Page 182 - CW E-Magazine (12-3-2024)

Special Report Special Report

payment by customers. By transferring aftermath. To protect their stretched sup- protocols is non-negotiable. According of the world has further heightened Importance of Environmental, Social, to promote sustainable practices and
credit risk to insurance companies, ply chains, companies globally over- to the National Disaster Management these uncertainties. Moreover, geo- and Governance (ESG) factors in the transparency, foster open dialogue with
companies can protect their accounts ordered in 2021 and 2022, which resul- Authority (NDMA), there are 1,861 political tensions between major trading risk management framework stakeholders, including investors, regu-
receivable and minimise the fi nancial ted in high inventory levels; this, in turn, Major Accident Hazard (MAH) units partners can escalate into trade disputes According to the World Economic lators, employees, and communities, to
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impact of defaults. led to destocking of chemicals in 2023. spread across India. In addition to this, or even trade wars, further exacerbating Forum (WEF), companies on the S&P address ESG concerns proactively, and
Recessionary conditions in Europe and there are thousands of registered and the challenges faced by chemical com- 500 ESG Index outperformed, suffered enhance transparency through regular
Changes in the credit risk profi le high infl ation in the US, combined with unregistered units below the MAH panies. For instance, friction between fewer losses, and recovered faster than reporting about ESG performance.
ChemImpex
IndiaChemTrade
of customers the persistent economic slowdown in criteria, dealing in hazardous material China and India has resulted in recipro- the S&P 500 during the pandemic.
Credit risk management is an ongo- China, have resulted in lower demand that pose disaster risks. Failure to com- cal anti-dumping actions by both coun- Therefore, companies cannot afford to In conclusion, while no strategy
For subscribers only
Free for subscribers of Chemical Weekly
ing process that requires regular moni- for chemicals in the international market ply with safety standards can lead to tries on various chemical products in ignore ESG risks and there should be can completely eliminate counterparty
ChemImpex, the trade database, tracks, on a daily
IndiaChemTrade provides consolidated trade statistics
toring and review. Chemical businesses coming into 2024. According to experts, accidents, injuries, and even fatalities, 2023. thorough due diligence on customers risk, a comprehensive risk management
should continuously assess the credit- the sector is not expected to recover besides inviting legal liabilities and basis, exports and imports of chemicals and related of India. The information provided here is based on the
and suppliers from an ESG perspective. approach can signifi cantly reduce expo-
products through the major ports in India — a vital
annual trade data published by the Directorate General
worthiness of their customers and adapt signifi cantly in 2024. regulatory sanctions. Therefore, a risk Energy consumption and climate- Chemical companies should also engage sure and safeguard the fi nancial health
of Commercial Intelligence and Statistics, Government
source of commercial intelligence. Find out on-line
their risk mitigation strategies accord- assessment of suppliers must include change risk with their supply and distribution chains of businesses in the chemical sector.
Chemical companies, with their
ingly. This may involve updating credit Foreign exchange (forex) volatility a safety audit pertaining to hazardous how international markets are moving; where your of India. The database can be searched by: Chemical
ABOUT THE AUTHOR
competitors are exporting and at what price; where
limits, renegotiating terms, or even ter- Forex volatility adds another layer material utilisation and storage, fi res, substantial energy consumption and Name/Harmonised Code to obtain the consolidated
minating relationships with high-risk of complexity to the operating environ- insurance claims for accidents, safety greenhouse gas emissions, fi nd them- With over 25 years of experience, Kaushal spent 18
imports are coming from and how their prices are
trade (import or export) in that item; or by Country to
counterparties if necessary. Identifying ment of chemical companies in India. certifi cations, etc. selves squarely in the crosshairs of the years with Dun & Bradstreet India in various leader-
obtain the trade (import or export) in all chemicals and
moving. Download all this data, seamlessly, for a
high-risk customers and strictly con- Exports of organic and inorganic chemi- global climate-change crisis. Traditio- ship roles including President & Managing Director
small fee — online, anytime, with no hassles.
related products between India and that country
