FY 2015-16 was a fruitful year for SAPPL with improved operating performance comparedto the previous year with a further significant reduction in net debt. Several steps wereinitiated to drive the execution of our strategy for accelerating growth in upcomingyears.
This Fiscal year your Companys net profit increased by 69.88% to Rs. 1209.76Lakhs. The persistent focus on cost reduction and efficiency programs contributed to cashgeneration from operating activities to the extent of Rs. 1644.92 Lakhs. Further our netdebt declined to Rs.759.75 Lakhs.
The Companys officials have from time to time attended various domestic andinternational pulp and paper related exhibitions for creating awareness and adoption ofthe latest technologies focusing on cost reduction ideas and marketing. During thistenure your Company had attended ICCMA Congress 2015 and WICMASymposium 2015 which arepremier annual meets for technological improvement and networking in the industry.
We firmly believe that the environment must be protected and should be used in asustainable way. We therefore use environmentally friendly expertise and resourceswhether it is raw material water or energy rationally by minimizing waste and maximizingrecycling. It is a matter of great satisfaction that the Companys Environmentalstandards are largely in tandem with those advocated by various agencies.
The new Sustainability and Environmental laws and compliances within the country andin overseas markets make FSC (Forest Stewardship Council) certification a necessity forour business. We are pleased to advise that during the year company acquired the FSCcertification for its products.
India's economic growth is expected to be at 7.6 per cent in 2016-17 followed by amodest acceleration to 7.7 per cent in 2017-18 as per a World Bank report. According tothe report India registered a 7.6 per cent growth rate in 2015-16.
The International Monetary Fund has projected that India will continue to grow at asteady pace as a result of the decline in oil prices and the low exposure of the countryto the prevailing global financial instability. On the domestic front the Make inIndia initiative along with 100 Smart cities and SwatchBharat Abhiyan projects of the Government are expected to infuse greaterpositivity in the economic sentiment.
According to recent data globally per capita paper consumption for Europe is 129 kgAustralia is 116 kg Asia is 45 kg and China is 75 kg. In India on the other hand theper capita paper consumption hovers between 9.8 kg and 11 kg. It will be seen that sincethe per capita consumption of paper in India is abysmally low at 9.8 kg as compared to theglobal average of 58 kg. there is a strong potential for substantial growth.
Meanwhile the Indian Paper Industry accounts for about 2.6% of the worldsproduction of paper providing employment to more than 0.5 million people directly and 1.5million people indirectly.
Due to growth in literacy change in lifestyle and increasing consciousness forpersonal hygiene per capita consumption of paper and tissue in India is increasing day byday. Even if this per capita consumption increases by one kilogram it will lead anincrease of paper production by one million tons.
It is clear that to meet the growing demand the Indian paper industry requires moreraw material and advanced technology. To meet this technology demand new technologies andlatest machinery for paper industry are available. There are many local innovations whichare quite economical as compared to the international market. In fact Indian machinerymanufacturers and technology suppliers have also started catering to the internationalmarket.
It is therefore expected that the paper industry in India will contribute more to theGDP exports and also to increased employment in the nearfuture.
As Industry outlook is very attractive your company is ready to grab this opportunityby manufacturing more quality paper.
Your company has the practice of modifying the plant and machineries from time to timein such a way that the relevant upgraded technology is adopted on a continuous basis.SAPPL has the ability for maximum utilization of available resources and deliver the bestresults. We have been working on sustainability on a long term basis.
In conclusion I would like to thank on behalf of the Board members all stakeholderwho are with us in this journey of achieving a bigger success and delivering more value.
Gautam D Shah
Chairman & Managing Director