As I write this letter the impact of the COVID-19 pandemic is at di_erent intensity indi_erent regions across the globe. While the flattening curve seems to be a positive signfor some countries some other regions are continuing to account for an increasing numberof cases.
During this tough period I o_er my sincere condolences to those who have been a_ectedby the pandemic. And I express my gratitude to all those who are fighting the pandemic.
Despite the challenging environment DMCC demonstrated great resolve and weathered thebusiness environment with prudent strategies and strong balance sheet. I attribute thisperformance to the hard work and determination demonstrated by our people who inspite of the adversity remained exceptionally focused to delivering on ourambitions and ensuring seamless supply of our products to our clients.
We left no stone unturned in putting the health and safety of our employees first. Ouremployees undertook extensive workplace precautions and followed all the requisitemeasures. While taking care of our people we did not lose sight of the larger purpose andcontinued to uplift lives by contributing funds to various social organisations. As aleading player in sulphur-based chemistry we are aware of the impact of our operations onthe environment and are undertaking all the necessary steps such as zero liquiddischarge and waste heat recovery to minimise it.
Being a chemical manufacturer we are responsible for managing and containing ourenvironmental footprint in the most prudent way possible.
We have embedded sustainability as a part of our strategy and are emphasising onsharpening our ESG focus. Guided by our strong leadership team we are workingrelentlessly towards attaining the highest standards of sustainability. At DMCC we alsobelieve in inclusive growth to create a self-su_icient ecosystem. Towards this end wehave made our due contributions for CSR initiatives by collaborating with variousinstitutions to help those in need.
We have been in the business for over 100 years and have established a name thatresonates with quality and trust. I am optimistic that we will continue to uphold ourlegacy for the years to come on the back of our expanding product portfolio and globalfootprint extensive research and development and technological innovations.
As I conclude I would like to thank all the stakeholders for trusting us to deliverand for their continued faith in us. Together we will build a much stronger DMCC in theyears to come.
MR. LAXMIKUMAR N. GOCULDAS
MS. MITIKA L. GOCULDAS
The year 2020 has been the year of the pandemic one that has had a lasting impact onour business and industry. The year has taught us a lot and these learnings will help uscontinue to change for the better.
As I reflect on the year gone by the one word that comes to mind is resilience. DMCCand its people were resilient during these extraordinarily times. The strong foundationthat we have built over 100+years helped us stand up to the challenge and quickly adapt tothe changing conditions to support the business. Through all this I am proud of
Our capacity expansion projects will ensure process and product development and furtherour vision of becoming global leaders with the lowest production costs on the back ofintegrated operations.
the way we showed resolve and never lost sight of our purpose to continue beingthe leader in sulphur-based chemistry and o_er high-quality cost-e_ective products andservices to our customers.
STRONG PERFORMANCE DURING TOUGH TIMES
Financial stability is the foundation for all other types of sustainability. Over theyears we have been undertaking a variety of measures to enhance our financial performanceand stability. Our revenue for FY 2020-21 grew by 6.65% to reach _ 200.15 crores comparedto _ 187.66 crores in FY 2019-20. Strong demand for our bulk and speciality chemicalproducts as well as strong performance driven by volume growth better realisations andimproved product mix contributed to our resilient numbers. Due to improvement in processe_iciency our EBITDA margin grew to reach 21.62% compared to 18.14% in FY 2019-20. Inline with the robust performance our PAT increased by 3.55% to _ 32.58 crores from _31.46 crores in FY 2019-20. We are optimistic of continuing this positive momentum in FY2021-22 on the back of new incremental capacities.
Our speciality chemicals business witnessed a good year owing to strong volumescontributing ~65% to the topline. Strong demand from export markets will augur well forour margins in the coming years. Our capacity expansion projects will ensure process andproduct development and further our vision of becoming global leaders with the lowestproduction costs on the back of integrated operations. We expect investments worth _ 50crores made in this segment to yield asset turns of more than 2x and we hope to achieveoptimum utilisations by end of FY 2022-23.
Our bulk chemicals business witnessed moderate volume growth despite majority of ourcustomers shutting own operations in Q1 FY 2020-21. The upcoming 350 TPD capacity shall bethe last capacity expansion in this segment for the foreseeable future. However the bulkchemicals plant will be set up first which will result in higher contribution from thissegment in FY 2021-22. Our boron business was worst hit due to unfavourable Governmentpolicy. Importing raw materials especially technical-grade boric acid is a_ected due toGovernment restrictions and global supply disruptions are resulting in severe raw materialshortage for the business. While we wait for the restrictions on raw material import to belifted we are focusing on downstream products in sulphur-based chemistry.
READY FOR EXPANSION
We have planned to undertake capacity expansions worth ~__100_crores at our Roha andDahej sites. In Roha we will undertake debottlenecking whereas in Dahej we will set upmulti-purpose and dedicated plants for bulk chemicals speciality chemicals andintermediates. The second wave of the pandemic has resulted in a delay in our plans due tounavailability of labour and scarce availability of oxygen for industrial use. Furtherthe prices of commodities such as cement and steel are on a significant rise which couldresult in a cost overrun of 10-15% on the total capex. However with the ramping up ofvaccination and the gradual recovery of the economy our expansion plans remain on track.These expansions will allow us to develop products using environment-friendly andcost-e_ective proprietary manufacturing processes and decrease the turnaround time of theproducts. We will be able to expand our capacity of sulphuric acid and its downstreamproducts and manufacture benzene sulfonyl chloride and a range of thio compounds.
LEVERAGING OUR RESEARCH STRENGTH
Our short- and long-term growth is fuelled by innovation. We are keen on bringing newhigh-quality low-cost sustainable solutions to meet our customers' needs. Our in-houseR&D team comprises highly skilled and experienced scientists and engineers. They focuson improving existing manufacturing processes developing new products and researching onnew applications for existing products. From literature surveys through laboratory andpilot trials and all the way to commercial production our team does it all. Our R&Dcentre's e_orts have been recognised by the Council of Scientific and Industrial ResearchGovernment of India an honour conferred only on those companies that have deeptechnical knowledge and process development ability and well-developed infrastructure.
TOWARDS A WELL_SHAPED FUTURE
We are confident that our Company will continue to o_er the best quality products andsolutions to meet the evolving demands of our customers. Our investment to expand oursulphuric acid capabilities will serve the captive needs of downstream products. Furtherwhile selecting new products we are focusing products that have margins of greater than30% and a payback period of less than three years. As I conclude I would like to thankthe Board and the management for their leadership and service. Their contributions havecemented DMCC's position as a leader in the industry. Our people remained determined toserve the customers and gave their best even during the most challenging times. I wouldlike to extend my gratitude to them. Finally I would like to thank all the stakeholdersfor their support we will continue creating great products and sustainable valuefor you.
|Best wishes |
|MR. BIMAL L. GOCULDAS |
|MD AND CEO |