Jayant Agro Organics: Auditors of Jayant Agro hold more than 1% in Jayant Agro.

Auditors who audit the books like what they see in case of Jayant Agro Organics. Best way to show your confidence is holding more than 1% stake in Jayant Agro by the auditors..

June 2014 Public holding more than 1% stake in Jayant agro:

1. Balwan Finance & Leasing Pvt Limited - 1,93,583 shares - 1.29% of paid up equity capital

2. ITOH OIL Chemicals Co. Ltd - 6,00,000 shares - 4% of paid up equity capital.

3. SShyam - 1,50,441 shares - 1% of paid up equity capital.

Link for shareholding data..

Now if we look for promoters of Balwan Finance & Leasing Pvt ltd. we get the following info..

Director Name: Sushila Tilokchand Ostwal

Director Name: Twinkle T Ostwal

Now if we look at the annual report March 2013.

Auditors are:

T.P Ostwal & Associates (Regd.)

Chartered Accountants.

Now T.P.Ostwal & Associates Senior partner is Tilokchand P Ostwal..

So there we have it .. one of the largest public shareholders of Jayant Agro is the Auditors of Jayant Agro itself.. Clearly the CA can see something other's cannot ..

One more Feather in the Cap of Jayant Agro Organics..

Conclusion: The Auditors who's job is to audit that the books are in order seems to be impressed by Jayant Agro Organics Financial.. so impressed are the auditors that he is willing to buy 1,93,583 shares (1.29% shareholding in Jayant Agro worth 2.43cr @126 not directly but through family holdings).

Jayant Agro: Postal Ballot for 700cr debt or stake/asset sale

Jayant Agro held a Board Meeting on July 5,2014. The board of directors took the following decision..

1. To conduct Postal Ballot, pursuant to Section 110 of the Companies Act, 2013 to obtain approval of shareholders, by passing a Special Resolution for:

    a) Borrowing of money up to Rs. 700 Crore under Section 180 (1) (c) of the Companies Act, 2013 where the money to be borrowed together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the Company’s bankers;

    b) Creating mortgages, charges, hypothecation etc. on the Company’s assets, undertaking properties, under Section 180 (1) (a) to secure the borrowings of the Company.

    c) Giving of loan to anybody corporate or providing guarantee or security to any body corporate or acquiring by way of subscription, purchase of otherwise securities of any body corporate in excess of the limits specified under Section 186 (3) of the Companies Act, 2013 up to Rs. 700 Crore.

2. Appointment of M/s. V. V. Chakradeo & Co., Practicing Company Secretaries, as scrutinizer for conducting the Postal Ballot voting process, pursuant to Section 110 of the Companies Act, 2013 and rule 22 of the Companies (Management and Administration) Rules, 2014.

=========================================

looking at the Board Meeting details it looks like Jayant Agro is going to borrow upto 700cr and the Postal Ballot Special resolution is for these 700cr.. and other related activities..

but then digging a bit deeper and looking at the Companies Act, 2013 shows something different..

Consider point b of the Postal Ballot..

b) Creating mortgages, charges, hypothecation etc. on the company assets, undertaking properties, under section 180(1)(a) to secure the borrowings of the Company

If you read Section 180(1)(a) of the Company Act 2013 it states..

=========================================

180. (1) The Board of Directors of a company shall exercise the following powers only with the consent of the company by a special resolution, namely:—

(a) to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking,of the whole or substantially the whole of any of such undertakings. Explanation.—For the purposes of this clause,—

(i) “undertaking” shall mean an undertaking in which the investment of the company exceeds twenty per cent. of its net worth as per the audited balance sheet of the preceding financial year or an undertaking which generates twenty per cent. of the total income of the company during the previous financial year;

(ii) the expression “substantially the whole of the undertaking” in any financial year shall mean twenty percent. or more of the value of the undertaking as per the audited balance sheet of the preceding financial year;

=========================================

You can compare the Postal Ballot statement for Section 180(1)(a) in blue  and one can read the company Act 2013 Section 180(1)(a) in red

Clearly Section 180(1)(a) talks about special resolution for sale of substantial assets (exceeds 20% of company networth or generates 20% of its income)

For the year ending March 2013:

Jayant Agro Standalone total Income: 1215Cr

Consolidated Total Income: 1640Cr

Thus Ihsedu Agro chem Total Income: 425Cr

20% of 1215 = 243Cr

20% of 1640 = 328Cr

So in both terms Ihsedu Agro Chem's Income exceed 20% of Jayant Agro's Income

======================

For the year ending March 2013

Jayant Agro Stand alone Networth: 143.16Cr

Jayant Agro Consolidated Networth: 173.65Cr

thus Ihsedu Agro Chem's Networth: 30.49Cr

20% of Jayant Agro Standalone Networth= 28.63Cr

20% of Jayant Agro Consolidated Networth= 34.73Cr

Ihsedu Agro Chem networth exceeds standalone networth of Jayant Agro..

