You are here » Home » Companies » Company Overview » Kabra Extrusion Technik Ltd

Kabra Extrusion Technik Ltd.

BSE: 524109 Sector: Engineering
NSE: KABRAEXTRU ISIN Code: INE900B01029
BSE LIVE 10:16 | 25 Sep 128.10 -5.95
(-4.44%)
OPEN

131.00

HIGH

132.55

LOW

128.10

NSE 10:01 | 25 Sep 130.00 -3.45
(-2.59%)
OPEN

133.00

HIGH

135.85

LOW

129.45

OPEN 131.00
PREVIOUS CLOSE 134.05
VOLUME 1790
52-Week high 168.00
52-Week low 96.05
P/E 24.35
Mkt Cap.(Rs cr) 409
Buy Price 128.10
Buy Qty 35.00
Sell Price 128.85
Sell Qty 60.00
OPEN 131.00
CLOSE 134.05
VOLUME 1790
52-Week high 168.00
52-Week low 96.05
P/E 24.35
Mkt Cap.(Rs cr) 409
Buy Price 128.10
Buy Qty 35.00
Sell Price 128.85
Sell Qty 60.00

Kabra Extrusion Technik Ltd. (KABRAEXTRU) - Chairman Speech

Company chairman speech

KABRA EXTRUSION TECHNIK LIMITED ANNUAL REPORT 2011-2012 CHAIRMAN'S REPORT Dear Fellow Stakeholders The Indian economy is expected to grow by 6.9% in the Financial Year 2012- 13 according to the World Bank. India's economic growth rate in 2011-12 slipped to a nine-year low of 6.5% as compared to the 8.4% growth in the preceding two years. Clearly fiscal and inflation concerns, cut into investment activities across businesses. These events, which affected consumer confidence in different regions of the world, undermined the demand for capital goods including plastic extrusion machinery, back home. Looking ahead to 2012, the macro-environment remains volatile and complicated and will pose challenges to our business. It is unrealistic to expect that the European sovereign debt crisis and looming concerns over the growth in global as well as the Indian economy can be entirely eased in the short-term. However, we share the belief that the worst will soon be behind us and an economic revival will commence soon. Despite the challenge of the macro- environment, we are confident that we will seize current opportunities to further strengthen our leadership positioning as the market and technology leader in the industry with our product portfolio. Over the longer term, the World Bank has pegged growth at 7.2% and 7.4% for fiscal years 2013-14 and 2014-15 respectively, in their report titled 'Global Economic Prospects'. In line with this economic outlook, the prospects of plastics extrusion machinery industry too appear positive in the long term. As per Plastindia Foundation, India's plastics processing sector will grow from 69,000 machines to 150,000 machines by the year 2020. We derive demand from the Plastic Industry which, despite the industry's high growth spanning over a period of over two decades, is yet to realize its full potential. The per capita consumption of plastics in India at 8 kgs, is one of the lowest in the world. The average global per capita consumption is 30 kgs as per the Indian Plastic Federation. Further, India's consumption of plastics will grow from 7.5 million tons to 15 million tons by 2015 as per Plastindia Foundation and is set to be the third largest consumer of plastics in the world. This is reflective of the positive outlook for plastic processing sector. India has the advantage of a large population and thus the consumer base is justifiably expected to propel India's plastics consumption to new levels in coming years. Impact For the financial year 2011-12, In line with the subdued economic backdrop, the Net Income stood at Rs. 19,499.70 Lacs, a de-growth of 13.76% as compared to the last financial year. This was mainly on account of slowdown in the end user industries due to which orders were delayed, which in turn resulted in inventory buildup of machines during the year. The overheads have already been incurred and accounted for the above. Further, the operational performance has been impacted by the rise in power cost per unit by over 30% with retrospective effect from June 2011. The entire amount has been accounted for in the third quarter of the financial year 2011-12. The Other Expenditure continued to rise on account of the capex incurred on the Dunetha plant. Most of the expenses incurred and accounted for in quarter three and four of financial year 2011-12 are not recurring in nature. As we are now getting past the cost curve with commercial operations having commenced in the previous quarter, we are poised to benefit from the revenue curve ahead, once the demand situation improves. Business Review & Outlook Last year KET acquired a 15 % stake in Gloucester Engineering Company Inc (GEC), USA which catapulted our positioning in the plastic extrusion machinery for Film Plants in terms of technical capabilities. We have already showcased the 3 layer and 5 layer - KAGE machine manufactured at Dunetha with Gloucester Engineering Co. Inc., USA (GEC) technology. The plant produces