Dear Valued Shareholders
The stability in earnings during the year under review has been accomplished throughour long standing strategy of geographical and product diversification portfolioexpansion especially on the value added and specialty side as well as on-going initiativeson operational effectiveness.
The reported sales and other income were flat at Rs 45.49 billion despite higher salesvolume due to decline in selling prices induced by fall in raw material prices. TheOperational EBITDA (profit before interest tax depreciation and exceptional items) washigher by 18% at Rs 9.44 billion. Higher cash flows from operations and a strong &liquid Balance Sheet with negative leverage (net cash positive) provide financialflexibility to access growth opportunities.
The successful start-up of the Indonesia PET film green field project along with itsassociated metallizer / resin plant and a quick ramp-up is a major milestone and willfavorably impact earnings for future besides consolidating our global leadership in theflexible packaging segment. Several ongoing smaller investments aimed at increasing ourcompetitive edge with increasing share of specialty products and improving ourproductivity will provide further stimulus to our operations in the next 1-3 years.
The BOPP line under implementation adjacent to the PET film line in Indonesia wouldhelp diversify the product offering drive economies of scale and help mitigate challengesposed by concerns surrounding sustainability on our core business of PET films.
The robustness of our industry and Company's superior positioning is evident from thelack of any adverse impact of the Covid-19 global pandemic. Operations across all theCompany's locations have remained largely unaffected and future business fundamentalsremain strong. Flexible packaging segment which constitutes a majority of our sales hasseen a surge in demand while industrial end use segment has seen some reduction both ofwhich would normalize over the medium term. Longer term implications related to importanceof hygiene higher home consumption newer applications in PPE / hygiene related usesde-globalization and preference for shorter supply chains etc would be broadly positivefor the industry and the Company in particular with its distributed manufacturing base andglobal reach.
In developing economies a marked shift from consumption of unpackaged food to packagedfood products is expected driven by health and hygiene considerations.
The Covid-19 pandemic has also helped ease concerns around usage of plastics inflexible packaging with its proven benefits from hygiene cost and low weight to packageperspective. Flexible packaging which is multilayered plastic constitutes about 5% oftotal plastic consumption globally and PET film in particular is less than 1%. Flexiblepackaging is considered superior on various sustainability criteria vis-a-vis traditionalpackaging alternatives due to its inherent functional properties.
The Company has been long involved in developing environment friendly and sustainablesolutions as an endeavor to contribute continuously and effectively towards globalinitiatives around sustainability and "circular" economy.
The Company has taken effective steps to safeguard its employees' health in the ongoingpandemic and also contributed to similar efforts in nearby communities at all its globalplant locations.
On behalf of the Board we would like to thank all the shareholders and otherstakeholders including business partners and the employees of the Company for theircontinued support and efforts.
Chief Executive Officer