It is my immense pleasure to communicate with you through this column and share theworking inform the steps taken on various matters and also apprise of the vision of theCompany for the year ahead in view of present domestic and global scenario.
We firmly believe that our country is on the path of exponential growth and rapiddevelopment. The Government has introduced various reforms to ease the way of doingbusiness without much bureaucratic hindrances. The policies are being formed to attractinvestment in the manufacturing sector from the domestic as well as internationalpromoters. These steps will help to make the model of 'Make in India' successful. Themultidimensional and targeted thrust to unleash the energies of the nation and empowermentto India's youth would ensure rapid all-round economic growth and prosperity. Policiesand reforms initiated by NITI Aayog for generating millions of job opportunitiesinfrastructure development for the better living standard of fellow countrymen in bothurban and rural areas are bound to bring overall development.
The NITI Aayog has also proposed several reforms in the agriculture sector which forms15 percent of country's GDP. Moreover 60 percent of rural household rely on agricultureas their principle means of livelihood. The planned reforms in the agriculture sector arelike direct purchase of agriculture produce by private players from farmers direct saleby farmers to end-consumers single trader license more allocation of funds to irrigationfacilities providing fertilizer seeds and pesticides etc. from the government sponsoredcenters. The vision of the Central Government is to devise strategies to double the incomeof farmers by 2022. Therefore there has been a major thrust on the development ofagriculture sector to achieve the targeted growth of the country.
The production and use of agrochemicals are the integral part of agriculture sector andalso contribute substantially to export earnings. India is the fourth largest globalproducer and exporter of agrochemicals. The reason for more exports of agrochemicals areIndia's capability in low cost manufacturing availability of technically trainedmanpower seasonal domestic demand manufacturing capacity better global price and strongpresence in the generic pesticide manufacturing. These capabilities and technicaladvancement have given the con dence to global players for direct import and avail tollmanufacturing of various agrochemicals.
Today Indian agrochemical companies are looking to replicate the success that thecountry's generic drug makers have had with medicines going 'off patent'. Agro chemicalsworth $4.1 billion are expected to go 'off patent' by 2020 as per the report from the TataStrategic Management Group of 2016. This is bound to open up new avenues for the Indianagrochemical companies because of the aforesaid reasons. The Indian companies arepreparing themselves and have started the process of getting molecules registered inseveral countries keeping in view their local requirement. Indian Companies have theresources and capabilities to produce world class agrochemicals as per their standard.
Your Company is already exporting major agrochemicals and looking forward to enhancethe export further to become a part of this growth story. The experience in manufacturingagrochemicals for last many years knowledge of international market and technicalexpertise available to adopt new processes and manufacturing new agrochemicals are some ofthe positives that the Company possess. However there is a need to build due capacitiesand intensify the focus on specific agro chemicals to generate more revenue to theCompany. Let me assure that your Company is fully prepared to become a part of this growthstory.
During the year under review your Company continues to focus more on agrochemicalsbeing the backbone of the Company. The turnover of agrochemicals increased by 13 percentfrom the previous year in the financial year 2016-17. It forms 62 percent of the totalrevenue generated for the Company. The plants were almost running in full capacity. Theproduction and sale of other chemicals have also increased. I am happy to share theincrease in turnover of Pharma Division by 32% from the last year. There was also quantumjump in the toll manufacturing during the year in both the prime manufacturing sites.Company's better working from last year in terms of turnover is because of the steps takenby the management like utilization of available facilities with maximum possible ef ciencyand producing quality products with timely supply.
Other key development during the year was of pruning of debt. The Company has enteredinto One Time Settlement (OTS) with the Central Bank of India. SD Agchem (Europe) NV awholly owned subsidiary of the Company has also successfully completed OTS with StateBank of India Antwerp. The details of both OTS are explained in the Directors' Report. Inline with the decision already taken the Company is divesting its non- performing assetsand businesses. Accordingly as approved by the members of the Company the efforts todivest Sintesis Quimica (SQ) are continuing because of no change in the working situation.Financial results of SQ continue to dent the consolidated financial results of the Companyas well as affecting the net worth on consolidation basis.
It is a matter of satisfaction that your Company has now recovered and its Indianoperations are poised to grow fast with renewed energy and committed efforts of allconcerned. The strategy adopted in the Company for a long term tie up with IndianInternational and Multinational Companies through direct sales have yielded results. Theyhave shown con dence in our capability and may come forward with more products to provideus better opportunities.
I on behalf of the Board of Directors and the management would like to compliment allour customers suppliers employees and other associates like banks for their becomingpart of our journey. Their continued support and con dence in our capability haveencouraged us to work more diligently and professionally.
Last but not the least our sincere thanks to all of you the shareholders for keepingfaith in the Board and the Management.
With best Wishes
Mukesh D Patel