Industry Structure and Development
A. Water Soluble Film (WSF):
Arrow Coated Products Ltd, an ISO 9001:2008 certified company, is one of the leading manufacturers of cast water soluble
film in the world, having world class manufacturing facilities in Ankleshwar, Gujarat & has one of largest cast water soluble
film manufacturing machines in the world. Industry is now waking up to the need of water soluble film and its packaging
advantages. This Wonder Product has got varied applications in industries ranging from Agrochemicals, Construction,
Chemical, Embroidery, Health& hygiene to Water transfer printing (3D printing). WSF provides an instant solution to the
various problems faced in handling of hazardous material by industries today.
Most modern industries are turning to WSF as their primary packaging product. WSF is environmentally friendly and is
proven to be harmless to flora and fauna, like rivers, fish and flora on land. Saving Ganga, from dirt and pollution will be a
project very near to the heart of all Arrow Team Members.
Our Company has developed a wide range of water soluble films especially for the agrochemical industry which dissolves
completely in water & meets WHO standards (solubility standards) as per CIPAC method without damaging the environment
or causing any harm to humans and has no health hazards. WHO has mandated that all Vector Control actives (like DDT,
Lambda, Pyrethrins etc), weedicides, herbicides, insecticides etc must be packed in WSF. This increases the scope of WSF
market in India and neighboring countries.
Various NGOs and our own efforts for propagating the use of WSF in packaging of hazardous chemicals like Fungicides,
Herbicides and Weedicides, which are exceptionally potent pesticides and the proper disposal of packaging materials, after
the chemicals are dispensed with. The failure would result in serious health problems to flora, fauna, animals and human
beings is now being acknowledged by this Industry. This has also led to the realization to follow international rules of
packaging these chemicals in WSF in future.
B. Mouth Melting Strip (MMS):
This technology is a relatively new development, but broadly based on WSF technology, which allows small quantities of
active ingredients to be delivered in a user-friendly format. Adapting existing products such as oral sprays, liquids or tablets,
or exploiting entirely new opportunities, Arrow MMS Division works closely with clients to create the most effective thin film
product and process solutions. Arrow has now mastered the technology of edible water soluble film, and has made
agreements with at least one company for out-licensing this patent in India. Coming year shall bring good results to the
revenue stream, as many active ingredients belonging to health and hygiene shall be the preferred drug delivery system via
this technology. As is aware, that this patent has now been granted in several countries, including Australia, South Africa,
Europe and India. This patent is still being prosecuted in the USA.
C. Security Products:
Arrow has been in the business of security documents and its components. This year Arrow intends to enter into a more
volume business phase of brand protection. Taking cue from our experience in designing security products for high end
security, this SBU has been divided into two separate divisions. Brand protection division shall handle medium end security
products and Govt. Business division shall handle high end security products. As IPR becomes important, brand protection
will gain importance and Arrow will have to be in the forefront to offer sharp solutions. Arrow has several patents in this
security cluster and intends to create revenues in the coming years. Your company has secured at least one major order,
from a leading agrochemical company in India, for this technology and it’s related product. This year we hope to add more
companies to ensure that their brands are protected while using our patented product as an exclusive supply chain vigilance
system
D. Arrow Care Division:
Arrow Care Division mainly comprises of products based on Health and Hygiene. This year Arrow plans to introduce atleast 3
Products Via this division. Arrow Carez, a soap and shampoo strip, which totally dissolves in water, Arrow Klenz, an
innovative “Sausage” shaped WSF capsule containing precise quantities of active ingredients in liquid form. The container
bottles (which were hitherto dispensed away, creating an environmental mess) will be re-used atleast 20 times. It’s a simple
innovation, which bring down the prices of cleaning liquids and make it affordable for even rural India to use and clean theirtable tops, glass windows, kitchens, cooking vessels, floors, toilets etc. In the near future, more products will be added on the
same platform technology. Arrow has appointed atleast two exclusive franchisees for promoting this technology. It is
expected to cover 30% of the Indian market in the coming 2 years.
With thrust on hygiene and sanitation, as per hour PM’s speech, these products will find their way into rural india, as we intend
to make them most affordable and cost efficient products.
