Unilex Colours and Chemicals Limited
Company
| Website 🔗 |  |
| Business Activity | Manufacture/Trade |
| Division | Chemicals |
| Sub-class | Pigments, and trading of chemicals and food colours |
| Location | Palghar, Maharashtra |
| Establishment Year | 2001 |
Management
| Managing Director | Aditya Sharma |
| Educational Qualifications | Master of Science in Organic Chemistry from University of Mumbai |
| Experience | 32 years of experience in the chemical industry |
| Annual Salary | ₹ 60 Lakhs |
| Total Number of Employees | 54 |
About
Unilex Colours and Chemicals Limited is an ISO-certified company engaged in manufacturing pigments and trading chemicals and food colours.
Products and Services:
Unilex Colours and Chemicals Limited boasts a diverse product range, catering to a wide array of industrial needs:
- Pigment Blue 15:3
- Pigment Blue 15:4
- Pigment Green 7
- Pigment Blue 15:0
- Pigment Blue 15:1
- Pigment Violet 27
Other Products:
- The company also manufactures a variety of other pigments, including Middle Chrome, Lemon Chrome, Pigment Violet 3 and 23, Ultramarine Blue, and other Azo pigments like Red 57:1, 53:1, Orange 5, 13, and Yellow 12, 13, 14.
- In addition to pigments, the company also trades in food colours, such as Tartrazine, Sunset Yellow, Allura Red, Ponceau 4R, Carmoisine, and Brilliant Blue.
Clients:
Unilex’s clientele spans various industries, including paints & coatings, plastics, printing inks, and textiles. The company also exports its products to multiple countries, including Vietnam, Brazil, Mexico, Nigeria, Russia, Turkey, Netherlands, Poland, China, Spain, Malaysia, Thailand, the United Arab Emirates, and Uzbekistan.
Manufacturing Process:
Procurement of Raw Material:
The company maintains sufficient inventory to meet customer demands and requirements.
Material Inspection:
All materials procured or manufactured at the site are properly tested for purity.
Ball Mill:
The raw CPC (Copper Phthalocyanine Crude) material is ground for 24 hours in a cylindrical mill.
Pigmentation Vessel Reflux:
The milled CPC is mixed with other raw materials and refluxed for 24 hours.
Filter Press:
The pigmented mass is filtered and washed to remove impurities.
Spin Flash Dryer:
The press cake is dried into a fine, dry pigment powder.
Final Inspection:
The inspection team collects samples from all manufactured items by lot to compare with standard samples.
Packaging:
The product is packaged into bags, jumbo bags, boxes, drums, etc., based on customer specifications.
Storage & Delivery:
The finished products are either directly loaded into trucks for shipment or stored in the warehouse.
Raw Materials:
The company’s raw materials include:
- BM CPC
- Caustic Soda Flakes
- Gum Rosin
- Hydrochloric Acid
- Mix Xylene
- Additive Monosulphonaled CPC Blue
- Unisol SI-20
Other Key Aspects:
Certifications:
- The company’s manufacturing facility holds ISO 9001:2015 certification for quality management in the manufacturing of pigments, food dyes, and drug intermediates.
- The company has been recognized as a Three Star Export House by the Ministry of Commerce, Government of India.
- The company has received a Certificate of REACH Registration issued under the REACH Regulation (Registration, Evaluation, Authorisation, and Restriction of Chemicals), a regulation of the European Union (EU)from Global Product Compliance AB Sweden.
Awards and Recognitions:
- The company received a Certificate of Merit from Basic Chemicals, Cosmetics & Dyes Export Promotion Council (CHEMEXCIL) on April 15, 2023, for its outstanding performance in the Basic Chemical, Organic & Inorganic Chemical, including Agro Chemicals panel.
Manufacturing Process Flowchart
Revenue – Category
Revenue – Region
Audit and Legal
Auditor’s Remarks:
There were no material issues or concerns raised by the auditors that would necessitate any adjustments or modifications to Unilex Colours and Chemicals Limited’s financial statements.
Non-Compliances and Other Issues:
Delayed Statutory Filings:
The company has experienced certain discrepancies/errors in some of its corporate records relating to forms filed with the Registrar of Companies and other provisions of the Companies Act, 1956/2013.
Delayed Tax Returns:
The company has experienced delays in the filing of GST returns and EPF returns due to operational reasons and technical issues with the EPF portal.
Contingent Liabilities:
As of March 31, 2024, Unilex Colours and Chemicals Limited has contingent liabilities amounting to ₹53.91 Lakhs mostly made up of GST-related payments (₹51.97 Lakhs).
Legal Cases:
Cases Filed Against the Company
Cases Filed by the Company
Tax Proceedings against the Company:
- Tax Proceedings: The company has one outstanding tax proceeding related to a demand raised under section 143 (3) of ₹ 1.88 Lakh for A.Y. 2018-19.