=======================

- Ihsedu Agro Chem is a substantial subsidiary with Income more than 20% of total Income for last year ie. 2013.

- Ihsedu Agro Chem is a substantail subsidiary with networth more than 20% of standalone networth of Jayant Agro.

- Ihsedu Agro Chem networth is less than 20% of consolidated Networth of Jayant Agro.

========================

Conclusion: looks like the postal ballot is after all not for raising loans upto 700Cr(upto.. means loan from 1cr to 700Cr  ).. its more so to get approval to sell a substantial asset... most likely its Ihsedu Agro Chem where Arkema would prefer to hold majority stake.. ( to protect its number one position in castor derivative business worldwide)

700cr could be a hypothetical number .. it could also be the price Arkema pays for majority stake in Ihsedu Agro chem.

Another point worth considering is that promoters might sell stake in Jayant agro itself for 700Cr by selling stake in Jayant Finvest which holds more than 50% in Jayant agro.. but then.. do they need a special resolution to sell stake in a company that is pvt?.. Naw.. so most likely its substantial stake sale by Jayant in Ihsedu agro chem.. and its going to be substantial.. amount somewhere around 700Cr 

So here it is much before the real announcement is made .. information is available that stake sale will happen giving us a chance to enter in before the stock starts appreciating..Jayant Agro: CMP: 121, MCap: 181.50cr

Multibagger if it all turns out to be true.. still its cheap even at cmp for jayant agro as a company.. so heads I win tails I donot loose much!!

=Happy Investing

whatsup-indianstockideas

PN: There is no guarantee ..this is my interpretation based on publicly available information.. Pls do your own deep dive before investing.

Jayant Agro Postal Ballot

Company act 2013 Section 180(1)(a)

Link to Company Act 2013

Link to Postal ballot 

Unresolved Global Oil Supply and Demand Equation Poses Risks

Article in Business Standard..

There is an urgent need to move to alternatives to crude oil.. and Castor oil derivatives which can produce 1000+ intermediates which are derived from Crude Oil is one of the given solutions..

Also castor oil derivative can replac crude oil derivatives "one to one" in the current production process with no changes to the production process.. which makes it a low hanging alternative to crude oil derivatives in the chemical industry..

Jayant Agro Organics by the virtue of being the largest player in castor oil and castor oil derivatives space is in a positon of strength to reap benefits from the same..

-----------------------

Unsolved global oil supply and demand equation poses risks: Dr Mosongo Moukwa

Looking out a few years, global demand for oil will continue to increase because of rising prosperity in emerging economies. Supply, however, will still remain constrained

Soon, the world will not be able to produce all the oil it needs as demand is continually rising while supply is falling. According to International Energy Agency (IEA), oil consumption will rise by 56% between now and 2040, with China and India, both responsible for half of this increase in consumption.

A study by Pickering, Holt &Co, an investment bankfocusing on energy, estimates that more than 50 billion barrels of oil and gas have been consumed in 2013 against only 20 billion barrels of conventional oil discovered. The study has examined 400 exploration wells and has concluded that companies have found less oil than anticipated, despite heavy investments in capital and technology. Deep-sea exploration, where morehydrocarbons are being discovered at about 1500 meters, is becoming ever more important.

None of the discoveries made in 2013 exceeded one billion barrels of oil equivalent. The largest one was made by the Italian ENI off the coast of Mozambique, with two deposits of 700 million barrels, followed by the Lontra (Angola) by the American Cobalt (900 million) and that of a field in Malaysia by Newfield Exploration (850 million). Others have been unsuccessful, such as in Ethiopia and Cote d’Ivoire by British Tullow Oil. Oil explorations by Shell and Total off the coast of French Guyana has produced very little.

According to the French Institute of Petroleum (IFPEN), reserves discoveries between 2008 and 2012, including deposits in hard places to operate, cover only 40% of global consumption of conventional oil. This is far from offsetting the decline of mature fields. According to the IEA, who studied the profile of 1600 fields having passed their peak production, production has fallen to an average rate of 6% per annum.

