Thread by @ashishkhokha

Fairchem speciality - some interesting and valuable insights from the Fairfax India march 9th letter to shareholders. The company is 1 of the 2 listed investments (amongst total 8) made by Fairfax group in India.
#FairchemSpeciality

Fairchem (earlier called ADI finechem) has developed an in-house tech that converts the waste generated during production of soya, sunflower, corn, and cotton oils, into valuable chemicals. Customer include BASF, Archer Daniels, Cargill, arkema, Asian paints.

Fairchem (ADI finechem) - in the last 10 years, sales have grown average 24%, earnings at 33%, shareholders equity at 22%, generating an RoE of 24%

Fairchem (ADI finechem) - in 2018, company debottlenecked operations and increased capacity from 45,000 to 72,000 MT. capacity utilisation in 2018 was 54%, giving considerable room to grow. In addition, company has initiated two CapEx programs that will go live in 2020.

Privi - is one of India's leading manufacturers of aroma chemicals. It has made significant investments in manufacturing capabilities for converting CST into aroma chemicals. CST is a better and more cost effective raw material than GTO , used conventionally in making aroma chem.

Privi - 2018 was a great year for privi, despite a fire incident that gutted the largest factory on April 26, 2018. Company was able to restart production in a record 29 days - using third party support and internal production to maintain customer continuity.

Privi - company also benefitted from sudden increase in prices and margins for certain aroma chemicals, due to supply constraints from other industry players. That reflects in the strong Q2 and Q3 topline numbers.

Fairfax global has generated 18% compounded growth in the last 30 years. They are extremely bullish on India and continue to make major investments. Another if their investee companies, IIFL holdings, is planning to demerge in 2019, which may unlock value.