film for barrier applications which are mainly used In oil packaging in addition to packaging of milk, water, oils, spices etc and also for lamination, stretch & shrink wraps. As I had mentioned last year, we remain convinced that this segment has tremendous potential and expect it to be a major growth driver. We have successfully completed the order we bagged from a company engaged in manufacturing and selling of edible oils, in Kerala last year. Packaging demand and resultant demand for plastic films is expected to take off as the growth of the middle class in developing nations continues, with more consumers around the world seeking out packaged food. Although the overall packaging industry was severely impacted by the economic recession, the plastic packaging market is gradually gaining significance through the latest technologies and enhanced products in the vast global packaging industry. The global plastic packaging market is a steadily growing market which is expected to follow a modest growth rate in mature markets and a progressive above average growth rate in emerging markets. Visiongain calculates that the global plastic packaging market will reach USD 196.42 billion in 2012. Further, plastics in packaging consume 3.5 million tones of polymers today and will increase to 9 million tonnes by 2020 in India. In the pipe segment too we have launched new products with our focus on research and technology. We have been focusing on Window profile extrusion due to modernization of building techniques and increasing awareness amongst architects on the various advantages of the PVC profiles. KET offers cPVC pipe extrusion lines in single as well as dual strand with technology from American Maplan Corporation, USA (AMC). With increasing outlay in agriculture year on year, irrigation continues to be one of our core focus areas as regards pipe extrusion lines. India's demand for plastics in irrigation alone is pegged to cross 2.5 million tonnes by 2015. Along with the round drip we are now also entering the flat drip lines market which has high scalability prospects. Another key development during the year was that the Technology agreement with Battenfeld Cincinnati was amended recently to include its group member, Battenfeld Cincinnati, Austria thereby strengthening KET's portfolio further with high quality, high performance innovative extruders, processing tools and down stream equipments for both pipe and film plants. KET has the exclusive right to make available Battenfeld Cincinnati's entire product range given its end to end strengths In terms of a modern manufacturing set up as well as well entrenched marketing set up. Overall, on the domestic front, we expect a gradual turn around in terms of industry demand and thereby a uptick in our order intake. We believe that in the coming year, the exports market will provide scale. KET now exports its machines to more than 70 countries. We are also expanding our base to many new countries. In addition to building capacities, we spent significant resources by participating in various trade fairs including the Plastindia Exhibition and received a very good response. Our Company has participated in 8 exhibitions and in the coming year too, we will focus on widening \ enhancing our global footprint and widening our agent base. Well Positioned I would like to highlight here that the Kolsite Group, of which Kabra Extrusiontechnik is a flagship company, has completed 50 years in the industry. We have faced various economic ups and downs and emerged stronger and better positioned for traversing the next growth curve. The fact that we showcased new products against the backdrop of a weak economic scenario underlines our faith in the industry prospects and our capabilities. We are reasonably confident that as soon as the industry starts picking up, we will be able to scale up our operations with ease, given our five decade long experience and expertise in the markets. A combination of effective marketing, dedicated customer service, technical support and the flexibility provided by our modern manufacturing facilities and technological collaborations will see us emerge stronger. Overall, our strategic efforts remain focused on saving costs, increased thrust on marketing and enhancing our product portfolio. As the macroeconomic parameters turn around, we will be ready to tap the next growth phase for our business. A Vote of Thanks I take this opportunity to thank all our stakeholders including our employees, associates, vendors, clients, bankers and shareholders for their support and faith in us. Let me assure you, we are leaving no stone unturned to ensure that your faith in us stands vindicated. S.V. Kabra Chairman & Managing Director