1994 MANIYAR PLAST LIMITED CHAIRMAN'S SPEECH TO THE SHAREHOLDERS A small unit with a turnovel of about Rs. 2.50 croles comes out with plans to expand its size to about seven times and then achieves the target withm six months. Not sitting idle enjoying this achievement the company plans another expansion and diversification and starts implementing it. This is the story of your company Maniyar Plast Limited. The company incorporated in 1.984 to produce woven sacks and fabrics kept silently addmg to its capcqcity developing its persollnel and cleated a niche in the malket. After making swe that it was pe.lfectly the right time to expand the company decided to increase its manufacturing capacity from 276 MT per annum to 2166 MT per annum. For this purpose the company incleased the equity capital in 1.9.93. The promotels stake stands at more than 60% todny and IDBI is holding approx 11.5% (Rs. 50 Lakhs) of (total equity capital with a lock-in period oi thee years upto Jan. 1.997. IDBI also pwvided a term loan of Rs. 250 lakhs for purpose of expansion. lDBI has nominated a Directol on the Board of the Company. Due to long experience a corlect choice was made in selectil the vendors of plant and machinely i.e. Extrudel Iiom Win folar Germany and St1l1inger looms from Austria. A natural outcome of good inputs i.e. the latest machinely and trained personnel was production of very good quality tinished goods. Encouraged vith the successful expansion the Board has recommended a maiden dividend of 15% as against 10% projected in the appraisal repolt before the public issue. This was inspite of 2 months commercial production. The capacity utilisation and profitability projections made at time of public issue as appraised by II)BI are also being exceeded. The marketing of the incleased production proved relatively easy. With good relationship and reputation already created with the customers the incleased production is being well accepted by the customers. The order book position is healthy with orders of one crore and 25 lakh bags which is equivalent to four months production. Olders are normaUy not accepted or placed for woven sacks for more than three months due to fluctuating raw material prices. To meet the demand of buyers, your company is getting job work done fiom nearby limits in the same line of manufacture. The company has also intalled its own lamination plant. Your company is enjoying healthy relationship with its main raw material suppliers who are ever ready to supply the material at favourable terms to your company. The company is planning further expansion in field of woven sacks by raising its capacity from 2166 MT to 056 MT per anum. The suppliers of plant and machinely wiD be same as per last expansion i.e. Lohia Starlinger Limited. The product range will further increase with this expansion. With projected bright future of cement and fertilise companies, of main customers, your company expects the ordel bdoks to remain fuD aver a vely long period. Under such conditions, your company expects to become one of the top producels of woven sacks in India within vely short span of time. Your company is also working in direction of obtaining ISO certification. As part of expansion/diversification, your company has taken suitable steps to produce tarpaulins by importing machinely from Switzel1and. The machinely has arlived and the production has started. This is fwther expected to increase the profits of the company. Howevel, the profits added by this lins of' manufacture have not been considered in the projections made below as the company is going to produce this item for the first time, the total market size is unknown and the biggest reason is the low availability of woven fabric which will be available to produce woven sacks as a matter of priority for our valued customers. Your company has also received several enquiries for export of woven sacks. In fact owner of Jung Shin Co. Ltd of.S orea had personally come to Jalgaon and demanded full production of your company. You will also be glad to know that your company is also diversifying into production of plastic moulded furniture and crates. For production of furniture, your company has entered into technical collaboration with M/s. Italtech, a member of FIAT oup of companies of Italy, who have an annual turnover of more than 10 billion dollars equivalent to Rs. 30000 crores. They will be supplying the maill plant snd machiney and moulds for this diversification project. The machinely which is going to be supplied will be state-of-art machinery and no Indian manufacturer of plastic furniture is having such an advanced machinery. The machine will have capacity to produce at least one and a half times faster and also the law material used will be 10% less resulting in lowest cost of producetion. In short, one chair will be produced in 37 seconds or 2000 chails will be produced per day. This line of business is not new for promotel s who are dealing with plastic for a long time. The company is also making efforts to export a major part of production. Your company has received export enquiries from several parties in Europe and West Asia. The types of chairs to be manufactured are on dispLy. Both the lines of manufacture are pollution free. In fact production of plastic furniture will help in presenvation precious forests by reducing requirement of wood for furniture. The plastic furniture offers other advantages like long life, easy maintainability, stackability, attractive colouls, termites proof and many mole. The land was procurred in the last expansion when provision was kept for the future. The location has logristic advantages like closeness to law material suppliers as lvell as major cost advantages such as cheap and abundant labour The construction h.s started for the expansion as well as diversification projects and expected to be completed by Oct. 1994. Recruitment of suitable personnel for the furniture project has started. In the furnitule line, marketing plays a very important role and therefore a major action has started in line of finding the best marketing strategies. Your company is negotiating with international companies for supply of crates. The financing of the new projects is being done through internal accrual, loan from IDBI and DPG facility. The present debt to equity ratio is vely low and this gives leverage to the company to raise new finance without rising the equity capital. The company is negotiating foreign currency and rupee term loans with IDBI. IDBl has appraised the project. The company expects to get the sanctionn of IDBI shortly. With the new projects On stream, your directors expect an EPS of more than Rs. 6 in the current year and Rs. 13 to 16 in the next financial year based on the present trend. At the end, I wish to place On record my sincere thanks to all my colleagues on the board for their valuable guidance. I also thank IDI and UBI for their timely financiaala support. I also thank other business associates for their cooperation. I also thankful to the staff, workers and their family members for their efforts in making your company successful. Last but not the least, I thank you all for showing your confidence in your board. Thank you. Shreekant Maniyar