About Godavari Biorefineries Limited

Godavari Biorefineries is one of the manufacturers of ethanol based chemicals in India and they are an integrated bio-refinery in India with an installed capacity of 570 KLPD for manufacturing ethanol as at June 30, 2024. They are one of India’s largest producers of ethanol in terms of volume as of March 31, 2024. As on March 31, 2024, they were also the largest manufacturer of MPO worldwide in terms of installed capacity, one of only two manufacturers of natural 1,3 butylene glycol and the only company in India to manufacture bio ethyl acetate. They have also set up India’s first bio-based EVE manufacturing facility in India as on March 31, 2024. Their diversified product portfolio comprises of bio-based chemicals, sugar, different grades of ethanol and power. These products find application in a range of industries such as food, beverages, pharmaceuticals, flavours & fragrances, power, fuel, personal care and cosmetics. 

The Company utilise sugarcane as a feedstock to manufacture a wide range of products, including sugar, ethanol, bio-based chemicals and power and were among the first few companies in India to utilise sugarcane juice and syrup for the production of ethanol. The Sameerwadi Manufacturing Facility with a crushing capacity of 18,000 TCDand the Company’s sugar mill, is among the top fifteen sugar complexes in India in terms of crushing capacity. They have entered into a memorandum of agreement with the Centre for High Technology, an administrative control of the Ministry of Petroleum & Natural Gas, Government of India in relation to grant of financial assistance to the Company for a maximum amount of ₹150.00 million for the proposed installation of a 2G ethanol plant at their Sameerwadi Manufacturing Facility.

Their customers include marquee players such as Hershey India Pvt Ltd, Hindustan Coca-Cola Beverages Private Limited, M/s Karnataka Chemical Industries, M/s Techno Waxchem Pvt Ltd, LANXESS India Private Limited, IFF Inc., Ankit Raj Organo Chemicals Limited, Escorts Chemical Industries, Khushbu Dye Chem Pvt Ltd, Privi Speciality Chemicals Limited, Shivam Industries, as well as major oil marketing companies. They have catered to customers from over 20 countries including Australia, China, Germany, France, Italy Japan, Kenya, Netherlands, Singapore, United Kingdom, United Arab Emirates, Indonesia and United States of America. 

As on June 30, 2024, they have engaged 52 permanent research employees including 8 scientists holding doctorates representing 3.28% of their total permanent employees. The Bankers of the Godavari Biorefineries Limited are Bank of India, Union Bank of India, Yes Bank Limited, IndusInd Bank Limited, SVC Co-operative Bank Ltd and Bandhan Bank Limited.

GLOBAL AND INDIAN BIOCHEMICAL MARKET OVERVIEW
The term biochemical can refer to any chemical compound that is part of the makeup of living cells, in Industrial terms biochemicals are chemicals that are derived from renewable sources, the alternative term used is bio-based chemicals. The bio-based chemicals market has been growing exponentially owing to the increasing need for environmentally sustainable solutions. 

Bio-based chemicals are produced from both plant- and microorganism-based sources. However, biorefineries primarily use feedstock such as sugar crops (e.g., beet and cane), lignocellulosic crops (e.g., managed forest, short rotation coppice, switchgrass), starch crops (e.g., wheat and maize), perennial grasses and legumes (e.g., ryegrass and alfalfa), aquatic biomass (e.g., algae and seaweed), lignocellulosic residues (e.g., forest residues, stover, and straw), oil crops (e.g., palm and oilseed rape), and organic residues (e.g., industrial, commercial, and postconsumer waste). 

The most important aspect of bio-based chemicals is the source or the feedstock. Feedstocks for bio-based chemicals can be obtained from three of the major kingdoms of life. 

The process of converting biomass into energy or chemicals is initiated by the mechanical separation of biomass into different components that are then treated separately. Further processing can be carried out as follows: (i) breaking up, (ii) plasticization, (iii) chemical modification, and (iv) biotechnological conversion via glucose to give required chemicals.

Indian Ethyl Acetate Market Overview
India is a net exporter of ethyl acetate, mainly exporting to the Europe, Middle East, and Africa. This positive trade balance gives an advantage to Indian players in exploring high-end markets such as Europe where more than half the Ethyl Acetate trade takes place. Many ethyl acetate suppliers have backward integrated ethanol production from molasses; such as Godavari Biorefineries Limited, Jubilant Ingrevia (formerly Jubilant LifeSciences), Dhampur Alcochem, Laxmi Organics, etc.

India ethyl acetate market stood at 450.5 KT in 2023 and is expected to grow at a CAGR of 9.0%, from 450.5 KT in 2023 to 693.1 KT in 2028. In terms of values, the market stood at USD 524.1 million in 2023 at an average price of USD 1,164 /MT. Looking ahead, the market is expected to continue its growth trajectory, with a projected CAGR of 11.2% from 2023 to 2028, reaching a value of USD 890.4 million by 2028.

