Company Profile: Fine Organic Industries Ltd.

Excerpt: Fine’s range of innovative additives have expanded their reach into several specialty applications in food, plastics, cosmetics, textiles, paints, inks, rubber and many more.

Founded in 1970, Fine Organics was the brainchild of Mr. Ramesh Shah, a Mumbai-based businessman with experience in chemical trading and Mr. Prakash Kamat, a skilled technocrat from India’s most premier chemical technology school. Together, they envisioned the potential of Oleochemical derivatives and created an organization founded on the pillars of innovation and passion. Fine Organics introduced the Indian market to high-quality additives for specialty applications with raw materials from locally-grown plant sources and quality levels on par with international standards.

Today, Fine’s range of innovative additives have expanded their reach into several specialty applications in food, plastics, cosmetics, textiles, paints, inks, rubber and many more.

Fine Organic Industries Ltd (FOIL) is the largest manufacturer of oleochemical-based additives in India and a strong player globally in this industry. It produces a wide range of specialty plant derived oleochemical-based additives used in food, plastic, cosmetics, paint, ink, coatings and other specialty application in various industries.

As at March 31, 2018, it had a range of 387 different products sold under the “Fine Organics” brand. It is the first company to introduce slip additives in India and is the largest producer of slip additives in the world. Success is the result of sustained efforts over the decades in all areas of its business, such as product innovation, process technology improvements, increases in scale, improved raw material procurement and focus on cultural understanding of consumers.

In the 12 months ended March 31, 2018, FOIL had 631 direct customers (i.e., end-users of its products) and 127 distributors (who sold its products to more than 5,000 customers) from 69 countries. Its direct customers are multinational, regional and local players manufacturing consumer products and petrochemical companies and polymer producers globally. Its plastics additives and specialty additives are also used in the packaging of foods and other fast moving consumer goods.

History and evolution

A brief history of the growth of the company is depicted in the figure 1 below

Manufacturing Facilities

FOIL currently has three production facilities: one in Ambernath (Maharashtra) (the’FirstAmbernath Facility’); one in Badlapur (Maharashtra) (the ‘Badlapur Facility’); and one in Dombivli (Maharashtra) (the ‘Dombivli Facility’). As at March 31, 2017, these three facilities had a combined installed capacity of approximately 64,300 tonnes per annum. Each of its current manufacturing facilities has the ability to manufacture its wide range of products, which provides with the necessary flexibility to cater to changing demands in the market, thereby avoiding dependence on any one major product category.

Figure 2

Toll Manufacturing

FOIL products are also manufactured on a job-work basis by Olefine Organics, a partnership firm and a Promoter Group entity, at a manufacturing facility in Ambernath, Maharashtra (the “Second Ambernath Facility”). The Second Ambernath Facility is situated on a plot of land that MIDC currently leases to Olefine. FOIL has entered into a leave and license agreement for the land with Olefine for a term of three years effective March 26, 2018.

FOIL will be taking over operation of the facility in the near future. As at December 31, 2017, the Second Ambernath Facility had an installed capacity of approximately 5,000 tonnes per annum.

FOIL has developed in-house process design expertise to construct its production facilities. This gives scale advantages by enabling the timely expansion of its capacity in response to market needs and reduces capital expenditure costs for expansions significantly compared to other players.

Business Segments

Food Emulsifiers

FOIL primarily manufactures three types of food additives, namely, anti-fungal agents/preservatives, emulsifiers and other specialty additives. It also manufacture some specialty premium food additives, which are used in enhancing properties of high-quality biscuits and sponge cakes. It manufactures the following types of food additives: • Anti-fungal agents/preservatives: preservatives are essential to make foods safer by preventing food from spoiling or from becoming toxic due to unwanted growth of bacteria, yeast and moulds.

