FY2017-18 WAS A YEAR THAT EXHIBITS THE INHERENT QUALITIES AND STRENGTHS THATMAKES THIS ORGANISATION SUCCESSFUL. GOOD TIMES OR BAD WHEN YOUR CUSTOMERS STAY WITHYOU AND WHEN NEW CUSTOMERS COME TO YOU IT ONLY GOES ON PROVE THAT YOU ARE ON THE RIGHTPATH"
IT IS OFTEN SAID 'GET YOUR BASICS RIGHT THE REST wILL follow'. THIS IS VERY APT IN OURCASE.
Since our inception we have maintained unwavering focus on quality and servicereliability. These basic yet most important element helped us in building the Asahi brandand create binding relations. They enabled us to consolidate our strengths and grow ourbusiness. The impact of this has been so profound that even amidst a challengingFY2017-18 the demand for our products remained strong and our customers stayed with us.
Our operational revenue increased by 13% to H293.83 Crores in FY2017-18. Howeverpricing pressure driven by significant surge in raw material prices along with continuousappreciation of Indian rupees impacted our realisations and gross margins adversely. It isbecause of this that despite a strong operating performance our operating profitremained subdued. Our EBITDA and PAT declined by 19% and 16% respectively to H38.25 Crores
and H23.08 Crores respectively.
Having said that it is important to understand that this decline was temporary andpurely led by external conditions. Internally the organization is in a stronger positionthan before and the demand for our products are rising which can be seen in volumegrowth. So when the prices stabilize which is already happening steadily ourprofitability will rebound strongly.
Now when I say that the organization has strengthened it is because there have beenquite a few positive developments that panned out during the year. Our continuous effortsto undertake operational streamlining initiatives contributed to 5% improvement in CPCBlue capacity utilization enabling us to enhance production and sales volume. We continuedwith sustained marketing and promotional activities resulting in successful acceptance ofour new product launched in FY2016-17 fiscal among the customers. We expect it to startmaking contribution from the
next fiscal onwards. We added three new customers during the year which shall provideus the opportunity to scale business with them and grow topline.
Focused on scaling-up
During the year we invested H35 Crores to acquire two land parcels in Bharuch Gujarat- a 60000 sq mts land at Dahej and another 115158 sq mts land at Saykha. We intend toset-up specialty pigments chemical plants here. This will strengthen our product offeringand enable us to enhance value- added offerings which will ultimately improve margins.
Strengthening product pipeline
R&D will be our important agenda. During the year we spent a total of H1.75 Crorestowards enhancing quality of existing products and developing new ones. We
developed few new products while some are in pipeline. Our continuous efforts toreinforce portfolio with better products to meet customers requirement have beeninstrumental in gaining their trust and commanding their top of mind. We have Governmentapproved R&D Center.
It is our belief that nobody has the right to damage natural resources and that it iseveryone's responsibility to protect them. We are already seeing the negative impact ofclimate change in unpredictable and extreme weather conditions. At Asahi we have alwaysconsidered environment sustainability as an equally important area as our business. Whilewe have installed sustainable technologies to ensure effective discharge of effluentsevery year we continue to
ensure our operations get more sustainable. We continue to reduce our carbon footprintand water consumption. We ensure discharge well within the prescribed norms. We havetrained and sensitized our employees to minimize wastages wherever possible.
In FY2017-18 we spent a sum of H72 Lakhs to install a solar plant which will furtherreduce our energy consumption from traditional sources. I am proud that we today havethe highest standards of environmental practices enhancing our reputation and making usan acceptable company globally.
Sustainable future growth
At Asahi we have proved our might with a resilient performance in a challenging yearwhen most other companies bled. Our consistent efforts to strengthen operationalefficiency enhance capacity and keep reinforcing
portfolio with better products are paving our way towards a more sustainable growth. Weare confident that the sum of efforts over the past couple of years will translate into ahealthy performance and we will reward our shareholders adequately.
I appreciate the efforts put in by our people. They are rightly the key driver ofgrowth. We will continue to provide them an open culture to foster and grow their skillsfacilitate them to think like entrepreneurs and bring in innovative ideas. We will providethem an engaging organization and help them build better career.
I thank all our stakeholders for their support. Your belief in us and our growth storyhas been encouraging. with our consistent efforts we will ensure that we keep deliveringbetter performance.
|Paru M. Jaykrishna |