I hope you and your family are safe. Safety something which we had completely takenfor granted has become critical especially after the more aggressive and fatal secondwave of the pandemic which hit India at its roots. A resilient India has fought back withadmirable courage to place the nation firmly on the path to recovery.
FY21 was a year of extremes.
For a year which started with seemingly devastating challenges ended with the Companyregistering a satisfactory performance. Despite a marginal dip in revenue compared to theprevious year at the bottomline we turned around - from the red to the black.
This transpired owing to the transformation in our garment business. It emerged as animportant contributor to business profits. Since this has been touched up in the earlierpages of this document I would not touch upon it again. So let me take you through ourtwo verticals - yarn and fabrics.
Our yarn business which is our flagship vertical continued to perform well. While thefirst couple of months of FY21 were dull owing to the pandemic and the nationwidelockdown demand almost suddenly emerged. This was largely owing to two factors 1) pent-updemand in the system owing to an empty pipeline and 2) the anti-China wave across keytextile importing nations. The latter had and will continue to support the Indian marketsin the current year.
To put things in perspective China accounts for 50% of the global textile trade. Asmall diversion to India owing to embargo on China created unprecedented opportunities forthe domestic industry.
What worked in our favour was that we were ready when this shift transpired - at theright place at the right time.
1) We were among the few to start plant operations at the initial unlocking ofcommercial activities. Our operations and HR teams worked well in getting our people backto work and securing their safety and well-being.
2) We kept a keen eye on the global fabric and garment hubs knowing well that theywould be seeking new business partners for sourcing their yarn requirement. In a number ofgeographies (who until now sourced yarn primarily from China) we had establishedcontacts. We leveraged these relationships to proactively prepare for emergingopportunities. In doing so we grew our global footprint - from 18 nations in FY20 to 27nations in FY21; a number of markets were first time entries for Maral.
3) In the domestic market too there were interesting profitable growth opportunities.For example there was a sudden surge in demand for organic cotton yarn. Our teams supplychain operations and marketing worked in tandem to make decisive inroads into thissegment. It helped the Company reap healthy gains.
The bottomline is that the market gave us opportunities in terms of increased volumesnew markets and robust prices. We remained aware and agile to maximise the benefit.
The performance of our fabric business remains subdued.
This was primarily because the fortunes of the fabric segment across India got squeezedbetween the rising prices of yarn and the lacklustre ecosystem of garmenters owing tosubdued offtake of garments due to the effects of the pandemic .
While the China factor provided interesting opportunities Indian fabric manufacturersincluding Maral could scarcely capitalise owing to two factors 1) non-competitive coststructures and
2) smaller capacities. Also the imposition of import duty on imported cotton hurt ourbusiness.
As such we focused on keeping our assets fully utilised to better absorb our fixedcosts.
From an operational standpoint the shopfloor team left no stone unturned to optimiseoperational cost.
On the one hand significant efforts were put in to reduce the consumption of dyeschemicals and other utilities; on the other team members worked in clusters to improveman-machine productivity reduce conversion losses and quality defects. FY21 for me isdedicated to team work. Every team put in their best foot forward to make this fiscal amemorable one.
We will continue to sustain the momentum over the coming years building upon what wehave achieved this far and executing our strategic blueprint with disciplineddetermination.
While the start to FY22 was hindered by the second wave of the pandemic its impact onbusiness activity was relatively lesser. As such our performance in the first quartercould be impacted by the health emergency that prevailed for about a month. I amoptimistic about our performance for FY22.
In the current year we are investing about B50 Crore in our verticals. A newgarmenting unit should commence operations in the first half of FY22. We also plan tomodernise some of the aging equipment in our yarn and fabric verticals. Also we plan toinvest in cutting automation solutions for our garment unit which should improve productquality and provide for considerable cost saving.
For the fabric vertical we plan to revamp our product development cell. This iscritical for our success as it will allow us to customise products aligned to therequirements of key international customers. While we will continue to add more customersin the domestic market we will also work on adding new geographies to our globalfootprint.
As we continue our journey of being better everyday
I would like to thank the Board for guiding me to execute my responsibilities in thebest possible manner. I would like to extend my gratitude to each and every member of ourteam for their relentless efforts in making this transformation a gratifying reality. Iwould also like to thank all our stakeholders Board Bankers and the Governmentauthorities for the support and assistance provided throughout our journey. I solicit yourcontinued cooperation.
Chairman Managing Director & CEO.