(BLACK ROSE

March 3, 2020

Corporate Relationship Department

BSE Limited
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai — 400001.

Scrip Code: 514183

Dear Sir,

Sub: Investor Presentation

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, please find enclosed herewith the Investor Presentation for the information of all the stakeholders
the Company.

Further, pursuant to Regulation 46(2) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a copy of the Investor Presentation will be uploaded on the Company’s website at
www.blackrosechemicals.com.

Thanking you,
For Black Rose Industries Limited

Mawd flaw
Nevil Aviani
Company Secretary and Compliance Officer

Black Rose Industries Ltd.

145/A, Mittal Towers, Nariman Point, Mumbai - 400 021, INDIA
Tel.: +91 22 4333 7200 / 2282 4075 « Fax : +91 22 2287 3022
E-mail: [email protected] * www.blackrosechemicals.com
Factory : Shree Laxmi Co-op. Industrial Estate Ltd., Hatkanangale, Dist. Kolhapur, Maharashtra, INDIA
CIN: L17120MH1990PLC054828
INVESTOR PRESENTATION 2020

The rising sun

How Black Rose – from distribution to manufacturing - has created a
foundation that prepares it for sustainable growth in revenues, profits
and shareholder value

March 3, 2020
INVESTOR PRESENTATION 2020

Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by BLACK ROSE INDUSTRIES LTD. (the
“Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to
purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding
commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document
containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the
Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy,
completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not
contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this
Presentation is expressly excluded.
This presentation contains certain forward looking statements concerning the Company’s future business prospects and business
profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such
forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and
uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international),
economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost overruns on contracts, our
ability to manage our international operations, government policies and actions regulations, interest and other fiscal costs generally
prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward looking
statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of
the Company.

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INVESTOR PRESENTATION 2020

Strong roots in Japan:

A significant strength
• Established as Asia Fab Ltd. in 1990; headquartered in • Anup Jatia, Executive
Mumbai, India; listed on the BSE from October 1, 1992 Director
• Name changed to Black Rose Industries Ltd. in 2006 when
 Raised in and completed
the promoters transferred their chemical business to the schooling in Japan; graduated
company in E&AS (Chemical
Engineering) & Economics
• Promoter family enjoys a strong business association with from California Institute of
Japan for over six decades Technology, USA
• Contrary to the conventional practice of Japanese  25 years of Japan-centric
experience in global
manufacturers to distribute their products through Japanese chemicals distribution and
intermediary companies, Black Rose enjoys direct various manufacturing
relationships with Japanese chemical manufacturers, activities
establishing strong and transparent relationships with the  Deep understanding of and
managements of the companies exposure to the Japanese
language, business culture
and practices
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INVESTOR PRESENTATION 2020

Business presence Chemical

of Black Rose Acrylamide – manufacturing
India’s first plant started in Jhagadia,
FY14; Current capacity of Gujarat
20,000 MTPA for merchant
sales and additional capacity
Chemical for captive intermediate
distribution monomer requirement

Polyacrylamide
Import and distribution of a
liquid (40,000 MTPA)
wide range of specialty and
and solid
performance chemicals
(10,000 MTPA in
progress)

Legacy/other businesses: The Company is also engaged in the B.R. Chemicals Co., Ltd.: A 100%
manufacture of fabrics and made-ups for industrial applications at subsidiary in Japan engaged in local
Kolhapur (Maharashtra), and renewable energy (a windmill each in distribution and export of chemicals
Gujarat and Rajasthan). These businesses contribute less than 3% to
the company’s revenues. 4
INVESTOR PRESENTATION 2020

Chemical distribution business

The foundation of BRIL’s growth – Reliability
Relationship-
based • Deeper • Fair pricing policy • Choice to work
understanding of leading to long- with credible
distribution eco-systems of standing customer customers who
involves direct principals and relationships value
and deeper customers has led relationships and
engagement to a superior reliability
with principals need-gap
fulfilment with
and customers best solutions;
service-oriented
positioning as a
reliable partner

Relationships built
through distribution
business continue to
provide new business
opportunities
(like entry in acrylamide
and polyacrylamide
manufacturing)
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INVESTOR PRESENTATION 2020

