JG CHemicals is India’s largest zinc oxide manufacturer in terms of production and revenue for zinc oxide manufacturing. The market share of the company is around 30%. They sell over 80 grades of zinc oxide and are among the top ten manufacturers of zinc oxides globally. Their product caters to a wide spectrum of industrial applications, including in rubber tyres & products, ceramics, paints & coatings, pharmaceuticals & cosmetics, electronics & batteries, agro-chemicals & fertilizers, speciality chemicals, lubricants, oil & gas and animal feed. They have a legacy of over four decades in manufacturing businesses,
Strengths And Risks
+ Market Leader: JG Chemicals is the largest manufacturer of zinc oxides in India and among the top ten manufacturers of zinc oxides globally, which offers them competitive advantages such as product pricing, economies of scale, and the ability to scale the business.
+ High Entry Barriers: Given the nature of the application and processes involved, company's products are subject to high quality standards and rigorous approval systems with stringent impurity specifications. These are very difficult to replicate for any entrant.
+ Long-term Relationships: Company has established direct relationship with their customers and over 95% of their sales in the last three fiscals is directly to customers without involvement of any intermediary/distributors.
+ Focus on Long Term Sustainability: Company uses the French process to produce various grades of zinc oxide, modern pulse jet bag filters, and combustion systems which ensures high productivity, low energy consumption and maintains required standards with respect to emission norms.
- Single Product: Company's business is almost completely dependent on the sale of one principal product zinc oxide (in various grades) and any reduction in the demand of the same may have an adverse effect on business.
- Dependence on Tyre Industry: Company's operations are heavily dependent on the rubber and tyre industry and there is a lack of diversification in business across other application industries.
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