  • Emulsifiers: emulsifiers are used to get the desired aesthetic structure and texture in various foods. They are also used in processing foods and help to maintain quality and freshness. In low-fat spreads, emulsifiers prevent separation of oil and fat. These are used in many types of baked products, extruded foods, chocolates, confectionary, margarine, low-fat spreads and coffee creamer.
  • Specialty additives: Company has also developed some premium food additives that are used in niche applications. For example, it has developed Finamul-87, which is a blend of emulsifiers used to reduce fat in high-quality biscuits. It has also developed Finagel, which is a batter-aerating agent used to make high-quality sponge with good volume, structure, sliceability and shelf life.

Plastics Additives

FOIL manufactures a large variety of plastic additives: polyolefins additives; styrenics/elastomer/thermoplastic elastomer compound additives; engineering plastic processing additives; foamed plastic product additives; polyvinyl chloride (PVC) processing additives and thermosets/composite product additives. It manufactures the following types of plastic additives:

  • Slip additives: slip additives reduce friction between plastic products (such as films, bottle caps, wires, cables, disposable syringes and car wipers) and other surfaces they come in contact while processing or during product usage.
  • Anti-fogging additives: anti-fogging additives convert water droplets formed on plastic films (such as food packaging and agricultural films) into a continuous transparent water layer that are suitable for cold and hot fog applications.
  • Anti-static additives: anti-static additives mitigate the build-up of electrical charges on plastic materials like films, furniture, flooring, and carpets, which results in attracting dust particles.
  • Lubricants: lubricants are used as flow improvers and mould release agents in PVC pipes, fittings, profiles, foam sheets, tubing, hose pipes, wires and cables and also in engineering plastics for manufacturing white goods and automotive parts.
  • Processing aids: processing aids improve the melt processability and handling of high molecular weight polymers and are used in filled compounds for packaging, furniture, and moulded articles of various plastic materials.

Other Additives and End-Use sector Products

Cosmetic and Pharmaceutical Additives

FOIL manufactures a number of cosmetic and pharmaceutical additives. Cosmetic and pharmaceutical additives are ingredients added in cosmetic and related pharmaceutical products to achieve certain specific properties. They have various functions such as enabling the manufacture of cosmetic and pharmaceutical products with different structures like creams, gels, pastes, lotions, solutions, varnishes, sticks, powders, ointments and aerosols. They aid cosmetic products in achieving long-term physical stability for transport and storage, inhibit germination through moulds, yeast and bacteria, increase chemical stability of sensitive active agents towards atmospheric oxygen, and influence sensory perception like consistency, dispersion on the skin, scent (fragrance) and colour.

Rubber Additives

FOIL manufactures a number of rubber additives. Rubber additives are added to elastomers to ensure that they meet the performance parameters of specific applications. Compounded rubber (rubber added with other ingredients) has many unique characteristics that are not present in other traditional materials, such as dampening properties, high elasticity and abrasion resistance. Consequently, rubber is used in applications such as tyres, conveyor belts, dock fenders, building foundations, automotive parts, hoses, shoe soles and a wide range of domestic appliances.

Paint and Coating Additives

FOIL produces anti-settling agents, emulsifiers, thickening/anti-sagging agents, wetting and dispersing agents, defoamers, biocides and anti-mar waxes for use in paint and coating applications. The main components present in coating materials, such as paints, are binders, pigments and extenders, solvents and additives. Other than these key ingredients, the additives in a paint composition also have a major influence on the various paint properties. Additives can also significantly modify the properties of the main ingredients of paint such as binder, pigments/extenders and solvents. The typical proportion of a single additive in a formulation is generally around 1.5% of the total quantity of the coating formulation. Although used in very small quantities, additives have a significant impact on application properties and performance of coatings and inks. Additives used in the correct order, at appropriate time, and at right levels, are capable of improving the appearance and durability of a coating, the flow of paints and inks, the efficiency of the manufacturing process, and the sustainability of formulations.

Figure 3: Product Portfolio

New Projects

FOIL is currently planning to set up an additional production facility in Ambernath with a planned installed capacity of 32,000 tonnes per annum (the ‘Third Ambernath Facility’). It expects it to commence operations in the fourth quarter of Fiscal 2019 and will involve cost of Rs. 130 crore.

