Many essential sectors like pharmaceuticals, FMCG and agriculture are heavily dependent on the chemical industry. Therefore, most plants catering to these sectors opened for work during the lockdown period itself. Analysts too opine that there will only be a moderate impact of COVID-19 on the listed space as demand challenges will be lesser than that faced by sectors like auto, consumer durables, energy, electronics, etc.

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Research firm Ambit says that another tailwind is that European innovator plants catering to pharma and agrochemicals continue to operate. One MNC player, on condition of anonymity and having a manufacturing facility in India, noted it has faced significant demand from countries like Japan and South Korea due to shifting in preference towards Indian suppliers.

The government has also reopened customs and eased port restrictions for essential services categories and this should help the chemical industry further.

Here is how some of the chemical companies are faring:

Vinati Organics: The company has two facilities that cater to pharmaceuticals, water treatment and personal care sectors. The Isobutyl Benzene (IBB) producing plant is running at maximum capacity as it is the primary raw material for manufacturing Ibuprofen, an anti-inflammatory drug. The ATBS (2-Acrylamido 2 Methylpropane Sulfonic Acid) producing facility has permission for only 10 percent manpower but the company expects relaxation of up to 50 percent from Aril 20.

UPL: In a filing to the stock exchanges, the company has informed stakeholders that they are already operating all the facilities globally as they cater to the agriculture sector. The company also says that they enough stock till April 30.

SRF: The company forays into multiple segments like agrochemicals, specialty chemicals, packaging, and technical textiles. Few plants belonging to the essential goods value chain in the Dahej Chemicals Complex, Gujarat have resumed operations. Other plants will restart as and when approvals are granted by local authorities.

Tata Chemicals: The Indian plants are working at a lower capacity but global ones are up and running. The company is a major producer of soda ash which is used in the dye industry and synthetic detergents and fertilizers.

First Published:Apr 19, 2020 8:02 PM IST