Richard Miller, a former BP geologist, and Steve R Sorrels, a co director of the Sussex Energy Group at the University of Sussex (UK), have stated that squeezing more oil out of older reserves and exploring new ones in the deep seas will not be sufficient to meet the production levels required to address the demand. They have estimated that we would need to bring on stream new productions equivalent to a minimum of 3 million barrels per day to compensate for declining crude oil production. This is equivalent to a New Saudi Arabia every 3 to 4 years in order to meet the demand. The oil peak is the result of declining production rates, not declining reserves.

Professor David J Murphy of Northern Illinois University, an expert in the role of energy in economic growth, has stated that the Energy Return on Investment (EROI) for global oil and gas production is about 15 and declining. EROI is the amount of energy produced compared to the amount of energy invested to get and use it. EROI of oil and gas production is 11 for the US and is also declining. It is generally less than 10 for unconventional oil and biofuels. As the EROI decreases, energy prices increase. The dependence on shale could worsen the decline rates in the long run, since these wells decline extremely fast.

The current rise in oil production in North America, one million barrel a day, has helped offset any outages coming from other oil producer countries and has helped the market remain in balance. Looking out a few years, global demand for oil will continue to increase because of rising prosperity in emerging economies. Supply, however, will still remain constrained.
 

Dr Mosongo Moukwa

Last year, IEA predicted that over the 2012-18 period, the largest contributors of new supplies to world markets, after the US and Canada, would be Iraq and Brazil. Iraq is expected to contribute to 45% of global oil growth between now and the end of the decade.  Technical challenges seem insurmountable in Brazil, and Iraq has exploded to chaos again, implying that geopolitical factors are the wild cards in the oil equation and they can outdistance the “market only” factors.
 
The price of oil has continuously risen since 2004, where it was at $30. Then, it spiked to $150 to come down to a floor of $100 per barrel in 2008. Today the oil price is at about $110 per barrel and the markets have been relatively calm, as investors have assumed that Baghdad will not fall. But, the risk is to the upside. While the price of oil has been high, exploration costs have also taken the same trajectory. According to Goldman Sachs, oil companies would need the price of oil to be at $120 per barrel in order for them to balance their own budgets.
 
The relationship between economic growth and energy consumption is straightforward: the former is a function of the latter. With national economies around the world forced to pay more than $120 for every barrel of oil consumed, a critical question must be asked: what happens when the world’s most important source of energy becomes unaffordable? 

----------------------------------------------------------------

The author is an Independent Consultant based in Chapel Hill, NC, USA, and was recently Vice President - Technology at Asian Paints Ltd, Mumbai, India. He is a member of the American Chemical Society and Product Development Management Association. Email: mosongo@mosongomoukwa.com

Link to Original Article

Conclusion: The world built around oil (hydro carbons) as the source of  energy is unraveling, Castor oil derivatives which can replace crude oil based derivatives without any changes in the process of production is a low hanging fruit.. with the added benefits that its "renewable" and "green" 

Jayant Agro Organics: Why I love this 2% Net Profit Margin Business

As you are well aware Jayant Agro is one of my "Best Buy's" along with GAEL, Tata comm and NHPC.

While duscussing the pro's and cons of Jayant Agro Organics as a stock worth investing, everybody's concern is: "its a 2% Net Profit margin business.." One wrong step all your profits are "Zero" Its a high risk investment.

Well lets look at a hypothetical business with 2% profit margin and say your investment is Rs100/= and you make 2% profit on it. that's Sales: 100/= Net Profit 2/= 

Net Profit Margin: Profit/Sales = 2/100 = 2%

Return On Capital Employed: Profit/Capital employed = 2/100 = 2%

well now consider one small change suppose 100/= is the sales done in 1 month then..

Annual (12 months sales)= 12 x 100 = 1200/= 

Annual (12 months profit) = 12 x 2 = 24/=

Now the key is to understand how much capital is employed, 

here the 100/= bucks capital is free after the first month to be used again in next 11 months so actual capital employed is only  100/= , lets calculate Net Profit margin and Return on capital employed

Net Profit margin = Profit / Sales = 24/1200 = 2%

Return on Capital Employed = Profit/Capital employed = 24/100 = 24%

So the 2% profit margin business, since it can sell its inventory & reinvest the capital again 12 times a year, capital employed actually gets a return of 24%

============================

Lets look at Jayant Agro's Net Profit Margin and Return on Capital employed (ROCE)

Consolidated 5 yrs avg data:

Net Profit Margin: 1.656%

ROCE = 16.798%

So as can be seen Jayant Agro has a wafer thin margin of 1.65% (5 yrs avg)  but ROCE is healthy 16.79% (5 yrs avg). The question is.. is Jayant just like the Business which has a 2% profit margin but turnover is every month? How do we know that..

