• Polyplex Corporation Limited is one of the largest global integrated manufacturer of thin PET film operating close to regional markets with supply points spread across the globe.
  • The year under review has seen significant improvement in the operational profitability after adjusting for unrealized FX losses on long term debt due to appreciation in the Euro towards the second half of the year. With market conditions also becoming favourable, the near term outlook looks promising.
  • Higher cash flows from operations and a strong balance sheet provides financial flexibility to access growth opportunities. The Company has commenced construction on a new greenfield facility near Jakarta in Indonesia for setting up the world’s largest width PET film line, an integrated PET resin plant on direct melt technology as also a downstream Metallizer with start-up scheduled for the second quarter of FY 19-20. The Thai subsidiary is also adding a second (third in the Group) silicone coating line to enable further inroads into specific value added applications.
  • The Company remains financially strong and confident about the future of this industry. A geographically diversified presence along with an extensive product offering and a widespread customer base has helped it to ensure higher sustainability in earnings. A new Metallizer in the US, a second Blown Polypropylene film line in Thailand and new Offline Coater in India besides ongoing investments in Holography capacity would start up in 2018 and provide further impetus to operations and margins.
  • Some of the popular, everyday consumer goods that our global-class packaging keeps safe, fresh, hygienic and cost-effective include milk, tea, coffee, potato chips, butter cubes, shampoo, toothpaste, cookies, etc. Most of our products are ‘food safe’, enjoying FDA compliance certifications.
  • Polyplex is among the leading players in the thin PET film packaging business with a globalized asset and resource base. Our current market share is more than 5% in the thin PET film industry which has been retained over the last five years through consistent capacity addition.
  • India is one of the world’s biggest and fastest growing flexible packaging markets. The thin PET film market size in India was estimated at around 433,000 tonnes for FY 2017-18. During FY 2018-19, growth of 10-12% is expected, with similar growth in the flexible packaging industry. The total current capacity of BOPET thin films in India is about 672,000 tonnes per annum with some of the surplus being exported. The Indian BOPP market in FY 2017-18 is estimated at about 400,000 tonnes per annum with a current capacity of 828,000 tonnes. Demand is expected to grow at around 11-13% annually.
  • The Company has a large international presence with active sales in all major regional markets/countries with an extensive base of about 1,700 customers and low customer concentration. Its top-10 customers contributed 24% of revenues in FY 2017- 18. Almost 66% of the Company’s revenues were from PET films (Thin and Thick) in FY 2017-18. Of the total sales of the group, 62% was accounted by end-users leading to further diversification on risk.
  • There is increase in operational EBITDA by 19%. This was mainly on account of higher sales volume and improved value addition as compare to previous year. However reported EBITDA is lower by 4% mainly due to unrealized foreign exchange fluctuation loss amounting to Rs. 4,934 lacs during the current year, in comparison to unrealized foreign exchange fluctuation gain of Rs. 6,805 lacs during the previous year.
  • The break-up of sales and operational income reveals that 66% of the overall revenues are derived from thin/thick PET films (65% in FY 2016-17), 3% from PET chips (2% in FY 2016-17), 13% from coating business (13% in FY 2016-17), 10% from BOPP films (12% in FY 2016-17) and 7% from CPP films/Blown films/other sales (8% in FY 2016-17).
  • The demand supply situation in global PET thin & thick film market has improved during the year and which is expected to further balance out in the near term. However, as some of the new capacities have been underperforming since being commissioned, it is expected that the pace of new investments will slow down over the next couple of years. The demand growth is expected to remain strong. The Company believes that it’s well-distributed manufacturing operations, diversified value-added product portfolio, quality consistency, international customer base, efficient supply chain and a conservative Balance Sheet has allowed it to grow profitably and withstand industry volatilities better.

 

Polyplex Corporation Annual Report 2018

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