"Innovation at APL Apollo is not a deliberate strategy. It is our inner strengthwhich gets reflected in everything our priorities products processes andperformance."
In all of 2018 every 60 seconds made a world of difference. For in this time limitEarth completed 1800 km rotation the world added more than 100 new lives to itspopulation. In the same time Google received about 3.7 mn queries the world spent aboutUS $862823 in online purchases about 187 mn emails were exchanged across the globe. Moreintriguing the leader of India Inc. Reliance Industries generated sales of `11 million.
the incredible speed at which the world is changing (markets are moving technology isevolving and traditional business models are dismantling) is giving rise to new businessspaces and solutions. the astonishing momentum at which an individual's mindset ischanging adapting to new-age technologies and demanding for more is mandating economiesindustries and companies to alter their delivery models completely. the intensity ofindustry disruption and rate-of-change of consumer needs today necessitates staying onestep ahead of market demand.
At APL Apollo we are determined to stay at the cutting-edge of technology which willhelp us in developing and delivering innovative solutions that add value to the customerand grow the market size as opposed to merely focusing on increasing our market share.Interestingly this comes to us naturally. For innovation at APL Apollo is not adeliberate strategy. It is in our DNA. It's our inner strength which gets reflected ineverything our priorities process product and performance.
Fiscal 2018-19 aptly demonstrates our ability to grow the market. Having installed theDFT technology we nearly doubled our sales volumes between April 2018 and March 2019.Moreover this is only the tip of the iceberg. For our products have been approved forimportant infrastructure projects namely airports and bridges which were held up owingto the General Elections. With that behind us we expect to see these projects get off theground. When that happens it will optimally utilise our DFT capacity.
In another development APL Apollo Tubes through its wholly owned subsidiary ShriLakshmi Metal Udyog Limited (SLMUL) would be acquiring more than 50% stake in ApolloTriCoat Tubes Limited. is investment will allow us access to new high-end galvanizingtechnology which will give us new products - Inline Galvanizing (ILG) Pipes Door FramesHybrid Pipes and Narrow Sections. Globally there are only ten lines for ILG Pipe and onlya couple of lines of Hybrid Pipes. is technology will create a new market segment in thegalvanized product segment and provide APL Apollo with a first mover advantage. While theILG pipes would be part of our structural offering the hybrid solution is a nichesolution for water applications. the bottom line is that our continuous focus oninnovation and technology is helping us to evolve and align ourselves with theever-evolving customer's demand. In doing so we hope to sustain our dominance in thisbusiness space.
Promise prospects and priorities
the steel demand in India is expected to grow around 6-8% by FY21 of which steel pipewill form 10-12% of the total steel demand. is proportion indicates the significantopportunity for steel pipe consumption in the years to come.
Strong Government impetus increasing purchasing power improving lifestyle dynamicsamong others are likely to catalyse the demand for steel pipe products from theinfrastructure construction and building materials sectors energy engineeringautomobile and agricultural segments. Moreover steel pipes and tube manufacturing isamong the fastest growing industries across the globe. India is one of the leading ERWsteel tubes manufacturing hubs. Being looked upon as a manufacturing base to the worldIndia can play a significant role in catering to the growing global demand for ERW steeltubes.
ere is a robust untapped potential across export markets especially across the USEurope and the Middle East for new-age products and solutions. Our success in enteringthe US with large sections (300x300 using our DFT technology) vindicates this belief.Going forward newer product launches such as Tricoat Tubes Narrow Sections we believewill further unlock vast potential across the overseas markets.
Our immediate focus
With the operationalisation of eight lines of DFT our current capacity stands at 2.1million MTPA.
We are taking this number higher. At the start of the current fiscal we entered intoan agreement with Shankara Building Products Limited to acquire its 200000 MTPAmanufacturing unit in South India. is facility has established lines for high-marginproducts namely GI and GP. Also we have a strong presence in these revenue verticals inSouth India. is acquisition becomes a perfect fit for us and has an attractive payback ofless than 3 years. With this acquisition APL Apollo's installed capacity will be 2.3million MTPA. Moreover the upcoming operationalisation of the Tricoat manufacturing lineof 250000 MTPA will further take our total installed capacity to 2.55 million MTPA.
We will continue to work towards achieving optimum utilisation of our capacity byfocusing on our CAP strategy. is strategy involves reaching new customers new areas andintroducing new products. rough these painstaking and patient efforts we aim to achievean 85-90% utilisation in the next couple of years. Once we reach the target of 85% wewill think about additional capex.
From a medium-term perspective we will work very deliberately to ensure that APLApollo always remains relevant and current to the people we serve and to the changestaking place in our environment. To that end we will continually shape the Companystrategically choosing the businesses in which we compete the areas of research in whichwe invest and the geographies in which we build to achieve the optimal configuration forsuccess.
It is sheer endurance that has brought us here. We have stayed the course and believedin our business model. We have successfully managed both failures and risks in afast-changing world that brings new and disruptive ideas every day. We have consistentlyraised the bar by benchmarking ourselves against the global best. rough a combination ofhigh technology talent and a culture rooted in deep science we have proved that as anorganisation we have what it takes to make world-class cutting- edge products.
As we move into 2019-20 I would like to thank our esteemed shareholders partnerscustomers and all other stakeholders for believing in our story and reposing theirconfidence in our capability and extending their support in our long journey of endurance.
Mr. Sanjay Gupta
Overall the Company is witnessing a steady revival in volumes across productcategories and has sufficient capacities to grow at a 20%
CAGR over the next two years. So our focus will be more towards improving our cashflows and profitability in the years ahead.