Total Revenue from continuing operations for the year ended 31st March, 2018 aggregated to Rs. 135,762 lakhs as against Rs.123,339 lakhs achieved during the previous year. Profit after tax from continuing operations for the year ended 31st March, 2018 was Rs. 8,583 lakhs as against Rs. 8,596 lakhs earned during the previous year. Pigment sales increased from Rs. 110,007 lakhs in the previous year to Rs. 131,148 lakhs in the year under review. Profits for the Pigment Division for the year under review amounted to Rs. 14,741 lakhs as compared to Rs. 14,449 lakhs of the previous year. Agro Sales for the year ended 31st March, 2018 amounted to Rs. 11,634 lakhs as against Rs. 14,453 lakhs achieved during the previous year. Profits for the Agro Division for the year under review amounted to Rs. 336 lakhs as against Rs. 507 lakhs for the previous year. As on the date of adoption of accounts, the Agro Chemical Trading Business and the investment in Wholly Owned Subsidiary, Prescient Color Ltd., have been classified as “Held for Sale / Discontinued Operations”.
Your Company continues to view focus on export markets. Initiatives are directed towards engaging with overseas markets with a view to testing and demonstrating international competitiveness and seeking profitable opportunities for growth. Revenue from pigment exports for the year ended 31st March, 2018 amounted to Rs. 60,603 Lakhs as against Rs. 50,660 Lakhs for the previous year
Pursuant to the decision of the Board of Directors, at its meeting held on 1st June, 2018, the Company has entered into a Share Purchase Agreement with Americhem Inc. USA to sell the entire shareholding in its Wholly Owned Subsidiary, Prescient Color Limited for an “Enterprise Value” of Rs. 11,700 Lakhs. The Equity Value for sale of shares on “Closing Date” is Rs. 10,228 Lakhs.
The Board of Directors in its meeting held on 27th June, 2018, have in-principle approved the transfer of Agro Formulation Brand Business for a fixed consideration of Rs. 700 Lakhs and a variable component in terms of royalty payable on sales. The modalities for this transaction are being worked out.
Your Company today, is the leader in Pigment manufacturing in India. Over the last many years your Company has seen good growth by developing a portfolio of world-class Pigment Products. During this period, your Company’s Gross Turnover and post-tax profit have recorded good growth. Return on Capital Employed has also improved. Total Shareholder Returns, measured in terms of increase in market capitalisation and dividends, have grown significantly in past few years in terms of efficiency of servicing financial capital.
The Company aims to closely associate with its Customers and increase operational and technical excellence, while pruning costs. Research and Development will also play a bigger role in improving the competitiveness through innovations.
The Company’s overseas subsidiaries in Netherlands, North America, Mexico and Shanghai are fully geared up and will play a major role in achieving quantum growth in sales and profitability thereby pushing exports. This among other measures will help the Company consolidate its position further as a reliable global player in the Pigments market. Barring any unforeseen circumstances, the current year’s prospects look favourable.
As the largest producer of pigments in India, Company manufactures an extensive range of Organic, Inorganic and Effect Pigments and dispersions catering to the Coatings, Plastics, Inks and Cosmetics Industries worldwide. The product offerings include recognized brands such as Sudaperm, Sudafast, Sudacolor, Sumica and Sumicos. Company’s development focus is on high performance pigments mainly for automotive coatings and engineering plastics that are produced in state of the art manufacturing facilities at Roha and Mahad. In line with the Company’s strategy to focus on its core business it has been decided to discontinue the operations of the Agro Chemical Division.
The Company is leader in the domestic pigment manufacturing industry with a 35% market share. The Company’s Pigments are exported to most of the discerning markets in Europe, America and Asia. There is an excess capacity for the manufacture of commodity pigments worldwide. This results in intense price competition in the commodity segments market. The China factor also continues to affect the Pigment industry.
The Pigments market is expected to grow due to demand for aesthetic consideration in industries such as paints and coatings, constructions, automobiles, etc. Pigments are widely used in these industries as a colorant which also protects the surface from weathering and corrosion. Moreover, pigments ability to enhance visual attraction and surface finish will generate profitable scope for pigments business over the next few years. However major economies continue to face deceleration in growth. Further on account of excess capacities, countries like China may resort to dumping of products in Indian markets to the detriment of the Indian Pigment Industry. The positive factor for Indian Pigment industry is the demand for its products is largely driven by domestic market and considering very low per capita consumption ratio holds promise.
The Company is gearing itself for sustaining its market position by adjusting to the market environment through improved service levels and continuous emphasis on cost management. The Company’s strategy of setting up sales offices to cater to European and North American customers is expected to give further push to Pigment exports as the Company is better equipped to understand and comply with customer preferences. The Company has also set up a Marketing / Sales Office in Shanghai, China to locally source raw materials and among others to cater to the requirements of Asia Pacific customers. The Company’s direct Subsidiary, Sudarshan Europe B.V. has formed a Wholly Owned Subsidiary in Mexico by the name Sudarshan Mexico to cater to the requirements of customers. As a consequence of all these actions, the Company expects better results during the current year.