Laxmi Organic Industries - Chartering Journey Into Fluorine Space: HDFC Securities

HDFC Securities Institutional Equities

Absorbing the processes and technologies and scaling them up is the identity of Laxmi Organic Industries Ltd. It has acquired assets from Clariant, Miteni and Yellowstone Chemicals in the last 15 years and scaled up these processes to become one of the top players globally.

We recently visited Laxmi Organic’s site at Lote Parshuram, Maharashtra, spanning ~30 acres (~1,22,000 square meters). The company has relocated Miteni’s fluorochemical assets from Italy and built an impressive facility on 50% (66,500 square meters) of this site.

It has invested Rs 5.5 billion to rebuild this plant. The company is entering the $25 billion fluorine chemistry global market with electrochemical fluorination and other technologies. It has a balanced business model with the essentials vertical as a cash cow business while the specialties vertical is a growing business.

The commodity business is feeding capital for the specialty business. The company is planning to invest Rs 7.1 billion at Dahej to augment the Essentials, Ketene, Diketene, and derivatives capacities.

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