BCL Industries Ltd

Ready for further growth

It is my absolute privilege to share with you the Annual Report for the financial year 2023-24. Since my current tenure as independent chairman of the Company had ended, this will be my last message to all our esteemed shareholders. I pen down my thoughts for the year gone by, I feel extreme joy to share with you that this has been yet another successful year for us. We have fortified our position as one of the largest agro-processing manufacturing companies in India, celebrating milestones in our different business verticals. While macroeconomic challenges rattled the global landscape, businesses worldwide faced a multitude of challenges in the past year. The pervasive impact of an impending recession, prolonged geopolitical tensions, accelerating climate emergency, supply chain disruptions, escalating raw material and fuel costs have roiled the operating environment. Nevertheless, the Indian economy demonstrated remarkable resilience in the face of adversaries, driven by prudent monetary policies by the Government of India, healthy consumer demand and a robust macroeconomic framework. Similarly, at BCL, we maintained a profitable year, embracing growth opportunities and improving our margins.

The Indian liquor industry is one of the fastest-growing beverage markets worldwide. Additionally, Indian-made Indian liquor (IMIL) contributes almost two-thirds of India's alcohol revenue. The current market presents remarkable growth opportunities for us. With the alcoholic beverages sector allowing 100% foreign direct investment, it has created a favourable environment for our business growth. Our country liquor portfolio comprises popular brands such as Green Apple Vodka, Ranjha Saunfi, Asli Santra and Punjab Special Whisky. In addition to this, we also supply

ENA to prominent brands such as Pernod Ricard, Amrut, ABD and Mohan Meakin. With the increase in demand for alcoholic beverages, our sales figures for IMIL are impressive, with 2,78,291 boxes sold in Q4FY24 itself and total of 12,33, 228 boxes sold in FY24. Leveraging our expertise in the market, we aim to capitalise on the growing demand for whisky, vodka and gin and steadily diversify our prospects. Moreover, we anticipate that India's burgeoning population, rising disposable incomes and evolving lifestyles will also substantially contribute to our expanding customer base. Also, governmental measures, such as the exemption of ENA from GST in the alcohol industry, are expected to play a pivotal role in bolstering our growth trajectory.

At BCL Industries, we always aim to pursue sustainable growth, catering to the dynamic needs of today without compromising the possibilities of tomorrow. We are charting our future path through innovative differentiation and strategic expansion, envisioning a new era of growth and progress. Our diversified product portfolio is a testament to our commitment to delivering enhanced value to our stakeholders and fostering sustainable development. While our state-of-the-art vertically integrated manufacturing facilities are equipped with world-class technologies and unparalleled capabilities to enhance product quality. Our business model is built on multiple unique selling points (USPs). Our expertise in grain procurement has helped us to transcend beyond traditional FCI rice-to-ethanol operations. Our focus on ENA and ethanol productions offers distinct advantages. While it is difficult to obtain license for ENA, barring the entry of new market players. on the other hand, ethanol benefits from strong regulatory support. In addition to this, our low-cost production capabilities, including our paddy straw fuel initiative, offer a cost-saving of INR 3-5 per litre. In FY2023-24, we have diligently focused on reducing debt and managing it under the interest subvention scheme. This strategic approach helped in maintaining a strong balance sheet, ultimately creating enhanced value for our shareholders. We also implemented strategies to improve our EBITDA margins and ensure an overall stable financial performance to combat our decline in production this year.

The report year observed BCL Industries undergoing significant expansion, particularly in our Bathinda distillery. We have not only doubled our capacity from 200 KLPD to 400 KLPD, we have also established a new 100 KLPD plant at our Svaksha Distillery in Kharagpur, West Bengal. While these expansions empowered us to meet the growing demand of our consumers and enhanced our flexibility to manufacture both ENA and Ethanol, our distillery unit at Bathinda also maintained an impressive 100% capacity utilization rate in FY 2023-24, reflecting the robust demand for both ENA and Ethanol in the market.

In a move poised for future growth, we have undertaken the initiative to establish a 75KLPD Bio-diesel plant in our Bathinda Unit during the fiscal year 2024-25. This plant will utilize maize oil extracted during ethanol production from maize, facilitating both forward and backward integration in our current ethanol process. This is a strategic move to streamline our process, bolster efficiency and further add value to our maize ethanol.

Looking ahead, we have ambitious plans to elevate our distillery capacity to 850 KLPD by the end of financial year 2026.

BCL Industries has always positioned itself as a sustainable business organisation, supporting the economy and driving the adoption of newer technologies and sustainable raw materials. Our commitment towards fostering a greener tomorrow encourages us to preserve the environment and enhance the quality of life for the communities we serve. We integrate corporate social responsibility initiatives into our business strategy demonstrating our commitment to societal well-being, reinforcing our reputation as a responsible corporate citizen. In our quest to cultivate a better tomorrow, technology has always played a crucial role in our growth. We have always remained at the forefront in investing in technology, solidifying our commitment to sustainability and economic development.

At BCL, we are committed to leading by example in innovation, driving growth and progress through our forward-thinking approach. With a legacy that spans over four decades, we strive to contribute towards building a more resilient and prosperous India. As India undergoes energy transition, we are strategically positioned to reduce the country's crude import bill. We are one of the largest manufactures of grain-based ethanol in the nation. Our business model aligns with the Government of India's policy for promoting indigenous grains and supporting farmers. With the Government introducing Ethanol Blended Petrol (EBP) programme to achieve 20% ethanol blending with petrol by ESY 2025-26, we are poised to capitalise on this lucrative opportunity. We are well-positioned to contribute to building a stronger India. With our business operations, we can contribute to India strengthening fuel security and facilitate the transition to a low-carbon economy.

Our foundation to our success has been laid on our commitment to ensuring customer satisfaction and building strong brand loyalty. We prioritize delivering high quality products and services consistently, exceeding customer expectations and meeting evolving market dynamics. We essentially incorporate strategic initiatives to not only satisfy our customers but also cultivate long-term brand loyalty.

We uphold the highest standards of corporate governance and ethics through a comprehensive framework anchored by several key pillars. In addition to this, we have a proficient Board of Directors, providing independent oversight and strategic guidance. As we move forward, we remain committed to stringent compliance with laws, rules, and regulations, ensuring ethical conduct across all operations. Lastly, I would want to conclude the message by acknowledging the invaluable contributions of our employees who are the heart and soul of our organization, whose hard work, creativity and passion make us thrive. I would also like to extend my heartfelt gratitude to all our stakeholders for their continued support and trust. Their unwavering belief in our vision and our company has fuelled our drive to innovate, grow and create long-term value. With our eyes set on the target, I look forward to your continued patronage as the Company embark on our new leg of growth.