"Today's uncertain & economic geopolitical environment calls for greateragility and flexibility."
In 2016-17 we witnessed a paradigm change around the world - rapid technologyadvancement tumultuous international developments in advanced economies or closer homeradical domestic policy actions like the passing of the GST bill and demonetisation.
Demonetisation has had short-term costs but holds the potential for long-term benefits.As I write this message India is getting geared up for GST implementation which isexpected to create a common tax platform improve compliance and governance and boostinvestment and growth. Amidst these developments India continued to maintain a stablemacroeconomy posting a GDP growth of over 6% with declining inflation and improved fiscaland external balances. With a GDP forecast of +7% level through 2019 India continues tofind its place among the world's fastest growing major economies.
3M India has carefully managed the environmental challenges and stayed the course onits growth path with a consistent performance during the FY 2016-17. It has posted anannual turnover growth of 10.53% accompanied by an increase in profitability of 22.74%over the previous year. The operating margin for the current year was at 16.68% comparedto 15.80% for the last year.
Our key strategy for growth in India is to expand relevance to our customers and widenour geographic presence which is in line with the parent company's strategy. Your companyhas responded to several trends in the market which have contributed to growth. Pick up inprivate consumption increased government expenditure on infrastructure projects alongwith sectoral growth in healthcare renewable energy roads and commercial equipment havehelped deploy your company's manufacturing and R&D strengths with products forautomotive healthcare construction and infrastructure. Private consumption and increasedindustrial activity and urbanisation have led to the rise in sustainability challengessuch as deteriorated air and water quality. Your company's portfolio prioritisation iswell aligned to such megatrends where it has applied its expertise in science to addressthese topical challenges. Your company continues to expand its portfolio of consumerfacing products through ecommerce to grow its reach across the country. Geographicexpansion was another key theme of your company's growth story with new leadership andfocused business execution plans in the Eastern region of the country.
Today's uncertain and volatile economic and geopolitical environment calls for greateragility and flexibility to adapt fast and stay resilient. I'm pleased to share that yourcompany has made several investments in building the capability of not only of itsemployees but also of its extended team of partners and suppliers through focused peopledevelopment programs digital initiatives and greater collaboration to solve problems forend customers. Your company has also substantially increased its community investments toinclude marginal sections of society as well as expanded its engagement with communitiesin other regions. With an eye on maintaining a healthy balance sheet and thinking big onnew opportunities and market segments your company is poised to grow the trajectory overthe next few years.
I would like to congratulate the 3M India team for continuing to show progress inperformance as well as in building a strong brand in the country. Under the ableleadership of Ms. Debarati Sen who took office during FY 2016-17 your company hasdemonstrated a hunger to succeed and harness the environmental developments and challengeswith an agile mindset oriented towards growth.
I'm grateful for the opportunity to execute my responsibilities as Chairman of yourcompany and thank the Board of Directors for their collaboration and you dearshareholders for your unstinted support. I wish the 3M India team the very best to put ina solid growth performance in FY 2017-18 and in the years ahead.
Bharat D. Shah