Dear Shareholders,
It gives us immense pleasure to present to you the 33rd Annual Report of Aimco
Pesticides Limited. This year, we are expanding the purpose of this report and taking this
opportunity to communicate our goals, business, and strategies more comprehensively.
Before we share our thoughts and give you a review of the year gone by, we would like
to take you through the journey of this organization. Our roots date back to almost 75
years when this organization was incorporated in the form of a partnership firm - All
India Medical Corporation (AIMCO). We started as a formulator with four plants across the
country. In efforts to streamline our operations, later on in 1993, we set up a
centralized manufacturing unit in Lote Parshuram, which also marked our entry into the
manufacturing of Chloropyrifos Technical. The company shifted its focus to exports and
R&D. While we faced turbulent times & hardships in our journey, especially during
the debt-restructuring, we are here, navigating our way back to our former glory.
Performance Review
To begin with a quick performance review, Consolidated revenue from operations at Rs.
185.24 crore reflects 6.08% year-on-year (YoY) decline over the previous year. EBITDA grew
by 3.65% to reach Rs. 13.89 crore, and PAT at Rs. 6.65 crore recorded 13.86% YoY degrowth
over the previous year. The fall in revenue from operations is on account of our Bulk
Formulations operations, which echoes a hostile external environment and competitive trade
from Chinese incumbents in our export markets. Bulk Formulations - a structurally low
margin business coupled with the unhealthy competition generated prices that were not
profitable for us, and thus, we stayed away from this business for the better part of the
financial year 2020. Our core area of focus - Technical's business did well in the year
under review.
Impact of COVID-19
The entire world was caught by surprise with rapid spread of the infectious Novel
Coronavirus pandemic that has disrupted economic operations, global supply-chains, and
human lifestyles worldwide. To combat the spread of this virus, the Home Ministry
introduced a series of lockdowns and curfews beginning 24th March 2020, while
Agrochemicals was quickly declared as an essential commodity and allowed to function in
the lockdowns, there were a lot of challenges at the ground level. The company fared
relatively well through this pandemic, our supplies were procured in advance in
anticipation of the crisis, and production break & challenges were limited to April.
While the company management does not foresee any material challenges in its supply chain,
there may be an impact on demand in its export markets for the coming season.
The company has taken actions to ensure the safety, health, and well-being of the Aimco
family. We have been in complete compliance with the guidelines issued by the authorities
at our offices and manufacturing facility. We effectively adopted the 'Work from Home'
culture in the interim and have now resumed normal office operations to the extent
possible. Manufacturing operations have completely normalized since June.
Strategy
While completing our debt restructuring & operational turnaround in 2014, we didn't
have the luxury to select and flexibility to focus on the most ideal business verticals or
the most profitable product segments; at the time idea was to turn profitable at the
earliest and limit our focus to the immediate future. That is not the case today, in the
past few years, our focus has transgressed immediate opportunities onto sustainability. To
that end, we have been concentrating on expanding our operations in our core competence
i.e. manufacturing Technical grade agrochemicals. The company has focused its energies and
capital to commercialize new molecules and file product registration to cater to the
export markets. We are confident of commercializing remunerative products in this segment
soon.
Going Forward
The COVID-19 pandemic may have an extended impact on business, but as communicated
earlier, our outlook for the coming year remains untethered due to this pandemic. The
Board of Directors and the Management team will guide the company in navigating through
this crisis and recalibrating its strategy to address the new realities.
Before we conclude, we wish to thank all our Board Members, team, regulatory
authorities, and investors for their faith, guidance, and support.
Warm Regards