My Dear Valued Stakeholders
Congratulations to All of you!!!
Once again it gives me immense pleasure to welcome you in yet another year ofCelebrations a milestone year engraving heartening odyssey of growth excellence andhighest ever record performance. It's been a year of assurance and exhilaration measuringevery wining step taken by your Company towards achieving a blissful future. As wecelebrate this eventful journey with gratification it's been an enthralling saga ofdaring to dream taking the road less travelled making a mark gaining insightsexploiting opportunities and expanding our horizons in the World of Speciality Chemicals.Despite the tides of amplified volatility in economic landscapeYour Company continues todeliver irrepressible performance and Value Creation prodded by Speciality Chemicalssegment delivering yet strong double-digit growth. Your Company continues to Crown morethan Triple centurion growth Y-o-Y in its share price on BSE with highest recorded at`666/share.
Your Company's Silver Jubilee journey chronicles a performance characterised by a neversay die spirit that soars in Prosperity and endures in adversity. The efforts enthusiasmand commitment capitalised by your Company and its Human capital over the years have beendemonstrated by consistent resilient operational performance with sprinting profitabilitytractioned by Speciality Chemicals segment. In recognition of this excellence yourcompany was Ranked at 1st position for the Fastest Growing Company under`1000 Crores market cap' by the most coveted Business World Magazine in the national andInternational fora. I am further delighted to inform that our past performance andCompany's future potential has also bred interest of various investors and your Companywas considered among the Top Six Stock-picks by Mutual Fund Houses' and one of theMarque Investor Reliance Mutual Fund has picked up 9.83% stake in your Company throughReliance Nippon Life Asset Management Limited. Seya has been investing in upgradation andcapacity addition to enter value added products which has resulted in the improvement ofperformance of the Company and more than
10-fold growth in less than half a decade. Your Company raised `500 Mn throughPreferential allotment in Nov'16 at a price of `180 per
Equity share (including a premium of `170 per share). The proceeds were deployedtowards the Greenfield expansion project.
SEYA exhibited exhilarating performance during the year in retrospect.
The Seeds that your Company sowed 5 years back are now bearing the fruit and Iamdelightedtoannounce thatinFY2016-17Revenue in less than half a decade. Your Companyraised `500 from Operation grew by almost 12% toMn through Preferential allotment inNov'16 at a price of`30861 Lakhs while EBIDTA 180 per
` margin robustly increased to 24.22% (`7474 Lakhs) underscoring
Equity share (including a premium of `170 per share). The proceeds an extra-ordinarygrowth of 49% (PY `5009 Lakhs) even amidst extremely were deployed towards the Greenfieldexpansion challenging backdrop of sharp declining project. global crude oil pricesconsiderably reducing realisations. The Profit After Tax (PAT) stood Winning Performanceat 4206 Lakhs up by a mammoth 57% as compared to
`2678 SEYALakhs exhibitedin previous exhilaratingyear. The performancelordliernumbers duringalso theabridged year in theNetDebttoEBIDTAto1.30(PY1.88).Allofthishasresultedin retrospect. The Seeds that your Company sowed 5years back are deleveragingof Debt:Equity andleveraging InterestCoverageratio now bearingthe fruit and I am delighted to announce that in FY at 0.29xand5.29xrespectively. 2016-17Revenue from Operation grew by almost 12% to `30861 Lakhs while EBIDTA margin robustlyincreased to 24.22% (`7474
While top-line growth was relegated due to alignment of product prices with that linkedto crude oil the positive momentum in SpecialityLakhs) underscoring an extra-ordinarygrowth of 49% (PY `5009 Chemicals business Lakhs) even amidstwas epitomised extremely bychallengingthe growth in backdropvolumesofmargins sharpandoverallprofitability.Wecontinuetorototilloursurplusinboosting declining global crudeoil prices considerably reducing realisations. ourcapabilitieswhichweareconfidentwillenableand securefuture The Profit After Tax (PAT) stood at `4206 Lakhsup by a mammoth growth and long-term value creation for our shareholders. On the main57%as compared to `2678 Lakhs in previous year. The lordlier numbers also abridged the NetDebt to EBIDTA to 1.30 (PY 1.88). All of this has resulted in deleveraging of Debt: Equityand leveraging Interest Coverage ratio at 0.19x and 5.29x respectively stay of goodperformance the Board of Directors has recommended a dividend of `1.00 per share of aface value of `10 in line with previous year dividend rate despite the expanded Capitalbase.
