I am happy to announce that we posted a strong result during the FY2015-16 despite theongoing macroeconomic scenario. Understanding the steep decline in polyester and crude oilprices the Company showcased its true spirit by recording increase in productionbymorethan20%andsustainable rise in revenues and profitability by 4% and 8% respectively.Our continued efforts and growing tie-ups helped us strengthen our leadership position inthe recycling industry. We believe that our hard work dedication and innovativetechnology will help us create sustainable value for all our shareholders.
At a time when a number of macroeconomic developments conspired to create aninhospitable environment for growth and were generally outside the Companys controlwe reorganised with speed and precision taking some key measures.
First we successfully completed the first full year of operations of our expanded RPSFcapacity of Bilaspur Unit. With this achievement we are now well positioned to rebalanceour supplies aligning to demand variations. With an expanded capacity of more than 21000TPA the new unit contributed 22% of the total production of the Company. Second Companysuccessfully passed on steep fall in prices of its finished products towing the pricefall in Crude Oil prices to its raw material suppliers and thereby minimizing the impactof price fall in its finished products. Third RPSF products of Bilaspur Unit gotoverwhelming response in the market due to superior quality and placed at premium overother products of the Company.
Fourth Company added new set of customers and thus widening its customer base as wellas deepening its market reach. Fifth our profit after tax improved by 8% despite higherprovisioning of tax by H 645 lac on expiry of tax holiday period at Rudrapur Unit of theCompany.
Slowdown in China and decrease in oil prices were the primary reasons for bleak macroeconomic conditions globally. Advanced economies are mostly making a modest recoverywhile many emerging market and developing economies are under strain from the rebalancingof the Chinese economy lower commodity prices and capital outflows. However Indiacontinued to emerge a stronger nation with GDP growth of 7.6% during FY2015-16 as against7.2% during the previous year. Emerging as the worlds fastest economy the growthwas substantiated by increase in per capita income rebound in farm output and animprovement in power generation. The dropping crude oil prices did result in curbing thefiscal deficit to a large extent. Now with the crude prices moving up steadily economiesacross the globe are expected to get back to the path of stability and growth.
Changing Industry Dynamics
Plastic Waste Management Rules 2016 issued by the Ministry of Environment Forest andClimate Change puts extended responsibility for collection of plastic scraps tomanufacturers producers and bulk generators. This will ensure increased collection ofplastic waste greater investments in waste collection processes higher income for wastecollectors/ rag pickers elimination of intermediaries and transformation of plastic scrapbusiness into organized market.
The last two years of below normal monsoon caused significant rural distress which inturn impacted many industries dependent on rural consumption and the economy in general.In 2016-17 monsoons are expected to be good. This shall not only result in better farmoutput and higher agricultural income but also higher per capita income for rural andurban economies. We expect this higher per capita income to have a positive cascadingeffect on increase in demand for textile sector. The recent approval for GST reform isanother shot in the arm for several manufacturing industries including us. The GST willmake the market more conducive and transparent and provide a level playing field toorganized players. With soaring cotton prices due to lower production as well asdisadvantageous position of cotton in GST regime by taking off its tax exempt statusmanmade fibre industry will get level playing field and demand of polyester products willincrease due to competitive pricing.
At Ganesha we continue to sustain our market leadership backed by our corecompetencies - quality product wide product range and greater operational efficiencies.Our timely and strategic investments in capacities and technology have enabled us tocapitalize on the market opportunities and derive tangible and intangible value. Wecontinue to forge strong relationships with our clients to drive value for them on along-term basis. Foreseeing the increased appetite for quality recycled products as wellas to capitalize the growing demand of Recycled Polyester Fibre Company is marchingtowards expanding RPSF capacities with a proposed brownfield expansion of 21000 TPA at itsBilaspur Unit.
Sensing the opportunity put forth by new regulations for handling the plastic scrapCompany is strengthening and widening its collection network across the country. Evolvingwith changing times and leveraging our deep market understanding we are now focusingtowards producing more value-added products with concentrated R&D efforts and cuttingedge technology.
On a concluding note although we remain one of the largest and oldest Company inIndia to recycle PET bottles into valuable products we strive to become more environmentfriendly and technologically sound. Hence I congratulate my employees and co-workers fortheir valuable support and trust and their tireless efforts towards achieving our goals.Also I would like to thank all our shareholders for their continued faith in our strengthand capabilities.
With warm regards
Shyam Sunder Sharmma