Primo Chemicals Ltd

DEAR VALUED SHAREHOLDERS,

I hope you and your family are doing well. As we embark on a New Year, I am glad to report that we have emerged robust and adept from the previous year's challenging business environment. Our Company encountered a period of financial challenge. However, we took the opportunity to adjust and align our strategies and operating model with industry trends.

In doing so, we are poised for a revival, guided by our focus on quality and sustainable growth.

A snapshot of our journey

In 2020, we assumed responsibility for marking a significant transition. Since then, we have adapted to the changes that have influenced our path. It has been a remarkable journey, marked by our entrepreneurial spirit and strategic vision. From the outset, we faced obstacles with determination, aiming to deliver value to all stakeholders through thoughtful and effective solutions.

In last year's annual report, we informed you about how successfully we had re-branded our company as ‘Primo Chemicals Limited, reflecting our commitment to growth and our passion for providing specialised products and services to our valued customers. I'm thrilled to report that, this year, our brand has not only grown stronger but has also expanded its reach, marking a significant milestone in our journey.

Our transformation, thus, highlights our dedication to progress and excellence, demonstrating our resilience in the face of adversity while remaining steadfast in our commitment to quality and growth.

The backdrop

FY24 was unique in several ways. The Indian economy sustained its status as the fastest-growing major economy for a third year. However, the Indian chemical industry faced significant headwinds owing to plateaued progress and disturbed confidence in many advanced and large developing economies. Further, crude oil prices and other raw materials increased significantly due to global supply chain disruptions squeezing profit margins for companies. Moreover, oversupply from China, destocking by customers and the channel, and enhanced capacities from domestic players resulted in significant price erosion, impacting business profitability.

Despite these trying times, we remained steadfast in progressing with our business strategies. Interestingly, by the end of the fiscal, we experienced a resurgence in market demand.

A promising future

In FY25 and beyond, we envision a better global economic outlook despite ongoing wars, which should translate into a rebound in prospects for the Indian chemical sector. Further, inflation across the globe is expected to stabilise at a reduced number, prompting central banks to consider interest rate cuts. India is likely to remain in the global spotlight. With the current Government's recent re-election, ongoing progressive policies and initiatives are expected to continue. Investment activities should see further growth, supported by good government spending and healthy corporate and banking sector balance sheets, creating a favourable environment for renewed private investment. These factors are also expected to lead to increased global capital inflows, contributing to economic growth. In light of prospects, a greater demand for Caustic Soda and other chemical products in the market is highly likely, considering the growing industrialisation in user sectors like paper, pulp, soap, aluminium, dyes, pigments, etc. This development presents a significant opportunity to increase our market share, volumes, and profitability. Thus, our immediate focus is to explore opportunities in other chemistry for prosperity. For that, we are diversifying our portfolio, for which we have already received the necessary approvals from the Punjab Pollution Control Board. We have successfully commissioned a 35 MW Captive Power Plant, which is now operational and generating electricity, marking a significant milestone in our journey towards energy self-sufficiency and reduced reliance on external power sources. This strategic investment will significantly sharpen our edge in an otherwise competitive sectoral landscape, resulting in a surge in profitability.

A concluding note

Going forward, we are optimistic about the many opportunities on the horizon. Our dedication to growth is mirrored by our resolve to remain agile, enabling us to adjust to the ever-evolving industry landscape swiftly. This flexibility ensures our ability to excel and maintain leadership in our sector.

In conclusion, I sincerely thank our stakeholders, including shareholders and investors, for their unwavering support. Our employees' dedication has been crucial in achieving our goals, and our Board members' guidance has been invaluable. Together, the Primo Chemicals team continues to deliver exceptional global value.

I express my profound gratitude to all who have contributed to our Company's remarkable journey. Your support has been instrumental in our success, and we are privileged to have you with us.

Looking ahead, we remain steadfast in our commitment to sustainable growth and creating lasting value, driven by our collective vision of excellence and advancement.

Thank you for being integral to our story.