Atul Ltd 2016-17

Atul Ltd | Annual Report 2016-17 Management Discussion and Analysis Atul Ltd has identified 2 reporting Segments, namely, Life Science Chemicals and Performance and Other Chemicals. Life Science Chemicals Segment Particulars 2016-17 2015-16 % change Sales ( ` cr) 807 737 9% Share in total sales (%) 31% 31% – Life Science Chemicals Segment consists of 3 Sub-segments, namely, Crop Protection, Pharmaceuticals and Intermediates and Aromatics - I. Crop Protection Product groups: Herbicides, Insecticides, Fungicides, Others The products falling under these product groups are used by customers belonging to Agriculture and Crop Protection Chemicals industries. The product groups comprise about 20 products and 40 formulations. 2,4-D, Indoxacarb and Isoprothiolane are some of the key products. During 2016-17, sales increased by 8% from ` 422 cr to ` 455 cr. Sales in India decreased by 8% from ` 166 cr to ` 153 cr; bulk sales in India increased by 20% from ` 69 cr to ` 83 cr whereas brand sales which are currently only in India decreased by 28% from ` 97 cr to ` 70 cr. Sales outside India increased by 18% from ` 256 cr to ` 302 cr and formed 66% of the total. Increase on account of volume was 22%. Sales increased mainly because of good demand for one of the key herbicides. The Company completed 2 projects and undertook 1 project for implementation. The size of the world Agriculture industry is estimated at US$ 3.2 tn and is growing at about 3%. The size of the world Crop Protection Chemicals industry is estimated at US$ 56 bn and is growing at about 5%. There are about 60 major crop protection chemical companies which dominate the world marketplace. The main user industries, namely Agriculture and Crop Protection Chemicals, are growing well because of the need to feed a growing population under constraints of related resources. The Company will participate in this growth by i) building a strong sales and marketing organisation and broadening and deepening its presence in other countries, particularly in Africa and South America, ii) promoting its brand sales, iii) improving its manufacturing and working capital efficiencies, iv) generating and adding capacities and v) introducing new products and formulations. Floods or famines may adversely affect the demand. Fluctuations in foreign exchange may impact sales realisations. Given that some of these chemicals can be toxic, it is essential to take due care in their manufacture and use. Registration costs are high in certain countries.