Look a little lower at Inventory turnover ratio.

5 yrs Avg Inventory turnover ratio: 13.022

Lets calculate inventory holding period in days = no of days in a year/Inventory turnover ratio 

= 365/13.022 = 28.02 days..

So Inventory Turnover Ratio indicates that Inventory holding period for Jayant Agro is 28Days (5 yrs avg) so within 1 month Jayant is able to sell all its inventory and (make 1.65% profit) and restock again this happens every year 13 times (inventory turnover ratio) this helps the company get a respectable ROCE even when the profit margins are just 1.65%

=========================

Similarly is you look at the Debt turnover ratio:

5 yrs avg Debt turnover ratio: 20.126

Debt turnover in days = no of days in a financial year/Debt turnover ratio = 365/20.126 = 18.13 days

WOW!! so Jayant has a 5 yrs avg debt turnover rate of 18.13 days.. clearly matches with the Inventory turnover ratio.. of 28.02 days..

=========================

So we can conclude looking at 5yrs data avg for jayant agro consolidated..

1.65% Net Profit Margin and ROCE = 16.79% and Inventory turnover ratio of: 13.022 (28 days) and Debt turnover ratio of 20.126 (18 days) we have a company which has a very efficient supply chain.. and it can turnover its inventory and its debt very very quickly(less than 1 month).. at wafer thin margins( keeping competitors at bay as well as ensuring its customers get competetive prices..) .. getting a respectable ROCE of 16.79%

=========================

Getting back to the rs100/= example.. say we have an option of an FD of 15% Per annum return or another FD of 2% per month return..Assuming equal risk levels which one will you choose? its very simple we know the 2% per month translates to 24% per annum and it wins hands down!!

Comparing 15% Per Annum and 2% per month is not correct way we need to look at per annum return
15% per annum and 24% per annum (2% per month * 12 months)

Clearly we can see that 24% return is better than 15% per annum.. Similarly looking at just profit margin gives us the wrong picture.. we need to look at ROCE.

=========================

Again.. its all great that Jayant is competetive and its able to turn over its inventory and debt at an amazing pace of less than 30 days .. I still need another confirmation.. to be convinced that Jayant is not a High Risk business..

According to the management : Jayant has been paying dividends since inception ie 20+ yrs of uninterrupted dividends since inception and uninterrupted profits..
From Annual report 2004-2005

From Annual report 2012-13

 Clearly the company has built a moat around itself based on its efficiency and its providing attractive return on investment (ROCE=16.79% 5yrs avg)  as well as competetive prices to its customers (Net Profit Margin: 1.65% 5 yrs avg)..

Another interesting point: Net profit since inception: 201.22cr
dividend payout since inception: 48.08cr
Avg dividend payout ratio (20+yrs): 48.8/201.22 =  24.25%

latest dividend payout (2013-2014): 5.17cr (Rs 3/= per share + dividend tax 15%)
Latest Net Profit (2013-2014): 39.75cr
Latest dividend payout ratio: 13.01%

Clearly if dividend payout reaches its 20+yrs avg payout ratio(24.25%) we should receive:  9.63cr (including div tax) which translates to 5.58/= per share (high probability of increase in dividend payout)


Conclusion: Dont go by the ultra low profit margins and debt in its books.. (most of it is short term) as we have seen Debt turnover is 18 days (5 yrs avg) Inventory turnover is 28 days(5 yrs avg) we have in Jayant agro a well oiled company running flawlessly (great supply chain) keeping competitors at bay. 

This is attracting speciality chemical majors (Arkema, Mitsui Chemicals, ITOH oil) to build strategic partnerships as Joint Ventures further cementing its position by locking in big customers (Arkema is the largest importer of castor oil and castor oil derivatives in the world!! 7 billion Euro sales &  Mitsui Chemical is one of the top Chemical companies in the world , 14 billion dollar sales, ITOH oil is a 100yrs old company in castor oil based speciality chemicals business).