Chemical distribution business

The foundation of BRIL’s growth – Reliability
Relationship- Agile business model, Efficient forecasting-based Better and consistent
based benefitting from stock maintenance margins
distribution opportunities but
involves direct protected from challenges
and deeper
engagement
with principals Closer access to
and customers markets provides a
deeper insight into
market dynamics,
leading to:

Relationships built Significant advantage to Expert positioning in the

through distribution principals and customers Indian market; value-add to
business continue to during periods of global principals and customers
provide new business Product specialisation with
opportunities tightness/oversupply in-depth understanding of facilitating their strategic
(like entry in acrylamide through preferential a global demand-supply decision making
and polyacrylamide allocation and pricing scenario
manufacturing)
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INVESTOR PRESENTATION 2020

Chemical distribution business:

BRIL works with brand-enhancing principals
Access to first-rate quality, strategic market support and ethical practices

Germany
European Salt Company GmbH & Co.
LANXESS
Energizing Chemistry
LANXESS Deutschland Gmbh

Japan
Koei Chemicals Co., Ltd.
Kuraray Co., Ltd.
Mitsubishi Gas Chemical Co., Ltd.
Mitsui Chemicals, Inc.
Mitsui Fine Chemicals, Inc.
MT AquaPolymer, Inc.
Nippon A & L Inc.
Okahata & Co. Ltd.

China Thailand Sumitomo Chemical Co., Ltd.

Hebei Chengxin Co., Ltd. Bara Chemical Co. Ltd. Sumitomo Seika Chemicals Co., Ltd.
Shandong Exceris Chemical Co. Ltd. GC Glycol Co., Ltd. Taoka Chemical Co., Ltd.
Toray Fine Chemicals Co., Ltd.

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INVESTOR PRESENTATION 2020

List of key distribution products

Speciality Exports
1 Bromo 3 Chloro Propane
2,4 Dinitro Chloro Benzene
Acrylonitrile
Alpha Picoline Acetophenone
Amine N1 (TEA Bottoms) Meta Amino Phenol
Benzylamine Meta Ureido Aniline
Diethanolamine
Ethyl Cyano Acetate Vinyl Sulfone
Gamma Picoline
Hydroquinone Performance
Isophthalic Acid
Cresol Formaldehyde Resins
Meta Cresol
Meta Ureido Aniline Cyanoacrylate Instant Adhesives
Meta Xylene Flocculants & Coagulants
Methacrylamide
Monoethanolamine Liquid Rubbers
Pyridine Pre-Vulcanisation Inhibitors (PVI)
Pyrrole
Tackifying Agents
Resorcinol
Triethanolamine

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INVESTOR PRESENTATION 2020

Chemical distribution business:

‘Reliability’ translating into growth
2015-16 2016-17 2017-18 2018-19 9M 2019-20
Distribution sales
(Rs. mn.)

90.82 113.52 128.98 136.58 129.03

Annualised sales
growth %

25% 14% 7% 26%

Sales growth in 2019-20 (9M) is a validation of the company’s…
• Evolving mindset of Indian end users to prefer distributors over traders due to their ability to deliver even
during global shortages (e.g. disruptions in the Chinese chemical manufacturing sector), and
• Ability of distributors to corner a larger market share due to preferential pricing during global slowdowns
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INVESTOR PRESENTATION 2020

Acrylamide manufacturing business:

The acrylamide opportunity
• Acrylamide is used industrially to manufacture • Global market size is 3 million MTPA;
polyacrylamides expected to grow at a CAGR of 4.6%
• Polyacrylamides are used in the following between 2019 and 2024
applications and sectors: • Growing investments in water
 Enhanced oil recovery treatment expected to create
 Fracking (shale oil/gas extraction) opportunities
 Water/waste water/sewage treatment • Asia-Pacific accounted for the major
 Paper market share followed by North
America and Europe
 Textiles
 Sugar • India has emerged as a manufacturing
base to feed domestic and
 Ceramic tiles international markets
 Base metals mining

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INVESTOR PRESENTATION 2020

Acrylamide manufacturing business:

The acrylamide opportunity (continued)

Domestic producers: Black Rose, SNF India

Overseas producers: Mitsui Chemicals, Mitsubishi Rayon, several Chinese companies, BASF, Kemira,
SNF Group. Most also produce polyacrylamide and captively consume a majority of their production.

