INDIA GLYCOLS LIMITED.
I have great pleasure in welcoming you to the Thirteenth Annual General
Meeting of your Company. The Directors' Report and the Audited Accounts for
the year ended March 31,1997 have been with you for some time and, with
your permission, I shall take them as read.
ECONOMIC SCENARIO AND YOUR COMPANY
The Central Government, in the Budget for 1997-98, restructured both the
direct and the indirect taxes. While, import duty on MEG remained
unchanged, excise duty on MEG and Ethoxylates and the products of
downstream industries have been reduced. The Industry friendly policies of
the Central Government are expected to give a fillip to the industrial
growth of the country in general and will also go a long way in improving
your company's prospects for the year 1997-98.
During the year, your Company's performance has been satisfactory. The
sales and the Net profit during the year registered a marginal increase
compared to 1995-96. The sales increased from Rs.117.27 crores to Rs.121.09
crores and the Net Profit from Rs.17.75 crores to Rs.18.64 crores. Your
Company has maintained dividend at 20% for the year which will be free of
tax in the hands of the shareholders. The outgo on dividend and corporate
dividend tax will be Rs. 6.13 crores.
During the year, production of MEG was 19481 MT compared to 20259 MT last
year. However, production of Ethoxylates/formulated surfactants has
improved significantly to 7671 MT compared to 4209 MT last year, an
increase of 83%. The production of Ethylene Oxide ex-reactor was 99.5% of
installed capacity. However, the lower production of MEG was on account of
diverting larger quantities of Ethylene Oxide to produce Ethoxlates.
You will be glad to note that the formulation plant put up in technical
collaboration with Sanyo Chemical Industries, Japan, has been commissioned
in August this year. This will enable your company to increase its product
range in value added performance chemicals required by many major
industries such as Textiles, Pharmaceuticals, Agro Chemicals, Lubricants
etc. The chlorosulphation project is being technologically upgraded with
the help of Sanyo Chemical Industries, Japan to produce products of
international quality for personal care business. As a result, the
implementation of the chlorosulphation project has been slightly delayed
and is expected to be commissioned in February, 1998.
During the five months of the current year, the sale of MEG has been 8253
MT compared to 7976 MT during corresponding period in previous year. Your
company has been able to sell its entire production of MEG. International
price of MEG has also shown firmness due to favourable demand supply
balance since April, 1997.
Sale of Ethoxylates/formulated surfactants has been 4825 MT compared to
2752 MT, an increase of 75% over the corresponding period last year. Your
Company through sustained marketing and R&D efforts, has achieved the
position of market leader in the Ethoxylates business and is recognised as
a major supplier of international quality ethoxylates/formulated
surfactants. With the commissioning of new formulation plant and expected
commissioning of the chlorosulphation plant, your Company would be able to
broaden its product base further and considerably increase its market share
in this business.
During the year, some additional capacity of MEG has been set up in the
country. Further capacity is expected in the coming years. However, during
the last one year, there has been a simultaneous increase of 55% in the
installed capacity of polyester industry leading to demand growth of 40%
for MEG in the same industry. Increased production of MEG is expected to
be absorbed by higher production of Polyester industry in the coming years.
Your company has created large storage capacity for molasses and alcohol to
tide over lean period of molasses availability in any year.
Your company is also in the process of debottlenecking the MEG plant which
will result in incremental production of MEG. At the same time, various
cost optimisation and energy conservation schemes are being implemented to
improve the profitability of the company.
RESEARCH AND DEVELOPMENT
Besides the existing R & D Centre, your Company is setting up a modern
"Applications Research Centre" at an investment of Rs. 150 lacs for
development and testing of performance chemicals. This will further
strengthen the in-house R&D to meet the customer specific needs of
Your company is installing additional power generating set of 4 MW capacity
based on heavy petroleum stock. With the commissioning of this set by
February 1998, your company will become self-sufficient for its power
requirements ensuring uninterrupted operation of the plant. This will also
result in considerable saving due to lower power cost.
ENVIRONMENT AND SAFETY
Your Company is fully conscious of its responsibilities in protecting the
environment. Towards achieving this objective, your company has
commissioned one more Methane Upflow Reactor which will not only enhance
the capacity of the existing bio-gas plant but also augment the effluent
treatment facilities. Your Company is further augmenting the Secondary and
Tertiary Treatment facilities with the construction of additional clarifier
and lagoons for aeration at an estimated cost of Rs. 3.0 crores.
Your company's plant was operated accident free during the year ensuring
safety of the plant and environment.
On behalf of the Board and on my own behalf, I sincerely thank the
employees, Central Government, Government of Uttar Pradesh, Financial
Institutions and Banks. I also thank you all for attending this meeting
sparing your valuable time. I am sure, with your fullest cooperation and
unstinted support, your company will continue to perform in the coming
years as well.
Chairman & Managing Director