trolling the internal credit policy, helps cals stood at US$30-bn in FY23. On Chemical products must meet nal manufacturing processes rely heavily from 2010 – 2017. He helped establish Acuite Ratings &
companies moderate their business ex- the other hand, a signifi cant portion of stringent quality standards and regula- on fossil fuels, releasing vast quantities Research Ltd. (formerly SMERA Ratings Limited), Dun &
ChemXchange
posure according to the buyer’s level of feedstock and equipment is imported tory requirements to ensure consumer of carbon dioxide into the atmosphere. Bradstreet’s joint venture with SIDBI, and has served on
Open to all registered users — no subscription required
transaction risk. By staying vigilant and by the sector. Therefore, fl uctuations safety and satisfaction. Compliance To mitigate this, a transition to cleaner, its Board.
ChemXchange — the chemical exchange with a difference — is where you can identify your buyers and sup-
proactive, businesses can minimise the in currency exchange rates directly with product labelling, packaging, and more sustainable energy sources is
plyers on-line, any time. This unique platform is free to all advertisers in the print version of Chemical Weekly.
likelihood of credit losses and protect impact the bottom line of companies. chemical composition regulations is imperative. With climate change in the He serves as an Independent Director on the Board of Apar Industries Ltd,
their fi nancial stability. Once again, companies need to ensure essential to prevent adverse health effects spotlight now, it is necessary for the a US$1.2-bn manufacturing conglomerate. He also serves on the Risk Manage-
For more information contact: 022-24044477. Fax: 022-24044450
that they hedge their forex exposure and legal repercussions. Moreover, as risk assessment framework to take into
Email: corporate@chemicalweekly.com or log on to chemicalweekly.com
It is also vitally important to take appropriately. global markets become increasingly account the steps that are being taken ment Committee of the Board of Directors.
into account other risks faced by the interconnected, chemical companies by the company whose risk is being Kaushal holds an MBA from Bowling Green State University and is passio-
chemicals sector: Compliance and regulatory risks must navigate a labyrinth of inter- assessed towards energy transition and nate about reading, geopolitics, art, and travel.
One of the foremost concerns for national regulations and trade agreements carbon footprint reduction.
Market and Economic risks chemical companies in India revolves to export their products. Failure to meet
around environmental regulations. these standards can result in product
Infl ation With increasing awareness of envi- recalls, market access restrictions,
Infl ation poses a signifi cant chal- ronmental issues and the imperative and damage to brand reputation. It is
lenge for companies in the chemical in- to mitigate pollution, regulatory bodies imperative to ascertain and verify qua-
dustry, as it directly impacts production impose strict guidelines on waste lity certifi cations awarded to companies
costs, raw material prices, and ultimately, management, emissions control, and in the chemicals sector while assessing Missed a copy !!!
profi t margins. The world has been sustainable practices. Non-compliance their risks.
combating high infl ation levels for the by companies or even their suppliers For Digital Edition of this month’s issue & all other past issues
last few years. Companies may want to can result in hefty fi nes, legal disputes, Geopolitical risks
consider locking in their raw material and reputational damage. Monitoring Chemical companies operating in Visit www.hpicindia.com
purchases and product sales through the compliance of all entities in a sup- India are heavily impacted by the vola-
hedging. It is important to avoid specu- ply chain is imperative for companies tility surrounding trade policies and
lating in this volatile environment. in the chemicals sector. regulations. Shifts in tariffs, import PDF copies available for download
quotas, and export controls can signifi - Mrs. Usha S. - usha@hpicindia.com
Demand-supply mismatch Similarly, ensuring the health and cantly impact the fl ow of raw materi- Register Now
Factory shutdowns and logistics safety of workers, communities, and als and fi nished products to chemical
challenges resulted in a huge mismatch consumers is paramount – from han- companies, disrupting supply chains Contact: For Subscription : Mrs. Usha S. - usha@hpicindia.com
between demand and supply during the dling hazardous substances to trans- and affecting profi tability. The recent For Advertising : Mr. Vijay Raghavan - vijay@hpicindia.com
COVID-19 pandemic and its immediate porting chemicals, adherence to safety wave of protectionism in various parts
182 Chemical Weekly March 12, 2024 Chemical Weekly March 12, 2024 183

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