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Omkar Speciality Chemicals

BSE: 533317|NSE: OMKARCHEM|ISIN: INE474L01016|SECTOR: Chemicals
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Chairman's Speech (Omkar Speciality Chemicals) Year : Mar '15
Dear Shareholders:
 
 It gives me comfort to share with you that OSCL is continuing its
 journey on the growth path. Despite of all odds and challenges, the
 Company has been able to report a steady performance in the year
 2014-15.
 
 The Global Speciality Chemicals industry size is pegged at around USD
 740 bn as per FICCI Speciality Chemical Report and 12th 5 year plan
 document accounting for roughly 22% of the Global Chemical Industry in
 general. Asia Pacific and Middle East countries are expected to
 contribute to the bulk of the future growth for this sector. The Indian
 Speciality Chemicals segment has emerged as one of the key beneficiary
 of high growth in end user industry and growth is likely to accelerate
 as India gains advantage over China.
 
 As you are aware, OSCL has embarked upon the expansion of its
 capacities at various locations to cater to the increasing demands for
 its existing products as well as the new products which have been
 developed. Significant amount of capex has been done and practically
 all the Units of the Company including its subsidiaries have gone into
 operations except Unit No. V at Chiplun which is awaiting Environmental
 Clearance from the State Government.  The proposal for this consent is
 now at fairly advance stage and we are quite hopeful to receive the
 clearance very shortly. This will enable the Company to enhance its
 capacities further to a significant extent during Current Year i.e. in
 FY 2015-16 itself.  Further the delay in getting this clearance has
 resulted into delays for commissioning of this project and the
 Company''s performance has been affected appreciably on account of the
 same.
 
 Another issue faced by the Company was the continuing fall in the price
 of Iodine which happens to be one of the major raw- material for
 production of Iodine Derivatives which form almost 45-50% of
 Company''s revenues. Even though the Company observed a volumetric
 growth of about 16% in production of these products, the topline
 achieved from this segment declined considerably.
 
 The stressed Working Capital cycle was one another concern for the
 Company, which was highlighted in the Annual Report of FY 2013-14. The
 management had taken this as a major task and the Company has closely
 monitored the receivables as well as inventory levels and had taken all
 necessary steps to control the same. I am extremely happy to share with
 you that the Company has maneuvered this task very effectively and the
 Working Capital cycle has been brought under a control to a great
 extent.  The management is confident to further improve upon this in
 coming quarters.
 
 Despite the set-back received in the business in Iodine derivatives
 segment, the Company was able to post good profits mainly on account of
 launch of niche speciality molecules and growth in its API business
 which offer better margins.
 
 During the Current Year i.e. FY2015-16, the focus of the Company will
 be to target products which will strive to yield better profitability
 as the fungibility of the facilities enable us to decide the product
 mix of our choice to maximize our gains. The management has also taken
 initiatives to cut down on various operational costs including the cost
 of finance.
 
 Another important area which will help the Company in value addition is
 the Company''s drive to go for backward and forward integrations of
 its value chain of products. These initiatives are making the Company
 fundamentally strong which will lead to sustainable growth in immediate
 future.
 
 On behalf of the Board, I would like to thank all the stakeholders and
 I greatly appreciate your continuous support and faith in OSCL.
 
 Sincerely, 
 Pravin S. Herlekar 
 Chairman & Managing Director
Source : Dion Global Solutions Limited
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