It is that time of the year again when I have the privilege of apprising you of the activities during the year gone by.
I am happy to announce that with your good wishes, your Company has maintained a steady performance.
During FY18, the Company’s Consolidated Revenue was up 5.3% year-on-year at Rs.2,424 Crores (exclusive of excise duty recovery) and Net Profit at Rs.171.6 Crores. Despite the temporary setback during the GST roll out and implementation in India and the challenges that are an integral part of any expansion project (Wada, Vapi - injection moulding & Colombia), the Company has maintained its growth trajectory and has charted out a strategic roadmap, that besides helping sustain and boost growth, is also conducive to adapt to the changing needs of customers and business dynamics. “Customer Centricity” being one of our core values is always the pivot of our innovations, processes and technology.
Two major developments in recent times pose both challenges and opportunity for us - challenges in the short term; opportunities in the long term.
The first is the call for ‘Sustainability’, which we are continuously addressing, the latest being our “sustainable innovations” Etain and Green Maple Leaf, details of which have been communicated earlier. The call for sustainability has reached new heights and now includes finding solutions for disposal of waste generated as well as handling the material post use. The social and legal obligations on the manufacturer and Brands to ensure eco-friendly waste collection and disposal is increasing by the day. For us, this means handling our laminate and tube scrap, and the best way for this is to recycle them; recycling helps recover valuable material besides trying to make it economically viable.
Our Plastic Based Laminate poses no problem for recycling since it consists only of polymers. It is the Aluminium Based Laminate (ABL) that poses a challenge since it has metal (aluminium) and polymer. We have been working on finding a solution for recycling ABL for 3-4 years now and I am happy to inform you that your Company is once again “first mover”; we have identified a process and technology that will facilitate electrostatic separation of polymer and metal. As a result, the polymer and metal can go into their respective recycling chains without any degradation during the process of liberation, without the use of heat or chemicals. We have christened this Project “Liberty”. It will be rolled out in India this year and subsequently to all our units. Later, we propose to offer the facility to our customers, should they want us to re-cycle them after the end of the consumer cycle.
The second challenge is the new flourishing business form - E-Retail or E-Commerce. It is a big disruptor globally as far as supply-chain is concerned. The established brands are struggling to compete with the mushrooming new brands, that just launch themselves on the e-commerce platform. They are gaining quite a bit of market share thanks to the advancement of internet and online technology. The tech savvy millennial population and Gen X are active on social media with a natural propensity to try new products, buying them online from e-commerce sites. This trend causes volatility and uncertainty in the offtake of existing brands in traditional forms of business on the one hand, while the newer ones on e-platform gain currency. The established players are grappling with the need to understand the on-ground scenario and find a solution to respond to the disruption caused by e-commerce. For us, this volatility makes the forecasts given to us by our Customers less reliable. Volatile forecasts and established Brands losing market share gives rise to need for us to fill in the gap in volumes. The mushrooming new brands on the e-commerce platform provides us ample opportunity.
However, to take advantage of this, we need to introspect - go into a self-disruption mode to change the way we do business, because here, speed to market is the essence. We have deliberated the situation internally and have begun working on solutions that will help us gain share and to be ready for the future, when e-commerce retailing becomes a way of life. The plan of action involves identifying bottlenecks and if need be, changing some of our processes and/or adapting technology to debottleneck production and be able to respond faster to changing needs of existing customers as well as prospective new ones. Our front end teams need to coordinate with the established Brands and give them their requirement while at the same time, meet with and evaluate opportunities with the new brands emerging owing to change in the delivery system viz. new market place, referred to as e-commerce.
In short, we need to be Lean, Hungry and Fast to stay ahead. We must change the rules of the game - do what it takes to accelerate speed of seizing new opportunities and executing them.
The entire organisation is fully charged up and I am confident that together, we will meet the targets we have set for ourselves. “THE OLD ORDER (TRULY) CHANGETH, YIELDING PLACE TO NEW....”
I would like to thank our valued Customers, Suppliers, Bankers and all our Stake holders including the Shareholders, for their continuous support in all our endeavours, the Board of Directors for their guidance and encouragement, Esselites across the globe for their never-say-die attitude and commitment, all of which have contributed to the growth of your Company.
Chairman & Managing Director