IFC may invest up to $30 mn in Camlin Fine Sciences facility in Dahej SEZ

International Finance Corporation (IFC) has proposed an investment of around $30 million in Camlin Fine Sciences Limited (Camlin). The speciality chemical company would use the money to fund its proposed investment in Gujarat.

IFC seeks to partly finance the company's capital expenditure plan through a mix of long-term foreign currency senior debt and a quasi-equity instrument. This kind of structure is not easily available from local banks at reasonable terms, especially without adequate fixed asset security cover, said the World Bank's investment arm. 

IFC's global agribusiness clients are potential clients of Camlin.

The project is proposed to be located in the Dahej SEZ in Gujarat, where it would enhance the availability of diphenols and a range of derivatives, such as antioxidants, performance chemicals and aroma chemicals used in food products, supplements, animal feed, pharmaceuticals and agrochemicals. 

The demand for antioxidants is growing due to the centralised mass production of food, change in lifestyles and increasing consciousness regarding health among consumers. 

The project would also help address the shortage of diphenols for sectors that heavily rely on its derivatives. 

The cost of production of diphenols at the Dahej facility is expected to be lower than that in the company's Italy plant, from where technology would be transferred. IFC expects some of the cost savings to translate into lower prices for customers. 

The project would help Camlin innovate new product formulations that improve the quality of speciality chemicals and make the manufacturing process more cost-effective and more customised to local needs.

Camlin is inter alia engaged in research, development, manufacturing, and marketing of speciality chemicals and blends used in a wide array of food, animal and pet nutrition, fragrance, pharmaceutical and industrial products.

The sponsor, Ashish Dandekar, along with his family and related entities, owns 22.34 per cent equity shares in the company. Ashish Dandekar has over 30 years of experience in the fine chemicals and pharmaceuticals industry and has been instrumental in the growth of the company since setting up the anti-oxidant plant in Tarapur in 1984 (prior to its de-merger from the erstwhile Camlin Limited).

The company is listed on Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). While institutional investors own 21.82 per cent, directors and Dandekar's relatives (other than sponsors) own 7.84 per cent. The remaining 48 per cent is held by other public shareholders as of 31 March 2018.