SWOT Analysis
Strengths
| Long-standing relationships with diversified customers across geographies: The company has a strong track record of building and maintaining long-term relationships with customers across various industries and geographies. |
| Diverse product range: The company offers a wide range of pigments and food colours, catering to the diverse needs of various industries. |
| Experienced management team: The company’s management team has a wealth of experience in the pigments and dyes industry. |
| Focus on R&D: The company has a strong focus on research and development, which has enabled it to develop innovative and customized products. |
Weaknesses
| Dependence on third-party suppliers: The company is dependent on third-party suppliers for some of its products and raw materials. |
| Significant working capital requirements: The company’s business is working capital intensive, which can put pressure on its cash flow. |
| Lack of long-term contracts: The company does not have long-term contracts with its customers or suppliers. |
Opportunities
| Growing demand for pigments and dyes: The global pigments and dyes market is expected to grow significantly in the coming years. |
| Expansion into new geographies: The company can expand its sales into new geographies, particularly in untapped markets with high demand potential. |
| Further development of its product portfolio: The company can further expand its product portfolio by developing new formulations and variants of its products. |
Threats
| Intense competition: The pigments and dyes industry is highly competitive, with the presence of both domestic and international players. |
| Fluctuations in raw material prices: The prices of raw materials, particularly crude oil, can be volatile, which can impact the company’s profitability. |
| Changes in government regulations: Changes in government regulations, particularly environmental regulations, can impact the company’s operations. |
Porter’s Five Forces1
| Threat of New Entrants | MODERATE |
| The pigment and dyes industry requires significant capital investment and technical expertise, which can act as barriers to entry. However, the presence of established players and the need to comply with regulations can also pose challenges for new entrants. |
| Bargaining Power of Suppliers | MODERATE |
| The company’s reliance on a limited number of suppliers can give suppliers some bargaining power. However, the company has a diverse supplier base, which can reduce their bargaining power. |
| Bargaining Power of Buyers | MODERATE |
| The company’s customers have a moderate level of bargaining power due to the presence of other players in the market. However, the company’s ability to offer customized products and services can help mitigate this bargaining power. |
| Threat of Substitute Products or Services | LOW |
| The threat of substitute products is relatively low in the pigments and dyes industry due to the specialized nature of the products and the need for compliance with regulations. |
| Rivalry Among Existing Competitors | HIGH |
| The pigments and dyes industry is highly competitive, with the presence of both domestic and international players. The competition is based on factors such as price, quality, product innovation, and customer service. |
Peer Comparison
The company’s performance on various financial and operational metrics compared to its peers for FY 2024 is as follows:
| Metric | Unilex Colours and Chemicals Limited | Kesar Petroproducts Limited | Sudarshan Chemical Industries Limited |
| Revenue from Operations (₹ in Crores) | 144 | 149 | 2,539 |
| Operating Profit Margin (%) | 3.07 | 2 | 13 |
| ROCE (%) | 18.2 | 3.14 | 11.4 |
| ROE (%) | 17.93 | 3.48 | 11.3 |
| Debt to Equity Ratio | 0.59 | 0.50 | 0.41 |
Green Box
Strong Financial Performance:
The company has a track record of strong financial performance, with consistent revenue growth and profitability.
Focus on R&D and innovation:
Unilex emphasizes research and development, enabling it to develop innovative and customized products tailored to specific customer needs and preferences. This focus on innovation is crucial for staying competitive in a dynamic market.
IPO Funds:
To Meet Working Capital Requirements:
The company plans to utilize ₹1,500 lakhs from the net proceeds of the IPO to meet its working capital requirements. This will be used to fund the purchase of raw materials, packing materials, and other operational expenses.
Repayment of a Portion of Certain Borrowings Availed by the Company:
The company plans to utilize ₹1,000 lakhs from the net proceeds of the IPO to repay a portion of its outstanding borrowings. This will help the company to reduce its debt servicing costs and improve its financial position.
Industry Outlook:
India’s chemical industry is expected to grow significantly in the coming years, driven by rising demand from various industries. The sector is anticipated to reach a value of US$300 billion by 2025 and US$1 trillion by 2040. Sources and related content
Amber Box
Capacity Utilization:
As of March 31, 2024, the company’s manufacturing unit achieved a 95% capacity utilization rate.
Negative Operating Cash Flow:
The company has reported negative operating cash flow for FY 2024 and 2022.
Product Concentration:
A significant portion of the company’s revenue (65.15%) is generated from sales of its top five products, making it vulnerable to changes in demand or competition for these products.
Export Dependence:
The company derives a majority of its revenue from exports, exposing it to international trade risks, geopolitical uncertainties, and currency exchange rate fluctuations.
Red Box
Related Party Transactions:
The company has engaged in related party transactions, mainly with Unisynth Chemicals and Vardhaman Dye-Stuff Industries Private Limited which represent more than 30% of its total revenue from operations which could potentially lead to conflicts of interest and adversely affect its financial condition.
Images
- The force value of “LOW” is considered good Click Porter’s Five Forces article for more information. ↩︎
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