Looking at our business in FY 2017-181 am pleased to report that the Company couldperform well notwithstanding the difficult market environment. Let me share with you someof its highlights:
The prices of Cotton and yarn traveled in tandem during the first half of the year.Whereas in second half of the year sudden volatility in cotton prices created a pricemismatch. GST introduction also had an impact on the Industry. But for these adversefactors our performance would have been much better. Ramping up of 36 Million new GarmentUnit with modern infrastructures has been completed and its full benefits can be reapedduring current year.
New Garment Capacity at Ethiopia
The Ethiopian Government delegation visited our Garment unit during their visit toCoimbatore. Quite impressed with the sophisticated set up they extended an invitation toestablish an Apparel Manufacturing Unit at Ethiopia offering various incentives andconcessions. Considering the core competence prevailing there the Board of Directors hasdecided to establish a Unit for manufacture of Apparels at 'Mekelle Industrial Park' setup by the Ethiopian Investment Commission.
"Ethiopia's textile industiy is fast catching up with the other Textile Countrieslike Vietnam Indonesia Cambodia and other Far East countries due to the followingadvantages:
Low Cost of Labour (around 50% of Labour Cost in India)
Lesser Cost of Power & Other Utility
Duty-Free Import of Garment from Ethiopia to US & Europe
Availability of Trainable Workforce
A Proactive Government Support
Special Industrial Zones
Duty Free Import
Empowered with strong textile exposure and core technical competence for the firsttime KPR is venturing into a global investment.
In addition to the above after a prolonged and prudent study & analysis of theMarket perspective KPR is also planning to embark on Retail business. Initially wepropose to approach the Knitwear segment of domestic market introducing Premium innerwear. Primary steps have been commenced and once it is finalized we will announce itslaunching plans.
Towards enhancing value to the Shareholders during the year also we resorted toBuyback of the Equity Shares of the Company by returning its surplus cash to an extent ofRs 108.14 Crores to the Shareholders of the Company.
Prime factors of Production
India being the largest Cotton producer and a consistent cotton surplus Countiyavailability of Cotton is rest assured. As per the International Cotton Advisory CommitteeReport global cotton production is set to rise in the coming year due to increased cottonarea. Report of normal monsoon and higher cotton area cultivation indicates comfortablesupply.
As per Cabotage Rule any foreign flag vessel was allowed to operate in the Indiancoast only when there is no Indian vessel available and also under a license issued by theDirectorate General of Shipping. The Textile Industry has been persistently requesting theCentral Government to allow the foreign flag vessels to operate in the coastal areaparticularly between Gujarat and Tuticorin ports for the purpose of bringing cotton and toreduce the logistics cost. We are glad to inform that considering the farmer's advantageand promotion of trade and Ease of Doing Business in
India the Central Government allowed the foreign flag vessels to operate at Indiancoast with respect to the commodities including cotton. In the same way the Indian shipswere also given a relaxation with regard to obtaining license from the DG shipping. Thismay reduce the cotton transportation cost.
Wind Power generation has been good and Tamil nadu has become power surplus State. OurHR Policy one of the best in the Country entails work force availability to KPR in spiteof labour scarcity in the Industiy. Thanks to the Central Government's strategic effortsprioritizing skill development initiatives to the Industry realizing the prominence ofTextile Industry in creating employment opportunities. Migrant work force from far ofStates also eases the situation.
Education is the most important power that shapes the lives of mankind and play acritical role in the development of a nation whether it is social or economic growth. Itis deemed to bring technological innovations to Countries that further the efficiency andproductivity. India can reach its true potential as a nation only when its population isequipped with the power of education. Realising its prime importance the Company continuesto earmark and spend its CSR Expenditure towards promotion of education.
Full fledged Employee Welfare facilities improve the levels of job satisfaction &confidence and ultimately enhance the morale and engagement of the work force. KPR's HRinitiatives extended with human touch are one step ahead of it. The foremost of thefacilities 'Higher Education' with the tie up of leading Universities and by well trained& experienced teaching fraternity is adjudged as a trendsetter to the Industry. We areglad to inform that in the 6th Convocation of Tamil Nadu Open University held at ArasurDegree Certificates were awarded to 231 employees who were graduated.
Making best use of the educational facilities extended by KPR the Employees also provetheir talent in the Government examination every year. We are proud that out of thosegraduates 15 Employees are rank holders. So far around 21000 employees have beenbenefitted by availing Higher Education facilities.
We are proud to share that:
1. Bombay Stock Exchange has upgraded K.P.R. Mill Limited to "A" Group from"B" Group with effect from 04.01.2018.
2. Business world' magazine has consistently ranked K.P.R Mill Limited as a TOP 500India's Laigest Companies for the year 2017 also.
3. Textile Sector Skill Council' in its handbook to impart Skill development hasspecifically mentioned KPR's valuable inputs in its compilation.
4. Business Today Magazine has continuously ranked your Chairman as one of the TOP 100CEO's in India' for the year 2017 also.
5. The Traditional and reputed "Vikatan magazine Group" has conferred"Self Made Entrepreneur Award for 2017" to the
6. Six Candidates of the KPR IAS ACADEMEY that offers free coaching to the aspirantsunder the Leadership of Mr. KPD. Sigamani have cleared the UPSC All India Civil SendeesExamination 2017-18.
7. Mr. P. Nataraj Managing Director has been honoured by the 'Cotton Association ofIndia' with the 'First Generation Entrepreneur Award for Textile Mills'
The Indian yarn market has gained momentum .It is reported that the Industry's yarnstock level is one of the lowest in recent years. With increased cotton prices and fabricdemand yarn prices started increasing. Support from the Garment Buyers is muchencouraging and we continue to enjoy impressive order level.
More than any of the world's largest economies India's major industries have displayedlevels of resilience and growth that will buoy business confidence. The Indian TextileIndustry's successful survival of the major impact of the two historical reforms namelythe demonetization and GST and is well back on the growth track once again proves beyonddoubt of its traditional strength as a global power. It is significant to note that thetextile industry competently faced the challenges and registered an export growth of 531%during 2017 as against the global export growth of 3.94%.
KPR possessing the high levels of scale quality technology expertise committedwork force and above all strategic vision & plans continue to shape its futurebuilding sustainable competence. It's new initiatives unleashed shall strengthen thegrowth opportunities in both International and Domestic Markets.
I thank the entire Management for their invaluable team work focusing on progress.
I am thankful to the Board of Directors for their guidance towards the growth of theCompany.
I would like to thank our shareholders for their unstinted support and confidence.
With best wishes