Vinati Organics Ltd. (VINATIORGA) - Chairman Speech
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Company chairman speech
We are happy to report that FY2019 was a milestone year for Vinati Organics as itcontinued to deliver strong results despite bleak macro-economic environment. Today weare a leading speciality chemical company with presence in over 35 countries across theworld. In 2018-19 we delivered a net income of Rs. 1158 crores and EBITDA of Rs. 454crores. Our operating income rose by Rs. 366 crores over previous fiscal to Rs. 1108crores. ROE for the year was 27% as against 18% in the previous year. Further all ourproduct streams demonstrated a robust performance. Our net profit grew by 96% from Rs. 144crores in FY18 to Rs. 282 crores in FY19. The financial performance is a reflection of ourfocus and commitment to provide innovative solutions to our customers. In an evolvingindustrial landscape our commitment towards producing innovative products throughgreen-chemistry positions us differently. As a global market leader in key productsVinati Organics continued to sustain and grow its market share backed by our integratedbusiness model and wide product portfolio.
In terms of product performance our major product ATBS contributed to more than 50% ofour revenue mix. The exit by one of our key competitors Lubrizol further aided thegrowth of market share. ATBS revenue grew by 69% in FY19 as against FY18 and we alsoincreased our global market share in ATBS from 45% to 65% during FY19. In our secondbiggest product IBB we could only achieve a higher single digit growth in volume onaccount of a client's capacity shutdown for brownfield expansion. But with expansion incapacity and rising demand for IBB worldwide we expect a robust double digit volumegrowth in FY2020. Besides this our third largest product Isobutylene and HP MTBEcontinued to post consistent growth and the customised products which were launched in thelast couple of years also stood up to our expectations delivering a robust performance.As regard to crude prices one of the key determinants of our operational cost we arrivedat formula-based pricing contract with our customers. This helped us prevent marginerosions with volatility in crude prices and deliver value to our customers as well. Withsustaining growth as our business strategy we are working towards bolstering our capacityto innovate and serve our customers more effectively. As a result we will increase ourATBS capacity from 26000 tonnes per annum to 40000 tonnes per annum resulting in a capexof Rs. 110 crore. It is expected to be operational by Q2FY20. Further our Butyl Phenolsproject is expected to commission by Q2FY20. With both these projects coming on stream inFY20 we are aiming for doubling our revenues over the next three years.
We continue to invest in new chemistries and processes to develop new products on thefoundation of eco-friendly process. With a high degree of competitive edge andsignificantly low risk to entry barrier of new entrant we remain on track to achieve thetargets set forth in the coming fiscal. In closing we would like to thank our Board ofDirectors the management team and all our employees for their untiring commitment anddedication to serving our customers. Our Board members remained engaged across a varietyof governance committees throughout the year and our employees and executive teamscontinue to work tirelessly to improve our set benchmarks for innovation and quality. Wewould also like to thank our customers and business partners for their continued trust inour company to create value in the coming years.
Vinati Saraf Mutreja
Managing Director & CEO