Dear Fellow Shareholders
Rhenium (Re) chemical element a very rare metal of Group 7 (VIlb) of the periodictable and one of the densest elements. The metal and its alloys have found limitedapplication as turbine blades in fighter-jet engines fountain pen points hightemperature thermocouples (with platinum) catalysts electrical contact points andinstrument-bearing points.
2020 will be known for Reconsideration Redefine Rejenuvate Rethink and Relearn thenew lessons from history.
2020 will also be known for utmost detailing by our scientists who actually relearnedthe basics of virology. 2020 will be known for central banks stand to Restrategisethemselves and have faith in common man. The actions of central banks have againhighlighted their central role in crisis management as they swiftly cut policy interestrates and launched large-scale balance sheet measures. The COVID-19 pandemic has been themost cataclysmic event to endure taking an unimaginable toll on everyone across the world- both at a personal and professional level. 2020 was a year of great strife challengesand worries. The COVID-19 pandemic disrupted lives and businesses shook up supply chainsand upended human society. As we continue to grapple with the crisis our thoughts andprayers remain with those individuals families and communities most affected by thePandemic. The economic toll from the pandemic was unprecedented. Operational challengesmounted due to restricted movement and disrupted supply lines. As the Covid-19 casescontinued to rise exponentially the economy declined sharply.
2020 taught entrepreneurs like me that magnitude of the economic shocks would be higherand we need to build the company for the bigger resilience.
But trust experience our authenticity compassion and me have helped the company inthis unique challenge along with the financial stress. All kind of questions in IF arealmost clear and we are ready with new energy and momentum. Covid-19 pandemic imposedsevere containment measures that hit the real economy first and then propagated to everynext sector we served. We also have to recalibrate the way we engage with at all levels.Increasing penetration and proactively towards more credible transparent trustworthyand scientifically better modulated products. The future will demand increased commitmentfrom companies and their products making sure that business stays committed to thecommunity consumers and the planet. What Rhenium (Re) taught us that until or unless weRelearn the dynamics of business and community growth we can't get the Premium.
Our company was not immune to these challenges. Like thousands of firms worldwide wealso experienced the pandemic's health economic and business repercussions in the firstquarter. We faced several logistical challenges and regulatory interventions and had tocoordinate with multiple stakeholders.
The economic and health scenarios in the country are still fragile and we are preparedto face the coming year with the same sense of unflinching commitment we are known for. Asthe country gently eases its way out of the crisis of second wave our clients wouldexpect our services to become fully operational. We are gearing up to ensure that ourpremises are safe hygienic and secure so that employees and workers feel comfortablecoming back to work with 100% capacity.
We expected the exercise to be 2-3-months long but it took longer as many states/cities continued to impose restrictions for an extended period of time. When the thirdwave of the pandemic hits us in August-October 2021 we would be well prepared and handlethe crisis seamlessly.
Today the world is all about 'Essentials' and we are proud to be recognised as atrusted input supplier in this space by addressing varied client needs using our sevendecades of experience and proficiency across sectors. Our deep market insights enable usto leverage growth opportunities in the key markets we operate in concurrently helping ourCompany to emerge as a trusted player. Over the last 75 years we have steadily increasedour offerings and reach to cater to the varied and dynamic demands of the markets weserve. Our integrated solutions portfolio is helping us engage across multiple levels withour customers and drive high customer retention. Our Essential by-products are relativelyinelastic in demand as observed this year despite a steep decline in GDP across markets.The defensive nature of our products makes us a unique sector with solid predictabilityeven in uncertain times. There could be a small delay in demand but a small vacuumdoesn't make a difference for the industry.
We confronted the uncertainties by focusing on three key priorities - 'safeguarding thehealth and well-being of our people ensuring business continuity to meet consumer needsand supporting communities through our relief efforts. Despite unavoidable problems in thefirst quarter of last financial year we reduced manufacturing
complexities which arose as a result of the lockdown and made available our products toconsumers with speed and agility. Despite loss in first quarter due to immovability of rawmaterial from one state to another we progressed well in next 3 quarters withdetermination and with a new strategy.