Jayant Agro
CMP: 128
MCap: 190cr
ROCE: 19.45%, ROE: 22.61%
3yrs CAGR Sales: 21.49%
3 yrs CAGR inNet Profits: 43.88%
PE: 4.83 (March 2014)
EV to Sales: 0.30
EV to EBIDTA: 4.96
7 yrs 588% increase in profits and 335% increase in sales
=================
Consolidated Sales/NP/dividend numbers.
March 2007 Sales 462.49Cr Net Profit: 6.76Cr Div:1.25
March 2008 Sales 605.96Cr Net Profit: 9.51Cr Div:1.25
March 2009 Sales 875.86Cr Net Profit 7.49Cr Div: 1.25
March 2010 Sales 904.01Cr Net Profit: 12.47Cr Div:1.50
March 2011 Sales 1,175.26Cr Net Profit: 24.92Cr Div 1.75
March 2012 Sales 1,832.26Cr Net Profit: 31.35Cr Div: 2.00
March 2013 Sales 1,624Cr Net Profit: 36.24Cr Div: 2.25
March 2014 Sales 1,550Cr NProfit: 39.75cr Div: 3/=
=================

Jayant Agro:Self Employed Women Association (SEWA) and castor supply chain

Interesting report done as part of M.Sc degree by student of DA-IICT (Dhirubhai Ambani Institute of Information and Communication Technology) Its a report of how SEWA is working as part of castor seed procurement supply chain with Jayant Agro Organics.

Link to the original document

SEWA  is  a  trade  union  registered  in  1972.  It  is  an  organization  of  poor,  self-employed women workers. These are women who earn a living through their own labor or  small  businesses.  They  do not obtain  regular salaried  employment  with welfare  benefits  like  workers  in  the  organized  sector.  They  are  the  unprotected labor force of our country. Constituting 93% of the labor force, these are workers of the unorganized sector. Of the female labor force in India, more than 94% are in the  unorganized  sector.  However  their  work  is  not  counted  and  hence  remains invisible. In fact, women workers themselves remain uncounted, undercounted and invisible.  SEWA’s  main  goals  are  to  organize  women  workers  for  full employment. Full employment means employment whereby workers obtain work security,  income  security,  food  security  and  social  security  (at  least  health  care, child  care  and  shelter).  SEWA  organizes  women  to  ensure  that  every  family obtains  full  employment.  By self reliance  we  mean  that  women  should  be autonomous and self-reliant, individually and collectively, both economically and  in terms of their decision-making ability. 

In rural India, agriculture and allied industrial sectors employ as much as 89.5% of the total female labor. In overall farm production, women's average contribution is estimated at 55% to 66% of the total labor.  

Brief description of RUDI               

RUDI  was  initiated  by  Self  Employed  Women’s  Association  (SEWA)  in  2004.RUDI  Multi  Trading  Company  Limited  has  been  established  in  2007  with  an objective  to  internally  generate  funds  for  the  rural  producer  groups.  This  will enhance the quality, capacity and efficiency of production through the use of better technology. Eventually it will result in scaling up the profit margins by way of bulk procurement and a well organized sales and distribution network. The profits will be shared by the members of the rural Self-Help Groups and Farmer’s Association, which  will  bring  a  positive  change  in  the  economic  condition  of  the  marginal farmers and workers who are struggling to survive and are below the poverty line.  

 

The  company  would  enable  direct  promotion  and  marketing  of  the  agro commodities procured through Farmer’s Association in the rural retail network of farmers and agriculture  laborers across all the villages of 14 districts of Gujarat. RUDI Company also enables multiple employment opportunities, reduce incidental expenses, availability of good quality agricultural & non-agricultural products to the  rural  consumers  at  affordable  prices  and  required  quantity,  elimination  of middlemen,  better  earning  for  the  producers  and  thereby  socio  economic development of the underprivileged rural people.     

 

About castor crop: 

Castor is a plant that is commercially very important to the world. Castor seed oil cake  is  very  useful  manure  to  crops.  It  is  a  very  good  fertilizer  alternative containing  optimum  levels  of  Nitrogen,  Phosphorous  and  Potassium  which  is suitable for cultivation of Paddy, Wheat, Maize and Sugarcane. Castor Oil’s application range is very wide‐the uses range from cosmetics, paints, synthetic resins & varnishes, to the areas of national security involving engineering plastics,  jet  engine  lubricants  and  polymers  for  electronics  and telecommunications. 

Gujarat  is  the  leading  state  in  castor  seeds  production  in  India  followed  by Rajasthan and Andhra Pradesh. Gujarat contributed 71% of the total production of castor seed in India in 2007‐08, followed by Rajasthan at 16%, Andhra Pradesh at 9% and other states sharing 4% Mehsana and Banaskantha is the largest castor producing districts in Gujarat. In Gujarat castor cultivation comes from 6 districts of North Gujarat, viz., Mehsana, Banaskantha, Sabarkantha, surendranagar, Patan and Kutch.  

