Balaji Amines and Alkyl Amines

Indian Amine Industry: Balaji Amines and Alkyl Amines

December 1, 20185:47 pm

The Chinese clampdown on polluting industries and shutting down of many smaller units have created demand supply mismatch. One such industry that I will be talking about is the Indian Amine Industry and there are two key players benefiting the change in fortunes are Balaji amines and Alkyl Amines.

What are Amines?

Amines are organic compounds derived from inorganic compound Ammonia(NH3). {Organic compounds are those having carbon atoms}. When the Hydrogen in Ammonia is replaced by Alkyl group i.e. molecule containing Carbon & Hydrogen, we get amines. There are 3 key players in Indian Amine industry which are RCF, Balaji Amines & Alkyl Amines.  I will be covering only the later two.

Aliphatic amines which are the core products of these companies, Balaji Amines and Alkyl amines find usage mainly in Pharmaceuticals & APIs(60% of revenue) followed by Agro chemicals.

Acetonitrile which is manufactured by Alkyl Amines and capacity for which is also setup by Balaji Amines is used as a solvent. Solvents are considered more or less as commodity chemicals, thus not having the pricing power. 

Both these companies export about 20% of their sales.

Indian Amine Industry: Key Attributes
Balaji Amines Alkyl Amines
Alkyl Amines Chemicals Ltd
  1. Alkyl Amines Chemicals limited is one the largest manufacturer of amines & derivative products of amines. The company has 12 plants, 2 at Patalganga (Maharashtra), 9 at Kurkumbh(Maharashtra) & 1 at Dahej(Gujarat).
  2. The Dahej based facility is the latest addition with a capacity of 30,000 TPA(Tonnes per annum) of methyl amine with a capacity utilization of 70%. It started operation from end March’2018. Of the 30,000T , 50% of production is consumed captively to produce derivative products. 
  3. Target capacity of Dahej plant is 120,000 TPA which will be gradually expanded over 5 years from the current capacity of 30,000T.
  4. Alkyl amine also has a capacity of 10,000 TPA of Isopropyl amine at patalganga which is used in agro-chemicals. 
  5. The company was earlier manufacturing methyl amines at Patalganga having a capacity of 15,000TPA. The facility has been converted to manufacture multi amines. (Ethylamine as of now)
  6. Alkyl Amines’ management is working hard on bringing down the efficiencies in the operations of the company. One visible aspect is the power as a percentage of sales have been brought down from 15% to 10% in last 5 years.
Balaji Amines Ltd
  1. Larger of the two main amine companies in India. 
  2. Balaji Amines as 3 plants, 2 in Maharashtra & 1 in Hyderabad.
  3. Balaji Amine is setting up a mega project in solapur (90 acres of land) which is expected to start production from FY20-21.
  4. Most of the products of Balaji Amines are derived products implying better margins.
  5. Performance was subdued in Q2 FY19 mainly due to the Maratha andolan in Maharashtra. Given the plant is at Solapur, Maharashtra which was one of the epicenter of the strike, it was obvious it would have impacted the company by way of continuous disturbances/bandhs.
  6. Balaji Amines also owns a 5 star hotel called as “Balaji Sarovar” in Solapur. Given that the hotel is run by Sarovar group & is not managed by Balaji Amines, is not negative for the company in terms of bandwidth allocation.
  7. The most alluring aspect about Balaji Amines is they have lot of additional capacity ready to start production as soon as they get the NOC. Given the positive amines & amine derivative market, they would be best positioned to take advantage of it.
  8. Balaji Amines also acquired one company from the promoter group called as ” Balaji Speciality Chemicals” for₹66cr. This company is expected to generate sales of ₹100 cr for FY19 and about ₹400cr for FY20.
Indian Amine Industry: Balaji Amines and Alkyl Amines :-- Product Profile
Balaji Amines and Alkyl Amines
Indian Amine Industry: Balaji Amines and Alkyl Amines :-- Financial Performance
Balaji Amines and Alkyl Amines
Balaji Amines Vs Alkyl Amines(Green cells impliesone co. having edge over the other)
Balaji Amines and Alkyl Amines: The better bet?

Since these companies have so many products with each product having their own supply demand dynamics, it is very difficult to predict future growth prospects. As of now, things look rosy and of the two, Balaji Amines with large unused capacity and larger percentage of sales coming from derivative product will be a better bet.

Alkyl amine just have one additional capacity of Dahej which is already operational.

The only problem with the unused capacity of Balaji Amines is that they have been waiting for NOC to start production for quite sometime now. This needs to be looked into closely.


Shekhar Yadav

I am a full time stock market investor. The blog is an extension of my research, thoughts & opinion. Please don't consider anything on this website to be an investment advise.


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