Ladies and Gentlemen,
It is less than 12 months that I stood here welcoming you all to the Silver Jubilee AGMof your Company- a milestone we all are proud to have attained, a feat that has filled meand the whole JMT Family with a renewed fervor and zest to scale new heights and reach newmilestones. With a sense of gratitude for your unwavering support in this long journey, Iwelcome you all to the 26th Annual general Meeting of your Company.
We all know the year 2012 has been very tough for the Auto Industry as a whole with asignificant slowdown in this segment due to several factors ranging from rising oilprices, high inflation and overall pessimism hovering over the Indian economy. The globalslowdown has hit the Indian Auto Industry and Auto Component Industry resulting in a bleakgrowth rate. Your Companys turnover has gone down by 16% compared to last year.
But the worst is over, we have hit the base and the only road ahead is an ascendingone. India is already in the process of becoming the destination of choice in the worldfor design and manufacture of automobiles and auto components.
Global OEMs are reaching out to Indian Auto Component manufacturing Companies at a fastpace. Companies proactively prepared with world class technology and highly skilledmanpower will definitely gain huge scope for growth and expansion.
The growing scope has also thrown up major challenges for the Indian Auto ComponentIndustry. Some of the major challenges include greater competition in domestic as well asexport markets, integrating into the global supply chain, quality level, low overalltechnology capability in terms of product design & development, and manufacturing& associated technologies in the value chain etc.
The concept of attaining competitiveness on the basis of abundant and cheap labour,favourable exchange rates and concessional duty structure is becoming inadequate andtherefore, not sustainable.Domestic auto component manufacturers are increasinglycomplying with the internationally accepted quality standards like six sigma, ISO,etcwhich has caught the attention of global OEMs.
Increasing number of global OEMs are moving substantial part of their manufacturingoperations to India so as to make India their export base. This will provide opportunityfor domestic component manufacturers to expand their clientele as well as presence.Further, it will also provide opportunity for domestic manufacturers to become a part ofglobal supply chain of these OEMs.
The need of the hour is technology upgradation and development coupled with skilledmanpower adept at multitasking, at all levels. Auto component companies with atechnological edge, global scale advantage or an identified and exploitable niche willhave better prospects in the current market.
With this aim, your Company has proposed to avail External Commercial Borrowing of USD9 million from International Finance Corporation, a member of the World Bank Group, to setup Automated Press Forging Plant at Adityapur. The new plant involves environmentally safeprocesses and much higher level of precision in its end products, requiring negligibleamount of machining post-forging. This is bound to give us an edge over our competitorsand enhance our production rate significantly.
Companys business strategy for FY 2013-14 includes procuring new and bettermachines, and hiring skilled manpower to achieve significant growth and improvement inrate of production and minimize rejections and losses.
Your support and encouragement is needed to surmount the flux of the market and to meetthe new challenges posed by the changing scenario of the Auto Industry. I take thisopportunity to convey my thanks and acknowledgement for the co-operation and assistanceextended by the Central Government, State Government, Financial Institutions, theCompanys Bankers, dealers and suppliers. I also sincerely appreciate each and everymember of the JMT Family for their sincere and committed contribution to the sustainedgrowth of the Company. May we have a more rewarding year and may we meet with betterfinancial performance of your Company. My best wishes to all of you.
Thank you for your presence and patient listening.
Rajeev Singh Dugal