India Ethyl Vinyl Ether Market Overview
The India market size for the Ethyl Vinyl Ether market was approximately 1,258 MT in 2023. The rise in demand was driven by growing demand from the pharmaceuticals & agrochemicals sector. Looking forward, the market is expected to grow at a CAGR of 10.0%, reaching to 2,026 MT by 2028.

Indian 1,3 Butylene Glycol (1,3-BG) Market Overview
Godavari Biorefineries Limited is the sole manufacturer of 1,3-BG in India as of 31st March 2024. The Indian demand is catered by indigenous production along with imports. The market, in terms of volume, stood at 230.8 MT in 2023 and is expected to grow at a CAGR of 3.0% from 2023 to 2028, reaching a value of 267.5 MT by 2028.

Indian Ethanol Market Overview
In the ethanol supply year 2023, India produced approximately 8,280 million litres of ethanol. Final C & B Heavy molasses, sugarcane juice, food grains unfit for human consumption, and any other potential domestic raw material sources available in the country may be used for making fuel-grade ethanol. 

In terms of volume, India ethanol market stood at 8,482 million litres in 2023 and is expected to grow at a CAGR of 18.0% from 2023 to 2028, reaching to 19,157 million litres by 2028.

The Indian ethanol market is projected to grow from USD 7.0 billion in 2023 to USD 17.5 billion by 2028, exhibiting a CAGR of 20.0% during 2023-2028, on the back of increasing ethanol use in applications such as fuel additives, disinfectants, and beverages. 

For over five years, the Indian government, under the National Policy on Biofuels (2018), has actively promoted the expansion of ethanol production capacity. This initiative aims to reduce the country's reliance on imported crude oil while utilizing surplus sugar stocks for ethanol production, thereby addressing both energy security and agricultural surplus management. 

In August 2024, the government approved the BioE3 Policy, aimed at advancing High-Performance Biomanufacturing. This policy seeks to harness cutting-edge biotechnological processes to create a wide range of bio-based products. Key focus areas include high-value bio-based chemicals, biopolymers, climate-resilient agriculture, carbon capture and utilization, etc. The BioE3 Policy can enhance ethanol production by promoting advanced biotechnological processes for more efficient, sustainable biofuel manufacturing.

Indian Cellulose Industry Market Overview
The Indian cellulose market was valued at USD 9.3 billion in 2023 and is expected to grow at a rate of 7.5% from 2023 to 2028, to reach a value of USD 13.4 billion in 2028. The cellulose market has been boosted by recent breakthroughs in fabrication technologies, recyclability, and expanding end-use options. End-use industries will reorient from petroleum-based products to sustenance-based products in the next years, increasing the importance of cellulose. 

Indian 3-Methyl 3-Penten-2-One Market Overview
3-Methyl-3-penten-2-one (MPO) is an indispensable, colourless liquid produced by aldol condensation of acetaldehyde with methyl ethyl ketone. It is used as a raw material for the synthesis of OTNE (octahydrotetramethyl acetophenone), a synthetic ketone fragrance known by commercial trade names such as IsoE-Super, which is one of the most important ingredients in perfumes. It is a precursor of 3-methyl-2-pentanone and is obtained by acid-catalyzed dehydration of 4-hydroxy-3-methyl-2-pentanone.

The India market for MPO stood at 2,907 MT in 2023 and is expected to grow at 2.0% from 2023 to 2028, reaching to 3,210 MT by 2028.

Indian Crotonaldehyde Market Overview
Crotonaldehyde is an organic chemical compound that is usually sold as a mixture of the E- and Z-isomers, which differ concerning the relative position of the methyl and formyl groups.

In terms of volume, the India market stood at 4,046 MT in 2023 and is expected to grow at a CAGR of 5.0% from 2023 to 2028, reaching to 5,164 MT by 2028. This growth reflects the compound's increasing importance across various industries in India, including pharmaceuticals, chemicals, crop protection, rubber, food, and leather.

Indian Sugar Market Overview
Globally, sugar is mainly extracted from sugarcane and the remaining from sugar beet. In India, sugar is extracted mainly from sugarcane.

Sugarcane is crushed to get sugarcane juice and bagasse is obtained as the by-product, which can further be used in power generation, partly used for captive consumption, and the remaining is sold. The sugarcane juice is further processed to get sugar and molasses, which can either be sold directly or further processed in the distillery to give alcohol. This alcohol can either be industrial alcohol which is sold to chemical companies for industrial consumption or potable alcohol (liquor); or ethanol which can be used for blending in the fuel. 

