'China Plus One' theme has played big role in international space: Neogen Chemicals

Neogen Chemicals’ Managing Director Harin Kanani said on August 10 that the 'China Plus One' theme has played a bigger role in the international space than in domestic.

“The China plus one factor is present both domestically as well as internationally. In fact domestically, they always preferred Indian suppliers to local suppliers, but of course, we had to match the prices and things like that,” he told CNBC-TV18.

He added that customers’ attitude has been better and they are even willing to offer a slight premium over the Chinese.

“But the ‘China Plus One’ has played a bigger role in the international place where if you are a European or a Japanese company. Historically, whether you are buying from China or whether you are buying from India, it didn't make much difference,” he said.

Kanani pointed out that with the changes in the last two to three years, more and more internal companies that were reliant on China are also trying to source from India.

The firm’s profit jumped 20 percent year-on-year in the first quarter of FY22 and there has been an improvement on the margin front

Kanani said the company’s revenue was up almost 10 percent and the profit after tax (PAT) went up by almost 20 percent. “But, this was in comparison to last quarter where we had a lockdown situation. So this is one of the major contributors going forward,” he told CNBC-TV18.

He added that the company is excited about adding capacity in the Dahej Special Economic Zone, which he said, is the immediate growth driver.

He also lauded the PLI schemes announced and implemented by the government in the past year for the pharma sector. Kanani added that new capacity will be downstream in 1 to 1.5 year downstream and that is when there will be bigger growth in the domestic business.