The global automotive industry landscape continues to transform andalong with it the auto components industry. With India already cementing its place as aglobal component sourcing hub we are well positioned to navigate through the emergingchallenges and capitalise on the upcoming opportunities. Our tradition of pursuingexcellence and keeping customer at the core' remained intact this year as wellbacked by determination prudent foresight and strong business fundamentals.
The synchronised upswing in the global economy that began aroundmid-2016 suddenly changed course in the second half of 2018 as the continued momentum inmanufacturing and trade dissipated. Sentiments were further dampened by the hardening ofUS interest rates volatile crude prices along with uncertainty over Brexit andheightened rhetoric around protectionism.
The Indian GDP growth dipped below 7% for full-year 2018-19 aftergrowing at 7.5% in the first half due to weak industrial output and overall subdueddemand. However with the election overhang now behind us the economy should grow at over7% going forward driven by the government's resolve towards achieving fiscalconsolidation and continued push for structural reforms.
The Indian automobile industry too had started FY 2018-19 on a positivenote supported by normal monsoon rising rural demand the government'sinfrastructure push and rise in industrial activity. However most vehicle segmentswitnessed a considerable slowdown in the second half due to higher fuel prices lowerfinancing availability steep price increase on account of insurance regulation changes inSeptember 2018.
Strong thrust on growth
Despite the loss of growth momentum in second half of the yearI'm happy to report that group aggregate sales crossed र 5000 Croresmilestone. Our group aggregate sales grew 12% in FY19 and CAGR growth of 15.5% over past10 years. This came with our Group companies strengthening market position in India andexpanding international business. We spent र 300 Crores on capex the highest in ourhistory to open two new manufacturing facilities electric power steeringmanufacturing facility in Ahmedabad for Rane NSK Steering Systems and Occupant safetyproducts at Trichy for Rane TRW Steering Systems add capacity for hydraulic steeringproducts in the commercial vehicle space and increase capacity for valve train componentsamong others.
Relentless pursuit of excellence
Rane NSK Steering Systems became the fifth group company to win theprestigious Deming Award which testified to our operational excellence. Our groupcompanies continued to pursue various lean measures to improve productivity and strategicinitiatives to save operational costs.
Driven by determination
At Rane Group the goal to achieve sustainable growth and profitabilityremains our priority and we are pursuing various strategies inline to achieve thisaspiration. We are aggressively defending and improving our market share in India withinnovative products and delighting customers.
To increase the international share of revenues we established ourfirst global manufacturing footprint in 2016 through acquisition of Rane PrecisionDie-Casting Inc. (RPDC). Notwithstanding the efforts RPDC continues to face challenges inits pursuit to become profitable. RPDC secured new businesses to ensure Sales growth. Westill see a lot of scope for operational improvements and undertaking several initiativesincluding deputing some senior managers from Rane Group.
Our turnaround strategy for Rane Engine Valve Limited is progressingaccording to plan. We refurbished old machines and equipment to improve process capabilityand availability and are proactively exploring non-automotive markets and strengtheningcustomer engagements. Initiatives were also taken to enhance skills of operators and keyresources in the shop floor by us. We augmented corporate and plant management teams toimprove the operational performance. There has been good improvement in capacityutilisation.
At Rane Group we focus on long term value creation. In the past wehave seen prolonged phase of low demand and losses in few of our businesses. However thosebusinesses have turned around and come back strongly to deliver value in the long term. Iwould like to assure you that our best efforts are on to revive these two businesses.
Investing in People
At Rane we believe people are our most critical asset. During theyear we focussed on functional and leadership capacity enhancement through variousinterventions. In recognition of our employee engagement initiatives the Great Place toWork institute awarded the Great Place to Work certification to our group companies RBLand RML for the second consecutive year.
Enabling Social Change Agents
We continued to progress well on our endeavour to be socially andenvironmentally responsible corporate citizen'. This year has been a notable year forus at Rane Foundation as we embarked on the next major project Rane Vidyalaya schoolestablished in June 2018 in Trichy to provide quality education to rural children. Thefirst Rane Pioneer of Change Award to identify and bring into limelight grass-root levelorganisations and individuals from Tamil Nadu who have excelled as social change leaderswas presented.
Progressing with Optimism
The first half of FY 20 appears challenging with slowing demand in mostof the vehicle segments. The anticipated pre-buy on account of transition to BS VI normalmonsoon the government's continued reforms and infrastructure push are likely topropel growth of the Indian economy and its automotive industry in the medium-to-longterm. Connected and Electric vehicle related technologies are likely to provide furtheropportunities.
We will continue to invest in R&D and drive innovations to buildvalue-add products. We will also leverage the global product portfolio of our JV partnerto introduce new technologies in India and tap into opportunities to supply in exportmarkets. We are exploring Industry 4.0 technologies to drive next level of operationalimprovements in the shop floor.
We are progressing with optimism on long term market opportunities anddetermined to continue our pursuit of excellence in operations to create value for all ourstakeholders.
On behalf of the Board of Rane Holdings Limited I would like to thankall our stakeholders Customers Employees Partners Vendors Bankers GovernmentCommunities and most importantly you our shareholders who have been part of thisexciting journey.
Chairman and Managing Director