Dear Valued Shareholders,
It's our privilege to connect with you at the 107th Annual
General Meeting of Balmer Lawrie & Co. Ltd. ("Balmer Lawrie"). It is a
pleasure to avail the opportunity of interacting with Shareholders of Balmer Lawrie and
share the progress and plans of your Company with you, while at the same time discussing
the opportunities and challenges that could confront us in the coming times.
The Business Environment
India is in its Amrit Kaal and surging ahead to be a global powerhouse
and the Indian Economy is set to surpass Japan and Germany to become the world's
third-largest economy by 2029.
India's G20 presidency has marked a significant milestone and has
underscored the leadership role it is assuming in the face of significant social &
economic uncertainty and volatile geo-political landscape faced by the world.
One of the key drivers of India's future growth momentum is the
huge investments being made to develop the physical infrastructure across the country.
Initiatives like Digital India, Make in India, PM Gati Shakti, the National Logistics
Policy, etc. are representatives of the policy framework of the Government that is giving
a fillip to India's economic growth. The recent policy interventions such as Ease of
Doing Business reforms,
Production Linked Incentive (PLI) scheme, Tax reform in the form of One
Nation One Tax, liberalization of the Foreign Direct Investment (FDI) policies, simplified
bankruptcy law, etc., all indicate the Government's approach towards developing a
business-conducive framework. The impact is visible as India has emerged as the fastest
growing major economy, has recorded consistent growth in GST collections, exhibited steady
growth in exports and has emerged as an attractive destination for foreign investors.
From its humble beginning as a partnership firm formed in 1867 to a
Miniratna I Public Sector Enterprise, under the Ministry of Petroleum and Natural Gas,
Government of India, Balmer Lawrie has left a mark of its own at every step of its
remarkable corporate journey. This journey of 157 years has not been devoid of challenges,
and we have been successfully responding to the demands of an ever changing environment,
leveraging every change as an opportunity to innovate and emerge as a leader in the
industry. Your Company is well-poised to take advantage of this economic upturn and that
is reflected in its financials - we have achieved our highest ever turnover and all the
key Businesses have demonstrated robust performance with respect to physical and financial
parameters.
The Company has eight Strategic Business Units- Industrial Packaging,
Greases & Lubricants, Logistics (Infrastructure, Services, Cold Chain), Travel &
Vacations, Chemicals and Refinery & Oil Field Services, with offices spread across the
country and a vast global network of business associates.
I would like to briefly discuss the significant developments in each of
the Strategic Business Units (SBU) of the Company during the year under review:
INDUSTRIAL PACKAGING (IP)
SBU: IP manufactures high quality 210L MS Drums catering to diverse
industry segments and is the market leader in this packaging product category. Our drums
are utilised for packaging Lubricants, Additives, Chemicals, Agrochemicals, Transformer
Oils, Food and Fruit Pulp. Overall industrial growth, especially in the Chemicals and
Lubricants segments, is the key driver for the drum industry in India.
Balmer Lawrie's Industrial Packaging business is acclaimed for
superior product quality, high reliability in supplies, modern manufacturing systems and
customer-centric experienced personnel. It has a large, diverse and growing customer base
in India as well as abroad and is very well respected in the market. The SBU has
established a dominant market presence and its competitive advantage is sustained through
continuous improvement and innovation. Out of the six manufacturing plants of SBU: IP pan
India, the plant at Navi Mumbai has a state-of-the-art facility and the Chittoor plant is
being modernized to add a new line for epoxy coating facility.
The SBU recorded its highest ever drums sales this fiscal and expects
to continue its growth trajectory during FY 2024-25 with the biggest drivers being the
Chemicals, Food, Transformer Oils and Lubes segments. The SBU will continuously work on
enhancing its product portfolio and explore new export markets for its products.
GREASES & LUBRICANTS (G&L)
The Indian lubricants market is the third largest in the world, among
the fastest growing markets worldwide, and it is expected to continue to grow over the
next five plus years. This augurs well for Balmer Lawrie and the SBU has taken significant
strides to strengthen its position in the market.
SBU: G&L has three manufacturing plants along with a
state-of-the-art Applications Research Laboratory which has been working continuously to
develop environment-friendly tribological solutions. The BALMEROL brand of greases is held
in high esteem owing to its long-standing presence and has strong affiliation and industry
recognition in core sectors like steel, railways, defence, automobiles and mining.
Along with retaining and expanding its traditional industrial base, the
SBU intends to sharply enhance its presence in the automotive sector by expanding the
product basket, increasing its distribution network and judiciously enhancing its
Marketing and Branding presence. It also intends to increase visibility by participating
in events, seminars, exhibitions and deepen its relationship with mechanics (key
influencer) and retailers through comprehensive engagement.
The outlook for the business remains positive for the next few years.
SBU: G&L has taken a strategic initiative to sign MOUs with PSU Oil Marketing
Companies and is planning to aggressively expand its digital marketing activities for
increasing the brand exposure of BALMEROL.
