CHAIRMAN CUM MANAGING DIRECTORS MESSAGE
This brings me great pleasure to present the performance of Ganesha Ecosphere for2017-18.
The Company generated income of Rs. 760.56 crore during FY 2017-18 a growth of 10.47%and profit after tax grew by 17.67%.
Ganesha Ecosphere countered a challenging business environment in 2017-18 in terms ofdemand slowdown in textile sector owing to GST rollout. Fabric was not subjected to tax inearlier tax system but now it has been brought under GST which affected the demand. Itwas temporary disruption and we feel that GST was much-needed tax reform and it willhelp in longer term perspective in strengthening the economy and in organising thebusinesses.
The Company not only countered the challenge with increased output revenue growth andbetter profitability but also commissioned a new RPSF production line of 21000 TPA at itsBilaspur Unit reinforcing our RPSF segment leadership and keeping past growth trendintact.
Availability of new production line with latest technical updates will not only help usto produce more but also broad base our product portfolio and address the demand arisingout of different product segments. While growing our business scale constantly we havebeen consistently strengthening our Balance Sheet. Our efforts towards rationalising debthelped in deleveraging the balance sheet on one hand and helped in reporting an improvedfinancial matrix. This along with a stronger product portfolio improved servicingcapability and enhanced efficiency are helping in posting better returns.
During the year under review we raised long term debt (net of repayments) of Rs. 25.50crore against new capex of over Rs. 90 crore in the new RPSF capacity with moderateincrease in debt-equity ratio from 0.32 in FY 2016-17 to 0.38 in FY 2017-18. Further thebusiness robustness helped us in corporate re-rating which in turn helped us to reduceaverage cost of debt from 10.40% in FY 2016-17 to 9.80% in FY 2017-18.
There are number of reasons that enhance the optimism for our business.
One the outlook for recycling continues to be sustainable.
From a macro perspective sustained economic and disposable income growth is drivingPET bottle consumption. With the Central Government laying a keen emphasis on recyclingthe need and prospects of the organised players in the sector have brightened. VariousState Governments due to increased quantum of plastic waste showing concern forresponsible waste management and insisting for to formalise the pet waste collectionmechanism to increase the collection of plastic scrap and diverting the same towardsrecycling companies. Responsibilities for framing collection mechanism are being directedtowards the manufacturers bulk consumers brand owners and packagers through extendedproducers responsibility (EPR) concept. This will drive not only increase thequantum of plastic scrap collection but also boost the recycling industry.
Two the implementation of GST starting mid-2017 will generate long-term benefits forour business.
A 25% increase by 2020 in recycled polyester consumption by major textile apparel andretail companies would
Prevent 2868000000 bottles being diverted from landfillsLead to a 35329509 kilogram reduction in human toxicity Save 1849464 megajoules interms of primary energy demand Reduce 122823 kilograms in Co2 emissions.
Source: Textile Exchanges Preferred Fiber and Materials 2017
Three global textile apparel and retail companies are consuming increased quantitiesof recycled polyester fibre. In the Textile Exchange Sustainability Conference 2017 morethan 45 textile apparel and retail companies pledged to increase their use of recycledstuff by more than 25% by 2020 prospectively broadening the market for our Company. Giventhis sectoral direction we believe that Ganesha Ecosphere is attractively placed withrich experience established raw material pipelines sizable manufacturing capacitiesproven manufacturing technology strong Balance Sheet broad product portfolio consistentcustomers profile and widening presence in India and abroad.
FY 2018-19 promises to be an exciting year in terms of quantum growth owing to fullimpact of new production capacity as well as emergence of new growth opportunities interms of optimism spelt out above.
I want to express our gratitude to all our stakeholders to our customers fortheir continued trust in our ability to support them and bring value to their business toour suppliers in helping us to plan our operations as per schedule to our employees andteams who represent the foundations of our past present and future growth and ourability to steer the Company to new heights with dedication skill and perseverance.
And lastly of course for you our shareholders for your unwavering belief in ourstrategy and judgement. We would also like to thank all local state and nationalgovernments the concerned bodies the banks and financial institutions for their strongsupport.
With warm regards
Shyam Sunder Sharmma