Vivimed Labs Ltd (Vivimed) is a speciality Chemical Company with prime focus on the Home and Personal Care (H&PC) segment (covering oral care, sun care, skin care, hair care, preservatives, anti-aging molecule etc.). It holds an unique position in the global H&PC industry with supply-chain relationship with global leaders including - Unilever, L'Oreal, Procter & Gamble, Johnson & Johnson etc.

 

Having been incorporated in 1989 and manufacturing Specialty Chemicals and cosmetic ingredients like Triclosan, Avis etc. Vivimed is the 2nd largest manufacturer of Triclosan (an antibacterial used for oral care) globally and one of the top three companies for UV-A filter (sunscreens). Apart from its range of active ingredients for H&PC segments, Vivimed offers its expertise in synthetic organic chemistry to offer products that are broad spectrum anti-bacterial and antifungal biocides, aimed at catering to the needs of high growth sectors such as Plastic additives, Industrial preservatives, Construction and Paint Industries. Also through acquisitions of Creative Health Care and merger of associated company VVS Pharmaceuticals & Pharmaceuticals Pvt Ltd, Vivimed entered into the speciality pharma business.

 

Vivimed, driven by its long standing supply-chain relationship and collaborative product development practices with global peers, has emerged as the partner of choice in the H&PC industry. In fact, Vivimed has been supplying Triclosan and CaGP to Unilever/HLL group since 1995 and directly sells Chlorophenesin, a Cosmetic blend to Collaborative Laboratories Limited, USA.

 In early FY08, Vivimed has been approved as a Global Supplier to L'Oreal - France. This will propel Vivimed into a strong position as an actives supplier to the USD 7 billion, Global Sunscreen Market which is growing at the rate of 7-10% annually. Apart from these longterm supply contracts, it has a strong customer network both in the domestic market as well as for the international markets. The domestic customers include - HLL, Anchor Health Care, Marico Industries, Godrej, Karnataka Soaps and Detergents, Jyothi Laboratories. The top global customers include - Unilever, Arnaud SA France,BASF Harmet International Inc., USA, L'Oreal, Eco Labs, Microban, Sanitized AG, Benckiser North America, Arch Chemicals USA, ISP,Amore Pacific Korea MCA Switzerland, etc

 

CUSTOM  MANUFACTURING

 

Of late, major cosmetic & toiletries companies are focusing more on marketing activity and outsourcing the manufacturing stage to remain competitive, which throws open the outsourcing opportunity in the global market for industrial biocides, water treatment specialty chemicals, and preservatives (which is valued at US$5 billion.). In order to exploit this emerging opportunity of outsourcing, Vivimed has ventured into the custom manufacturing segment.

 

HOME AND PERSONAL CARE ACTIVES DIVISION

 

The H&PC Actives Division has been a key mover and the driver that has enabled Vivimed Labs build its international reputation. Known to global manufacturers across the world for its strength in synthetic organic chemistry the H&PC division has under its umbrella five areas:

 

1 Oral Care

2 Sun Care

3 Skin Care

4 Hair Care

5 Preservatives.

 

SPECIALITY PHARMA DIVISION

The Specialty Division has its inherent strengths in drug delivery ad drug discovery. They are focused on providing cures in the Oncology space, Arthritis, Syndrome X, Macular degeneration, Psoriasis and Stress.

JAMES ROBINSON

James Robinson Ltd., UK, is a leading global supplier of dyes used in a host of personal care and  Consumer products ranging from hair dyes, pharmaceuticals and photographic films/prints to ophthalmic sunglasses and fluorescent yellow tennis ba*ls.

James Robinson is an award winning company. It serves key markets in hair dyes, imaging and personal care sectors. It also offers a novel range of photochromic dyes for a wide variety of applications including ophthalmics, plastics, coatings and inks, and fluorescent dyes for both textile and non-textile applications.

 

In February 2008, Vivimed announced acquisition of James Robinson, a subsidiary of UK-based global chemicals major Yule Catto & Co. for about $30 million. The company has a leadership position in the Hair Dyes and Intermediate segments. The Personal Care products of James Robinson complement Vivimed’s strong portfolio of active ingredients for this sector and this acquisition will be EPS accretive.

 

HARMET INTERNATIONAL US is to increase the company’s footprint into the US markets.

 

Financial results

 

                                                       March 09               march 08

Sales   (crores)                                 280                      181

Net profits                                        22                         16

Equity                                               9.4                         9.4

Eps                                                   23.4                        16.97   

For q1 fy10 sales was 78.96 crores (q1 fy09  52.41)

Net profit for q1 fy10  6.96 crores (q1 fy09  4.2)

POSITIVES

NICHE SEGMENT WITH STRONG PRODUCT PORTFOLIO

GOOD GROWTH DURING LAST FOUR FINANCIALS AND FIRST QUARTER FY10

ACQUISITION  ADDING TO COMPANY’S GROWTH

CHEAP VALUATIONS FOR AN FMCG (ancillary) COMPANY

NEGATIVES

HIGH DEBT BURDEN (presumably for acquisition of James Robinson)

Promoters have pledged 19 percent of their stake

   

I am buying the stock for purpose of future dividends. At present they have debt burden which they need to address and I would have been more happy if they paid back some debt instead of giving dividend.

what lured me into buying was the business which they are in and its scalability and the possibility of generating lots of free cash once its debt burden lightens. Let's see how it goes. By the time dividends increase the share price may have appreciated.

Originally posted by sajanvm Have you looked at the cash flows ? Are they enough to payout good dividends ?

Hi For fy09 company has declared dividend of 1.5 per share.

Edited by hit2710 - 07/Aug/2009 at 4:15pm

I concentrate more on the earnings and here is last few quarters earnings