It is heartening to note that both plants of the Company in Ankleshwar, Gujarat and Vizag, Andhra Pradesh continue to run efficiently. As a result, we have been able to withstand pressures in the market. The Company is now looking to add a third location for a new plant in Andhra Pradesh.
The performance of our automobile electronics business in Europe has been exceedingly good and strategic initiatives have proved to be rewarding. In a span of five years the turnover of this business has increased by over 250%. The bottom line is also showing commensurate growth. In order to expand the business, another plant is being set up in Windsor, Canada to cater to the North American market. The entire automobile electronics business is carried out by APAG Holdings under APAG Elektronik AG.
The Denim plant in Ethiopia is now showing signs of turning the corner. The most difficult issues of labour turnover and inconsistent quality have been largely overcome.
In order to align the product mix to current market requirements, some fresh investments are being made to add a ring spinning section. The Company is also getting into integrated manufacturing by adding garmenting in a small way. The losses of last year are much lower than previous years and further improvement is expected next year.
Moving forward, I am optimistic on the future course of economic developments and combined with our initiatives I also remain confident about the Company''s performance in the coming year.
I am grateful to the dedicated team in the Company and all its subsidiaries who have untiringly worked in challenging circumstances to bring back the Company into a profit on a consolidated basis.
R. V Kanoria Chairman & Managing Director
The global economy is picking up with significant improvement in global trade and investment recovery in advanced economies.
The Indian economy continues to improve its growth trajectory. This is reflected in improvement in trade and strengthening private investment. Inflation has been under check and the new fiscal environment promises good dividends.
We, however, have to remain cautious about the rise in oil prices which creates a negative pressure on the balance of payments and could lead to pressure on the value of the Rupee.
The majority government at the Centre is in its fourth year. During this time it has taken significant steps including rationalization of taxation. It has also effectively tackled the long pending issue of nonperforming assets in the banking sector. The introduction of Goods & Services Tax (GST) and the Insolvency & Bankruptcy Code (IBC) will have far reaching positive impact. Both the GST and IBC are, however, in a nascent stage and the government has to be sensitive to make sure that required modifications and corrections are done timely and effectively.
During the year under review, the performance of the Company remained under pressure. The future, however, is looking much brighter. The chemicals business suffered from fluctuating commodity prices, particularly in inputs required for the products of the Company.