It is a privilege to present the annual performance of your company for FY 2017-18. Iam pleased to inform that the company has performed even better this year in spite of itbeing a challenging year for the textile industry post GST regime.
The company has reported a revenue of Rs 1928.0 Cr a growth of 24% Y-o-Y basis andEBITDA of Rs 156.9 Cr registering an increase of 18% Y-o-Y basis. The company has alsomade a tremendous growth of 47% in PAT Y-o-Y basis. The positive divergence betweenrevenue growth and profit growth indicates the robustness of company's business model andcompetitive position.
Your company is now firmly established in the business of manufacturing SyntheticFilament Yarn. We are producing wide variety of yarns. We have narrowed down our focusgradually on Polyester Yarns which forms a major portion of Man Made Fibre.
Our experience in Synthetic Fibre is more than four decades. Prior to manufacturing wewere trading difierent varieties of Synthetic Yarns. Coping up with vagaries ofmanufacturers we had made a foray into manufacturing. A humble beginning was made bysetting up a small plant at Noida for manufacturing of Monofilament Yarn and the productrolled out in 1994.
A capacity of 500 TPA was not enough to whet the appetite. Your company took anotherbig step towards growth and set up a larger capacity plant at Dadra which started itscommercial production of multi filament yarns in 1996. Over the years Dadra has grown toa capacity 130 tonnes per day producing a wide range of products like Partially OrientedYarn (POY) Draw Texturized Yarn (DTY) and coloured yarns.
Continuing the quest for growth the new plant located at Dahej Gujarat is a CP unitof 600 TPD and POY of 260 TPD based on "Melt to Yarn" process technology. Wehave made rapid strides in adding value added products through brown field expansions . Atpresent our capacity has increased from to 328300 TPA .We have created our footprints inuncharted path in 34 countries for exporting our products.
The growth in textile fibers continues to be driven both domestically and globallyprimarily by manmade fibers. Natural fibers have reached a saturation point and have a lotof constraints in growth like arable land water etc. Besides the cost of a naturalfibers is high in comparison to manmade fibers. Amongst various manmade fibers polyesteris the most prominent and has the largest share of 80% of all Man-made Fibres. The futuregrowth in textile fiber is being led by Polyester due to its excellent properties and itsafiordable cost. There are no two opinions that Polyester has gradually become the fiberfor the masses. The global demand for polyester fiber is growing at around 5% which meansthat the increase in demand will be approx. 3 MT annually.
Asia Pacific region continues to be the main supplier of polyester fiber and accountsfor around 90% of the global volume. China has the largest share at around 70%. Indiaoccupies second position at around 10%. The rate of growth in China is slowing down.Indian manufacturers have the opportunity to fill up this gap. We feel that futureprospects for polyester fiber business in India is likely to be bright.
In addition to the opportunity due to slow down in China some recent policyinitiatives by the Government of India will act as accelerators. After GST rates wereannounced import of a large quantity of polyester fabric started which was afiecting thedomestic producers. After representation of various industry associations Government hasincreased the custom duty from 10% to 20 % which will make import of fabric expensive. Theimport duty specifies a rate of 20 % on the value or Rs 38/sq. mt. whichever is higher.This will discourage malpractices of under valuing. The refund of unabsorbed credit due toinverted duty structure on Man Made Fabrics has also been permitted. The refund ofunutilized GST on fabric to the small units of weavers will improve their limitedfinances. These steps will stimulate domestic production of yarns and improve operatingcapacities and further investments.
These changes will act as stimulants that could create around 4-5 million jobs annuallydirectly and indirectly. The polyester filament yarn business is going to witnesssustained growth for some years. It has been much less talked about business segment.Polyester has established its supremacy over the other man-made fibres and the shift fromcotton to polyester is gaining acceptance from end users . I am sure in months to comeyou all will hear a lot more about polyester fiber business and that too in a positiveway.
We are buoyant about future prospects of our business and we fervently are looking foropportunities for strengthening and growing our business.
We have spotted some debottlenecking opportunities in our plant which will help usincrease our polymerization capacity from 900 TPD to 1050 TPD. More polymer availabilitywould also create an opportunity to dovetail more of value added products. We areundertaking necessary steps to augment the debottlenecked capacity by this year and weplan to add more POY and DTY capacity which will be commissioned in FY20.
Another aspect which I mentioned last year was about distinct change in the culture ofthe company. Our efiorts to professionalise the management has not only improved ouroverall performance but also has created a bond of trust and team spirit. The trust factorhas taken deep roots internally in the organization. The trust factor has spread beyondthe internal boundaries of our operations. We believe we have established our credibilityin aspects of our business. We have dependable suppliers supportive bankers and reliablecustomers. I believe in the axiom that "If people like you they will listen to youbut if they trust you they will do business with you. Trust can't be bought. It has to beearned. We have over the years earned it.
I can say that culmination of all business strategies ends at the customer. "Asatisfied customer is the best business strategy of all." The company values its"Human Resources" as one of the most important factors for its success. Movingaway from annual appraisals to Continuous Performance Management improving skill setsgrooming potential youngsters are some of the worth mentioning steps in nurturing andnourishing our human assets who are driving the growth of the company.
The company in spite of intense competition has managed to maintain an edge over itscompetitors due to consistent product quality and low operating cost. Basically Filatexnow has become ONE STOP catering to wide range of domestic and international customers.
With continued support and co-operation of long standing customers dedicatedemployees partners supportive bankers and other business associates we remain committedto the most of the future and our efiorts will be dedicated to sustain the strengths ofIndian Textile sector.
Last but not least on behalf of the Filatex Board I thank you our valuedshareholders for your continuous support and encouragement.
Madhu Sudhan Bhageria