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Asahi Songwon Colors Ltd.

BSE: 532853 Sector: Industrials
NSE: ASAHISONG ISIN Code: INE228I01012
BSE LIVE 10:12 | 21 Nov 338.00 3.15
(0.94%)
OPEN

338.00

HIGH

338.00

LOW

338.00

NSE 10:00 | 21 Nov 338.95 4.35
(1.30%)
OPEN

338.15

HIGH

339.80

LOW

335.70

OPEN 338.00
PREVIOUS CLOSE 334.85
VOLUME 10
52-Week high 368.00
52-Week low 191.50
P/E 15.16
Mkt Cap.(Rs cr) 415
Buy Price 337.05
Buy Qty 22.00
Sell Price 338.00
Sell Qty 10.00
OPEN 338.00
CLOSE 334.85
VOLUME 10
52-Week high 368.00
52-Week low 191.50
P/E 15.16
Mkt Cap.(Rs cr) 415
Buy Price 337.05
Buy Qty 22.00
Sell Price 338.00
Sell Qty 10.00

Asahi Songwon Colors Ltd. (ASAHISONG) - Chairman Speech

Company chairman speech

"BRINGING PASSION AT WORK ENABLED US TO DELIVER RECORD PERFORMANCE IN 2016 17; ADOPTINGPROACTIVE APPROACH SHALL ENABLE US TO SUSTAIN THIS OVER LONG TERM."

I am pleased to report to you at the end of what has been a splendid year for theCompany. While the year has been great in terms of record performance what makes it evenbetter is the fact that industry dynamics have turned favourable for Indian pigmentmanufacturers. As regulators in China the world's largest pigment manufacturer initiatedcrackdown on local industries driven by environment pollution related concerns severalbig players suffered set-backs and shutdown operations. Amidst this backdrop the Indianmanufacturers with better technical environmental and operational technologies are in asweet spot to capitalise on the opportunity. Moreover with global economic scenariolikely to improve downstream industries like printing ink plastics paint coatings andtextiles are expected to pick up. Research and Markets forecasts the global pigmentmarket pegged at USD 26 bn in 2016 and is expected to rise to USD 32 bn by 2023 growingat a CAGR of 3.8 %.

Performance review of the year

Talking of the financial performance the year 2016-17 has been very satisfying. Ouroperational revenues recorded a 15% growth from RS. 224.67 cr in 2015-16 to RS. 257.84 crin 2016-17 driven by a strong growth of 23% in production volumes to 1644 MT. This wasdriven by the CPC Blue Crude capacity debottlenecking project that we undertook in theprevious fiscal. With a mere RS. 3.50 cr worth of investment we have been able toincrease capacities by 13% which has contributed towards an additional sale of RS. 33 crduring the year. Interestingly despite this 23% growth in production our overhead costshave in fact declined owing to several cost control measures implemented by us. So on onehand our capacity increased with practically no major investment while on the other handthe overhead costs declined. This was reflected in our even stronger growth inprofitability as EBITDA and PAT increased by 19% each to RS. 47.08 cr and RS. 25.02 crrespectively. As a result the EBITDA and PAT margins surged 58 and 36 basis pointsrespectively to 18.26% and 9.70% respectively.

Key developments in 2016-17

While this kind of growth makes us proud we are confident that this is just thebeginning as we proactively pursue further improvement in efficiencies productivity andcost reduction. One of the most critical steps towards this is our initiative to increaseaccountability within the organisation and adopting a result oriented approach. I believethis approach shall facilitate us in becoming more mature stable and non-cyclical as anorganisation along with enhancing our long-term business sustainability. Some of thecrucial proactive initiatives undertaken by us during the year include: Extending ourproduct portfolio by adding two new products – the Alpha Blue and Beta Blue 15:4. ForAlpha Blue a new 600 TPA facility was set-up which has already commenced the trailshipments. For Beta Blue 15:4 that finds application in publication gravure ink systemwe have started supplies to leading customers on trial basis. Developed four new products(Phthalocyanine Blue 15.0 and 15.1 Orange 64 and Yellow 12) that would go into commercialproduction in the next fiscal. Installed a 128 kVA solar power plant that shall enhanceour power reliability and reduce carbon footprints and power costs. Increased focus ondevelopment of high performance pigments raising product quality and enhancingproductivity to become more competitive and earn higher margins.

Continued efforts towards cost and carbon footprint reduction through processreengineering and improvement cycle time reduction preventing wastages and minimisingenergy consumption. Successfully completed installation of a comprehensive air pollutioncontrol system that shall further facilitate in reduction of pollution.

Employee initiatives

On our mission to become a proactive organisation people would be the most criticalelement. We believe that as people within the organisation get accustomed to existingpractices and conventions it becomes necessary to have some disruption to bring them outof their comfort zones push them to take on bigger challenges and change mind-sets. Inview of this each quarter we invite employees from top to bottom to bring in fresh ideas.We are also encouraging employees to join external exhibitions and seminars to get betterinsight of the market scenario. The entire concept of proactive would revolve aroundfostering an open culture of brain storming promoting team work and having a spirit builton an ethical work culture.

Outlook

I believe that Asahi Songwon is at an important inflection point in its existencewhereby a combination of internal and external factors shall catalyse our growth momentumin the coming years. We are also proactively working towards making the organisation morecompetitive through adoption of zero tolerance for quality and delivery scheduleintroducing new pigment grades for different markets improving logistics and enhancingregulatory compliance. Our proactive attitude is reflected in our robust three new productlaunches in the past two years as compared to no new launches in seven years prior tothat. With highly skilled team robust manufacturing facilities and equipment experienceand expertise we have everything in place. From here onwards our proactive effortstowards new product development new market development and continuous improvement shallmake a difference.

Message to the shareholders

I on behalf of the Board am thankful to all our stakeholders who have continued to bewith us over the years. The shareholders for believing in our growth story and investingin us the suppliers for doing business with us and the customers for having trust in us.Finally I would like to appreciate the efforts of each of our employees who have helpedthe organisation to reach its current level.

Warm regards

Paru M. Jaykrishna

Chairperson