 

 

Role of SEWA:  

 

SEWA has its own district office in nine district of Gujarat. Surendranagar district association  has  232  groups  of  farmers.  Each  farmer  group  has  usually  10-20 members. Majority of the members are women. The main work of these groups is to provide small  farmers,  a  village level  platform  from  where  they  can  sell  their products. It helps small farmer to get appropriate money for their products because 

it save their transportation cost to the market and bargaining rates of market. In this way the rural women and small farmers works and get mutually benefitted as farmer association share profit with the company where SEWA has a tie-up and farmers get money at their home. 

Castor Production in Dhrangadhra block: 

There are 8000-9000 members of Sewa district association from different village of Dhargadhra.   They visit all villages of different blocks  and ask farmer to sell their castor to them. They buy castor or at the appropriate rates and then procure it. Once the  procurement process  gets  finished  then by  the help  of local  labor they make  it  clean,  package  it  and  make  the  castor  load  on  the  company  truck.  The procurement  is  determined  by  SEWA  headquarter  at  Ahmadabad.  They  keeps inform everyday to their district associations about daily castor rates. When  member  of  farmers  group  go  for  procurement  they  already  know  about today’s  rate  of  castor  as  they  have  been  already  informed  by  Company  main headquarter  at  Ahmadabad  ,  so  before  purchasing  they  keep  two  things  in  their mind,  first  that  today’s  rate  of  castor  and  second  quality  of  castor.  The  price  is usually fixed but can be negotiable at good quality of castor product. 

They purchase castor according to the quality because the company to whom they sell it have certain criteria for quality standard determination. If one bag of castor doesn’t have weight of 75.2 kg of weight they don’t give same rate that was fixed earlier. So it becomes members of farmer group responsibility to purchase castor of good quality and package it well.  

 

Jayant Agro-organic ltd. (The Company) 

Jayant Agro-Organics Limited is an emerging global oleo chemical company with leadership in the castor-based specialty chemicals industry. With proven research capabilities,  strict  adherence  to  stringent  quality  controls  conforming  to International Standards and flawless record of honoring delivery schedules it is no wonder  that  Jayant  Agro-Organics  Ltd.  is  the  preferred  partner  of  choice worldwide for sourcing of castor oil and castor oil derivatives. With the long-term approach  we  have  adopted  to the  industry  it  is  no  wonder that  we balance  your requirement equations not only chemically but also economically. 

This company has a tie-up with SEWA. They  purchase castor in a bulk amount from farmers group. They give 2% of total sell, means if farmer group sell castor of  cost  1lakhs  in  a  day  then  they  will  get  2000  Rs.    In  Surendranagr  district association, they sell 20 ton/day means, they sell castor of worth 650,000 Rs, and if price rate of castor is 650/20kg means they will get 13,000 Rs.  The 1.25% of this amount goes to SEWA’S district association and remaining 0.75% goes to SEWA main headquarter in Ahmadabad. 

PN: I have deleted a portion of the document to make it more readable.. but the document itself is worth reading .. It also provides us an idea about how well entrenched Jayant is with its non standard supply chain involving NGO and farmers directly.. and giving them a market determined price.

This information could be detrimental for Jayant agro as competitors could also enter into similar agreements ..but my personal view is a company is more than just one part .. its how the whole organization works together as a team that makes a difference..  Jayant at CMP: 105/= is a great stock to buy.. deep value and a multibagger on long term basis..

Quarter ending March 2014 according to my estimates, Jayant Agro Organics is scheduled to report anywhere between 450-550Cr of sales (consolidated) 

Link to the original document

Ukraine:Crisis .. The Russian View Point.. Make's more sense than what is being FED to everyone

As always truth is the last thing to be disclosed.. reading through Putin's talk to reporters.. looks like we are being fed a "cooked up" story..  just read it and maybe you will get the view from Russia.. 

Strange that this information is not being provided by Indian media or the likes of CNN,BBC, Aljazeera 

Must read for all.. Here's the link (Vladimir Putin's talk to Reporters about Ukraine)

http://www.informationclearinghouse.info/article37889.htm

Jayant Agro: Castor Oil: Indian Institute of Chemical Technology: Hyderabad

This is a presentation given in Solvent Extractors Association: Castor Oil Global Conference in 2011

by Indian Institute of Chemical Technology: Hyderabad with regards to Castor Oil.

I have put all the slides.. just to keep the flow of the presentation..
What I find interesting is:
- Castor oil  Bio-refinery
- Various new technologies available with IICT-hyderabad.
- Castor oil is a source for the preparation of thousands of derivatives to replace petroleum intermediates.

I remember Jayant management talking about using enzymes as catalyst for getting castor oil derivatives as the next step forward for Jayant Agro.

Welcome to an Inside Job!!