LOGISTICS INFRASTRUCTURE (LI)
The Logistics Infrastructure (LI) business of the Company comprises two
major segments viz., Container Freight Stations (CFS) and Warehousing & Distribution
(W&D).
Presently, the Company has three state-of-the- art CFSs located at
Nhava Sheva, Chennai and Kolkata. The Company's Warehousing and Distribution
facilities are presently fully operational at Kolkata & Coimbatore locations. The
Company had undertaken initiatives for expansion of its warehousing facilities during the
last financial year in CFS - Kolkata and CFS - Chennai, which are now being optimally
utilized. In addition to this, SBU: LI is in the process of expanding its open yard area
in CFS - Chennai to cater to the increasing demands on the export front.
Balmer Lawrie has set up a Multi Modal Logistics Hub in association
with Visakhapatnam Port Authority at Visakhapatnam and the subsidiary is known as
Visakhapatnam Port Logistics
Park Limited (VPLPL). All the activities related to clearance of goods
for domestic use, warehousing, temporary admissions, re-export, temporary storage for
onward transit and outright export, transhipment, etc. are being carried out in a CFS at
VPLPL.
Backed by state-of-the-art logistics assets, SBU: LI continuously
collaborates with SBU: Logistics Services and SBU: Cold Chain to offer comprehensive
Integrated Logistics Solutions to our customer base across India. The Rail linked
facilities at Kolkata and Visakhapatnam provide cost effective and environmentally
friendly solutions to the EXIM trade with options for multiple connectivity with various
ports in the Eastern and Western Regions.
The outlook for SBU: LI is promising, driven by several positive trends
and opportunities in the logistics and supply chain sectors. The expected growth in both
imports and exports, improved connectivity through Dedicated Freight Corridor (DFC), port
connectivity and improved hinterland infrastructure along with adoption of technology in
operations will benefit the SBU in future.
LOGISTICS SERVICES (LS)
The Logistics market segment in India has witnessed transformative
growth primarily owing to the focused approach of the Indian economy to make India a
global manufacturing hub. Logistics providers are adopting green practices, such as using
eco-friendly packaging materials, optimizing routes to reduce fuel consumption, usage of
Railways and Inland waterways as much as possible and investing in electric or hybrid
vehicles, to attract environmentally conscious customers and reduce carbon footprint.
With a strong network of partners and agents across the globe, Balmer
Lawrie offers end- to-end logistics solutions, including air freight, sea freight and road
transportation for all types of cargo. The global freight market has seen unprecedented
volatility owing to geo-political events starting with Russia's war with Ukraine,
Israel-Palestine conflict, the Red Sea crisis and all such events have had significant
impact on the fortunes of the SBU.
Despite these challenges, the SBU has not only been able to retain
business from major GOI and
CPSU customers but has also been successful in significantly increasing
its business share in the private segment. The SBU now aspires to focus and increase its
market share in private business by strengthening its Sales and Marketing capability
through proactive brand positioning, event participation and enhancement of its social
media platforms to reach the next higher level.
Volatile freight costs, a highly competitive market, high sensitivity
towards global and geo- political scenario, supply and demand imbalance and mergers &
acquisitions of bigger players in this segment have been the challenges faced by this SBU.
The business is taking adequate steps to mitigate the challenges
through its established and growing global associate network, rich technology solutions
and offering the clients a single window logistics solution by collaborating with SBU:
Logistics Infrastructure.
COLD CHAIN SERVICES (CC)
Balmer Lawrie is one of the leading Cold Chain Logistics companies in
India offering one- stop-shop solution under brand "LOGICOLD" to the
temperature-controlled supply chain requirements of the nation. LOGICOLD has the expertise
in handling all products between the range of -25?C to +25?C. There are four LOGICOLD
units operating out of Hyderabad, Rai (Haryana), Patalaganga (Maharashtra) and
Bhubaneshwar (Odisha) along with 24 reefer vehicles of various capacities on pan India
basis.
There has been a rising demand for the organised cold chain industry to
offer services through state-of-the-art Temperature-Controlled Warehouses (TCWs) along
with value added services like pre-cooling, pre-conditioning, ripening, packaging, blast
freezing, etc. and primary and secondary logistics through Temperature-Controlled Vehicles
(TCV). The market has benefitted significantly from the stringent regulations governing
the production and supply of temperature-sensitive products. The industry is poised for
growth owing to the surge in demand of organised retail sectors, quick service restaurants
and e-commerce. The Pharma segment in India has also witnessed rapid growth over the
years. Food and pharma both the industries are highly sensitive and demands
state-of-the-art TCWs and TCVs to fulfil their storage and distribution needs and the
stringent standards offer a widening space for LOGICOLD to grow in the industry.
The SBU is well poised to take advantage of Balmer Lawrie's other
Logistics vertical and offer integrated and value-added solutions to its customers.
