The flexible packaging industry has experienced rapid growth globally as a result ofincreased consumption change in packing format from rigid to flexible and greaterinnovation. In India factors such as low packaged food penetration growing organizedretail and rising personal disposable income have helped the Industry to grow rapidlyparticularly during last one decade. Considering expected growth in these factors theIndustry growth is expected to further accelerate in coming decades. Cosmo Films hasbenefitted from the accelerated market growth and with close to four decades of industryexperience and presence in more than eighty countries the Company today has become one ofthe leading manufacturers and exporters of Biaxially Oriented Polypropylene (BOPP) Filmsaround the world. Further besides being world's largest manufacturer of thermallamination films the Company today with consistent efforts on value added specialityfilms; has become largest value added films supplier in India.
During the financial year 2017 Profits after Tax (PAT) on standalone basis marginallyincreased by 3% to Rs.112 Crores from Rs.108 Crores during previous year. Consolidated PATwas Rs.89 Crores during financial year 2017 compared to Rs. 96 Crores during previousyear. PAT for the year was unfavourably impacted by temporary factors such asdemonetization and one time exceptional forex loss in Japan subsidiary. The Company couldsuccessfully mitigate impact of these factors to a large extent by increase in the sale ofhigher margin value added products and operational efficiency.
The Company is strategically selecting its growth plan to enhance high margin valueadded films portfolio on one hand and to become one of the lowest cost producer in theworld in selecting product categories on another hand. In this direction the Company hascommissioned 10.4 meter width BOPP line in Feb 2017 ahead of schedule. Company had aninstalled capacity for BOPP films of 136000 MT p.a and with this new line the capacitywill be 196000 MT p.a. The capacity is expected to be ramped up to its full capacity frommid financial year 2018 and should contribute in Company's growth. We have also recentlyannounced 36000 MT annual capacity speciality BOPET (Biaxially Oriented PolyethyleneTerephthalate) production line which is expected to be commissioned during financial year2019 primarily with niche speciality products.We have started to establish strongpackaging film business with our existing infrastructure and asset base in USA and Korea.This helps us to be closer to our customer and help company on a better margin on suchsales.
Cosmo's advanced research and development team with its relentless focus allows us todrive innovative product development globally and meet the ever changing needs of thepackaging industry. With our continuous R&D efforts we have created a more customercentric product offering and have a strong pipeline of value added films which will drivethe Company's sales in the coming years. R&D focus has been on re-energizing existingproducts launching new products and getting into new categories. The Company recognisesimportance and long term benefits of investment in Information Technology (IT)infrastructure to leverage technology for enhancing efficiencies and productivity. As aresult of which the Company has successfully implemented "Customer RelationshipManagement" (CRM) first in the Indian Industry during financial year 2017.
Cosmo strongly believes in employee development defining a culture where by employeecan shape up his career by way of identifying his/her areas for growth. As a step toachieve this the Company has conducted an Employee Engagement Survey through a worldrenowned agency. The information obtained from this study was used as inputs in theformation of the organization's HR policies and programs to ensure Cosmo continues to be agood organization for current and future employees. In the survey generally the Companyhas achieved scores much higher than the industry.
As we strive for business excellence & growth we also continue to focus onenvironment & sustainability initiatives. We are committed to Swachh Bharat Campaign(Clean India Mission) by Government of India through various philanthropic initiatives ofCosmo Foundation. As part of this Swachh Vidyarthi Swachh Vidhyalaya campaign wasinitiated in 21 primary and grant-in-aid schools in Karjan villages of Gujarat to bringawareness on personal hygiene environmental & behavioural change. We have alsoinitiated a drive in the City of Aurangabad to invoke interest among the local public tocollect plastic waste and send it for recycling and to spread awareness on disposal ofwaste etc. This year we are targeting to construct & maintain toilets for girls in 15schools covering 10 villages of Karjan Dist. By engaging in continuous dialogue with thestakeholders as a global corporate citizen Cosmo aims to increase awareness &importance of promoting Swachhta and also of the unique role Cosmo plays in addressing thechallenges of building more sustainable societies.
I would like to thank our stakeholders for reposing their confidence and faith in theCompany. We are committed to deliver long term stakeholder value and look forward toachieve several milestones on the path of excellence and profitable growth in comingyears.
Chairman and Managing Director