Dear Shareholders,
I write to you in the backdrop of a particularly challenging year for
the Indian economy in the midst of recession in the Euro zone, muted
domestic investment demand and limited fiscal and monetary space to
stimulate the economy. Further the hike in crude oil price and the
depreciation of the rupee has also impacted the industry and the
overall business sentiments. The country''s economic growth projections
continue to be scaled down and there are expectations that the year
2012-13 would be the second consecutive year of lowest growth, in the
past decade, as per the latest CRISIL report on the state of the
economy. However, declining global crude oil prices and normal monsoon
are positive factors that would help in improving growth rate. The
interest rate cycle has been reversed by the RBI.
For I G Petro, the PA market was sluggish especially during the third
quarter of the year as the market condition was unfavorable due to
heavy dumping in the local markets. The PA manufacturers association
made a representation to the Government for imposing Safeguard duty on
PA to avoid dumping of PA at cheap rates in order to ease the margin
pressure and achieve sustainability. The Government imposed the
Safeguard duty of 10% ad-valorem during January 2012 for a period of
one year due to which the imports became dearer and the industry
started showing some signs of improvement.
However, despite the challenging scenario and difficult conditions, I
am happy to share that the Company has delivered good performance by
achieving a production of 1,15,673 MT working at 99.62% capacity during
the year as against 1,09,147 MT at 94% during the previous year
2010-11.
Moving forward, we believe that our focused strategy to expand
capacities and our existing strengths will be the foundation for
sustainable future growth. Our planned expansion project is well on
stream and we expect it to be completed within the targeted period of
the first quarter of Financial Year 2013-14. The total expanded PA
capacity would be 1,66,110 MT. The expanded capacity would mitigate
itself against the increasing cost pressures arising out of volatile
raw material prices, thus strengthening our gross margins. The Company
is also exploring certain opportunities to captivity utilize the huge
capacity which would be available after expansion as a forward
integration process and add certain value-added products to de-risk its
existing business.
On this positive note of optimism, before I end, I would like to thank
all members of the staff for their contribution to the Company''s growth
and all stakeholders, bankers for the faith reposed in us. We assure
you of our best and continue to work to deliver value to our customers
and shareholders.
Yours Sincerely,
M M Dhanuka
Chairman
