Dear Fellow Shareholders
''One of the tests of leadership is the ability to recognize a problem before itbecomes an emergency.'' This is the famous quote from American Businessman Mr. ArnoldHenry Glasow. A real American thinker self-effacing and generous of spirit he shunnedthe national spotlight in 1980s.
Trust me 2020 will be an exceptional year in exceptional times.
The shadow of COVID-19 is firmly upon all of us. Covid-19 is on its way to create whatwill perhaps be the most serious global economic crisis in a century since the GreatDepression that began in 1929 and lasted a decade. While full numbers for India are notavailable data from some other countries paint a dark picture. This contagion willextract a heavy price from humanity and every business. We are confident that Sukhjit willemerge stronger more resilient more efficient more agile and more effective and indoing so reset reinvent reconstruct and rework itself to succeed in the new-normal thatwill emerge. However what will remain unwavering will be our integrity core values ofCare and Deliver and resolve to better serve our customers continuously.
The unfolding global COVID-19 pandemic is a human crisis of historic scale andcomplexity. It is straining health care systems government fiscal capacity and theability of many organizations to cope with the changes wrought by the virus and theresponse to it. The level of uncertainty for most leaders is unprecedented and most ofour frameworks for planning and problem solving are unable to manage the geographicvariability uncertainty and the exponential change brought by the COVID-19 crisis.
The biggest question is How must we transform our business to win the Fight-and win theFuture? Many leaders are asking the same set of questions: How should I forecast myrevenues? How should I adjust my budget? When will this be over and when will we returnto ''normal''?
In the wake of so much uncertainty we are focusing on framing potential scenarios anduse them to develop a robust plan of action. As the new manufacturing facility for 600 TPDgoes into operation we are conservatively
targeting sales of ? 1000 crore FY 2021-22 if all things get normalized till the endof March 2021. To achieve this we will have an ACE strategy this year:
ACE: Accountability consistency efficiency to achieve sustainability andefficiency
Already people and organizations alike are adopting new behaviors. There has been amassive shift to remote work-and to a new kind of work-life balance as work and familymix. Businesses are investing to make remote work more efficient and sustainable.Consumers across demographics are purchasing dramatically more goods online and companieshave built delivery services to meet the demand. Students facing school and universityshutdowns have shifted to e-learning supported by governments providing tablets andvideoconferencing systems to make it more accessible.
It's entirely likely that some of those shifts in behavior will be permanent leadingto larger-scale transformations. At-home consumption of goods and services will lead tostructural changes in e-commerce grocery shopping food preparation food packagingclothing styles and healthcare. And virtual access to critical services will create newways of delivering health care and education.
Looking beyond these changes to second-order effects we see substantial uncertainty insome our current offerings. Our team and sales experts are busy in finding how willconsumer preferences and consumption habits change further? What will trade travel andcapital flow look like? New levels of scenario planning will be necessary to address thesefar-reaching questions and to find the right buyer for our products.
Five factors that stood out and that we think are relevant today for Sukhjit:
1. Act proactively. We will endeavour to preserve cash and cut costs to protect andcreate a strong foundation for your organization. We will be investing only in necessaryareas for long term sustainability.
2. Stick to a clear vision. Even as they looked for new sources of growth we arepursuing the clear vision that we had before the crisis-a vision that was based on a smallnumber of long-term themes. The Fight phase is going to be longer than most leaders wehave talked to anticipate. We expect that it will be between 6 to 9 months before avaccine or highly effective treatment can be developed and deployed.
3. Increase demand vitality. The biggest question today is what are the product andservice innovations today that you can pursue and perfect after the crisis? Createdemand-focused capability and adapt your commercial efforts and your offering to what thecustomer needs now-and where they currently are at. Step change your online presence andability to market sell and service online.
4. Create supply agility. Given variability and uncertainty build agility andadaptation into your supply base and supply chain. The Fight phase will be moreeconomically challenging than most leaders seem to expect. Because the situation isvolatile consumer and worker confidence has been shaken and because of the risk offurther outbreaks and localized lockdowns or perhaps even national ones we envision anongoing impact to the global economy. There will be huge correction in the prices and webelieve that only cost efficient producers will stay in this business in the medium term.
5. Build enterprise resilience. We have understood that we couldn' t avoid futuredisruptions so we built organizations not only to withstand future shocks but also toanticipate them including streamlining core operations and redesigning processes tocapitalize on digital capabilities.
Like every next mid size company we are also impacted but the strong foundation andour management determination will take the company to sustain and accelerate. We cannotpredict the future. But we can seek to understand what the future might hold and what thatmeans for the Nation industry sectors and individual companies. We need scenarios tobound the uncertainty to help us understand the underlying drivers of outcomes and forsome understanding of how we can shape those outcomes.
We still believe that our success will depend how we partner with the best customerssuppliers and innovators and how we engage the talents of all our people and supporttheir safety and wellbeing in this Macro economic crisis situation ?
There is great power in simplicity in a complex and challenging world. The managementagrees that passion and hard work is critical for driving innovation and competitivenessin a fast-changing and dynamic marketplace. This year's performance is testimony to thehard work and unstinting commitment of our people around the Industry. As a Board werecognise the importance of good governance but in my view the most importantcontribution any board can make is to support the executive team in developing strategyand implementing it in a focused and responsible way - doing the right things in the rightway at all times. To this end my colleagues and I spent a lot of time this year gettingto understand better the strategic opportunities and challenges in the eco-system forSukhjit.
The investments we've been making over the last few years to build a broadergeographical presence new systems and processes and new technical and sales capabilitiesare now coming through in our recent financial results.
Sukhjit is in a good position just because we have focused on two things in allbusiness cycles. First is quality along with consistency and second is preserving cash forfuture. We are optimistic that we will be debt free in next 2-3 years and will have aportfolio of ingredients well placed to benefit from growing global consumer demand fortastier and healthier foods and drinks. Despite all challenges Sukhjit team is ready todeliver another year of sustainability and consistency.
On behalf of Board I extend a warm welcome to Mrs. Manjoo Sardana as our newChairperson and as Non Executive director. We are also looking forward to using her skillsin strategy and other management functions. We also welcome Mr. Vikas Uppal as NonExecutive independent director and Mrs. Shalini Umesh Chablani as Non Executive directorand look forward to their very productive and positive guidance.
Trust us the management often has a genuine desire to protect employees but long-termfinancial interests are a major consideration as well. Like few other old economycompanies we were able to avoid layoffs. However the risk on the horizon is potentiallymuch greater than 2008-09 and we are preparing for scenarios that are multiples worse thanthat.
We would like to thank our employees for their commitment to Sukhjit. It is their hardwork alignment behind our strategy and dedication that enables us to deliver on ourpromises. We also want to thank you our shareholders for your continuing support yourconfidence and above all for your trust in this challenging times. Rest assured that ourpassion to deliver the best and our passion for quality will continue to generate thesustainable profitable returns you rightfully expect from us.
Regards K K Sardana
"Success isn't a result ofspontaneous combustion. You must setyourseif onfire."
- Arnold Henry Glasow