F. Patents and IPR SBU:
IPR is an important revenue stream for any Company. Arrow has spent reasonably heavy amounts of money in R&D and
filing of patents in the last couple of years. Arrow have received 3 patent grants in Australia, United State and Europe, this
year. In all we now have 30 granted patents nationally and internationally. Some of these patents have changed the way
many Detergents, Pharma and Agro chemical products are being packaged and delivered. For example the Self Destructive
Irreversible Security Packaging Water Soluble Film launched last year has captured the interest of the Agrochemical
Industry. The drug delivery system, using mouth melting strips, is planned to bring revenues, having tied up with a Japanese
company, as informed to the share holders. The delay in launch of this product is mainly due to regulatory affairs and time
taken for acquiring licenses of various active ingredients, in this new form of drug delivery system.
We are in continuous discussions with Companies on various patent revenue models.
Intellectual property is one of the tools that differentiate your Company from other smaller competition; with protected core
technology in the form of patents one has nuggets of wealth at the centre of the business. The patents are value creators for
the Companies as they can be licensed, sold, assigned or cross licensed, so having a strong patent portfolio enables a
Company to be royalty earner than royalty payer. Your company has proposes to approach DSIR (Department of Sciences
and Research) for assisting us in creating pilot production for these families of patents. Scale up of these pilot projects will
then allow your company to compete in the International arena, as our management is convinced that IP is the only way to
leap forward in this globally interconnected world.
The patent rights are territorial in nature, so one has to file and seek patent grant in all the countries separately where one
wants to protect the invention. The filing of patent applications all over the world is an expensive task but once the patent is
granted then various revenue generation streams come in to effect, which will create a WIN-WIN situation and long term
incomes for your Company. Patents are granted for period of more than 15 years, but not more than 20 years, as per laws in
most of the countries. Indian Patent office, since joining the TRIPS agreement and being a WTO signatory, has started
granting (and protecting inventions) product and process patents.
G. Arrow UK Activities:
Arrow UK increased further stake in Advance IP Technologies Limited (AIPT), a UK based Company. Arrow UK is a majority
share holder of AIPT. This Company was formed as a jointly owned company by Arrow and Israel based promoters, being
joint inventors in a Bio-digestible Drug Delivery Device (controlled) Patent. Advance IP specializes in generating revenues
from various IPR (Patent) created by both the partners. Arrow is a Joint Patent holder of a block buster Patent in health and
hygiene and the same has been assigned to Advance IP (AIPT). This Patent has been granted in UK and is being prosecuted
in Europe, USA, Australia, China and India. UK laws allow all IP related income to be taxed at a lower rate bracket, so Arrow
UK will gain monetary advantage in this process. Arrow UK and AIPT have made profits this year and we expect, going
forward, this trend to continue in the coming years
F. Export Division SBU:
Exports of our products have increased but there is a potentially unlimited and untapped market worldwide. There are only 3
major players in cast water soluble films and Arrow is one of them. All of us have unique methods of production of these films
and have earned patent protection. Arrow UK has generated excellent inquiries and all this need special care. This year we
segregated a new division specially to address to Arrow UK and other export markets. This should give a positive impetus to
our export sales this year. With new investments in automated technology, Arrow is now gearing up to produce International
quality of films as well as increase the quantum to satisfy the ever increasing hunger for WSF (water soluble films).
G. Arrow Pharma Foray:
Taking advantage of the patented technology, our Company is in the process of securing partner(s) in the field of
Pharmaceuticals and Nutraceuticals for entering into this highly lucrative and IPR sensitive field of saving human and animal
lives. In future, Arrow proposes to enter crop protection using a different version of this patented process and patented product. As India starts its vision into providing food grains for the world population, the need for low pesticides residue will be
very important. These are long term revenue generating fields that your Company is targeting using our Patents and
knowledge acquired over the years. Both these ventures will mean additional Capital expenditures and your Company is
planning this ahead of time. Arrow’s Pharma foray will be limited to the use of its patented drug (Active) delivery system, using
edible Water Soluble Film, while the crop protection technology uses non edible WSF, and may take the out licensing route to
market.
stock fallen from 575.00 levels expecting 20 eps for this year2015 one can accumulate at current levels.
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