I hope and sincerely wish that you and your families are safe and doing well.
In these challenging times when India underwent another wave of the pandemic safetyand well-being of our associates and our business partners has been our foremost priority.This was followed by ensuring continuity of business and serving our customers. Thank youfor standing by us during these tough times.
This time around the impact of the pandemic has been more severe impacting even theyounger age groups and extending beyond urban geographies. It is important that we remainmore vigilant and cautious and ensure that all necessary precautions are followed to staysafe. To ensure the safety of our employees we have taken various measures like work fromhome limiting non-essential travel and implementing stringent safety protocols at ourfactories. Similar precautions and initiatives were taken to ensure the safety of ourcustomers and end consumers such as introduction of Zero contact service and launch ofmobile tyre service van.
The team at Goodyear has ensured that the operations have been running with minimumdisruption thereby minimizing the impact to the Company and simultaneously catering tothe market demand.
I am pleased to share that your Company has delivered strong financial results in FY2020-21.
For the Financial Year 2020-21 the total income of the Company was Rs. 181429 Lakhsas compared to Rs. 178074 Lakhs in the previous Financial Year 2019-20. Profit beforetax (PBT) during the Financial Year 2020-21 was Rs. 18317 Lakhs as compared to Rs. 11684Lakhs in the previous Financial Year 2019-20 showing an increase of 57%.
To ensure safety of our plant employees various initiatives were implemented at ourmanufacturing locations. All Government and Goodyear specific safety protocols andguidelines were strictly implemented.
To enable a safer and healthier workplace in-house vaccination drive was organized atour manufacturing location for all associates and their families to fight Covid-19. As apart of the vaccination drive all Government and Goodyear protocols were followed.
The industry is again witnessing headwinds due to the second wave of Covid-19 pandemicwhich has created short term disruption in the business. However we are optimistic thatthe mid to long term industry outlook remains positive.
India continues to be the largest tractor market globally with all major OriginalEquipment Manufacturers (OEMs) participating in this category. India has one of the lowestrates of farm mechanization despite having a high dependence on agriculture sector makingit a high potential market for growth of tractor industry.
For the Farm Tyre industry the mid to long-term (3-5 years) growth outlook is expectedat 6%-8% (source: CRISIL). Lower tractor penetration and increasing trend towardsmechanization due to paucity of manual migrant labor will help drive the overall demand.Moreover strong focus by the Government to enhance rural income through enhanced MinimumSupport Price (MSP) and policy reforms will also compliment the growth in demand.
Last year was a challenging time for industry and individuals across the globe due tothe outbreak of COVID-19 pandemic. The demand in the first half of the year was severelyimpacted because of pan India lockdown. However the second half of the year saw strongdemand recovery due to pent up demand of the first half of the year and gradual easing oflockdown restrictions.
The positive farm sentiments were largely contributed by:
Government declaring Farm sector as essential service during the pandemic
Government support through higher purchase prices aided with market procurementimproved cash liquidity with farmers
Healthy monsoon precipitation across regions
Favorable kharif crop outlook supported by early sowing seasonally highreservoir levels and adequate labour availability
Government support programs (like direct benefit transfers to farmers)
Our business continued its focus on sustaining leadership with OEMs through excellencein Key Account Management to deliver enhanced Customer Service.
In the replacement business channel expansion and extraction remained a key focusarea. This was supported by operational excellence to ensure delivery of the right tyre tothe right place at the right time and at the right cost.
For 2021 IMD has forecasted a normal monsoon. After a strong start for the seasonthere has been a delay in progress of monsoon. However it is expected that there will berecovery in the monsoon and will end the season in line with normal forecast.
The prospects for the farm sector look promising due to Government support programs inFY 2021-22 through initiatives such as:
Increase in MSP for kharif crops for the financial year 2021-22 by average1%-6.6%
Continuation of Government support programs (like direct benefit transfers andfree ration to farmers)
Credit availability for farmers has increased to 16.5 lakh crores in 2021-22 vs15 lakh crores in 2020 (Source: Cropin.com)
Rural infrastructure development fund has increased from 30000 crores to 40000crores (Source: Cropin.com)
While the pandemic has currently created headwinds your Company remains positive onthe mid/long-term outlook of the Car tyre industry. The growing middle class low carpenetration and trend for personal mobility with the backdrop of pandemic is expected todrive car sales in the future thereby reflecting a positive momentum in the aftermarketsegment. We continue to work on our key strategic initiatives to grow faster than theindustry. Some of the key strategic initiatives taken in the Financial Year 2020-21 are:
Channel expansion and increase in distribution footprint by leveraging thesynergies between Farm and Consumer business
Higher channel engagement and enhanced loyalty through various customer connectprograms
Policy simplification and effective communication to build trust with tradepartners
Delivering outstanding customer service through online mobile application foron-the-spot warranty claim resolution
Growth in brand salience through:
a. Visibility at point of sale through store branding and point of sale material
b. Various marketing programs with key focus on digital such as 'Zero Contact Service'
Health Equipment & Personal Protective Equipment (PPE) support to Governmenthospital in Faridabad: Goodyear supported Covid-19 healthcare facilities at FaridabadCivil Hospital with Personal Protective and Quarantine Ward Equipment to help the fightagainst the Covid-19 pandemic. Critical equipment donated included bedside ventilatorsmultipara monitors pulse oximeters amongst others. Goodyear India has also provided thefacility's frontline staff with the critical personal protective gear such as PPE KitsN95 masks and sanitizers. This initiative has helped strengthen the public health system'sresponse to the COVID-19 pandemic.
Solutions to Air Pollution (SAP) : The Company installed 22 Wind AugmentationPurifying Units (WAYU) an ambient Air Purification System at 3 highly polluted locationsof Ballabgarh Haryana and developed a 2.5 km stretch of Greenbelt area at the divider onthe National Highway from Company's plant at Ballabhgarh to Escort Mujesar Metro StationFaridabad. The aim of this initiative is to protect the environment and improve thequality of air that people breathe in Faridabad and Ballabgarh and to help reduce thelevels of air pollution allowing citizens to lead a healthier life.
Adopt a School : The Company supported the Government Girls Primary School(GGPS) NIT 1 Faridabad and Government Girls Primary School Sector 3 BallabhgarhFaridabad with the aim of enhancing the quality and accessibility of education for thegirl child. This initiative will not only help in providing a holistic learningenvironment for girls but also promote diversity gender equality and inclusion insociety.
Despite the external challenges and continued economic uncertainty due to Covid-19 weare well-positioned for continued recovery and remain very optimistic about Goodyear'sfuture. We are well placed to deliver great products and services which will enable us tofully capture the value of the Goodyear brand.
I would like to thank our valued shareholders our employees our customers and otherstakeholders for the continued support confidence and trust that you have reposed in us.
Please ensure that you and your families continue to stay safe and take all necessaryprecautions during this period of Covid-19.
I wish you and your families the very best of health and happiness for the year ahead.Stay safe and healthy!
|Sandeep Mahajan |
|Chairman & Managing Director |