From the Desk of Chairman and Managing Director
It is a privilege to present before you the FY 2017-18 Annual Report of the Companyour first one since the successful maiden public issue and listing in the BSE Ltd. underthe SME category. The IPO was an important part of our corporate growth strategy and Ithank all the investors to have reposed their trust on us with such an overwhelmingresponse. Our new journey could not have started in a better way. And I assure you thatyour Company will take every right step to ensure wealth creation for all itsstakeholders.
Before I take you through our current year's performance and what the future holds forus let me take a moment to tell you what we have achieved in these two decades ofexistence. Being engaged in chemical manufacturing the greatest challenge in scalingbusiness is to ensure the products meet required quality and safety standards. The factthat our products are exported to some 40 different countries having stringent quality andenvironment norms endorses the kind of standards that we have. We are proud to haveachieved this and are confident this will enable us to achieve stronger growth in comingyears.
Performance review of the year
Your Company has seen an appreciable performance in the last financial year. Ourrevenues have grown by 27% to Rs. 24980.44 lakhs and EBITDA grew 27% to Rs. 3159.53lakhs. This strong operating performance was driven by better capacity utilisation at ourplants both of which achieved over 90% utilisation compared to 85% in FY 2016-17.This led to increase in production and better spread of overheads. Our net profit growthat 117% to Rs. 797.13 lakhs was much stronger driven by higher demand in Europe and USAmarket and benefit of China pollution issue.
We introduced products in the lube segment like extreme pressure additives andcorrosion inhibitors. Also it was a matter of pride for us as we ventured into two newmarkets: China and Russia.
While we are prepared as an organisation to scale new heights what makes me even moreconfident of our future is the immense opportunity that lies ahead. Globally thespecialty chemical market is expected to grow at a compounded 5.30% through 2017 to 2025and reach a size of USD 589.80 billion. This growth would be driven by economic growth ofAsia-Pacific region higher demand for environment-friendly chemicals and sustainableoperations and increasing demand for value-added offerings from specialty chemicalmanufacturers.
Closer home the Indian market for specialty chemicals is expected to grow atcompounded 10% until FY 2025 and nearly double in size. This will be boosted by higherdemand from the end user industries and increasing adoption of specialty chemicals. Thedemand is likely to peak in FY 2018-19 driven by the tighter global supply as companies inChina face stringent environmental regulations.
The positive economic scenario globally will catalyse this development. The globaleconomy is forecasted to grow at 3.9% with improving trade scenario and recovery inseveral key economies. In India backed by stabilisation of various structural reformsthe economy is now expected to be back on track and record steady growths of over 7% inthe coming years.
We remain confident for quite a few reasons. We have all the necessary qualitycertifications and our products are witnessing strong traction in the internationalmarkets. In FY 2017-18 exports accounted for 56% of total revenues. Our proximity toMiddle East the global source of petrochemicals feedstock enables procurement at lowcost which in turn enables us to maintain low cost of production. With our quality andcompetitive pricing we are well-placed in the industry.
Our wide portfolio of products across food antioxidant rubber aroma lube andspecialty categories provide us scope to cater to several end user industries. Thisprovides us the advantage of diversification as well as the opportunity to scale eachcategory.
Further buoyed by our public issue we have raised a sum of Rs. [899.20] lakhs. Wewill utilise the proceeds of this issue towards capacity expansion programme for lubeadditives rubber antioxidants and food antioxidants. Expansion in these segments willenable us take advantage of opportunities arising due to change in government policies.
I thank all our stakeholders for their continued trust and support. A special mentionto our employees whose efforts have contributed to the Company's success. We will provideevery opportunity to our employees to help them improve skills build better career andcontinue contributing to the Company's performance.
Finally I would end by saying that this is a new beginning for the Company and we willundertake every effort to ensure its success.
Chairman and Managing Director