Sustainability

Raw Material And Procurement

We source most of our raw materials sourced domestically and have less dependency on imports. We rely on multiple raw material sources available in India and hence risks of shortages are minimised. Our raw materials include basic chemicals like sulfuric acid, nitric acid, hydrochloric acid, benzene derivatives, phenol derivatives etc.
 

We usually do not enter into long-term supply contracts with any of our raw material suppliers and typically source raw materials from third-party suppliers under contracts of shorter period or the open market. We also enter into purchase orders for supply of our raw materials. The terms and conditions on warranties for product quality and return policy are specified in the purchase orders. The purchase price of our raw materials generally is in line with the market prices, they are based on, or linked to, the international prices of such raw material and the variations are typically passed on to the customer. We usually purchase raw materials based on historical levels of sales, actual sales orders on hand and the anticipated production requirements taking into consideration any expected fluctuation in raw material prices and delivery delay. The prices of our key raw materials globally have been volatile and increases in the prices of these materials have an impact on our cost of production.

Our Manufacturing Facilities and warehouses are strategically located with road, rail and port connectivity to our customers. The ability to store raw materials at our facilities enables us to withstand disruptions in supply as well as volatility in the price of raw material for a short duration. These inventory levels are planned based on contractual quantities and expected orders, which are confirmed due to our long-standing relationship with customers. We maintain a lead time material requirement planning system and utilize a financial accounting and controlling system to manage our levels of inventory. Our storage facilities allow us to avoid suspending our production processes, which are costly and time consuming to restart, and also enable us to accumulate products to satisfy market demand effectively during peak times by being able to meet customers’ demands in full and on time.