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Dear Shareholders,
The
world economy
the size of which is of the
order of US$ 63 tn in 2010 showed signs of recovery
and, according to IMF, grew by about 5.1% (-0.5%
in 2009). GDP of India at US$ 1.2 tn grew by 9%;
agriculture, industrial and service sectors contributed
14%, 31% and 55% respectively. Emerging economies
are likely to fuel growth in the foreseeable future.
During the same period, the
world Chemical
Industry
with revenue of US$ 3.4 tn grew by 5%
driven mainly by China, Brazil and Korea. Indian
Chemical Industry at US$ 56 bn is at number 11, but
this merely reflects the potential that still lies hidden
to be realized rather than its rank. Chemical Industry
in China for example is 11 times bigger than India!
The performance of our Company for the
year
in terms of sales and profit witnessed further
improvement over the preceding year. Working
capital in terms of number of days (NoDs) was better
though in a small way. Our Company acquired for
the first time in its history 50% shareholding in a
foreign manufacturing company and established a
marketing company in Brazil. Our Company built new
foundations to improve performance of its subsidiary
and associate companies.
To be specific, despite difficulties and uncertainties,
our Company
improved sales by 29% to
`
1508 crores
improved profit before tax from
`
80 crores to
`
139 crores
reduced gross working capital by 19 days to
179 days
acquired and integrated Polygrip brand
established Atul Brasil Quimicos
took steps to implement projects in subsidiary and
associate companies
Furthermore, our Company undertook more than 250
Key Initiatives
(KIs) in the areas of HR Development,
Systems, Operations, SH&E, Customer Satisfaction,
New Business, Sales, Working Capital and Profitability.
The KIs, some of which have been mentioned on
pages 10 and 11, taken during the year will help us to
strengthen the long-term performance and make our
Company more resilient and robust.
During the year
, our Company completed
capex
of
`
22 crores; of these,
`
12 crores were
for debottlenecking and expansion,
`
7 crores to
enhance SH&E and
`
3 crores for others. Capex of
`
36 crores are still under implementation which will
be capitalized during
2011-12
. We are endeavouring
to unfold the potential of our Company with relatively
small capex, and the more we look within, the larger
we see the possibilities to create value; this will help
us to grow the business disproportionately higher
when compared with the capex | capital employed.
During
2011-12
, we are taking up multifarious KIs to
boost the long-term performance of our Company.
The nature of these initiatives may be similar, but
they are not the same. Our focus to improve the
short-term performance without losing sight of
the long-term growth will remain the basis of our
working. Our
three key challenges
are to improve
the contribution margins so as to improve the quality
of profit, cut down working capital in terms of NoDs
and make the manufacturing operations even more
compatible with environment.
We are endeavouring to pursue several
KIs during
2011-12:
51 to enhance efficiencies
18 to add new customers and enter new
geographies
28 to introduce new products
Overview by the Chairman
Atul Ltd I Annual Report 2010-11