Paushak -Moats
1…Backward integration
=Paushak’s strong operating efficiency is aided by its backward integrated operations, which have led to strong operating margins (37.1% in fiscal 2021 and 31.2% in fiscal 2020). Return on capital employed (RoCE) was healthy at 18.7% in fiscal 2021.
=While most of the specialty chemicals industry depends heavily on import for their raw material supplies, the company has a low import bill
2…Strong .Barriers to Entry
=Highly explosive
= further heightened due to stringent government regulation and arduous process in getting licenses (for new entrants and for existing capacity expansions). On an average, any approval takes between 4-5 years.
3…Low-Cost Producer
(however, it is yet to establish itself as ‘the’ Lowest Cost Producer)
Due to .Economies of Scale
4…Large fish in small pond
=The key market of Paushak is the phosgene-based specialty derivatives catering to the Pharmaceutical and Agrochemical industries. These markets contribute to roughly 10% of the entire Phosgene market. Hence, the market may be too small and too specialized (due to high quality requirements) for the larger players to enter. This could be one of the reasons why Paushak has been facing competition from limited players (primarily from China).
5…Technology
=Paushak has also accelerated its efforts to improve the technology while enhancing capabilities and capacities to emerge
as “Technology driven global Specialty Chemical Company”.
=Paushak has been able to develop indigenous technology
for its one of the key product portfolio and would be expanding the capacity to a much larger size with “Make in India”
approach. It will not only result in import substitution in India but will also help Paushak to become a global supplier
while ensuring cost competitiveness
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