Estimated demand and supply of acrylamide (50% basis)*

Estimated figures FY20 FY21 FY22

India domestic demand 26,000 MTPA 29,000 MTPA 36,000 MTPA

India actual production 26,000 MTPA 35,000 MTPA 51,000 MTPA

India exports 7,000 MTPA 10,000 MTPA 15,000 MTPA

India imports 7,000 MTPA 4,000 MTPA 500 MTPA

Global demand 3,000,000 MTPA 3,135,000 MTPA 3,276,000 MTPA

* Company estimates

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INVESTOR PRESENTATION 2020

Acrylamide manufacturing business:

Raw material scenario
• Acrylonitrile is the key raw material for acrylamide
• 1 kg. of acrylamide (50% basis) consumes ~0.4 kg. of acrylonitrile
• Price of acrylamide is mainly affected by changes in the cost of acrylonitrile
• Acrylonitrile is also used in manufacturing acrylic fiber and other materials
• More than 27 manufacturers globally; key manufacturers comprise INEOS Nitrile, Ascend Performance Chemicals, Tong Suh Petrochemicals,
SECCO, Shenghong Group, Sinopec, CPDC, Petkim, Tae Kwang, among others.
• As there is no local producer, the entire India demand is met through imports
• The global acrylonitrile capacity in 2018 was approximately 6.86 mn MTPA; demand was approximately 5.93 mn MTPA

Acrylonitrile consumption for the manufacture of acrylamide has Global consumption of acrylonitrile by application*
increased consistently from about 0.75 million MTPA to 1 million
MTPA in five years at a CAGR of 10.06%

20%

2020 1,000,000 MTPA 40%

ABS
18% Acrylic fibre
2015 750,000 MTPA Acrylamide
22%
Others
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* Company estimates
INVESTOR PRESENTATION 2020

Acrylamide manufacturing business:

The entry of Black Rose
• Acrylamide was among key Black Rose obtained an exclusive • Licensed Mitsui’s biocatalytic
products in Black Rose’s manufacturing license from technology
distribution business. The principal Mitsui Chemicals owing to: • Environmentally friendly zero
Mitsui Chemicals stopped the liquid discharge and no by-
manufacture of acrylamide solids products
to focus on acrylamide liquids Strong market knowledge • Lower capital investment and
• Acrylamide Liquid typically operating cost when compared
contains 50% water, resulting in a with copper-based and other
high logistics cost for import
Direct end-user base biocatalytic technologies
• Black Rose’s BRILMIDE® • Commercial production
acrylamide is available in solution commenced in September 2013;
and powder form, packed in
Long-standing relationship expanded in November 2018 and
drums, IBCs, tankers and bags. It is
with Mitsui Chemicals in January 2020
used in the manufacturing of
flocculants, ceramic binders, • Sales mix: 55% domestic and 45%
textile auxiliaries, cement export (FY19)
additives, water proofing agents Respect for Japanese
and paint emulsions. business culture

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INVESTOR PRESENTATION 2020

Acrylamide manufacturing business:

Further growth
Crossed 90% utilization of Since late Q3 FY20, demand Demand for captive consumption
installed capacity in October 2019 growing in the domestic market; in polyacrylamides manufacturing
further penetration into robust will gradually increase from
international markets, including Q4FY20
USA, achieved

Current capacity includes Capex for the initial plant setup Further capacity expansion
20,000 MTPA for merchant sales was Rs. 369 mn. For additional possible at existing site depending
and additional quantity for captive capacity expansion, capex was just upon need
intermediate monomer Rs. 32.5 mn, funded from internal
requirement accruals.

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INVESTOR PRESENTATION 2020

Acrylamides manufacturing business:

Provides an insight into BRIL’s business philosophy

Prudent Incremental
Phased
creation of capacity
expansion to
base and addition at
follow thereafter
infrastructure marginal capex

Phased capacity Focus on

expansion (once maximizing
existing capacity capacity
sold) utilization

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INVESTOR PRESENTATION 2020

Polyacrylamides manufacturing business:

Polyacrylamides (PAM) – An overview
• Polyacrylamides represent a class of polymers Global applications of PAM*
that are water-soluble and formed solely from
acrylamide or together with other monomers
4% 3%
• Widely used as flocculating agent, thickening
agent, binder, super absorbent polymers, soil
conditioners, filtering aid, lubricant and oil 22%
recovery agent
48%
• PAM consumed in sectors with strong growth
viz. water and waste water treatment, ceramic
tiles, paper & pulp, sugar, base metal mining, oil,
etc.
• Depending on the application, PAM is consumed 23%
in liquid (PAM-L) and solid (PAM-S) forms
Water treatment Paper
Oil fields Mineral processing
Others
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* Company estimates
INVESTOR PRESENTATION 2020

