"We have in place a strategic Management long-term approach to widen overview anddeepen our market penetration and kickstart diverse revenue streams to ensure sustainablegrowth"
It gives me immense pleasure to present a snapshot of our FY16 performance in thecontext of the broad sectoral environment.
Several advanced economies remain at difierent stages of recovery in the aftermath ofthe global financial crisis. Although significant regional variations persist growthrates in numerous mature and emerging markets have converged. The US economy in realterms grew at a rate of 2.1% in FY16 (compared to 2.4% in FY15) propelled by growingemployment rates swelling housing demand and increasing consumer spending. Going forwarda lot will depend on how efficiently wages and investments are able to keep up with risingconsumption levels. In China a remarkable shift is underway spearheaded by a robustgrowth in the services segment and implementation of decisive policies ofisetting theimpact of the slowdown in industrial activity and consequent layofis. The Chinese servicessector now accounts for almost half of the nations GDP and a majority of the newjobs in urban centres.
During the fiscal gone by Indias GDP grew by 7.6% in FY16 compared to 7.2% inFY15 following a revival in the industrial and agriculture segments. India cemented itsstatus as the worlds fastest-growing large economy on the back of a strong 7.9%growth rate in Q4 FY16. In comparison China reported a 6.7% growth rate the slowest inseven years.
From a macro perspective the systematic introduction of Vannamei shrimps turnedIndias ailing aquaculture sector around. The result is that India now possesses thepotential to cross C60000 crore in seafood exports by 2020 with a number of large globalseafood and shrimp buyers considering India as their port-of-first-call when it comes toaccessing quality processed shrimp. After growing output revenues and profits for sixconsecutive years Indias shrimp feed sector encountered its first major setbackduring the year under review. Despite a strong first half during which your Companyregistered a growth of 20% performance declined sharply during the last two quarters.During Q3 an outbreak of EHP disease followed by heavy rains across Southern Indiaadversely impacted shrimp production.
Although we reported a 15% growth in annual revenues profits declined from C19.5crore in FY15 to C0.7 crore in FY16. This decline in profits was due to exceptional itemslike the one-time-settlement of loans owed to Canara Bank and unexpected losses stemmingfrom the shutdown of factory. The cumulative impact of exceptional items during the yearamounted to C20.88 crore. As is understandable the decline in profits during FY16 waslargely on account of external factors that were beyond the Companys control. Withseveral farsighted initiatives already undertaken we are confident of soon regaining ourgrowth momentum.
We believe that we are not here to merely enhance our market share. Instead it is ourresponsibility to expand the aquaculture market in India. Consequently we extended beyondmarketing our products to educating our stakeholders; from a singular focus on captiveprofitability to across-the-table value-addition; from manufacturing existing products toundertaking research-driven product development.
Case in point: During the year we launched Baywhite Enriched a newvariant of nutrition-rich shrimp feed to boost shrimp growth and immunity. The shrimpfeed fortified with stable microflora ensures a healthy gut enhances energyavailability and improves lipid breakdown.
The product received encouraging response during the year. However the full impact willbe manifested once the countrys shrimp production returns to normalcy.
The amalgamation process of Pinnae Feeds Limited into the Company was kickstartedduring the last fiscal. This should allow us to widen our operational presence over thenear-term and ensure superior resource utilization enhance economies-of-scale eliminatefunctional overlaps and reduce overheads during the years to come. We also resumedprocessing and exporting shrimp to American and European markets to strengthen revenuesand margins going into FY17.
The state-of-the-art hatchery project which was scheduled to commence operations lastyear ran into unforeseen delays and is now expected to be completed by Q4 FY17. Bysetting up this hatchery we will help farmers access quality shrimp seed.
Farmers use a host of products and additives to farm shrimps. These products includeprobiotics animal healthcare products and ammonia binders among others. A dearth ofgenuine antibiotic-free range of farm care products pose a significant risk to shrimpfarmers. To address this issue we are aiming to market a high-performance antibiotic-freerange of farm care products under the brand name of BayLife. This ancillarysegment will be synergic with our existing business reinforce customer engagements andallow us to carve out a larger slice of the revenue pie.
We remain optimistic of our long-term prospects for a number of reasons. Theinternational demand for shrimp remains robust and the Indian aquaculture industry appearsto be all set to stage a comeback. The Company made several inroads into new markets andthey have started yielding positive results. We believe that by diversifying our revenuemix and extending our market penetration we will able to increase our volumes andmargins adding value in the hands of our shareholders.
I would like to take this opportunity to acknowledge our employees for theircontribution dedication and commitment. I would also like to thank our customersbusiness partners vendors and other business associates without whose support we wouldnot have been able to scale heights. I would like to express my gratitude to variousCentral and State
Government authorities and industry bodies for consolidating what for long had been anascent space. Finally I wish to thank all our stakeholders for their undivided interestsupport faith and encouragement and look forward to their continued support.
|Vikramaditya Mohan Thapar |