I am delighted to share with you the events and developments of your Company duringcourse of financial year 2016-17. The overall performance of your Company has witnessed ahealthy growth in profits with consolidated Net Profit increasing by 59%. We continued todo well in most of our core businesses. The year gone is representative of the valueGodrej Industries continues to create for all its stakeholders.
As a conglomerate with diverse business interest growth at consolidated level ispursued through competitively growing your Company's core businesses building anenvironment to achieve transformation while also nurturing and investing in emergentbusinesses of the future.
This approach of your Company's business strategy is captured in the approach calledCREATE which stands for:
C Consumer and Chemicals
Godrej Consumer Products Ltd is a leading emerging markets company. In FY2017 GCPLdelivered another year of competitive and profitable growth. Despite some category andgeography specific challenges GCPL has delivered good sales growth which is a reflectionof its clear strategic portfolio choices backed by strong execution. Moreover GCPL alsodelivered robust operating profits across businesses while investing in its brands and ininnovations. On a consolidated basis GCPL reported 58% growth in its Net Profit at Rs.1304 crore as compared to Rs. 828 crore of the previous year.
One of GCPL's most important imperatives is to extend leadership in our core categories- home care personal wash and hair care. We remain focused on delivering superior aheadof the market growth driving consumption and penetration in our core categories as wellas extending into attractive adjacencies. The strategic pillars of GCPL is to sustainleadership position in its core categories strengthen presence in emerging categoriesdrive growth in international business accelerate the pace of innovation strengthenbrand portfolio create a future ready sales organization build a global best-in-classsupply chain and continue to execute different initiatives to foster an agile and highperformance culture. I am pleased to share that GCPL was ranked the number 1 FMCG companyto work for in in Great Place to Work Best Workplaces in India 2016' list;its thirteenth consecutive year on the list. It was also ranked number 12 on theGreat Place to Work Best Workplaces in Asia 2017' list and ranked among thetop 19 Aon Hewitt Best Employers in India - 2017' survey.
GCPL remains focused on its 3x3 strategy of building a presence in 3 emerging markets(Asia Africa and Latin America) across 3 categories (home care personal wash and haircare). This we believe will provide us immense opportunities across all our geographiesand categories. GCPL will continue to invest competitively in its brands and enhancego-to-market infrastructure. We remain excited about the enormous growth potential inIndia and other emerging market given low penetration and consumption rates in our corecategories. I am confident that with our clear strategic focus differentiated productportfolio superior execution and top-notch team we will continue to deliverindustry-leading results in the future.
Our Chemicals business recorded a growth of 17% in revenue in FY2016-17. The chemicalsbusiness continued its strong focus on cost control and energy efficiencies. This coupledwith a strategic approach to front-end sales contributed to the good performance acrossproduct categories.
I am happy to share that our Chemicals business has received the prestigiousAward of Excellency' from Chemexcil (an industry council setup by the Ministry ofCommerce and Industry) for its outstanding export performance. I am also happy to sharethat our Valia plant was awarded the Energy Efficient Unit' for a second time in arow at CII National Awards for Excellence in Energy Management 2016. Additionally 7 theplant also won the Innovative Project' award for their consistent effort inintroducing new energy efficiency technologies. Further to share with you your company'smanaging director Mr. Nadir Godrej was honoured with CHEMTECH leadership & excellenceaward 2017- Hall of Fame.
R E Real Estate (GPL)
FY2016-17 has been a strong year for business development GPL added 7 new projectswith a saleable area of 18 million sq.ft. GPL entered the Noida market and sold more than1 million sq.ft. despite weak market conditions. GPL's new launches received anencouraging response despite weak market conditions. Total booking volume registered forFY2016-17 stood at 3.1 million sq. ft. and booking value of Rs. 2020 Cr. GPL's TotalIncome stood at Rs. 1733 crore. EBITDA increased by 42% to Rs. 401 crore and Net Profitincreased by 30% to Rs. 207 crore. Strong profit growth was contributed by our flagshipproject The Trees' which attainted revenue recognition much ahead of schedule.
In FY2016-17 GPL delivered 4.6 million sq.ft which includes 3.3 million sq.ft ofresidential and 1.3 million square feet of commercial space across four cities. I am happyto share with you that GPL was ranked 2nd in Asia & 5th globally by GRESB (Global RealEstate Sustainability Benchmark) - An industry-driven organization which assessesEnvironmental Social and Governance (ESG) performance of real estate assets globally Asyou know the sector is going through a significant transition at the moment. The processof consolidation that was already underway will now gather pace with both demonetizationand more importantly the Real Estate Regulatory Act. While these reforms may create someshort-term uncertainty and delay they will eventually help improve governance standardsin the sector thereby improving consumer confidence and real estate demand. The governmenthas put in place many policy reforms to encourage real estate development especially inthe affordable housing space and we believe these reforms will lead to sustainedimprovements in the sector. We expect 2017 to be a transition year but the years ahead arelikely to be very exciting ones for the sector. We believe our brand national presencedemonstrated track record and capabilities put us in a strong position todisproportionately benefit from any improvement in the environment and will allow us toremain on a high growth trajectory in the years ahead.