Covid-19 has fostered a wave of innovation both positive and negative in Sukhjit'sleadership team. Scientific studies along with considerable risks that Sukhjit could takewere essential for ending the Covid-19 crisis and designing new techniques to adapt to apost-pandemic world.
From a neuropsychiatric perspective there are obvious signs of global psychologicaldistress related to social isolation and fears of illness death and countlessuncertainties about the future. Many people may not be actively seeking employment due tosocial distancing measures. Lot of people with more than average savings prefer to take abreak and spend time with family to reduce anxiety. Interestingly consumers are spendingmore time in kitchen than in restaurants and actually looking the packing for ingredients.Remote work has become the new norm allowing people to work from the comfort of their ownhome and focus more on quality of foods and ingredients.
Government focus to boost food Processing and pharma Industry: Union Governmentproduction-linked incentive (PLI) scheme to promote processed food manufacturing with anestimated cost of Rs 10900 crore to the exchequer over the next six years is seen tobring a positive sentiment among the food processing industry in the country. PLI schemewill promote growth and investments in the sector. While the initiative paves the way formany Indian brands to go global it will give opportunities for Sukhjit to sell globallyindirectly.
In Pharma India's first post-pandemic budget has provided a boost of nearly 200 percent for developing the pharmaceutical sector to help the country bolster its image as the'pharmacy of the world'. In the allocation for the Union Department of Pharmaceuticalswhich comes under the Ministry of Chemicals and Fertilizers Budget 2021-22 earmarks Rs124.42 crore for initiatives aimed at 'Development of Pharmaceutical Industry'. The bigpush for the pharma sector can be seen as an attempt by the government to wean India offraw material imports from China that are heavily used in local drug manufacturing.
In America according to a leading research firm. Melius Research industrial firms ofall types that reported results in the first half of 2020 predict a 20% increase incapital expenditures in food processing industry. The pandemic put many projects on holdbut they're coming back on board.
At Sukhjit where we come from influences what we are and what we do. We draw on theseroots - values experiences loyalty brand value and knowledge - to sustain acrosschallenging market cycles and respond with speed when realities improve. These roots havetranslated into value for all our stakeholders strengthening our business sustainability.But we still believe that there is a huge scope of improvement in financial andoperational efficiencies.
Last year we have received some mails and queries from long term shareholders. Let meReassure each one of you that the every member of Sukhjit team is committed to deliverwith lot of hard work and consistency. I understand that it's a human Phycology that"One never notices what has been done; one can only see what remains to bedone". Life is 10% what happens to us and 90% how we react to it.
On personal level from covid I have learned that Giving back to society. Empathy andGood Karmas are the most important lessons of life. Empathy means understanding thingsdeeply absorbing the unwritten and going the extra mile for people who depend on us.Although Empathy is intuitive we believe it can be developed intellectually throughimpactful acts. I would like to assure you that we continue to stand with the common manduring this challenging phase of Covid-19.
Going forward we feel that the second wave is likely to subside by June 21 & thethird wave may not hit our country with that severity due to vaccination and otherpreventive measures being undertaken by the Government. So if the GDP will achieve thetarget of 9% the starch Industry will show a growth of 15% to 20% during F.Y. 21-22.Since some part of this year has been affected by 2nd wave of Covid but we are hopeful toachieve a turnover of close to Rs. 1000 crore during the running year but next year i.e.22-23 will certainly come out with results of our expansion undertaken last year with 80to 90% utilisation of our expanded capacity and we may achieve 15% growth in turnoveralong with reasonable amount of increase in EBITDA.
We are optimistic that each of us will rise to this challenge with all the will powerhope energy and prayer that we can muster! If the pandemic has taught us a lesson it isto embrace humanity and make a difference with our lives for whatever time we have on theplanet.
|Best Regards |
|K. K. Sardana |