Polyacrylamides business:
Industry scenario
Polyacrylamide liquids Polyacrylamide solids
Global market US$4.5 billion (2019)
Global growth (estimated) 6.0% (2019-2025)
Global producers BASF, Kemira, SNF Group, MT Aqua, Mitsubishi Rayon and several Chinese producers
Domestic demand 120,000 MTPA 100,000 MTPA
Domestic applications Ceramic tiles, paper, paint emulsions, Oil & gas: 90,000 MTPA
textile, printing inks and mining Water treatment, sugar etc.: 10,000 MTPA
Domestic producers BASF India, SNF India, Ion Exchange, Imports from Europe and Asia
Thermax, Pidilite, Jeson Industries, (domestic production: <1%)
Visen Industries, Nalco and others

Raw material Acrylonitrile (for

manufacture of
Acrylic acid: Arkema,
BASF, LG Chem, Evonik
Cationic monomer:
BASF / Toagosei
Caustic soda – (local
suppliers) Gujarat
sources acrylamide) Industries, Mitsubishi
Chemical Holdings,
Alkali, Aditya Birla
Chemicals (Grasim)
Nippon Shokubai
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INVESTOR PRESENTATION 2020

Polyacrylamides manufacturing business:

The entry of Black Rose
Manufacture both Although acrylamide Process and product Helps de-risk the
polyacrylamide is sold as raw developed at in- business from a
liquids (PAM-L) and material to other house R&D facility; purely raw material
solids (PAM-S) using chemical producers, opportunity to supplier to a finished
acrylamide PAM is sold as a license technology product supplier,
manufactured in- finished product and no restrictions to widening the
house (with higher value- access any customer base as
addition) market/customer well as markets

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INVESTOR PRESENTATION 2020

Polyacrylamide liquids:
Attractive domestic opportunity
• Capacity: 40,000 MTPA (under commissioning)

• To service ceramic tiles binder, paper and textile industries

• Timelines: October 2019: 120 MTPA, January 2020: 6,600 MTPA

• Black Rose’s BRILBIND® ceramic binder is available in liquid form, packed in drums and tankers.
This product is used for increasing the green strength of vitrified tiles.

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INVESTOR PRESENTATION 2020

Polyacrylamide solids:
Significant opportunity
• Capacity: 10,000 MTPA (in progress)
• Domestic production negligible; first (large-scale) mover advantage targeted
• To service waste water / sewage treatment industries in the initial phase; to address the domestic and
international needs of MNC co-producers
• No significant PAM solid capacity anywhere in South Asia, Middle East, or Africa; opportunity to emerge as a
significant regional player
• Owing to shifting supply preferences, users are shifting their sourcing of PAM solid out of China which provides
additional opportunity for us to fill the gap
• Black Rose’s offerings:
• BRILFLOC® polyacrylamide used in sewage and effluent water treatment process. Product is available in
multiple packing.
• BRILTREAT® are organic and inorganic coagulants used for BOD and COD reduction, flocculating aid and
de-colourising industrial effluent water. Product is available in multiple packing.
• BRILPAM® polyacrylamide used in soil conditioning, filtering aid, oil recovery agent and sugar juice
clarification. Product is available in multiple packing.

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INVESTOR PRESENTATION 2020

Financials – Profit & Loss (Standalone)*

Rs. in millions
Particulars FY16 FY17 FY18 FY19 9M FY20
Income from operations 1,286.8 1,661.6 1,849.7 2,134.9 1,862.3
% growth - 29% 11% 15% 16%
EBITDA 91.4 143.1 210.6 230.7 245.5
Depreciation 27.3 27.4 24.1 21.1 15.9
PBIT 64.1 115.8 186.5 209.6 229.6
Interest 44.7 47.6 38.2 31.3 19.20
PBT 24.5 75.1 153.1 185.8 205.7
Taxation 8.8 25.5 41.5 52.9 48.1
PAT 15.7 49.6 111.6 132.9 157.6
* Not including 100% subsidiary B.R. Chemicals Co., Ltd., Japan