FOIL is also in the preliminary stages of planning the development of two additional production facilities: one in Patalganga (Maharashtra) with a planned initial installed capacity of approximately 10,000 tonnes per annum (the “Patalganga Facility”); and one in Ambernath (Maharashtra) for which company is awaiting possession of the land and have yet to decide on the planned initial installed capacity (the “Fourth Ambernath Facility”). The estimated cost of setting up the Patalganga Facility is ₹500 million.

Global expansion

FOIL intends to expand globally In order to serve its existing direct customers and distributors, as well as to secure new direct customers and distributors. It entered into a joint venture agreement with Adcotec dated January 17, 2018, to set up FineAdd, which will operate the German Facility. FineAdd will manufacture specialty food emulsifiers and other food additives. The new production facility in Leipzig, Germany will have planned initial installed capacity of 10,000 tonnes per annum. FOIL expects to commence operations in the third quarter of Fiscal 2020. This facility will be owned and operated by a joint venture company (which it plans to name FineAdd Ingredients GmbH, in which it will have 50% equity interest.


The Company’s main focus has been to expand product range into segments that offer high growth potential. While the company continues to maintain its focus in the additives space, it is planning to diversify and strengthen its business by manufacturing and distributing premixes for bakery and confectionary products and pan release agents. Fine Zeelandia Private Limited, a joint venture company in which FOIL have a 50% equity interest, is in the process of setting up a new manufacturing facility in Patalganga to manufacture these products. This new facility has a planned initial installed capacity of 10,000 tonnes per annum and is expected to cost Rs. 60 croe. It is expected to commence operations in the first quarter of Fiscal 2019.

Fine Zeelandia currently acts as an exclusive distributor for Zeelandia International Holdings B.V.’s range of premixes for bakery and confectionary products and pan release agents in India, Sri Lanka, Bangladesh and Nepal, but does not currently manufacture these products. The Fine Zeelandia Facility will produce premixes for bakery and confectionary products and pan release agents, in line with company’s strategy to enter high-growth segment.

Research & Development

The company has a dedicated research and development (‘R&D’) centre located in Mahape, Navi Mumbai. Its R&D activities are focused on improving production processes, improving the quality of its present products, creating new additives and creating downstream products. It has developed several new products, such as Acetem, Datem and Lactem, and processes, such as in-house technology for the production of fatty amides for the polymer industry.

FOIL is currently conducting research and development for new products such as fatty amines, polyglycerols and guerbet alcohols and new organic anti-block additives and new additives to make plastics biodegradable. It is also conducting research into new technologies for chemical processing to minimise energy costs.

Company’s R&D efforts place significant emphasis on improving our production processes, improving the quality of our present products, creating new additives and creating downstream products, such as Acetem, Datem, and Lactem. Company is in the process of developing a downstream product called Citrem, which is a hydrophilic (attracted to water molecules and water-soluble) emulsifier used in the confectionary industry. Company is also developing other blends of existing products for foods, plastics and other applications. R&D efforts are driven by customer needs, in terms of meeting specific needs that our direct customers communicate to us prior to us manufacturing our products.

FOIL has had several significant achievements in innovation and R&D. It has developed:

  • a glycerol derivative for polymer applications;
  • a bio-based plasticizer with improved properties and processing characteristics of polymer;
  • a natural based monoglyceride with improved odour and flavour;
  • a polypropylene cap composition; and
  • applications of an ester additive from bio-derived raw materials.

Since April 1, 2014, Company has developed and launched 46 new products.FOIL has also developed and recently commercialized a feed nutrition additive based on natural vegetable oils, which it intends to export to selected markets, mainly in Europe and the United States.

FOIL has also developed, but not fully commercialized yet, a feed nutrition additive that increases milk yield from cows and buffaloes.


FOIL has been awarded the “Meritorious Performance in Industrial Safety” award from the National Safety Council of Maharashtra annually since 2013.

