I warmly welcome you all in this august gathering to review the annual performance ofthe fiscal 2016-17.
The Industrial Minerals sector has always been considered as an important segment forthe Indian economy. The mining sector has been reeling for few years now under a lethalmix of high borrowing costs on one hand and environmental and regulatory policy paralysison the part of the government on the other hand. But with the government in place bybringing reforms in the mining industry the hope has revived in the industry to bring insome major growth oriented mining and mineral development policy reforms in the next fewyears which should boost this industry to the next level. With global economic activitynow picking up steam after a long-awaited cyclical recovery in investment manufacturingand trade the world growth is expected to rise from 3.1 percent in 2016 to over 3.5percent in 2017 and 3.6% in 2018.
2016-17 passed by witnessed a major setback in terms of changes in mining regulationsand restrictions imposed especially by Rajasthan government disallowing mines operatingwithout Environmental Clearance (EC) Licenses leading to closure of many mines and causingprice escalations and demand supply gap. Provisional clearances were offered onconditional basis for certain minerals and clarity was very ambiguous about the actionstaken and the expectations. About 500 mines are covered under the Act of 22/3 and areawaiting the scrapping of this Act by Mining Department which is very uncertain at thispoint of time. Side-by-side royalties have also increased in Gujarat Rajasthan andAndhra Pradesh creating dis-satisfied conditions in raw material procurement. But overallthe impact has been quite positive to restrict illegal mining by the government andcreating a safe and sustainable environment for people working at the mines.
A few minor changes in the mining scenario for leasing and auction of mines have beenbrought into notice by the Central government. Apart from that not many significantchanges have been noticed or realized in the Industrial Minerals industry that the Companyoperates in. This industry still predominantly functions in an unorganized way wherein alimited players are trying to get their act through and shift their focus in an organizedway segmenting them in the category in which 20 Microns operates since more than fewdecades. India has always been a self sufficient nation with well endowed natural mineralresources in the league of larger nations of USA Europe and China. This industry fallingunder the larger Minerals & Mining sector is a significant contributor to India's GDPgrowth which is currentlyon the decline.
Much greater emphasis is required on development of mineral deposits by way ofprospecting and zero-waste mining in which directions the Company plans to work-out andimplement. Indian government does not formally define mining as a core industrialactivity. Rather it is viewed as more often as an ancillary raw material industry. Themining legislation always gave accent to regulation which emphasized management of themines rather than on exploration and development.
The future should therefore usher in an era of mineral development with socio-economicdevelopment as the focus. A significant amount of mineral potential still lying untappedcould contribute enormously to the country's GDP if the challenges are overshadowed by ahigh flow of FDI in this sector.
The mining industry in India has however started to shape the future directions of thisengagement towards an inclusive agenda for improving livelihoods of the local populacebringing in much needed investment job wealth creation and government revenues.
The future therefore now lies on deployment of latest technologies as well asinterpretation of geological data to its best advantage for opening up of new mines. Asmineral exploration is a key to attracting investment in the mining sector separatelegislation and procedure for grant of prospecting/exploration licenses is required.
India has seen probably the best exports in terms of Minerals because of the low oceanfreight coupled with increased demand and availability
of materials. In value terms Export to Africa and Middle East has held up the best.However export sales of 20 Microns product sales has increased 24% over last year. Mineralexport from India is growning up sharply over few years. Minerals like Talc Feldspar hasseen tremendous growth.
2016-17 was quite challenging in itself due to the overall slowdown in the industrialsegment as well as in the retail market especially in the second half of the year due tohistorical decision of de-monitisation and despite in such a sluggish scenario Company'smajor Divisions - VAD and CNC - were able to manage the growth over the previous financialyear. It's also remarkable to note that our growth pace has been consistently maintainedstrong EBIDTA or bottom Line growth compared to the last fiscal despite critical marketscenario and even in the commodities segment we have introduced various premium productswhich have given them substantial cost benefits in their product formulation.
While concluding Our Will to Win Team 20 has sustained across cycles and I amconfident that it will serve us well ahead at this time of great optimism. I am gratefulto them for their sustained efforts in making 20 Microns a leading Nano & MiconisedMinerals company in the world. I would also like to thank all our stakeholders BoardBankers and the Government for the support and assistance provided throughout our journey.I solicit your continued cooperation as has always been with 20 Microns.
Thank you all
Chandresh S. Parikh