I am delighted to have the opportunity to present the Annual Report of the Companywhich encapsulates our progress in what has been a landmark year for us on multiplefronts. Despite the challenges encountered during the year we have been able to executeour strategy with remarkable agility and this is reflected in the success in many of ourefforts.
If you look at the macro trends in the industry they continue to provide tailwinds forour sustained growth as a company. Some salient trends are:
- Reliability of supply and consistent quality being the key criteria for customers'decisionmaking
- Opportunities are opening up to replace suppliers from regions such as China
- Focus on the technical prowess of a company as a key differentiator especially inthe CRAMS business
On each of the above counts Solara is well-positioned to benefit from theopportunities and accelerate its growth.
Our focus on ensuring world- class quality and reliable supply chain performance hascreated further opportunities for us to enter new markets scale up business with newcustomers and increase the share of wallet with existing customers. Our engagement withlarge pharmaceutical companies for growing our CRAMS business is starting to gaintraction which augurs well for our future.
A MILESTONE MERGER
Before I delve into some of our key achievements in FY 2020-21 I would like to writeabout a crucial milestone for Solara - the recently announced merger with Aurore LifeScience Empyrean Lifesciences and Hydra Active Pharma Sciences which makes us the secondlargest API/CRAMs player in India.
Aurore is engaged in developing a wide range of generic pharmaceutical products. Theproposed merger will facilitate focused growth and operational efficiency. This Mergerenhances business potential and increases the capability of Solara to offer a widerportfolio of products with a diversified resource base and help develop deeper clientrelationships. Besides it will add to our R&D capabilities and lead to greatereconomies of scale. The move is EPS accretive immediately and fits in with the otherstrategic priorities of Solara. Post the necessary shareholder and regulatory approvalswe will begin executing and realising the synergies from the merger.
THE YEAR THAT WAS
We started FY 2020-21 under extremely tough circumstances with the first wave of theCOVID-19 pandemic threatening our employees' wellness our supply chain and creatinguncertainty in the distribution network and thereby our ability to deliver to our clients.
The Solara team rose to this challenge and I am immensely proud of the fact that everyemployee of the Company went beyond his/her call of duty to ensure that we were able tofunction smoothly and fulfil our commitments to our customers and to the larger society.We ensured that our employees' were safe through various initiatives targeted at theirphysical and mental well-being.
Through this difficult period we executed our business continuity plans and safetyplans to minimise disruptions in our services to our customers. We also supported thecommunities in our locations through the supply of ventilators sanitisers dry rationsand other such needs to help pandemic-impacted neighbourhoods. We continue to takeemployee safety and wellness as our topmost priority and we are taking all measures toprovide a safe working environment across all our locations. Our employees have seamlesslytransitioned to working in the new normal' and their dedication has made it possible forSolara to further endear itself to its partners because of the reliability and quality ofits goods and services.
In spite of the impact of the pandemic we were able to complete the construction andoperationalise our greenfield facility at Vizag.
We commissioned Phase 1 of the Vizag facility in Q2 FY 2021 and commercialised andscaled up the facility in the second half of the year. With the commissioning of the Vizagfacility we have significantly strengthened our Ibuprofen business with our ability todeepen our market presence and customer reach.
OTHER SIGNIFICANT GAINS
The year also saw us enhance our regulatory filing velocity.
We have more than doubled our regulatory filings in the US and EU markets compared toFY 2019-20. We hope to maintain this momentum in the coming years on the strength of thechanges we have implemented in our R&D function.
Our signature strength in generating cost efficiencies continued unabated during FY2020-21. In both sourcing and operations our teams did an exceptional job in reducingcosts and optimising resource use. This has enabled us to record consistent growth inmargins over the year.
In FY 2020-21 we have also infused strength and vigour in the leadership as part ofthe planned transition process.
I am delighted to work with a high-calibre leadership team as we embark on an excitingfuture together. All in all despite the unique challenges of FY 2020-21 we have beenable to sustain our growth momentum.
RIGHT TO WIN
I would like to briefly elucidate how we are executing our long-term strategy with aclear vision to be one of the top global API/CRAMS players.
I had alluded to some macro developments in the opening paragraph. Todisproportionately benefit from the macro tailwinds we have decided on some key strategicpivots to drive our growth.
The first pivot is to ensure that we differentiate our upcoming product portfolio sothat we have the Right to win' on a sustainable basis. To this end we have refreshed ourproduct selection process where we have taken special care to balance market/businessmetrics with technical/science- based differentiation. This balanced approach will allowus to invest our R&D resources in products that further differentiate Solara createlong-term customer stickiness and enables sustainable profitable growth.
The second and an equally important pivot is to undertake programmes and initiativesthat will deepen the talent pool and employee engagement. To accomplish this we haveinitiated a host of measures including those that enhance the Company's image as apurpose-driven organisation rejuvenate our HR processes and structure our approach totalent acquisition and development.
I fundamentally believe that the right talent working in the right culture andexecuting the right strategy will enable us to create greater value for our stakeholders.
I take this opportunity to thank the Board shareholders and all our stakeholders forinvesting their trust and confidence in us.
Bharath R Sesha
Managing Director and CEO