STAR PAPER MILLS LIMITED
ANNUAL REPORT 2005-2006
There is no question that 2005-6 was an eventful year at Star Paper. While
we remained committed to enhancing operational efficiencies and improving
our financial performance, we clearly had our share of challenges during
the financial year under review.
A runaway increase in raw material prices on account of the rising demand
for wood, strengthening crude prices, which in turn spiked fuel oil prices
and the shut of PM 2 our - largest paper machine - for retrofit, were the
main contributors to a downturn in our fortunes.
Star Paper succeeded in increasing average product realisation by 7.5 per
cent and was able to increase gross turnover despite the handicaps
However, these efforts were not enough to offset the impact of adverse
factors and the net result was a decline in the bottomline.
But for the stringent cost control efforts, the situation could have been a
Although in the current year, I do not foresee any respite from both raw
material and fuel oil prices, I will take this opportunity to tell you why,
despite these challenges, I remain optimistic about our future.
Our Rs. 85 cr modernisation and expansion programme, to be completed in
2006-7, will result in improved performance down the years. This programme
envisages investments that will not only strengthen our efficiencies in
managing costs but also reinforce our environmental commitment.
At Star Paper, we are optimistic that the demand for the Company's products
is expected to increase in line with the country's economic growth,
resulting in ample Opportunities for growth.
I seek your continued support in facing the odds and scripting a success
story over the coming years.