When we look back at the year gone by it has been one of strong growthand recovery. Economies and businesses across the world have rebounded and are steadilygrowing after a year full of lockdowns and disruptions owing to the COVID-19 pandemic.
For us at ASCL it was a year of overcoming challenges exhibitingresilience expanding our portfolio and marching towards growth. The year only furtherstrengthened our belief in ourselves - of overcoming any major shifts in the externalenvironment.
A year of challenges and recovery
Just as the global economy was bouncing back from the aftermath of thepandemic the Russia-Ukraine war triggered a costly humanitarian crisis added toinflation and is threatening to pull back economies and businesses that are on therecovery path. Food and fuel prices have increased rapidly threatening those in thelow-income groups. According to the World Economic Outlook interest rates are expected torise as central banks tighten policy exerting pressure on emerging market and developingeconomies.
The Indian economy is back on a growth trajectory after the negativeimpacts of COVID-19. The economy grew 8.7% in FY 2022 marking an improvement aftercontracting 6.6% in FY 2021. Nationwide vaccinations have helped reduce the severity ofthe third wave with minimal disruptions to mobility and economic activity. Further theIndian government is focused on accelerating the recovery of the economy by undertakinginitiatives to improve logistics infrastructure facilitate industrial production andimprove farmers' income.
The Russia-Ukraine war has impacted fuel prices in India since thecountry imports a major part of its fuel.
Resilience in the pigments market
The global pigments market is expected to register a moderatesingle-digit growth of about 2.8% in terms of volume over the 2020 to 2027 period.
The market has been witnessing significant consolidation over the lastfive years. There is a steady increase in competition erosion in margins rapidcommoditisation and supply-demand imbalance which will continue to drive consolidation inthe years to come. Moreover the growing shift toward sustainability and circular economythe emergence of a plethora of transformative technologies such as autonomous vehiclesystems and the ever-tightening regulatory scenario are expected to have wide-scaleimplications on the pigments market. The demand for pigments is expected to furtherincrease due to dyes in digital printing inks being replaced by pigments coupled with anincrease in pigment loading due to growth in powder coatings and construction materials.
The Indian dyes and pigment market is anticipated to grow at aconsiderable CAGR of 5.1% during 2021-2027. The Indian chemical sector is a key GDP driverfor India; hence the Indian Governement is undertaking several initiatives to promote thecountry's chemicals sector. Moreover with rising urbanisation the demand for paints andcoatings is expected to increase in turn driving the demand for pigments. InterestinglyIndia's cosmetics industry is majorly contributing to the demand for pigments. Due to therising standards of living and changing lifestyles people in India are spending heavilyon hair and skin care and cosmetics accelerating the growth of the Indian dyes andpigments market. Further the environmental crackdowns in China which have resulted inthe shutdown of several dye companies augurs well for India.
With its manufacturing ecosystem technology and industry compliance
India is well positioned in the pigments market and is ready to caterto the customer base that is likely to shift from China.
Against this backdrop ASCL is well positioned to leverage itsstrengths and make the most of the opportunities coming our way in the coming years.
Performance that withstood the storm
During the year the rise in raw material prices increasing coal andenergy costs and the uncertainty in freight costs and the availability of containers posedhurdles to our business. Despite these challenges the team at ASCL continued withperseverance and we managed to acquire additional customers and grow beyond the 5% growththat our industry generally witnesses year on year. Further the anti-China sentimentcoupled with environmental crackdowns in China factories have positioned India and inturn us to supply to customers and multinationals looking for an alternative. This willbode well for our Azo and Blue businesses. Further we have captured a significant marketshare in the Blue business.
A major win for us this year is the acquisition of Atlas LifesciencesPrivate Limited (Atlas) and our entry into the API business. This has positioned us wellto steer onto a strong earnings growth path. We gladly welcome the Atlas team onboard atASCL and look forward to working together to generate sustainable value for allstakeholders and achieve our long-term goals.
A passionate and skilled workforce
Everything we have achieved till date is due to the passion and hardwork of our passionate people. They responded extremely well to the challenges that theyear posed. Every member of the ASCL family believes in the philosophy of the three Ts -trust transparency and teamwork. It unites them to achieve the vision of becoming atrusted market leader in pigments globally.
We managed to acquire additional customers and grow beyond the 5%growth that our industry generally witnesses year on year.
As an organisation we leave no stone unturned in creating a productivework environment for our people. We provide relevant career progression paths andperformance-based rewards to recognise our people. Their commitment has allowed us tomaintain long-standing customer relationships with our customers and gain their trust.
A business built on ethics and environmental consciousness
Since inception we have been operating in an ethical manner beingfair and transparent in our business with our partners. This in addition to our superiorquality has allowed us to gain reputation and trust. We are an environmentally consciousbusiness and strive to reduce our carbon footprint. Our plants are surrounded by greencover and we ensure wastewater is treated before being discharged. 'Reduce reuserecycle' is the philosophy we follow across our operations. With robust corporategovernance and compliance to all environmental and social norms we continue to balanceprofitability with sustainability as we grow from strength to strength.
As we enter the next year we will continue to pursue profitability andsustainability. I am confident that ASCL's ever-evolving strengths and capabilities willultimately make us the preferred world leader in pigments.
|Best wishes |
|Paru M. Jaykrishna |