MESSAGE TO SHAREHOLDERS
Change is the only constant in life is the famous quote by the Greekphilosopher Heraclitus and today the whole world is witnessing a complete turnaround intheir various business aspects. The year 2020 started with some of the most challengingtimes in the form of the Covid-19 crisis. By now most of us have either adopted thisNew Normal' or trying to adjust to the changing times both at work and home or bystarting Working from Home'.
Globally Financial Year 2019-20 commenced with the weakest pace in recent times. Withrising trade barriers escalating trade wars and deepening global financial crisesreduced the growth pace. The global economy was hoping for some revival at the beginningof 2020 but by January this year with the arrival of Covid-19 all wiped off. The hopesof a financial world over; countries started imposing lockdowns to safeguard humanitywhich also brought about economic slowdown affecting several businesses across the globe.
Indian economic scenario was not different from the changing global circumstances. TheFY-2020 started on an optimistic note with the country's Gross Domestic Product (GDP)projected to grow at 7.1%. But as the year progressed several factors like bankingenvironment regulations financial crises depleting consumer demands and Covid-19lockdowns slowed the economy.
Eventually the Indian economy registered a growth of 4.2% by the end of FY-2020. Theslowdown was witnessed in almost all sectors right from manufacturing to construction andthe auto industry was no exception.
Undeterred by the changing circumstances your own company has decided to embark on theinvestment opportunity in FY-21. I am glad to announce our Board's in-principle approvalfor investment towards a new product line would expand our existing driveline segment.Your Company has decided to venture into the development and production of ConstantVelocity
Joint (CVJ). The product is already being manufactured by a few other JTEKT Groupcompanies across the globe. The Company will receive technical support from its Parentcompany in the area of production preparation involving selection of machines jigsfixtures and testing equipment; development of local supply chain involving supplierevaluation and approval; and skilling the Indian technical team involving training intechniques of handling machines troubleshooting and maintenance.
Further your company has made significant of a Technical Centre in India. The IndianTechnical Centre will boost technical capabilities by reducing the turn-around time fornew product development and providing cost-effective solutions to its domestic as well asoverseas partners.
I am also happy to announce that your Company is a proud recipient of accreditationsfrom its customers in FY-2020. While adhering to the core values of JTEKT Way namelyCustomer First Ownership Continuous Kaizen Teamwork and Self-Discipline and theAspiration for Innovation and Technique the Company received accreditation from FiatIndia Automobiles India Pvt. Ltd. for achieving Zero PPM and Zero Warranty'; fromIsuzu Motors India for achieving Best Delivery Performance' and from Toyota forachieving Zero PPM and meeting Safety Quality & Delivery targets'.
These recognitions are a testimony to our commitment to excellence in the delivery ofproducts and customer satisfaction.
Adopted in 2018 we are now unified with Hoshin Management system that aims at:
Creating a strong corporate constitution that is capable of sustained high performance
Setting Mid / Long-term/Annual plans by
- Prioritizing activities and resources
- Involving all members from top to bottom who define activities and set targets fortheir respective positions
- Turning over the management cycle by way of four-step management Plan-Do-Check-Act(PDCA).
The FY-2020 was a challenging year for the auto industry as the demand for the newcars depleted globally and in India. Realigning to the changed demand-supply ratio yourCompany rationalized its operations. The timely forecast coupled with swift measures likerelocation of manufacturing lines product relocation line loading reduction ininventory was undertaken to enhance operational efficiency and serve the customers better.
Currently JIN's manufacturing operations are spread across seven Plants in NorthWest and South of India. However a structured roadmap is ready for completing therationalization process in a phased manner in different Plants to better our productivityand operational efficiency.
As an integrative initiative under manufacturing rationalization the sheet metal unitwas merged with the Aluminium die-casting unit in FY-2020. Since both thefacilities were producing parts mainly for captive consumption the combining of thesemanufacturing facilities have brought synergies of operations and helped in optimisingcosts in various areas of business operations including logistics compliancesadministration and all other operations which could be aligned.
Keeping the Customer in focus your Company made its presence felt at the 15th editionof Auto Expo 2020 Components concluded successfully on 9th February 2020. Your Companyshowcased a host of made-in-India auto components at the event under the theme No. 1& Only One at Pragati Maidan New Delhi. Besides our existing product line wealso exhibited dual-pinion type electric power steering (DP-EPS) and a modular type powersteering used for off-highway vehicles called I-EPS. Apart from these various types ofbearings were also displayed at the event.
Key customers and leaders those visited our stall were from Maruti Suzuki Mahindra& Mahindra Toyota Honda Cars Tata Motors Ford India Group PSA and many others.The Company's management team hosted more than 2000 visitors at its stall.
While concluding I would like to mention about our information technology (IT) cellinitiative which was swift during the lockdown period to put the Work from Home facilitiesin place. This enabled us to continue our operations unhindered.
As a result all our operations right from manufacturing to management was back to theregular by June 2020. Continuing with this efficiency we expect to touch 80% of ourproduction as originally planned by December 2020 subject to Indian economy facing nonew uncertainties.
Further I take this opportunity to express my gratitude to our customers.
We are grateful to be of service to them: Maruti Suzuki Mahindra & Mahindra TataMotors Honda Fiat India Toyota Kirloskar John Deere Club Car E-Z-GO ISUZU andRenault-Nissan India.
My special thanks to our bankers State Bank of India Corporation Bank StandardChartered Bank Kotak Mahindra Bank Allahabad Bank IDFC IndusInd Bank Sumitomo MitsuiBanking Corporation MUFG Bank Limited and Mizuho Bank Limited for reposing theirconfidence in us. A special thanks to all our employees for making JTEKT a strongperformer.
Finally I thank our shareholders for their firm their continued patronage.Looking-forward to our collective journey driving into the brighter tomorrow' withour commitment of Investing in the Future'.
|Thank you |
|Yours sincerely |
|Sudhir Chopra |
|Executive Vice Chairman |