### **Overview** JG Chemicals Limited (JGCL), established in 1975 and headquartered in Kolkata, West Bengal, is India’s largest manufacturer of zinc oxide and ranks among the **top five globally** and the **largest in Asia**. The company operates under the BDJ Group, led by MD & CEO Anirudh Jhunjhunwala and WTD & CFO Anuj Jhunjhunwala. With a strong legacy of over 50 years, JGCL has grown from a modest 600 MTPA facility in Kolkata to a leading global player with a total zinc chemicals capacity of **nearly 70,000 MTPA** across three key manufacturing facilities. JGCL is also India’s **largest zinc recycler**, utilizing proprietary in-house recycling technology to process zinc scrap, ash, and dross into high-purity zinc-based products. --- ### **Market Position & Customer Base** - **Global Reach**: Serves **over 200 domestic** and **more than 50 international clients** across **10+ countries**. - **Tyre Industry Leadership**: - Supplies **9 out of 10 global top tyre manufacturers**. - Supplies **all 11 leading tyre companies in India**. - **High Retention**: Boasts a **repeat order rate exceeding 95%**, underscoring strong customer loyalty and satisfaction. - **End-Customer Focus**: Over **95% of sales are made directly to end users**, enabling deep technical engagement and long-term partnerships. --- ### **Production & Manufacturing Capabilities** - **Current Facilities**: - Two plants in **West Bengal** (Kolkata) - One flagship plant in **Naidupeta, Andhra Pradesh** - **Naidupeta Plant – Global Benchmark**: - The **only IATF 16949-certified zinc oxide facility in the world**, a critical advantage for supplying OEMs in the automotive and tyre sectors. - Holds **WHO GMP certification** and is compliant with **IP, BP, USP, and European Pharmacopoeia (Ph.Eu)** standards—making it one of the few facilities globally able to serve **regulated sectors** such as pharmaceuticals, cosmetics, and nutraceuticals. - **Capacity**: Combined production capacity of **77,040 MTPA**, including: - ~70,000 MTPA zinc oxide - 10,080 MTPA zinc sulphate - 7,056 MTPA zinc ingots - **Customization**: Offers **over 80 specialized grades** of zinc oxide, tailored to unique customer requirements across diverse industries. --- ### **Strategic Expansion – Dahej Greenfield Project** - **Location**: Dahej, Gujarat – strategically positioned to serve Western India. - **Capacity**: **40,000 MTPA** of zinc chemicals, including zinc oxide and zinc sulphate. - **Investment**: **INR 100 crores**, fully funded through **internal accruals** (zero debt). - **Technology**: Utilizes **advanced in-house recycling processes**, allowing high scrap utilization and improved cost efficiency. - **Commissioning**: Scheduled for **H1 of FY27**. - **Strategic Objectives**: - Expand into **ceramics** (including the Morbi cluster), **pharmaceuticals**, **specialty chemicals**, **agriculture**, and **battery** markets. - Increase **non-rubber revenue** from **15% to 30%** by targeting high-margin, value-added segments. - Unlock incremental revenue potential of **over ₹900 crores** upon stabilization. --- ### **Technological & Sustainable Advantages** - **French Process with Proprietary Recycling**: - Uses **100% recycled zinc scrap** for most grades—giving a **significant cost advantage** over competitors reliant on virgin zinc. - Virgin zinc reserved only for high-end applications (e.g., pharma), optimizing raw material costs. - **Sustainability**: - Recycling reduces **CO₂ emissions by 80%**, **water pollution by 76%**, and **water consumption by 40%** compared to primary zinc production. - Aligns with global ESG trends and green manufacturing standards. - **R&D Investment**: - Committed ₹60.58 million (as of Jul 2025) to establish a **dedicated R&D unit** at Naidupeta to: - Develop new product variants - Enhance formulation capabilities - Innovate in areas like **waste-tire recycling**, **battery-grade ZnO**, and **zinc-based micronutrients** --- ### **Key Growth Drivers** 1. **Diversification Beyond Rubber**: - Rubber/tyre currently accounts for ~80% of sales. - Strategic focus on **non-rubber applications** to de-risk and capture higher margins. - Target markets: - **Pharmaceuticals & Cosmetics**: Substituting imports with domestic, certified output. - **Ceramics**: Tapping into the large Morbi cluster. - **Agriculture**: Expanding zinc sulphate for **zinc-deficient soils**—especially in South India. - **Batteries**: Developing **zinc oxide for alkaline & EV batteries**, aligned with government clean energy initiatives. 2. **Zinc Sulphate Expansion**: - 10,080 MTPA plant is the **largest in Southern India**, serving a regional market with 60,000–70,000 MTPA demand. - Raw material (zinc ash) is sourced in-house and through long-term galvanizer partnerships. 3. **Content-Per-Tyre Increase**: Collaborating with tyre OEMs to **increase zinc oxide usage per tyre** through advanced formulations. --- ### **Raw Material & Supply Chain Strength** - **Global Sourcing Network**: - Procures zinc scrap from **over 100 suppliers across 50+ countries**. - Access to diverse impurity profiles enables **flexible formulation** and process optimization. - **Barriers to Entry**: - Long approval cycles (5–7 years) in pharma, tyre, and ceramics sectors. - High working capital needs, complex customization, and global supply chain complexity deter new entrants. - Fragmented Indian market (~50 players), with most below 5,000 MTPA; **JGCL dominates at ~30% market share**. - **“China Immunity”**: - Production costs are comparable to Chinese peers due to **LME-linked pricing** and efficient recycling. - India imports only **4–6% of its ZnO**, mostly high-end grades now being replaced by JGCL’s domestic output. --- ### **Pricing & Financial Model** - **Pass-Through Pricing**: Revenue and margins are **linked to LME zinc prices**, minimizing exposure to commodity volatility. - **Margins**: - Pressured during sharp price corrections (e.g., H1 FY24) due to inventory valuation. - Recovered in H2 FY24 and improving with higher sales of **specialty and premium-grade products**. - **Zero-Debt Status**: All capacity expansions and projects (including Dahej) are **self-funded through internal accruals**—demonstrating strong cash flow generation.