Chairman and Managing Director's overview
"Our objective will be to conduct our business the way we have been doing exceptto make it larger and better."
We went into business 26 years ago with the conviction that we needed to maximise thevalue of soya bean abundantly available in Madhya Pradesh.
I am pleased to communicate that the time has come when the green shoots of ourconviction are becoming increasingly visible and attractive. Kriti Nutrients reported anattractive performance in 2018-19. The Company delivered profitable growth; revenuesincreased 5.09 % while profit after tax strengthened 738 . %. The revenue of र 486crore that we reported was the highest in our existence helping amortise fixed costseffectively. I am pleased to report that the Company reported an attractive 38.04% RoCEduring the year under review.
At Kriti Nutrients we believe that we are at an inflection point for some goodreasons.
The Company is an attractive proxy of a modernising world where protein has emerged aspossibly the most decisive long-term dietary preference. Experts have gone on to describeprotein as the last macronutrient left standing and an aspirational lifestyle enhancer.
The result is that a Wall Street Journal article was headlined When the Box SaysProtein' Shoppers Say I'll take it'' which captures the dynamics of therevolution. The result is evident on Google where a 2019 search for the wordprotein' threw up no less than 70 million searches.
Growing protein gap
What makes this subject relevant is that there is evidence that a number of countriesappear deficient in their protein intake. The Indian Dietetic Association (IDA) claimedthat 93% of Indians are unaware of their ideal protein requirement; India's vegetariandiets are 84% protein-deficient on account of poor awareness; 65% Indian non-vegetariandiets are deficient in protein (Source: IDA); more than
70% Indians development on account of protein content (Source: In Body and IPSOS). Whatmakes this space compelling from a long-term perspective is that by 2050 when the world'spopulation is likely to reach 96 . billion an additional 265 million tonnes of proteinwill be required annually to feed the world (Source: B?hler) making it imperative toincrease global protein output by 50 % over today's level. Besides by then plantproteins could replace three-quarters of animal proteins products consumed todayincreasing an emphasis on agriculture.
Our business model
At Kriti Nutrients we invested in the right business model to address this long-termopportunity.
One we selected to be present in Madhya Pradesh which is the soya bean bowl ofIndia.
Two we escaped the commodity trap by choosing to manufacture value-added productsfor downstream sectors like food and pharmaceuticals on the one hand and marketedretail-focused branded soya bean oil in Madhya Pradesh on the other.
Three we invested in state-of-the-art infrastructure that validates our commitmentto workplace hygiene and respect among international buyers.
Four we invested in relationships of mutual dependence as the foundationfrompoormuscle of our business sustainability with quality-driven B2B customers inthe global markets and primary customers (distributors) in the domestic market.
Five we differentiated ourselves through the manufacture of value-added productsstrengthening our profitability.
Six we invested in Research & Development with the conviction that a morespecialised product portfolio would strengthen business sustainability.
I am pleased to report that our business-building has reached a point where ourcustomers have increased customer wallet share has grown and customer engagements areexpanding into multi-year revenue opportunities. A similar optimism exists on the otherside of our business where our branded refined soya bean oil addresses discerningcustomers. Besides we possess a debt-free Balance Sheet and high liquidity a robustfoundation for long-term growth.
In 2019-20 our objective will be to conduct our business the way we have been doing inthe last few years if only to make the scale larger and business quality better. Thesecond priority is critical; by being able to customise value-added products for globalcustomers we would be able to increase revenues and enhance margins strengthening ourbusiness profitability.
I am optimistic that we are attractively placed to enhance value in the hands of allour stakeholders.
Shiv Singh Mehta
Chairman & Managing Director