The molasses goes through three stages — A, B, and C, the last one being where the molasses is most uncrystallized and non-recoverable. The ‘C’ molasses roughly constitutes 3.8% to 4.5% of the sugarcane and has a remaining TFS (total fermentable sugar) of 40%. After C-molasses are sent to the distillery, ethanol is extracted from them. Every 100 kg of TFS yields 60 litres of ethanol. Thus, from one tons of sugarcane, mills can produce 115 kg of sugar (at 11.5% recovery) and 45 kg of molasses (18 kg TFS) that gives 10.8 litres of ethanol.

India is the largest consumer of sugar in the world. The sugar industry is amongst the most important agro-based industries in the country. In current marketing year (October 2022-September 2023), the Indian sugar consumption stood at 29.6 MMT and is expected to grow at 3.5% from 2022/23 to 2028/29, reaching a value of 36.3 MMT by 2028. 

Due to increased consumer awareness, consumers now demand organic and chemical-free ingredients thus creating a demand for organic sugar. Looking ahead, the market is expected to grow at a CAGR of 0.6% from 2022/23 to 2028/29, reaching a value of USD 13.0 billion by 2028.

INDIAN BIO-ACETIC ACID MARKET OVERVIEW
Bio-acetic acid is produced from bio-based ethanol. It is a colorless liquid with a distinctive sour taste and pungent smell widely used as a raw material in the production of industrial chemicals & solvents. It is often used as a food additive in food industry, and as an acidifying agent in pharmaceuticals. It can also be used in formulations of health and personal care products such hair care products, mouthwashes, and breath fresheners.

Bio-acetic acid is at emerging phase in India. The India market for bio-acetic acid stood at 437.0 MT in 2023 and is expected to grow at a CAGR of 8.0% from 2023 to 2024, reaching upto 642.3 MT by 2028.

The factors that are driving the Indian bio-acetic acid market include:

The rising demand from end-use industries in food & beverages, cosmetics, pharmaceuticals, and other chemicals. 

In the food and beverage industry, bio-acetic acid finds numerous applications as an additive and preservative. The rising disposable incomes and preference for processed and ready-to-eat foods are fueling the demand for bioacetic acid from the food & beverage industry. 

The growth and expansion of the Indian pharmaceutical industry is expected to drive the demand for acetic acid. Rising health awareness and continuous research and development in the pharmaceutical industry is driving the industry in India. The Indian government is also implementing policies to promote the growth of the pharmaceutical industry such as infrastructure development and tax incentives. 

Acetic acid is a key raw material that is used for making Vinyl Acetate Monomer (VAM) which is used in paints, coatings, adhesives, and textiles. The country’s growing construction and automotive industry are driving the demand for VAM thereby driving the demand for bio-acetic acid. The Indian bio-acetic acid market holds immense growth potential, driven by sustainability concerns, government support, and diverse applications. 

Overcoming challenges, including feedstock availability and infrastructure development, will be crucial to unlock its full potential. Continued advancements in technology, increased market awareness, and collaboration between various stakeholders will fuel the market's progress, positioning India as a key player in the global bio-acetic acid landscape.

GODAVARI BIOREFINERIES LIMITED COMPETITIVE STRENGTHS
1. They are a manufacturer of Ethanol-based Chemicals and are one of the largest producers of Ethanol in terms of volume
2. They are an integrated bio-refinery in India with an installed capacity of 570 KLPD for manufacturing ethanol as on March 31, 2024
3. Diversified product portfolio and well-established relationship with a diversified marquee customer base across industries and geographies
4. Well-developed in-house research and development capabilities
5. They are a member of the Somaiya group and have an experienced Promoter, Board of Directors, Key Managerial Personnel and Senior Management

GODAVARI BIOREFINERIES LIMITED STRATEGIES
1. Continuing to diversify product offerings and improving operational efficiency
2. Implementation of additional measures for improving feedstock security and increasing value derived from feedstock
3. Increasing the share of business of existing customers and further diversifying the customer base
4. Continuing focus on implementation of sustainable practices and strengthening the control over their inputs
5. Reduction of borrowings and leverage

GODAVARI BIOREFINERIES LIMITED RISK FACTORS & CONCERNS
1. They depend on a few suppliers for supply of a significant portion of raw materials (excluding sugarcane).
2. They are dependent on the availability of sugarcane, molasses and feedstock for the manufacturing of their products in the sugar, distillery and cogeneration segments.
3. Their sugar, distillery and cogeneration segments are subject to seasonal vagaries .
4. The revenue from the sale of ethanol is dependent on the sales to oil marketing companies pursuant to the ethanol blended petrol programme instituted by the Government of India.
5. Bio chemicals industry is capital intensive, and they may need to seek additional financing in the future to support their growth strategies.
6. They extend credit to harvesting and transport contractors, farmers and cultivators from whom they purchase sugarcane.