EBITDA Margins (%) PAT Margins (%) EPS (Rs.) Dividend (%)
15.0% 10.0% 4.00 40.00
11.4% 10.8% 13.2% 8.5% 3.10 30.00
8.0% 6.0% 6.2% 3.00 2.60 30.00
10.0% 8.6% 2.20
7.1% 6.0%
3.0% 2.00 20.00 15.00
4.0% 1.00 10.00
5.0% 1.2%
2.0% 1.00 0.30 10.00

0.0% 0.0% 0.00 0.00

FY16 FY17 FY18 FY19 9M FY16 FY17 FY18 FY19 9M FY16 FY17 FY18 FY19 9M FY17 FY18 FY19
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INVESTOR PRESENTATION 2020

Financials – Balance Sheet (Standalone)*

Rs. in millions
Particulars FY16 FY17 FY18 FY19 9M FY20 Return on Equity (%)
40.00% 32.14%
Sources of Funds 28.26%
30.00% 25.87%
Equity Share Capital 51.0 51.0 51.0 51.0 51.0
19.53%
Reserves & Surplus 157.0 202.9 296.2 419.2 558.3 20.00%
Net Worth 208.0 253.9 347.2 470.2 609.3 7.59%
10.00%
Deferred Tax 18.4 43.1 41.4 40.2 35.4
Loans 386.7 389.4 316.5 258.2 183.3 0.00%

Total Sources 613.1 686.5 705.1 768.5 828.0 FY16 FY17 FY18 FY19 9M
Application of Funds
Gross Block 514.1 519.4 524.1 526.0 529.5 Return on Capital Employed (%)
Less: Depreciation 130.9 158.0 182.1 199.0 213.9
30.00% 26.45% 27.27% 27.73%
Net Block 383.1 361.5 342.0 327.0 315.6
Capital WIP 0.0 0.0 0.0 2.2 18.0 20.00% 16.87%
Investments 1.6 1.6 1.6 1.6 1.6 10.73%
Other Non Current Assets 8.6 2.9 27.3 5.4 4.7 10.00%
Current Assets, Loans and Advances
Inventories 145.6 245.3 261.6 331.2 238.0 0.00%
S. Debtors 227.5 296.5 338.4 279.7 476.7 FY16 FY17 FY18 FY19 9M
Cash & Bank Balances 5.2 16.2 35.3 48.0 50.7
Loans & Advances 50.2 102.0 1.1 1.7 2.3 Total Debt/Equity (X)
Other Current assets 16.9 19.6 34.8 82.2 55.1
2 1.86
Total Current Assets 445.5 679.6 671.2 742.8 822.8 1.53
Current Liabilities and Provisions 1.5
0.91
S. Creditors 172.2 285.6 269.1 246.7 279.1 1
0.55
Other Current Liabilities 43.4 52.5 62.1 57.5 48.0 0.30
0.5
Provisions 10.3 21.0 5.8 6.3 7.6
0
Total Current Liabilities and Provisions 225.9 359.1 337.0 310.5 334.7
FY16 FY17 FY18 FY19 9M
Total Applications 613.1 686.5 705.1 768.5 828.0
* Not including 100% subsidiary B.R. Chemicals Co., Ltd., Japan 22
INVESTOR PRESENTATION 2020

Financials
Revenue mix

2.8% 1.0%
26.6%
30.5%

FY16 9M FY20

68.5%
70.6%

Chemical manufacturing Chemical manufacturing

Distribution Distribution
Others Others
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INVESTOR PRESENTATION 2020

The Management Awards & Recognitions

Black Rose believes in strong corporate governance Best SME for Corporate Governance
and professional management. Award
The 70 member team lead by Anup Jatia, Executive At the 3rd Business Today Yes Bank
Director, comprises: SME Awards 2011
• 19 managerial staff
Inc.500 Award
• 13 executives/administrative staff
By The Growth Institute in 2012-2013
• 38 manufacturing staff as on January 2020
Black Rose is a One Star Export House

ISO certification
ISO 9001, ISO 14001 & OHSAS 18001 for acrylamide plant

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INVESTOR PRESENTATION 2020

Contact
Mr. Nevil Avlani
Company Secretary & Compliance Officer
Head office
145/A, Mittal Towers
Nariman Point, Mumbai 400 021, India
Call / Fax
+91-22-4333-7200
+91-22-2287-3022 (Fax)
Mail to
[email protected]