Dear Fellow Shareholders
These are interesting times at CFS. Over the last few years we have been strategicallyfocussing on integration. Let me take you through our integration journey briefly: westarted with backward integration in 2011 with CFS Europe our Diphenol plant at RavennaItaly. We have vertically integrated our downstream products like TBHQ BHA 4-TBCGuaiacol etc. to ensure the stability of our products their supply quality assurancetraceability transparency and their provision at the most competitive price. We thenstarted on our forward integration journey to get closer to our customers by offeringthem customised solutions and opening our sales and marketing offices in markets likeNorth Central and South America and in Asia.
Today we stand on a firm footing as theintegrationjourneyisprogressing. We are poisedand prepared to unlock new possibilities and potential as we straddle the entire valuechain from manufacturing to marketing.
With the global population touching nearly 7.4 billion the potential for expansion andgrowth is unprecedented. CFS is geared to capitalise on this huge opportunity and reachout and touch lives of people all over the world. Pet and farm animals is another marketwhere we are poised to expand strongly in the future.
Shelf Life Solutions we believe is a very promising space. We are focussed to bewherever theres a need for Shelf Life Solutions no matter how challenging the path.We expanded our Shelf Life Solution business with forward integration into antioxidantblends. We are expanding our global reach to address the pet food and animal nutritionmarkets in different geographies. We believe in closely working with our customers withthe aim to provide easy access enhanced timely delivery and offer cost-effectivenessthrough superior output of our products and services.
We set up CFS North America LLC a 100% owned subsidiary of Camlin Fine Sciences Ltd.to focus on the development manufacturing and selling of customised antioxidant blends tothe food petfood and animal feed industries
In January 2016 we started our operations in Central
America with the launch of CFS Antioxidantes De Mexico S.A. de C.V. a 100% subsidiaryof Camlin Fine Sciences Ltd. To further strengthen our presence and reach to our customersin Central America we acquired 65% stake in Dresen Qumica S.A.P.I de C.V a leadingfood and feed blend company in Mexico
One of the key highlights of this year is our partnership with Dresen a leading blendcompany catering to pet food and animal nutrition industry. In addition to antioxidantproducts Dresen also has many products in its portfolio which we will now be able tooffer to our existing and new clients
Our subsidiary in Brazil established in 2013-14 continues to channelise its resourcesand expertise in developing antioxidant blends and catering to the food pet food andanimal nutrition industries
With this we have covered the length and breadth of American continents to serve thembetter
To strengthen our foothold in China we are in the process of setting up a 100%subsidiary company which should commence from mid next year
With the world moving towards natural sources we introduced a range of naturalantioxidants under the brand name NaSure - plant-based extracts like Rosemaryextract Green tea extract and Natural Tocopherols.
We will leverage every opportunity in the antioxidant segment by bringing intailor-made blends with applications in fats and oils fried snack foods bakeryconfectionery and dairy products. With the addition of the blends the customers would notonly have complete traceability from raw material to finished product but also bettercontrol over their product basket.
We are in the process of setting up operations in European Union (EU) to focus ondeveloping customised blends for food petfood and animal nutrition industries.
Our Performance Chemicals division introduced new products during the year. We continueto focus on deeper market penetration by adding distribution channels in newergeographies. We will be setting up a distribution hub in China and plan to enter intoother key markets like North and Latin America. Our vision is to become a major Diphenolsupplier in the world and our Dahej project is underway to make this a reality. We areawaiting environmental clearance to begin execution of Dahej project. We would furtherbuild on our strength of Diphenols by expanding our portfolio with newer Hydroquinone andCatechol derivatives.
In our manufacturing facilities we have successfully implemented process improvementmeasures for Hydroquinone and Catechol in Italy and in Tarapur to optimise cost andcapacities. This has also given a boost to Guaiacol capacity this year.
Our Aroma Ingredients business is at a nascent stage. This year we have introducedEvanil a potent form of vanillin. We are also developing vanillin blends to widen theapplication for bakery and dairy applications.
At CFS we have been consistently investing in augmenting our capabilities andcompetencies by expanding our reach and presence building our sales teams and enhancingour innovation and research & development strength. The Companys Shelf LifeSolutions Development Testing and Applications Laboratory at its head office has begunits operations in full swing. This Centralised laboratory of CFS is equipped to providetechnical expertise and support to the various CFS application laboratories locatedglobally for developing formulations and blends to cater to the food petfood and animalnutrition industries.
Consolidated Gross Sales (inclusive of net sales and purchases between CFSL and itssubsidiaries) for the financial year ending on 31st March 2016 is at Rs50422.83 Lacs in comparison with that of previous financial year ending on 31stMarch 2015 at Rs 57057.68 Lacs Consolidated EBIDTA (before exceptional item) for theyear was Rs 9606.71 Lacs compared to Rs 9289.02 Lacs of the previous year ConsolidatedPBT (before exceptional items) for the year was Rs 5456.57 Lacs compared to Rs 5247.83Lacs of the previous year
Consolidated Cash Accruals (before exceptional item & tax) for the 12 months periodending on 31st March 2016 is at Rs 7162.00 Lacs in comparison with that ofprevious financial year ending on 31st March 2015 at Rs 6001.70 Lacs
The Company has shown stability with respect to volumes in this financial year for theentire product portfolio besides capturing new product segments. However the negativeimpact on values due to the drop in sales prices driven by drop in crude oil prices haveeffectively reduced the sales value though there has been a positive impact onmaterial/input costs arising due to fall in chemical prices.
We continue to plough back our surplus in enhancing our capabilities which we areconfident will enable and ensure our future growth in the long term.
As a responsible corporate citizen we are committed through our various interventionsin aiding child education nutrition and health-care. We continue to adhere to highestlevel of compliance and governance and have always advocated fairness and transparency inour organisation. We are building our people strength especially outside India where wecurrently have approximately 152 people. As we grow we are adding a rich diversity andensuring inclusiveness that makes us truly a global organisation.
I am convinced that CFS is poised for a sustained phase of growth. We have got all thebuilding blocks in place.
Our passion will earn us customer satisfaction and a distinct place in the world offine sciences as we continue bringing science to everyday life.
Thank you for your trust and faith in CFS.
|With regards |
|Ashish S. Dandekar |