It is my pleasure to appraise you of your Company's performance during FY17 and thebroad contours of the future we are creating.
Mission 20-20-20 continues to be the driving force across the business and functions.I am aware that the Sales for the year Rs. 2388 crores and the Net profit Rs. 190 croreshealthy as they are may not be exactly reflecting our growth ambition. The reasonsalready have been articulated elsewhere in this Annual Report. These are mostly minor roadbumps and do not detract the business from achieving the Mission. New business developmentis progressing well in EAP. India long-term story is intact; the softness in sales offtake could continue until GST implementation but thereafter the economy and businesswill only emerge stronger. New business development process in Europe and Americas hasbeen revamped with focus on building enough fall-back projects in order to secure theCompany's volume plans. Acquisition of the German Joint venture has created opportunityfor synergies in European operations and a team is working to secure these at thesoonest. Consolidation of manufacturing in India and stabilization of the new facility inColombia have been completed by March and the benefits should begin to flow in the newfinancial year instead of the one off costs entailed in the year under report. All thisgives me confidence that we are well on track to realize our Mission.
Our future as I see will be even more exciting. You will recall that in my address lastyear I talked about Delighting Customers and Unveiling horizons. It has been a revelationto me what all we can do to take the business to new heights. Mystik is a classic examplewhere we brought together a number of technologies to create a truly disruptive packagingsolution using laminated tubes. This opens up an entirely new category of Hair Colorantswhich today are fast growing lifestyle products consumed across the world. Between theorganized and other brands and including the developers that go along with the colorantsit offers a 4 billion tube new market opportunity. Similar aggressive products in thePharma and Food categories now can be targeted for replacing their traditional packagingformats with Mystik tubes again a new opportunity.
That brings me to the huge potential of technology which we can harness for creatinginnovative products for our customers to change the whole way we manufacture and serviceour customers and the way they experience us as Supply partners. They should see us as theSupplier of Choice. It is said that "it is wiser to help the Customer buy from usinstead of we trying to sell to them." Therein lies the key to sustained profitableand competitive growth. At Essel we are quietly driving this dream.
We do not see Technology as limited to the traditional ways of making a laminate ortube but as a body of scientific knowledge in any area which we can adopt adapt orreplicate to solve our problems and make a big impact. That is what has helped us tocreate besides Mystik some powerful packaging solutions branded as Aeir Prizm ClarionGreen Maple Leaf which are in various stages of trials with our customers. We areleveraging high speed digital image processing technology to track our products throughthe entire manufacturing process - the result we are implementing a capability to spotdefects on line at speed of light and consequently are able to promise the customer thatour products can be moved to their production line direct from trucks without need forinspection or quarantine. We expect the pilot of this to start very soon. We are alreadypiloting a technology which digitally handles customer artwork so as to assure a highintegrity image on the tube in our production lines thereby crashing the lead-time forthe customer to market a new launch/relaunch and to assure a First time Right production.We see these as not mere incremental but as step changes disruptive developments whichwill go to strengthen our credentials as industry leader among customers.
There are a number of similar initiatives unleashed in the manufacturing process acrossour global operation aimed to bring in standardization and automation. Data analytics atmachine level to improve process stability study for deploying robotics etc are some ofthese which should change our manufacturing landscape in the near future. Customers muchunderstand that an innovation- driven technically and financially strong supplier bringsmore value to their brands long term and it is value and not the cost or price that makesfor long term business success.
To this end we have identified and staffed key Technology functions established theirlinkages with business and implemented ways of team working that will tap and leveragethe knowledge and perspectives whether external or internal to Essel and help forgesuperior solutions to delight our customers. There is a lot of excitement today in ourteams. Ultimately it is the people who make the difference. And we continue to invest intheir development present them opportunities to create a great future for the businessand to themselves. Continuously improving employee engagement scores with some of ourunits already at the country/industry best in these scores bears an ample testimony tothis. Surely we are out there to deploy Technology that will make a difference with thedisruptive solutions it will provide.
I take this opportunity to thank our valued Customers our bankers and all ourstakeholders for their consistent support the Board of Directors for their guidance andencouragement at all times Esselites across the globe for their effusive energycommitment and great efforts all of which have contributed to your Company's growth.
Chairman & Managing Director