The world witnessed political and economic volatility in 2016. Amidst thisunpredictability India saw relative political and economic stability by recording one ofthe highest Gross Domestic Product (GDP) growth rates in the world and witnessing someimpactful long-term reforms like demonetization and GST. However demonetization slowedactivity in cash-dependent sectors. The manufacturing sector was sluggish in 2016 owing toweaker domestic demand and subdued bank credit. All of these developments had an impact onyour Company. In this environment your Company continued to expand its business. Oursales increased by 7% over the previous year and stood at Rs. 55257.9 million. On theback of a normal monsoon our Agricultural Solutions business grew by 8%. Pricing pressureon our flagship crop protection products due to generics eroded margins which was partlyoffset by cost saving measures. Performance Products grew 9% with significant improvementin profitability; higher sales of Dispersion and Care Chemicals products from Dahej plantwas a key driver. Sales of Functional Materials & Solutions grew by 8% benefiting fromthe growth of the auto industry. Our Chemicals business suffered from overcapacities inpetrochemicals but realized better prices on monomers due to market instability. Capacityand asset utilization as well as operating margins significantly improved and weoptimized our working capital. We resolved technical issues at the Dahej site and obtainedkey customer approvals after successful audits. Our Thane site turned 50 highlightingour long-term focus on safety and sustainability as well as our broad productioncapabilities. We continued to increase our investment with the opening of our sixthconstruction chemicals plant in India in Kharagpur to meet the increasing demand forhigh quality construction chemicals in the Eastern part of India. Your Company alsointroduced a host of new products and solutions. The Crop Protection business continued todiversify its portfolio by launching Seltima and Basagran for rice crop this year.Your Company further consolidated its position in corn markets by introducing its productTynzer in several new geographies. Our Construction Chemicals division launchedMasterSeal sealants range and MasterWeld adhesive range for buildings MasterLife CI220 a unique dual mechanism corrosion inhibitor for fresh concrete and MasterProtect7000 CR a state-of-the-art corrosion resistant coating. Our Chemicals Intermediatesbusiness diversified its portfolio by introducing products such as N Octyl Pyrrolidone foragro formulations and Ionic liquids (Basionics) for anti-static application across severalindustries.
As part of our strategic portfolio management we divested our Industrial Coatingsbusiness to AkzoNobel and the Leather Chemicals business to the Stahl Group. Suchdivestments will help us to focus resources on profitable growth opportunities inthe future. Safety continues to be top priority for your Company both for our ownoperations and for our contractors. Among other initiatives we adopted the GloballyHarmonized System (GHS) of classification in line with our commitment to the higheststandards of product stewardship and labelling. Today all our product packaging in Indiauses GHS labels. Our CSR initiatives continued to focus on WASH (Water Sanitation andHygiene) and education. At Dahej Mangalore and Mumbai we worked closely with thelocal communities around our sites to conduct behavioral change programs provide pipedwater and install digital classrooms. Your Company received recognitions from variouscustomers and stakeholders this year. The Coatings and Fuel & Lubricants teams wonmany awards from key customers like Ford Motors and Mahindra for contributing to theirsuccess as suppliers. Our Ankleshwar site won second place in Ankleshwar IndustriesAssociation (AIA) Anandapura Trophy for Highest Manufacturing Performance (in terms ofturnover) in the large-scale category. Working Mother and AVTAR recognised your Company asone of the Best Companies for Women in India'. Your Company was also ranked 2ndout of top 500 companies listed on Bombay Stock Exchange on compliance of secretarialaudit norms. To support the growth of our business we further strengthened ourorganizational culture in 2016. One of the core competencies at BASF embracing diversitywas formalized with the formation of a Diversity + Inclusion team. The launch of newpolicies like work-from-home and flexi-time helped bring in a more contemporary workculture. Ongoing initiatives like Fit@BASF have helped employees lead a healthier and moreactive life. The future holds promise and I look forward with optimism. India is set toplay a leading role in the field of sustainability and has demonstrated this by settingambitious targets under the Paris Agreement on climate change. Your Company is ideallyplaced to take advantage of the opportunities that this move will provide. Sustainabilityand innovation the twin pillars of sustained long-term growth are firmly founded atyour Company. We will continue to work to keep our stakeholders connected and engaged inline with our corporate purpose: to create chemistry for a sustainable future. With bestwishes
Raman Ramachandran Ph.D.