Quality Assurance

First Ambernath Facility is GMP, Halal, and RSPO certified, and is FSSC 22000 compliant for the processing and bulk packing of food additives and fatty acids esters Category K, and ISO 9001:2008 compliant for the manufacture and supply of specialty chemicals for food, polymer, textile, metal, cosmetic, pharmaceutical, paints and other allied industries. As at March 31, 2018, 64 of FOIL products are Kosher pursuant to the Star K Kosher Certification. Company strives to follow the HACCP standards for the manufacture of additives for food, quality control, stores, dispatch and maintenance for our three currently operating facilities. Company’s product Erucamide is registered under REACH and five other products are in the process of being registered during the calendar year 2018 as per the guidelines of the European Chemicals Agency (ECHA).

Major Events & Milestones

Awards & Accreditations

Subsidiaries and Joint Ventures

Fine Organics USA Inc.,United States (“Fine Organics US”)

Fine Organics US was incorporated as a private company on July 29, 2013 at Missouri City in the state of Texas under the applicable laws of Texas. Fine Organics US is authorized to carry on any and all lawful business for which the corporation may be organized under the Texas Business Organisations Code. Currently, Fine Organics US is engaged in the business of, inter alia, marketing, design, purchase, sale, import and export of additives of plastic, rubber, cosmetic, paint and all types of specialized applications. It acts as the marketing arm of the Company and caters to the customers in the U.S. and Canada regions.

Fine Organics Europe BVBA, Europe (“Fine Organics Europe”)

Fine Organics Europe was incorporated as a private company on February 10, 2016 at Antwerp in Belgium under the under the applicable laws of Belgium. The incorporation deed authorizes Fine Organics Europe to carry on the business of, inter alia, marketing, design, purchase, sale, import and export of additives of plastic, rubber, cosmetic, paint and all types of specialized applications. It acts as the marketing arm of the Company and caters to the customers in the European regions.

Joint Venture

Fine Zeelandia Private Limited (“Fine Zeelandia”)

Fine Zeelandia was incorporated as a private company on December 1, 2014 at Mumbai under the Companies Act, 2013. The memorandum of association authorizes Fine Zeelandia to carry on the business of manufacturing, processing supplying, distributing, dealing, importing and exporting of emulsifiers, preservatives, breads and pastry products, dough divider oils, pan release agents, pan release spraying equipment and premixes for bakery and confectionary products.


For Fiscals 2015, 2016 and 2017 and nine months ended December 31, 2017, our revenue from operations net off excise duty from sales to foreign customers amounted to ₹3,588.68 million, ₹3,509.64 million, ₹4,817.67 million and ₹3,245.12 million, respectively, and our revenue from operations net off excise duty from sales to domestic customers amounted to ₹2,479.39 million, ₹3,015.28 million, ₹2,964.35 million and ₹2,564.60 million, respectively. The bar graph below shows the breakdown of our revenue from operations net off excise duty in India and exports for the periods indicated.

SWOT Analysis

Competitive Strengths

  • Largest Producer of Oleochemical-based Additives in India and One of the Few Large Players in the Oleochemical based Additives Industry in the World.
  • Diversified Product Portfolio Catering to a Variety of High Growth Industries
  • Specialised Business Model with High Entry Barriers
  • Flexible and Strategically Located Production Facilities with In-house Development Capabilities
  • Strong R&D Capability with a Focus on Innovation.
  • Diversified Customer Base with Long-Term Relationships with Marquee Customers.
  • Strong Management Team.

Business Strategy

  • Expand Total Installed Production Capacity and Product Range.
  • Expand into Manufacturing Premixes for Bakery and Confectionary Products and Pan Release Agents.
  • Increase Sales of Higher-Margin Downstream Products.
  • Global Expansion.
  • Continuing Focus on R&D.

Key Concerns

  • Increase in the cost of raw materials;
  • Failure to compete effectively in the current market;
  • Fluctuations of the Rupee against other currencies;
  • If FOIL is unable to successfully develop, manufacture and sell new types of downstream products;
  • Failure to protect FOIL’s intellectual property and technical know-how against third party infringement or breaches of confidentiality;
  • FOIL’s shareholding in Fine Zeelandia and FineAdd is subject to certain restrictions and the Company is subject to certain non-compete obligations; and
  • If FOIL is unable to estimate demand for its products and thereby effectively manage its inventory.