FY 2019-20 ended in an unparalleled manner. COVID-19 scripted a new chapter in historyand is considered as the biggest test for mankind. The way people will live interactwork and travel may not be the same again. As I write this letter I am working from homelike so many of my colleagues following the guidelines of local and national healthorganisations to minimise social contact in an effort to slow the spread of the COVID-19coronavirus which has now reached a global pandemic level.
FY2020 was a challenging year for us. A global speacialty chemical business is notimmune to the effects of fundamental transformations like those in energy and automotivesectors. Against this background DCW Limited is clear on what we stand for: reliabilityand stability. Today I can say we have kept our word we have delivered. We held earningssteady even though market conditions were far tougher than in the previous year. And wedemonstrated that we stick consistently to our course even when going gets rough.
The key factors to accomplishing this were being focused towards our balanced portfolioand following a strict cost discipline. Towards this end
I am pleased to share with you our performance for FY2020.
OUR PERFORMANCE FORTHE YEAR
Our revenue from operation for FY2020 was Rs 12772.8 million as against Rs 13528.0million in the previous year registering 5.9% year-on-year degrowth. Commodity chemicalrevenue for FY2020 stood at Rs 11199 million down by 8.5% on a YoY basis while ourspecialty chemical revenue stood at Rs 1426 million up by 23.9% on a YoY basis. Profitbefore tax was recorded at Rs -396.6 million as against Rs -218.6 million during theprevious year. Profit after tax for the year stood at Rs -267.6 million as against Rs-42.7 million in the previous year.
Further we have invested in various CAPEX and expansion programs and have undertakenthese projects to cater to various long-term growth and high margin opportunitiesespecially in the specialty chemicals business.
BUILDING OUR NICHE SPECIALTY BUSINESS
We are a leading manufacturer of specialty chemicals in Synthetic Rutile SyntheticIron Oxide Pigments (SIOP) and the only manufacturer of Chlorinated Polyvinyl Chloride(C-PVC) in India with technical license from Arkema. Our specialty chemicals businesscontributes 11.2% of sales for FY2020 as our integrated operations help to effectivelyuse co-products and generate high-value products in a highly cost-efficient manner.
Further the Union Ministry of Commerce and Industry announced on 19th February 2020Anti-Dumping Duty (ADD) on imported C-PVC resin/compound from China and South Korea. Thismove is followed by Provisional ADD duty announced on 26th August 2019. Post theProvisional ADD the share of imports from China and South Korea went down to 6% duringSeptember-December 2019. This had a positive impact on us as we witnessed about 12%increase in the net realisations for C-PVC compared to just a 2% increase in the landedcost for imports from countries other than China & South Korea.
OUR STRATEGY FOR FUTURE
India's growing prominence in the global supply chain and further recognition of DCW'sown position as a partner of choice for a large number of domestic and internationalclients has enabled us to witness an all-round growth in both - commodity and specialtychemical business a trend which we believe will continue. We thus remain committed todrive growth and value creation.
With major CAPEX being done over the last few years in the specialty chemical segmentand de-bottlenecking of commodity chemical business we are expecting robust capacityscale-up for all our products in the short and medium- term. As a part of the strategy wewill continue to focus on our niche specialty chemical business to ramp-up the profitmargin profile.
Today we are a stronger and more focused with the foundation required to achieve ourvision of becoming the premier specialty chemicals Company. At the same time our journeyis not complete. We have many opportunities and challenges as we work to achieve our fullpotential by delivering greater revenue growth margin expansion and cash generation.
Although the pandemic may subside after some time the significant economic declineworldwide it has caused may not any time soon. We will persevere so that we do notdownsize the destiny of our Company and that of our own in the longterm. In fact we willbuild even more resilient businesses and communities where we operate.
In closing I would like to express gratefulness to our stakeholders for your supportand your loyalty to DCW Limited. We will do everything in our power to ensure that theCompany remains on its successful course.
Mr. Pramod Kumar Jain