While top-line growth was relegated due to alignment of product Winning Strategiesprices with that linked to crude oil the positive momentum in Speciality The future isnothing but a culmination of Chemicals business was epitomised by the Present growth involumes margins and overall profitability. We continue to rototill
With a clear defined vision our surplus in boosting our capabilities which to emergeas Most Integrated Global we are confident producerwill enable forand Specialitysecurefuture Chemicalsgrowthandandhavinglong-term invested valu creation `4.41 Bn
Capex in last 5 years Seya took its next step forward to startfor our shareholders. Onthe mainstay of good performance the`7.35
Bn round of expansion to be completed over next 2-3 years. With reasonably complex (notcomplicated) and fully backward & forward Board of Directors has recommended adividend of `1.00 per share integrated of face value manufacturingof `10 in lineblueprintwith previouscapital yearand dividend technologicallyrate intensivedespite thescaleexpanded of operations Capital base.your Company continues to create a large base tooutpace the industry and deliver persistent growth year-on-year on the vertebrae of itsstrengths combined with costWinning Strategies leadership and value-added productofferings. Gaining further momentum from stability in the global crude oil prices andrelatedThe future is nothing but a culmination of the Present petrochemicals your Companyhas already initiated work for its upcomingWith a clear projectsdefined integral vision toemerge to its existingas Most businessIntegrated operationsGlobal by embarking on producerfor a backward & forward integration project with capacity Speciality Chemicals andhaving invested `4.41Bn expansion of captive products initiative to reduce cost of energyandCapex in last 5 years Seya took its next step forward to start diversification in newhigh value Speciality Chemical products. The `7.35Bn round of expansion to be completedover next 2-3 years. Greenfield expansion being one of its kind full integrated state-of-
With reasonably complex (not complicated) and fully backward & art manufacturingfacility with Global scale and size of Individual plants shall have an aggregateinstalled capacity of 512550 MTPA forward integrated manufacturing blueprint capital andand shall be in vicinity of existing manufacturing operations there bytechnologicallyintensive scale of operations your Company further integratingcontinues tocreatemanufacturing large base to operations. I outpace the industry and am glad tounderlinedeliver that your Company has achieved its financial closure on 25 persistentgrowth year-on-year on the vertebrae of its strengths th March
2017 and is expected to commission its Commercial Production in combined with costleadership and value-added product offerings. the second half of FY 19. Once implementedit will further immensely strengthen your Company's sustainability and resilience andcreateGaining further momentum from stability in the global crude oil value for itsesteemed shareholders. The Greenfield expansion project prices and related petrochemicalsyour Company has already entails: initiated work for its upcoming projects integral to itsexisting business operations by embarking on a backward & forward v integrationBackward Integration project with capacity to manufacture Bulk Raw materials whichexpansion of captive products initiative are beingto reduc procured cost at 2.5 to 3times theirof energy and diversification manufacturing new cost due high valueto noImports and Limited No. of manufacturers in India Speciality Chemical products. TheGreenfield expansion who are beingcompetitors of Seya. one of its kind full integratedstate-of-art manufacturing facility with Global scale and size of Individual plants shallhave an v aggregateRecycle installed& Reusecapacityof By-Products of 512550toMTPAproduceand Value shall beAddedin
Products thereby reducing its Disposal Cost. vicinity of existing manufacturingoperations thereby further integrating manufacturing operations. I am glad to underlinethat v yourSet-up of 14 MW Free Captive and Cogen Power Generation Company has achievedits financial closure on 25th March from Process Waste Heat: 8 MW of Free Power shall be2017 generatedand is expected by Recoveryto commission of WasteitsHeatCommercialgeneratedProduction in during the theprocess of manufacture of proposed raw materialsusing Wastesecond half of FY19. Once implemented it will further immensely HeatRecoverystrengthen Systemsour Company's and 6 MW sustainability of Power shall begeneratedand resilience andusingcreatCogen value Thermal Power Plant. for its esteemedshareholders. The Greenfield expansion project entails: v Back Forward Integration in Highvalue and High margin Specialityward Integration to manufacture Bulk Raw materials whichare being procured at 2.5 to 3 times their manufacturingChemicals on similar lines as theearlier forward Integration project successfully executed 3 years back resulting in Valuecostaddition and increase in EBIDTA margin due to No Imports and Limited No. ofmanufacturers in India who are competitors of Seya. v RecycleHorizontal&ReuseIntegrationof By-Products into fast movingto produce High Value marginAdded andProducts High Value Speciality Chemicals thereby reducing its Disposal used Cost. inLithium Ion batteries
Set-up for Mobiles/laptops/etc Agrochemicals Pharmaceuticals Soapsof 14 MW FreeCaptive and Cogen Power Generation from & Detergent IndustryProcess Waste Dyes Heat:Wine Paper Mining Industry Food 8 MW of Free Power shall be
Industry Aeronautical Fuel Dye & Pigment intermediates
Printing Inks used in ball point pens curing of polyester and vinyl ester resinsFabric softeners Synthesis of cosmetics and colouring agents
Steady revival in global trade in 2017 and 2018 is expected to be driven by rebound inimport demand from large Emerging Markets and Developing Economies (EMDEs). While theoverall trend for growth in the global economy continues to point upwards the pace ofgrowth is likely to be moderate in the immediate term. Acceleration in USA's growth due toexpansionary fiscal policies and the attempts to accelerate infrastructure spending couldprovide a major boost to the global economy.
