Praj Industries

Shaping the Future
 
 Shaping the Future is all about managing migration from the well
 trodden path onto a new one.  During 2007-08, Praj has done just that
 -we have been engaged in future defining actions - putting technology
 to the test; global aspirations into action; networking and increasing
 our area of influence; enhancing customer value, and most important, we
 have focused our energies on to a single thought - applying
 biotechnology/science/bio based technologies for a sustainable future.
 
 Our recently inaugurated advanced R&D facilities, Matrix-the innovation
 centre, is a testimony to our investment into the future. We did not
 just equip it as a state-of-the-art centre of innovation, but we also
 achieved breakthroughs in next gen biofuels technology.
 
 The next generation biofuels do not merely attempt to overcome the food
 vs. fuel debate, they also demonstrate how scientific temperament in a
 society/corporation can overcome the issues facing our planet.
 
 In fact, we have a slightly different take on this debate - we feel it
 should be food and fuel rather than food vs. fuel. There is a
 tremendous synergy between the two sources of energy - one for human
 consumption and another for transportation. In todays connected world,
 both are equally important. While one is for survival, the other is for
 livelihood. In order to transcend the debate and work on the same side,
 we should go beyond the rhetoric to look at how we can make the two
 seemingly conflicting ideas work as one. We have used technology to
 play this role.
 
 Technology is a great equalizer. Technology provides sustainability.
 The common philosophy of sustainability wherein reduce, reuse and
 recycle has been employed by the biofuels industry over the years. It
 also forms the tenet of all our processes and actions.
 
 We extended ourselves beyond our scope to accord sustainability through
 our understanding of feedstocks. Our plan to set up an energy crops
 group is guided by our concern that technology should actively promote
 agriculture. Many efforts have been made earlier in this direction with
 good results around the world.
 
 This also enables us to increase our area of influence thereby enabling
 us to shape the future which is more sustainable. We have made a
 beginning in Philippines and in Mexico where we are working with
 Government Agencies to arrive at solutions which will help both,
 agriculture and biofuels.  Apart from that we work with various
 Companies to find solutions to feedstock issues.
 
 Shaping the Future is also about assuming responsibility for it, or
 taking a leading position for it. Our leadership emanates from our
 global aspirations, directing our actions to attain this status. Today,
 we have a presence across more than 40 countries in all five
 continents. In Europe and Brazil, we have partnered global Companies
 from that region and in USA we have acquired a Company. Our pride lies
 in the fact that we are able to understand customer requirements and
 serve customers in diverse geographies.
 
 In doing all this, we would like to remind ourselves that our customers
 remain a significant part of our success. In fact, our repeat business
 continues to be in the region of 30%. It speaks volumes for our
 customer satisfaction rating. We dont plan to rest on our laurels.
 Customer satisfaction is a continual process. The closer we work with
 our customer, the better we are at adding value to their business. Our
 investments into R & D, in expanding our manufacturing capacity,
 setting up a workshop closer to the port, internal initiatives towards
 value engineering and the sheer resource base in terms of manpower
 (which is one of the largest in this industry), is testimony to our
 commitment to customers.
 
 As we move on towards our 25th Anniversary year, I would like to bring
 in more transformations in our corporate fabric. I would like for PRAJ
 to enhance its activities as a good corporate citizen - a caring
 organization which will improve quality of life for everyone and above
 all work towards a greener and cleaner environment. We have made some
 beginnings. We would now like to take it forward in a big way.
 
 In time to come, Praj will explore the frontiers of bio based
 technologies which will create a lasting differential for the Company.
 Our work with cellulosic ethanol is a beginning towards this end.
 Industrial Biotech holds great promise. During one of my discussions
 with Vinod Khosla, who is also an investor in my Company and a biofuels
 evangelist, he mentioned that technologies which are closest to natural
 phenomenon or have elements of bio-mimicry are the most sustainable.
 
 Industrial processes have a tremendous scope to move closer to nature.
 And biotech is one way to get there. Industrial biotech, I feel, is as
 yet unexplored - Playing second or even third fiddle to other - biotech
 streams. We should recognize that the time for white biotech to assume
 its greater responsibility is now, when the world is grappling with
 different challenges, the biggest of them being global warming.
 
 What has fascinated me about biotechnology and its application to
 industrial process is the fact that it can be integrated with multiple
 disciplines and can bring out the most optimum solution.  We have been
 doing some of this with ethanol and now with biodiesel. We would now
 like to take this forward.
 
 I would like to see PRAJ drive itself with new energy and vigor.
 Transform itself into a powerhouse of process solutions through
 innovation and a constant search for sustainable ecosystems which will
 shape the future.
 
                                                   Pramod Chaudhari
                                                 Executive Chairman
 
 Pune, May 2008.