircuit. On the fatal day, he felt having lost all fortunes with his net worth tumbling to a negative zone. The company at that time had a turnover of ₹20 crores. Its revival from that zero levels remained a herculean task requiring huge financial resources, much above the sanctioned level of working capital to the company. However, within seven days, Union Bank of India rendered its support with an immediate release of ₹ 2.7 crores. “That decision gave me a fresh line of hope,” he recalls. That enabled the company to rebuild its asset and restart the production in four months. “That made me retrieve my hope from the crisis,” he remembers. In five years after the revival, the company’s turnover grew five times to reach near ₹100 crores. “I assign larger credit of this achievement to Union Bank of India for its timely support and most prudent approach,” he says admiring the service of Union Bank. Now everything is going on well, he tells. The public sector bank continues to support the growth of the company. Currently, the company has 120 employees, 90 people in the office and 30 workers in the factory.
Ambani Organics believes in sustainable development and thus, manufactures cost-effective, efficient, eco-friendly and high performance speciality chemicals. The company’s water-based emulsions serve diversified markets of textiles, paints, paper, adhesives, construction and chemical industries. Two-thirds of the products are sold in the domestic market, where still there is a huge demand potential. In July 2018, the company approached the capital market for listing on the SME Platform of the National Stock Exchange (NSE) through an initial public offer (IPO) of 13.68 lakh equity shares of ₹10 at a premium of ₹56 to collect an aggregate ₹9.03 crore. After the public offer, the promoters hold 73 per cent.
“Now we are planning a major capacity-expansion to reach 5000 tonnes a month in a three-to-five year period,” he says. The expansion plan is afoot, beginning with land acquiring. The process is going on, says Rakesh Shah. The new capacity addition plan will have the flexibility to make the overall capacity double with diversified products like salicylic acid and its derivatives other than acrylic emulsions. Many new developments are happening
nowadays. One of the major strengths is its in-house Research and Development (R&D). “We are focusing on developing import substitute super speciality products, mainly peroxide derivatives. Right now we are manufacturing
acrylic emulsions, which are used in textile, paper, paint, packaging, constructions, etc,” he says.