A Agri Business (GAVL)
A normal monsoon after two back to back poor monsoons provided much needed boost to theagri sector. GAVL was also positively impacted by these conditions as evident in ourfinancial performance. In FY2016-17 GAVL recorded consolidated revenue of Rs. 4985 croreas against Rs. 3819 crore a growth of 31% over the previous year. Profit Before Tax forthe year grew by 12% to Rs. 375 crore as compared to Rs. 335 crore in FY2015-16.
The company successfully integrated Astec Life Sciences Ltd. (Astec) and CreamlineDairy Products Limited (Creamline) with FY2016-17 financials reflecting the full yearperformance of these two companies. We continue our focus on operational efficienciesR&D initiatives and building a strong relationship with our customers especially thefarmers. The Animal feeds vertical had a steady performance in FY2016-17 despite headwindsin few categories its revenue for FY2016-17 grew by 3% as compared to FY2015-16.
GAVL's joint venture in Bangladesh (ACI Godrej) recorded a sales growth of 13% inFY2016-17. The business continues to consolidate and grow its market share in thecategories of Feed. The Oil Palm vertical business recoded a sales of Rs. 507 crore agrowth of 25% over the previous financial year. Remunerative prices of Fresh Fruit Bunches(FFB) for the farmers helped in bringing sizeable area under Oil Palm this year. Goodsouth west monsoons during the year helped the crop protection business to clock a growthof 54% in sales as compared to the previous year. The business continues to focus onbuilding synergies with Astec LifeSciences Ltd.
Astec LifeSciences Ltd a subsidiary of GAVL recorded a Total Income of Rs. 316 crore inFY2016-17 a growth of 24% over FY2015-16. The sales growth was driven by growth in bothdomestic and export sales.
Creamline Dairy Products Ltd. (CDPL) another subsidiary of GAVL had a robust yearwith revenues growingby9%ascomparedtothepreviousyear.CDPL is focusing on value addedproducts that has started yielding results the sales of the products portfolio increasedby 24% in FY2016-17 as compared to FY16.
InthepoultrysegmentsalesinFY2016-17remainedflat as compared to FY2015-16. Our strategywill continue to remain focus on building a brand based business under the Real GoodChicken' and Yummiez' brands.
Overall the future prospect of GAVL remains robust and I am confident that we willcontinue to deliver industry outperforming results in the coming years.
As a Group your Company believes in inclusive growth that aims at enhancing thecompetitiveness of the businesses while simultaneously advancing the economic and socialconditions of the communities in which it operates. This focus is implemented Group widethrough the Godrej Good and Green' initiative.
As part of Good & Green the Group by 2020 aspires to create a more employableIndian workforce a greener India and innovate for products that are greener or cater tothe bottom of the income pyramid. The Group has made good progress on each of theseobjectives during the last fiscal year. Through employability programs in beauticiantraining channel sales rural entrepreneurship and animal husbandry the Group has beenable to train and empower thousands of unemployed or underemployed youth in the last year.
E Emergent Businesses
Over the last few years your Company has incubated new businesses and grown themsuccessfully. The emergent business in your Company's portfolio viz. Nature's Basket isscaling up well.
Natures Basket (NBL) the gourmet food retailing business is one such business whereyour Company sees immense growth potential given low penetration levels and growingaddressable market. NBL is now spread across 3 key metros in India through 26 outlets.During the year the Company has set up a Supply Chain Function to improve overallavailability and inventory management and use of technology for improving in storeprocesses. NBL recorded a 15% increase in sales in FY2016-17. I am pleased to share thatNBL was recognised at multiple retail forums like Food & Grocery forum FranchiseIndia Retail Award for Omni Chanel performance TRRAIN awards for Customer service etc.
To conclude we have had a reasonably good year. We remain encouraged and confident ofachieving our long term objectives of inclusive sustainable and profitable growth. As welook ahead I feel confident of strong growth in the medium to long term. Post theremonetisation of currency the demand has improved in India. We are now getting back tothe recovery seen during the pre-demonetisation period. We look forward to the GSTimplementation which I believe will be transformative for the Indian economy and willsignificantly boost consumption and GDP growth. It will also create a level playing fieldfor the organized players by bringing the tax evaders under compliance.
I am confident that our disciplined strategy prudent approach focus on agileexecution and our committed team will enable us to improve performance further and creategreater shareholder value.
I would like to take this opportunity to thank all our employees for their contributionin the continued success of Godrej Industries. I would also like to extend my gratitudetowards our business partners associates vendors and also the Central State governmentsand government agencies for their sustained support. I would also like to express mysincere appreciation to all of our shareholders for your continued faith trustencouragement and support.
Chairman Godrej Industries Ltd.