"We must accept-finite disappointment, but never lose infinite hope. Miracles
start to happen when you give as much energy to your dreams as you do to your fears."
- Martin Luther King Jr
Dear Shareholders,
My warm greetings to all of you!
I hope that you and your loved ones are safe and coping adequately with the tremendous
upheaval in your lives in the wake of the global pandemic caused by COVID-19. The world
woke up to this threat in Q4 of FY 2019-20 and the rapid rise of infections and related
deaths worldwide has led to disruption on an unprecedented scale and dimension. While the
world is racing to contain the spread, treat the infected, and find a vaccine; the social,
psychological and economic fallout of this pandemic is expected to be felt long and wide.
What is driving us through these trying times is hope. It is the hope that things will get
better, safer and as near normal as possible.
We are indeed living through very unusual times and your Company has faced the
challenge of Covid-19. At this point of time, all our plants are operational. I take this
opportunity to extend my deepest gratitude to each and every member of the Seya family for
their resilience and agility in ensuring we keep our operations running and doing all that
we can to respond effectively to the COVID-19 pandemic. We are determined to work as a
team across the industry to harness our know-how, experience and expertise to combat this
evolving crisis and emerge stronger as we come out of this challenge. Our approach to the
pandemic was centred around four key actions of:
1. Safety of our employees, communities, partners and assets
2. Rapid pivot to digital to ensure business continuity
3. Conservation of cash through cost control, working capital and capex reduction
4. Ensuring continuous support to our customers and supply chain partners.
Economic Environment
FY 2019-20 was an extremely challenging year for the global economy and was marked by
multiple upheavals. Trade conflicts, political uncertainties, heightened volatility in
commodity prices with some never before seen developments with respect to crude oil,
protectionism etc. Towards the end of the fiscal, unprecedented impact was witnessed from
the global spread of the COVID-19, which caused turmoil across markets worldwide. The
pandemic has unfolded with alarming magnitude and the severity of the health and economic
crisis is incomparable to any event in recent memory. Government enforced border controls
and lockdowns of varied durations across multiple countries have impacted economic
operations around the world. However, even as Governments around the world deploy fiscal
and monetary stimulus in order to successfully resuscitate demand, it is believed that the
second and third order effects of the pandemic may limit the pace of recovery. In Fiscal
2019-20, the Indian Economy was benefiting from lower interest rates, witnessed benign
inflation, improved liquidity and was on course to witness improved tax collections.
Towards the second half of the fiscal, India began to witness early signs of an uptick in
business activities signalling return of momentum to Asia's third-largest economy in
consonance with the global economy. India was on a relative growth trajectory, with the
strengthening of the agrarian space, corporate and income tax rate cuts, narrowing trade
deficit and increasing foreign investments. The positive outcome of this was expected to
translate into increased consumer demand and private investments, which had been slacking
for a while. However, those were short lived as the pandemic has derailed the prospects
for higher economic growth in the short term. The pace of recovery is currently uncertain
as the country is yet unwinding from the lockdown and the medium to long term outlook is
opaque at every level.
The chemical industry in India has been actively gaining global market share in recent
years and has been a beacon of hope. Leading players have demonstrated intent to scale up,
diversify offerings and plough earnings back into the business by pursuing innovation and
sophistication. Looking towards an optimistic future, India's chemical industry is set for
sustained growth receiving impetus with capital investment and affirmative Government
policies.
Resilience in Adversity
FY 2019-20, saw a challenging business environment with lower GDP growth and slowdown
in consumption. Our business was impacted by global economic weakness in few end-user
segments, weakening consumer sentiment, slow demand in some large usage verticals, sharp
volatility in the prices of key raw materials and currencies and finally, the COVID-19
pandemic. The novel coronavirus has affected not just human health but severely impacted
businesses and the society at large. However, I am pleased to inform you that despite such
exceptional business conditions, your Company has delivered competitive and profitable
performance. We recorded a
Sales Turnover of Rs 258.19 Cr and PAT of Rs 47.01 Cr despite declining revenues
resulting from weakened raw material prices, benefits of which are passed on to the
Customers, shortage of Nitric acid, effluent disposal and water scarcity which impacted
our operations and performance. We implemented our Business Continuity Plan aimed at
ensuring health and protection to all our employees while adhering to the guidelines
provided by the Government authorities. Manufacturing activities commenced from mid - May
2020 in a phased manner, based on approvals from local authorities. Well-being of our
employees and safety of our manufacturing sites were given paramount importance. Given the
developments with regard to the COVID-19 pandemic and its fallout, the Board prudently
decided to conserve cash for the quarters ahead.
Opportunities
China, which accounts for about 20% of global speciality chemicals revenues, has
tightened environmental standards, resulting in the closure or shifting of capacities in
about 50 chemical manufacturing clusters. The increased labour costs and the COVID-19
pandemic have aggravated the situation further as companies seek to reduce their
dependence on China and source alternative suppliers. The continuation of US-China trade
war and a resultant increase in tariffs could have negative implications for its trade and
subsequently the domestic capacity and production in China. All these factors are pushing
the Capex and Opex costs upwards, making Chinese chemical companies less competitive in
the export market. Such situation in China is expected to favor Indian producers. Seya,
with its integrated value chain and diversified product mix, strong technical
capabilities, robust track record and cost-efficient operations, forms an ideal fit China.
Our teams are working with various existing and prospective Indian and global players on
multiple such opportunities.
Responsible Care
As a signatory of Responsible Care to the current paradigm change, we remain ardent to
our duties and responsibilities. These include creating a safe working environment,
adhering to the best management practices and embedding sustainability into our
facilities. We have dedicated our Strategic Business Units to ensure sustainable
manufacturing and adhering to all the safety norms and standards. The Company is committed
towards responsible chemistry while conserving environment, safeguarding our employees
& customers and taking care of the welfare of the community. We shall be investing
into further reducing environmental impact with a focus on ‘value from waste'. Either
directly, or indirectly, we continue to support society around us. Our approach to
environmental preservation evolves with advancements in science, technology and best
practices. We continue our efforts to reduce our carbon and water footprint, and waste,
and innovate to address the challenges posed by climate change.
I would like to take this opportunity to reiterate that your Company stands united with
the nation during this challenging phase of COVID-19. As a responsible corporate citizen,
we adhered to the Government guidelines that were issued during different phases of the
Covid-19 induced lockdown to contain the spread of the virus. With the slow and gradual
upliftment of regulations, the reopening of plants in different sectors, is likely to lead
to a gradual recovery.
The Company's fundamentals are intact to support the strong growth prospects. Your
Company believes that committed and qualified teams are the key to contribute towards a
sustainable future. Rooted in Values is our Integrity, Understanding, Unity, and
Responsibility. I must take this opportunity to congratulate and express my appreciation
to the human assets of Seya. My dear shareholders your support gave SEYA Incredible
strength which can't be explained in words. Your belief and confidence in the company and
its management helped SEYA to achieve what it has achieved today. We resolute to remain
committed to significantly keep enhancing value of our stakeholders.
My fellow board members, customers, vendors and other stakeholders without your support
and encouragement SEYA's growth story is incomplete. In conclusion, I will reiterate the
words of Martin Luther King Jr. who said, "We must accept finite disappointment, but
never lose infinite hope. Miracles start to happen when you give as much energy to your
dreams as you do to your fears." There is enough reason to hope for the better, and
that is backed by a focused strategy and a plan of action.
We will overcome! Best Wishes!
for entities looking for alternate supplier independent of
ASHOK G RAJANI
Chairman & Managing Director