Heranba Industries IPO: Business Verticals, major products, strengths, growth strategies and concerns II Details highlighted by Sharekhan

Heranba Industries Ltd, incorporated on March 17, 1992, is a crop protection chemical manufacturer, exporter and marketing company based in Vapi, Gujarat. It manufactures intermediates, technicals and formulations. 

Heranba Industries is one of the leading domestic producers of synthetic pyrethroids such as cypermethrin, alphacypermethrin, deltamethrin, permitherin, lambda cyhalothrin, etc. Its range of pesticides includes insecticides, herbicides, fungicides and public health products for pest control.

Heranba Industries Key business verticals:

(a) Domestic institutional sales of Technicals: Manufacturing and sales of Technicals in bulk to domestic companies

(b) Technicals exports: Exports of Technicals in bulk

(c) Branded Formulations: Manufacturing and Selling of Formulations under own brands through the company’s distribution network in India

(d) Formulations Exports: Exports of Formulations in bulk and customer-specified packaging outside India

(e) Public Health: Manufacturing and selling of general insect-control chemicals by participating in public health tenders issued by governmental authorities and selling products to pest management companies.

Heranba Industries Major Products - Technical Grade Pesticides/Technicals

1) Insecticides - Insecticides are substances used to kill insects. They include ovicides and larvicides used against insect eggs and larvae, respectively. Insecticides are majorly used in agriculture. The company manufacture the following insecticides: Cypermethrin, Deltamethrin, Alpha Cypermethrin, Acephate, Lambda Cyhalothrin, Permethrin, Profenophos, Temephos, Theta Cypermethrin, Thiamethoxam and Imidacloprid.

2) Fungicide - Fungicides are biocidal chemical compounds or biological organisms used to kill parasitic fungi or their spores. A fungistatic inhibits their growth. Fungi can cause serious damage to crops, resulting in critical losses of yield, quality and profit.  Heranba Industries manufactures the following Fungicides: Tricyclazole and Hexaconazole. 

3) Herbicides - Herbicides also commonly known as weed killers, are substances used to control unwanted plants while leaving the crop relatively unharmed. The company manufactures the following Herbicide: Glyphosate, Metribuzin & Clodinofop.

4) Intermediates - An intermediate is a molecule that is formed from two or more reactants and then reacts further to give products. Most chemical reactions require more than one step and an intermediate is the product of each step, except for the last one, after which the final products are produced. The company manufacture the following Intermediates: Cypermethric Acid Chloride (CMAC), High CIS CMA, High CIS CMAC, High Trans CMA, High Trans CMAC, Bromobenzenes and Metaphenoxy Benzaldehyde (MPBD).

5) Formulations - A pesticide formulation is a mixture of chemicals which effectively control a pest. Formulating a pesticide involves processing it to improve its storage, handling, safety, application, or effectiveness. Formulations and branding of formulations are a forward integration to the Technicals business.

Heranba Industries Key strengths:

1) Presence in a wide range of products across the entire value chain of synthetic pyrethroids

2) Product registrations in domestic and international markets enable global outreach

3) Strong product portfolio and wide distribution network

4) Diversified and stable customer base

Heranba Industries Key growth strategies:

1) Enhancing and streamlining production capacities and operations

2) Development of new products at the R&D facility at Unit III (Sarigam Unit)

3) Entering highly-regulated markets of US and Europe

4) Enhancing Formulations & Technicals business in the international markets

Heranba Industries Key Concerns:

1) Availability and price of raw materials

2) Ability to obtain registrations

3) Seasonal and climatic variations