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Message from Chairman
From the Chairman to: the Members of Thirumalai Chemicals Limited Dear Members,
I am happy to share with you your Company''s Annual Report for FY-19.
FY-19 was not as good as the previous year. We started with a strong first half, with excellent performance all through. From the 3rd Quarter onwards there was a reduction in demand and our margins. The sharp fall in crude and commodity prices across the board led to a number of issues. As a result of price volatility, our customers reduced buying for fear of trading loss, and this affected our revenues. Thus for H2 the results were poor as you would have noticed.
We have taken up this opportunity to initiate a cost reduction exercise across the Company. This will be an ongoing effort and we hope to see results from next year.
In Q1 of the current year FY-20 volumes and margins have improved. There has been large imports of PA our main commodity product from Far East - some of this is off-spec product and hazardous.
Unlike Europe, US and many other developed countries, India has poor protection against off-spec imports. The government has been made aware of this and are taking steps to protect the end consumer.
About 18 months ago, we started a major revamp of our plants to introduce newer technologies which will reduce cost, improve safety and performance. Your Company had to carry out this when most sections of the Plant were operational and hence a difficult exercise.
This major project has been completed and we will see contributions from about September. This was done entirely from internal funds.
The expansion project at Dahej received approval after a long delay; we were able to start construction only recently. We expect to complete by the end of this year and see initial results the next year. This plant located very close to our customers would reduce logistics and input costs; and will be an important hub for our future growth.
Our subsidiary in Malaysia had experience similar to ours in H2 in terms of a slack. Again their business started recovering in Q1.
They have recently completed their Maleic Anhydride (MAn) derivatives project and have just started commercial production. Their cash flow continues to be good. The management of the subsidiary went through a complete overhaul and they are working hard to deliver good performance; they are also planning on a project for further capacity growth in their core product MAn.
The ongoing trade war between the US and China is creating significant volatality. We are very conscious of the risks and gearing up to meet them.
The proposed Fine Chemicals / Food Ingredients project of your company in the US is in the final stages of approval. We hope to start engineering in the next few months.
We have to be ready and we are ready to handle the increased uncertainty and risks that all businesses are facing.
We can look forward to the future with confidence: Your Company''s Balance Sheet is robust. Our Company has an excellent reputation; we are technically and commercially competent; your Company''s employees at all levels are united in the effort to excel and have the guidance of an outstanding Board.
I request you to go through the report and send your queries by email to chairman.1920@thirumalaichemicals. com.
I invite all members to join us at your company''s AGM on the 25th July, where we can receive your guidance and suggestions.
Chairman of the Board of Directors
Thirumalai Chemicals Limited