The global economy has witnessed major setbacks over the last twelve months in the formof heightened risks of US-China trade war a delayed Brexit renewed US sanctions on Iranescalating oil prices and tightening financial conditions. Global growth which wasearlier projected at almost 4% has now been scaled down to only 3.3% this year and thenext. Although India remains one of fastest growing major economies and also the fastestto grow in the last decade following the global financial crisis of 2008 the growthmomentum has eased. Growth has come down to 6.8% from 7.2% and is likely to grow at 7% in2019-20.
Better prices due to GST had helped maintain consumption growth especially fornecessities. But inflation control measures led to agrarian distress leading to amoderation in consumption spending on declining rural incomes. The rural economy that isbadly hit by the agrarian crisis could receive a further jolt from a less-than- normalmonsoon this year. Urban demand too was affected by liquidity constraints and tighterfinancial conditions. Recovery remains elusive inspite of the general elections throwingup a stable government. While reining in inflation provided headroom to RBI to lowerpolicy rates the limited availability of liquidity after the NBFC crisis in the secondhalf of last year led to an unsavoury outcome of high interest rates making RBI's ratecuts almost
a non-event. Although RBI tried to offset the liquidity deficit most notably throughtwin dollar swaps they were not enough.
This was further aggravated by the likelihood of the Government overshooting the fiscaldeficit target. Elevated oil prices were a further drag.
On the business reforms front the year gone by witnessed the stabilisation of GSTregime that could generate efficiencies throughout the value chain. The IBC also put tobed the worst of the NPA crisis as both recoveries as well resumption in operations somein the hands of new management took place. Your Company was able to successfully take overthe operations of Sirpur Paper Mills.
Your Company still managed to produce its best ever performance amidst such a scenariowith highest ever sales volumes of over 5 Lac tonnes. We also managed full capacityutilisation compared to the overall manufacturing sector running at a capacity utilisationof 75%.
At JK Paper we have always believed that true leadership is about developing leadersat all levels. Because it is they with their passion initiative and teamwork whoanticipate change and lead their Company towards higher goals. Extensive investments weremade in people and people practices. Fostering the spirit of entrepreneurship has enabledJK Paper to be the 'change leader' in the Indian paper industry. The talent pool at JKPaper would rank among the very best in the Indian paper industry today.
To improve quality of life of the rural poor in and around our mills we are committedto help them organise self-help groups (SHGs). Recognising the good work banks are comingforward with loans to build confidence of SHGs and help them scale their income-generatingactivities. We have adopted the Industrial Training Institute (ITI) Ukai Gujarat underthe PPP route also undertake continuous upgradation and provide training in line withindustry requirements. Over thousands of students have been trained in various trades.
The farm forestry development program started in 1991 has created employment andlivelihood opportunities for a significant number of people and the Company also sourcesits raw material requirement from farm forestry on low- productive land.
We believe that tomorrow belongs to those who prepare for it today. Past patternscannot always be applied to find answers for tomorrow. That is why we have to be flexiblein our approach to maintain the Company's leadership in the market. Your continued supporthas enabled us to progress this far and look forward to continuing this journey andachieving greater heights together.
Bharat Hari Singhania