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SRF Chairman's Speech > Engineering - Heavy > Chairman's Speech from SRF - BSE: 503806, NSE: SRF
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SRF

BSE: 503806|NSE: SRF|ISIN: INE647A01010|SECTOR: Textiles - Manmade
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Chairman's Speech (SRF) Year : Mar '18

Dear Shareholders,

I am delighted to share with you the events and developments of your Company during the course of Financial Year (FY) 2017-18. The overall performance of your Company has witnessed a healthy growth and we continue to do well in most of our core businesses, keeping in mind the dynamic domestic and global macroeconomic environment. In FY 2017-18, India’s economic performance remained resilient. The introduction of the landmark Goods and Services Tax (GST) brought in some uncertainties as businesses adjusted to the new regime. This however, did not take long, and from the fourth quarter onwards, signs of growth returning were evident.

Further, the International Monetary Fund (IMF) expects economic activity to strengthen through 2018 in both advanced economies as well as the emerging markets. SRF faces this changing environment with optimism.

At the Business level, FY 2017-18 demonstrated yet again, the strength of our strategy, to enhance our manufacturing prowess, maintain strong quality systems and be at the forefront of innovation in India.

Our continued investment in facilities further augment our market reach and complement India’s growth story. While doing this, we continue to offer our employees an enriching career and forums to enhance their skill sets and capabilities, making them ready for the future. Being responsible fiscally and environmentally is something that shapes our identity and secures our future.

In the year gone by, we continued to strengthen our market share in the Fluorochemicals Business and remain the largest producer in India. During the year, we witnessed a steady transition from HFC-22 to increasing usage of HFC blends and HFC 32. We have been at the forefront of leading this revolution in India. I am glad to share that your Company entered into a definitive agreement with a Global player to acquire its HFC 125 assets at a value of around USD 10 million. This acquisition is in line with our overall fluorine-based refrigerants strategy and showcases our endeavor to continuously invest in products for the future. With this acquisition, we will now have the unique advantage of manufacturing all three major HFCs - namely, HFC 134a, HFC 32 and HFC 125, which will be marketed under the Company’s FLORON® brand. The capacity of AHF, which is a basic raw material for most of the HFCs is also being increased to cater to future needs. These investments will help SRF become a fully backward integrated player and nearly double our existing HFC capacities. We also successfully filed the Drug Master File for Dymel’s HFC 134a pharma gas with the US FDA. During the year, we successfully commissioned the Greenfield Chloromethanes plant at our Dahej complex with a capacity of 40,000 MT per annum using our inhouse technology. Here, we have effectively doubled our capacity and are now one of the largest producers of Chloromethanes in India. I am also glad to share that this newly commissioned plant has already achieved hundred percent capacity utilization during the year.

About the Specialty Chemicals Business, the overall sentiment in the global agro-chemical industry remained subdued and impacted our results. However, we have seen visible green shoots in the sector, which we believe signals an uptick in the industry. We continue to strengthen our capabilities further in this segment. During the year, we successfully commissioned new plants of MPP3, amongst others. Going forward, we will continue to focus on the commercial conversion of new products developed in both pharma and agro segments in the next couple of years. We have built an excellent facility at Dahej, backed by strong R&D, manufacturing and skilled talent and the funnel remains strong and robust, ahead of the expected revival of the industry. We have currently filed 135 patents, of which twelve have been granted. I am also happy to share that your Company’s Bhiwadi facility was conferred the 23rd Bhamashah Award 2017 by the Government of Rajasthan for significant contribution in the field of primary and elementary education along with infrastructural development of schools in the state. Our sites at Bhiwadi and Dahej also received permission to use the Responsible Care logo from the Indian Chemical Council.

In the Technical Textiles Business, we saw good traction with our customers in the Tyre Cord Fabrics segment as we continue to focus on increasing cost efficiencies through a judicious management of raw materials and inventories. We have also seen some positive initiatives by the Government of India to safeguard the interests of domestic players. In Belting Fabrics, we continue to focus on delivering superior products with the help of our strong R&D DNA, which has yielded fruitful results for your Company. In Coated Fabrics, we maintained our market share of more than 50% and in the Laminated Fabrics segment, we continue to maintain price leadership and supply the best quality products in the market. I am also glad to share that our Technical Textiles plant in Rayong, Thailand was awarded the ‘Green Star’ award for the 3rd consecutive year by the Government of Thailand. It is a recognition of the sustainable efforts towards safety, protection of the environment and care for the community that your Company practices.

As we continue to deliver excellence to our customers and stakeholders through investments in our manufacturing facilities and building stronger partnerships, I am glad to share that our Packaging Films Business’ newly commissioned Bi-axially Oriented Polyethylene Terephthalate (BOPET) films and Bi-axially Oriented Polypropylene (BOPP) films plants at DTA, Indore have been fully utilized in the year. In fact, all our domestic facilities operated at optimal levels despite challenging external environment. Our South Africa and Thailand facilities also performed well during the year. We continue to focus on efficient utilization of raw materials, set new benchmarks of being the lowest cost producer and further optimize the product mix towards innovative, value-added products. FY 2017-18 has been a year where we have invested significantly in our capacity build-up and in this regard, I am extremely pleased to inform you that your Company has recently announced the setting up of a new BOPET line and Metallizer plant in Hungary at an approximate investment of Euro 60 million. Europe’s imports of BOPET films is significant and our large customer base will help us generate traction as a local supplier.

Your Company, as a part of its CSR, continues to engage with its communities and work on some of society’s most pressing issues. SRF Foundation took concrete steps in compliance with Section 135 of the Companies Act, 2013 during FY 2017-18 and expanded its work in the identified areas of education, vocational skills, natural resource management and affirmative action on a sustainable basis.

Summing up, I believe your Company has maintained its growth momentum last year setting new records of performance and operational excellence. Given the present economic indications and the plans developed for the future, I am confident that your Company will continue to better its performance in the coming years.

I would like to express our gratitude for your confidence in us. I would also acknowledge the unfailing support of our extended family of customers, dealers, suppliers, financial institutions and partners, which has been a major source of inspiration to your Company. Finally, my sincere gratitude to the employees of SRF who make these dreams come true.

Sincerely,

Arun Bharat Ram

Chairman

Source : Dion Global Solutions Limited
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