Must See for Investors!! The Inside Job of how the whole system is Rigged.. story about Financial Crisis..

http://vimeo.com/57527797

You scratch my back and I scratch yours!!

(Takes some time to load be patient!!)

Jayant Agro: Stats: Castor oil based patents

Found this list of patents that are castor based. Interesting observations.

- 25 patents in EU for plant protection, fertilizer composition, animal purpose(feed?)

- 42 patents in US for pharmaceutical drugs and compositions.. surfactants, sustain release tablets, injectable formulations, treatment medicine for cancer, HIV, diabetese, arthritis etc..

- 20 patents for cosmetic compositions.. toothpaste, gelling agent, absorption agents, softening agent, micro emulsions..

120 patents registered in US and 97 patents registered in EU.. this is only for the period 1996 to 2000
India has 4 patents and since Jayant Agro's patent was issued in 2002 .. its not included in the list..

If we search for "castor" in the patent office we get 47,331 unique results..

Jayant Agro Organics: Bio-Polyol Plant JV

We have written before about the JV agreement between Jayant Agro and Mitsui Chemicals but there have been a recent development.. such as Mitsui chemical has closed some of its plants in Japan and other countries. 

Mitsui Chemicals has also signed a licensing agreement with Saudi Basic Industries Corporation (SABIC) for transfer of proprietary technology for MDI/TDI plant. (Link)

What I would like to point out is the "System Houses" that Mitsui Chemicals would like to service using Vithal Castor Polyols Pvt limited giving us an idea about Vithal Castor Polyol Pvt limited position in the scheme of things..

System Houses to be serviced by Vithal Castor Polyol Pvt limited:

1. Tianjin Cosmo Polyurethane

2. Nagoya Works, Mitsui Chemicals

3. Foshan Mitsui Chemicals Polyurethanes

4. Thai Mitsui Speciality Chemicals

5. Cosmo Polyurethane (Malaysia)

6. P.T. Cosmo Polyurethane Indonesia

Here is the complete document.

Jayant Agro Mitsui JV - Page 1

Jayant Agro Mitsui JV-Page 2

Link to Original Document 

Conclusion: If we look at the big picture Jayant Agro Organics is nolonger a standalone entity .. it has built strong forward linkages with market leaders and set to lead the castor oil and castor oil derivatives market in India and worldwide.  

Jayant Agro Blog Archives

Third Industrial Revolution:Best Buy's: Jayant agro, GAEL, NHPC & Tata Comm

Interesting article.. in Business Standard.. here is the link to the original article

Third Industrial Revolution To Drive Green Chemistry Adoption

The global green chemistry market is expected to become $ 98.5 billion by 2020, presenting huge opportunities for Indian companies using green principles to produce chemicals

Global manufacturing industry is witnessing a change which is fast and universal. In fact, many believe that we are already witnessing the third wave of industrial revolution in which Internet-based communication technology is converging with renewable resources. Just like during first and second industrial revolutions, chemistry is again expected to play a pivotal role in ushering third industrial revolution, as the world makes a transition from the fossil-age to the renewable-based economy.

“The third industrial revolution is already taking place in front of us; indeed we are living historical moments today. Additionally, the third industrial revolution is all about ‘green’ and ‘sustainable’ chemistry. Green chemistry is all about our license to operate, while sustainable chemistry is all about to become the new leaders of the future. No industry, or company will be able to operate without a clear mastering of the key principles of green chemistry,” said Rafael Cayuela of STYRON Europe, and Author of the book, ‘Future of chemical industry by 2050’, who was in Mumbai in December last year to attend the Industrial Green Chemistry Workshop (IGCW).

He believes that the need of the world to live with just 4,000 gms of carbon dioxide (CO2) per capita and per day in 2050 will create massive opportunities and incentives for the chemical industry. “The future leaders of our industry will be the ones excelling on the management of the principles of sustainable chemistry; and the ones able to create innovative and collaborative solutions that reduce emissions and energy,” added Cayuela.

Relevance for India
STYRON Europe's Rafael Cayuela So, what is the relevance of green chemistry to developing countries like India? Cayuela feels that green chemistry will become a ‘must’ for the chemical industry, independently of the degree of economic development. India is expected to multiple its GDP per capita by more than 10 times in the next decades, creating massive opportunities for the chemical industry. However, India will need to address these massive changes in small steps; as conditions in the country vary from region to region, from state to state.

ALSO READ: CEO, the change agent to achieve sustainability goals

“Certain parts of the industry as well as society are already at the top of the world, others will require more time. For instance, industries already largely exposed to the international market, like the Indian tyre and automotive industry are already largely using and applying ‘green’ and ‘sustainable’ chemistry, others are still lagging well behind. India will need to develop further these advanced ‘cluster’ or ‘industries’ while start growing gradually on those lagging behind,” observed Cayuela.

