Dear Fellow Members
Trust you and your dear ones are doing well and keeping good health.
It gives me immense pleasure to share few thoughts with you about our Company oncompletion of 75 years.
It's very rare to find companies remaining alive and relevant leave alone profitableand looking at growth on their 75 Anniversary. It is a matter of pride for all of us andmore so when our Company has delivered its best ever performance.
There couldn't have been a more momentous occasion for the Board of Directors of yourCompany to propose a dividend and I am happy to share that they were extremely pleased torecommend for your approval Dividend of 15% after a gap of 33 years. A commendable featindeed this was made possible only by the sheer hard work and belief of our managementteam I will dwell on this in detail a little later.
As you all are aware it was just about a year back there was a change of control ofthe Company wherein Votorantim Cimentos sold its stake to one of the most known andreputed private equity firms in India-True North (TN). TN has many diverse businessesunder their fold and are known for their business acumen ethics and value creation. Weare happy that the Company has after a long time come under active management style offunctioning. Private Equity is growth oriented value creating funds always seeking andstriving for value enhancement.
I am sure you would have observed from the financial results of past 12 months wehave constantly and continuously worked towards creating value for all stakeholders. YourCompany is one of the oldest cement companies in India almost a pioneering efforts by itsfounders. It had a good fortune to have been inaugurated by one of the tallest leaders ofour country- Sardar Vallabhbhai Patel. It was the vision of the founders to not only setup cement plant but also to have in place other infrastructures like captive jettyrailway siding and it was one of the pioneers of transporting cement/clinker by seatransport. It was also first one to have a split location- cement / clinker plant at Sikkaand a Cement grinding plant in Siwari in the heart of Mumbai. Over the period due tovariety of reasons most of the advantages were lost but I firmly believe that in everyadversity lies an opportunity. We are now constantly working to see how we can revive mostof these critical assets into a new business opportunities. We have lots of ideas to addvalue to our business and as we go along we will unfold them.
Currently all over the globe we are going through our most challenging times due toPandemic COVID- 19. It has changed and challenged the way we look at life and businesses.Nature is playing its invisible hand leaving us bewildered. Like every one else we werealso impacted our operations were closed from 25 March 2020 as per the lock downdirectives. We were fortunate that Sikka and Jamnagar did not have many cases and we couldstart our operations from 10 April. Gradually markets are opening up and at the time ofwriting this note to you we still have many parts of Gujrat and India closed posingchallenge for businesses and economy. Our challenge is manifold- demand still strugglingto come back dependence on construction labour- most of them being migrating labour andlogistics. Cement demand is expected to be low for the most part of the year due to hugedisruption in construction activity.
I am a great believer in mankind's innate ability to strive back and create newopportunities.
Agriculture and construction are key constituents of employing over 70% of ourpopulation-directly and indirectly and over 25% of GDP. It's just incumbent upon us thatwe lay enough emphasis this year on these two economic activities to re-employ ourmillions of brothers and sisters and create a new order. It's the moment to seize thisopportunity and pull the economy back on rails. More than ever before agriculture andrural economy will play a pivotal role in bringing the cheer back on gloomy faces of ourcountry.
Cement industry plays a very important and pivotal role in every developing economy andin current context more so. It could be a huge opportunity for us to use this calamity asan opportunity to start building infrastructure at all levels and more so in health caresector. We as nation seemed to have failed in recognising our need for a robust healthcare system. COVID-19 made us realise yet again that we are most vulnerable with congenialHeart Disease and Diabetes patients and this pandemic left them in very poor state. it'sstill not too late for us to invest heavily in our health care infrastructure. Anotherarea which deserves huge impetus is- Affordable Housing. It should be taken up as missionfor every citizen to have his/ her own house to build a truly aatmanirbhar India and everyeffort should be made to realize this mission.
We are fortunate to have an Industry leading team lead by Rajeev Nambiar they havedemonstrated during last one year that they are second to none. Though your Company isperhaps the smallest in the industry but their zeal hard work and quick thinking on feethave given us one of best returns on capital. Our industry is known for huge capital needsand often poor return on capital due to intense competition and sometimes unabated desireto grow. We at SDCC are very clear we will grow but not blindly and will always keepthe return on capital as our base case. We are exploring many avenues to get the bestreturn from our existing capacities and infrastructure at the same time making all ourefforts to secure Limestone- key to our growth. We will share with you once the plans arefinalised in that direction. This coming year has lots of uncertainties and it's a goodtime to reflect on how to conserve capital and reduce costs and look for savings to boostearnings.
The lock down surely helped us in reducing the severity of COVID-19 but on flip side ithas taken a huge toll on economy which will take a while before recovering. Similarly thesociety has taken a huge toll be it unfortunate deaths of young lives while travellingback home or loss of jobs of self employed daily wage earners. They are the biggestsufferers of this pandemic. There are many steps we can take as society with the help ofNGOs and Government to rebuild our societies and our echo system of peace and harmony. Weneed to once again learn to respect Environment keep it the way nature wants it to be.
Let's hope and pray that India emerges as a strong nation post this very unforeseen andunfortunate pandemic. We all have a role to play and I am sure we all will rise to theoccasion to help re-build scarred society & Economy soon.
I wish you and family safe all the time.