India is currently at the brightest spot among global economies to deliver improvinggrowth as economic fundamentals remain stronger than in other emerging market economieswith the combined impact of strong structural government reforms RBI's inflationimprovement in economic activity. Implementation of bold reforms in economic andindustrial policies has gathered momentum with the economy being restored on a high growthpath. The Indian chemical industry stands to gain from this growth and the policy like
Make in India' campaign and alongside theme of Ease-of-Business announced by theGovernment has been reciprocated by several global leading companies coming forward tocommit investments in setting-up world-class manufacturing units in the country. Severallarge commitments in the Chemical sector will undoubtedly increase the output andcontribution of the sector in the years ahead. India is witnessing a shift globally andAsia being the epicentre of growth and enjoying abundant skilled resources is emergingas the world's chemical manufacturing hub. India enjoys low-cost manufacturingcapabilities by virtue of relatively lower-cost labour highly competent leadership andgeographic proximity with the Middle East one of the world's key raw material sources.Recent developments contributing to a stronger and stable currency positive governanceenvironment and improvement in skills and capabilities is serving to enhance thecompetitive advantage. With the benefits of several tailwinds and the Government's focuson eliminating the infrastructure gaps in the country through investments in the sectorIndia continues to emerge as a critical manufacturing hub for the Chemical Industry.
Structural advantage with a growing market and purchasing power due to growingdisposable incomes and increasing urbanization have led to demand for paints textilesadhesives and construction. India has all the requisite ingredients for a RobustHigh-growth Chemical Industry the same ingredients that throttled Chemical Industrygrowth in China which include a large and growing population Mass urbanization and arapidly expanding middle class supporting numerous consumer markets. "Never give up.Today is hard tomorrow will be worse but the day after tomorrow will be sunshine".With a Pioneering Past Persistent Present and Purposeful
Future Your Company continues to expand its footprint in Speciality
Chemicals by ushering in products having wide spectrum of applications inPharmaceuticals (like Paracetamol floxacins etc) Personal & Health Care Products(like Hair dyes Protein & Health Supplements) Printing Inks & Paints (used inLaser/Ink jet Printers for Road markings etc) Agrochemicals (like DDT etc)Insecticides/ Pesticides (like Quinalphos etc) Rubber chemicals (for Leatherprotection) Textile dyes (Dye of Cotton & Denim fabrics) Thermic fluids (used asheating medium) etc. Seya's strength lies in its in-depth product expertise ability toadapt to new markets provide superior Quality Products at Competitive Prices with TimelyDelivery to the Satisfaction of the Customer. Your company continues to focus totractionconsistent profitable and sustainable growth with its forward integration products in theSpeciality Chemicals segment which witnessed Revenue from the segment contributing toalmost 99% of the total revenue and those from the new products comprising 91% of NetSales.
The world's epicentre has shifted to Indian manufacturers to fill the void created bythe deficit in supply owing to shutdown of Leading companies in China due to environmentalconcerns crafting highly lucrative opportunity for SEYA which is well known as one of thelowest cost producers in its class of products globally owing to the level of integrationin our manufacturing processes and wide international market presence through merchantexports. With a sense of excitement and anticipation your Company is diligentlypersevering to welcome its next level of transformational growth once the Commercialproduction from the proposed Greenfield expansion has been put on rolls.
We are positive about a stepped-up performance in FY 18 as the Speciality Chemicals areon a strong growth path. SEYA with its supported by higher disposable income anddiversified product portfolio catering across various businesses unmatchable backward andforward integrated infrastructure and improved market sentiments will continue deliveringprofitable growth leading to higher returns and value creation for our Stakeholders.
Team Seya's competence professionalism and superlative performance has been finallyrecognised and acknowledged all over the world by awards and accolades. Rooted in Valuesis our Integrity
Understanding Unity Responsibility and Excellence. I must take this opportunity tocongratulate and express my appreciation to the human assets of Seya. Your Directorsstrive to build a great place for great people to do great work. Continuing the winningspree
SEYA has notched up an impressive tally of awards for excellence at individual as wellas organisational level across various industry platforms and categories. I am proud thatTeam SEYA has proved that a plausible impossibility is better than a convincingpossibility. The professional management embedded across all functions and levels willcontinue to lead and drive SEYA.
My dear shareholders your support gave SEYA Incredible strength which can't beexplained in words. Your belief and confidence in the company and its management helpedSEYA to achieve what it has achieved today. We resolute to remain committed tosignificantly keep enhancing value of our stakeholders. I would also like to thank ourbankers who have continued to repose their faith in the Company and we are encouraged bytheir unstinting support. My fellow board members customers vendors and otherstakeholders without their support and encouragement SEYA's growth story is incomplete. Iwill complete with words of exhortation by Stephen Covey "Your most important workis always ahead of you never behind you". With great satisfaction and greateranticipation I call upon Team SEYA to surpass ourselves still stronger to win the goalsthat we have set for ourselves in pursuit of Excellence
|Best Wishes |
|ASHOK G RAJANI |
|Chairman & Managing Director |