Work in progress 
Rajnish Sarna, Executive Director, PI Industries Ltd Many pharmaceutical companies in India have now started exploring green chemistry based routes of synthesis right during the initial phase of development of the molecule. For example, Dr Reddy’s Labs claims to be the first generic pharmaceutical company to become a member of the Green Chemistry Institute (GCI) of American Chemical Society (ACS), which aims to catalyse and enable the implementation of green chemistry and engineering throughout the global chemical enterprise.

ALSO READ: Six barriers to implementation of green chemistry in India

Similarly, companies such as PI Industries Ltd are working on energy-efficient processes which use safe and less-toxic raw materials, and generate minimum or no waste. “With a guiding philosophy of 3R’s - reduce, recycle & reuse, PI Industries has always been on the forefront in building and implementing environment-friendly and sustainable processes. From synthesising greener process routes at the R&D laboratory to using low-carbon materials at the manufacturing plants, PI has always facilitated sustainable growth,” claimed Rajnish Sarna, Executive Director, PI Industries Ltd.

Affordable for SMEs?
Global chemical industry and users of chemicals operate in a highly interconnected supply chain network spread across various countries. The global manufacturing set up has shifted from developed economy to developing and emerging markets, where small and medium scale manufacturers play a big role. Hence, incorporating sustainable philosophy into manufacturing processes has become critical for SMEs in India.

Prof James Clark of University of York Prof James Clark, Director, The Green Chemistry Centre of Excellence for Industry, University of York, UK, opined, “SMEs are likely to have customers who are very concerned about the environmental profile of their chemicals, and including the carbon/environmental footprint of their manufacture. Companies such as P&G and Unilever are committed to dramatically lower the impacts of their products and as they contribute very little to those impacts (they only formulate, pack and distribute) they will look to their supply chains to make the biggest reductions. SMEs can also lead the greener product revolution such as manufacturing bio-based chemicals.”

ALSO READ: Bio-based polyamides: India, the assured raw material supplier?

Expecting SMEs to invest in time-consuming research program to develop green processes in a big ask. But, experts claim that well-planned, practical-solutions can be formulated for SMEs to make their manufacturing more sustainable and eco-friendly. “Certain myths about green chemistry prevailing around us are also a barrier in its implementation. There are myths such as green chemistry is good theory but practically not feasible, it is difficult and complex, it is not viable for SMEs, it requires huge resources, etc. At Newreka, we have commercialised green chemistry based solutions, even for small & mid-sized pharma and fine chemical companies, involving hardly any capital investment and breakeven period of sometimes as low as three months,” observed Nitesh Mehta is the Founder-Director of Newreka Green Synth Technologies Pvt Ltd.

In fact, by improving the overall resource efficiency, green chemistry can provide financial benefits to chemical companies from lower material usage, energy and capital expenditure costs in addition to environmental benefits. “PI has consequently seen an improvement in the yield, reduction in raw material consumption, improvement in solvent recovery and reduction of waste generation. This was achieved through seamless collaboration among R&D, process development, technology absorption, supply chain and operations teams,” said Sarna.

According to a recent report by Pike Research, the green chemistry market is estimated to grow from $ 2.8 billion in 2011 to $ 98.5 billion by 2020, while green chemicals are expected to save industry about $ 65.5 billion by 2020. This presents huge opportunities for Indian companies, especially those using renewables resources and green principles to produce chemicals.

Capacity of BioBased Chemical Intermediates to double in 2017  ---------------------------------
Jayant Agro with its Castor oil and castor oil derivatives business in the front and center of the Green Chemistry revolution. India produces 85% of world's castor Crop and Jayant is the largest Castor oil & Castor oil Derivatives player in India.

CMP: 74, MCap: 111Cr
ROCE: 19.45%, ROE: 22.61%
3 yrs CAGR in Sales: 21.49%
3 yrs CAGR in Profits: 43.88%
PE: 2.63
Price to Book: 0.65
EV to sales: 0.25
EV to EBITDA: 4.15
Quantative Data for Jayant Agro

Jayant Agro: Green Chemistry Play(Castor oil can replace Crude oil in the chemical industry)
GAEL: Agro Processing Play (One of the Largest solvent extraction and Maize Derivative manufacturer in India)
Tata Communication: Communication Play (Only player to own a Fiber Optic Ring around the whole world)
NHPC: Renewable Energy Play (Largest Hydro Power Company in India)