SH Kelkar: A fragrance and flavour maker

SH Kelkar (SHK) is the fourth largest Fragrance and Flavour company in India with 12% market share. SHK is the third largest fragrance producer in India with 20.5% market share.

SHK was established in 1955 by SH Kelkar and VG Vaze. It has four manufacturing facilities, which are located in India and Netherlands. It exports fragrance products to 52 countries and flavour products to 15 countries.

SHK has a total installed manufacturing capacity of over 21,655 tons annually. It produced 7,170 tons of fragrance and 434 tons of flavour. Its current capacity utilization stands at 45%.

SHK has a wide portfolio of 9,700 fragrances, ingredients and flavour products. It sources approximately 250 ingredients. It sourced 62% of its total raw materials from suppliers in India, and 38% from suppliers in Indonesia, Germany, Brazil and US.

SHK’s fragrance products are used as a raw material in personal wash, fabric care, skin and hair care, fine fragrances and household products. Its flavour products are used as a raw material by producers of baked goods, dairy products, beverages and pharmaceutical products.

It has 3700 fragrance customers and 400 flavour customers. SHK has long term relationships with several customers spanning over 15 years.

SHK has a team of 18 scientists, 12 perfumers, 2 flavourists, evaluators and application executives. It has a team of 95 sales and marketing personnel.

Market Share:

F&F Industry:
– Top 5 players control 70% of Indian F&F industry
– SHK is the largest Indian player and closely competes with Global MNCs
– Globally Fragrance & Flavours market is dominated by four companies (Givaudan, Firmenich, IFF and Symrise), with high entry barriers
– Fragrances and flavours are often the key reason why consumers prefer one brand over another
– Fragrances and flavours typically make up just 1 to 5% of product costs
– F&F products are consumed on a constant basis, and are less sensitive to changes in economic growth

F&F Industry has strong entry barriers due to
– High customer acquisition time
– Established long-term relationships with customers
– Sustained R&D efforts
– Availability of key Ingredients
– Stringent regulatory compliance

– Mr. Ramesh Vaze and Mr. Kedar Vaze, promoters, have over 50 and 17 years of experience in the fragrance and flavour industry, respectively
– Promoter holds 56.9% of the company
– Blackstone holds 10% of the company
– Mr. Premji holds 1.5% of the company
– Smallcap World Fund holds 1.3% of the company



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