The financial year 2006-07 for DNL was quite eventful and challenging.
I am grateful to the shareholders for their trust and support shown by
the way of subscription of rights issue. The funds raised were used for
acquisition of diamino stilbene disulphonic acid (DASDA) business of
Vasant Chemicals Limited. The Rs 55 crore acquisition will enable DNL
to move up the value chain in its nitro toluene business as well as to
expand its international market presence. This is one of the most
significant acquisitions and will undeniably enhance shareholder value.
The acquired business has been named as Hyderabad Specialities
Division - DNL, and we will introduce newer technologies there to add
value and improve return on assets.
The company is expanding its horizons by de-bottlenecking its
operations and putting up one more multi-purpose nitration stream at
Vadodara. This shall enhance the total capacity of nitration to 45,000
tonnes. Newer fine chemicals for pharma are also being planned at
Vadodara and Roha. We have also set up a multi-purpose pilot plant at
Roha to develop a wide range of fine chemicals. During the year we have
successfully implemented Enterprise Resource Planning software which
would be instrumental in better and faster decision making.
While we have made significant strides towards a better future, the
price-driven competition from China has been at its worst. Though we
have been able to retain or increase our market share, the
profitability has suffered. On the positive note, the prices seem to
have bottomed out and have started inching upwards. In order to improve
our long-term competitive position, we have conducted a detailed
scrutiny of all our business processes from efficiency viewpoint. We
have taken a range of targeted measures to raise efficiency and reduce
cost. Hence a combination of improved external environment and internal
measures to boost efficiency should augur well for the future.
I wish to place on record my appreciation of the commitment and hard
work of all our employees. I am also grateful for continued support of
my colleagues, our customers and business associates and above all the
shareholders and members of the Board.