TRAVEL
The outlook of the Indian aviation industry is quite upbeat and
continued focus of the Government to boost travel and tourism through investments in
infrastructure, technology, connectivity and policies shall propel the growth of this
segment. Travel Management Companies (TMCs) like Balmer Lawrie shall have a huge
opportunity complementing the growth of the aviation industry by offering a suite of
services to the customer, supported by robust technology platforms.
Balmer Lawrie is one of the largest Corporate Travel Management
Companies in India and provides end-to-end domestic and international travel, ticketing
and tourism services. Balmer Lawrie enjoys the privilege of being a Government of India
authorised travel agent and we have been catering to prestigious customers including the
Ministries and various Government organisations and CPSEs.
Our strength is based on a flexible and scalable digital architecture
which perfectly complements service from a dedicated staff spanning 70+ locations across
the country. These attributes are further supported by deep relationships with Airlines
and innovative product offerings. Balmer Lawrie was the first to launch a dedicated Self-
Booking portal for Government employees, which has been a great success and has been able
to achieve a significant mind and market share amongst its target customer base.
Our tailored product for Defence personnel, Defence Travel System (DTS)
has also seen a substantial growth in the number of tickets and users as new units &
establishments from Defence services are being brought under the ambit of this portal. As
an initiative towards technology, the SBU was successful in onboarding various corporate
clients on Standard Self Booking Tool
(SSBT) and is now poised to bring more services (hotels, cabs) to drive
non-ticketing revenue.
As is well documented, the air travel segment has experienced a
tremendous boom after the COVID-19 pandemic, despite significant increase of airfare.
Leveraging this tailwind and supplementing that with superior customer service and an
aggressive sales strategy, the Travel Business has clocked the highest turnover, profit
and highest number of Tickets in FY 2023-24.
VACATIONS
The Government's focus to boost the Travel and Tourism segment in
India through various initiatives has played a significant role in revamping the Travel
and Tourism industry post COVID-19. The year 2023 was designated as the "Visit
India" year by the Ministry of Tourism, inviting the world to experience the
country's splendour. India has witnessed a huge inflow of international tourists by
virtue of global events like G20, Cricket World Cup, IPL, etc.
India's tourism and hospitality industry experienced significant
recovery and growth in 2023, marked by increased domestic and international demand, major
global events, spiritual & religious tourism and expansions in hotel chains.
The Vacations vertical is a one-stop-shop for all travel and holiday
needs, offering a wide range of services to various customer segments and has a strong
presence in the market with a large network of branch locations. We are providing
integrated travel and holiday solutions including International Group (and Customised)
Tour packages, Domestic leisure holidays and the booking of standalone services such as
Air, Hotel, Rail Europe Travel, Car, Cruises, Sightseeing, Visa processing, Travel
insurance, etc. The vertical also serves Corporates (MNCs, Private and Public Limited
Companies), PSUs and various other Government departments for their end-to-end MICE
(Meetings, Incentives, Conferences and Exhibitions) movements.
The Vacations vertical has taken initiatives to strengthen the internal
operations, enhance brand visibility through social media and upgrade technology to offer
better customer service. It launched a dedicated call center and introduced
new products in GIT / domestic segments, which is expected to
contribute to the overall growth of the vertical. The vertical is now focusing on domestic
and international leisure travel, including inbound tourism as a new segment of business.
CHEMICALS
Leveraging indigenous technology, Balmer Lawrie manufactures end-to-end
leather chemicals under the brand Balmol, Balsyn, Balchem and Balfin at its modern
manufacturing facility at Chennai.
SBU: Chemicals has received the Zero Discharge Hazardous Certification
Level 3.1, an international certification for usage of chemicals. The SBU has been awarded
Gold Level by International Research Institute for Manufacturing and has won Silver award
for India Green manufacturing challenge for sustainability initiatives. All products of
SBU: Chemicals meet REACH compliance and it has developed an eco-friendly, metal free
tanning process with Glutaraldehyde, which has wide appeal in the market.
We have a significant market share in wet end operations and have
forayed into the finishing chemicals segment by launching our own finishing chemicals. The
SBU has well equipped ‘Technical Service Centers' in all the major leather
manufacturing clusters in India and renders high quality technical service to the
tanneries.
Increasing usage of non-leather products and environmental norms which
may lead to closure of small tanneries due to increased operational costs, could be a
concern for the leather chemicals business and the SBU has been exploring other
opportunities in the Chemicals space.
We have entered the Textile chemicals and Agro chemicals market by
launching products which have synergies like textile binder, wetting agent, etc. The SBU
is well equipped to explore opportunities for growth and improve business in the coming
years.
REFINERY & OIL FIELD SERVICES (ROFS)
SBU: ROFS is engaged in niche service catering to the oil & gas
industry that prevents pollution and helps in recycling oily wastes through recovery of
hydrocarbons.
The SBU intends to leverage its experience in project execution and
wide base of satisfied clientele to foray into allied service areas through diversifying
its service offerings.
The demand for sludge processing services is expected to be stagnant in
the near term and diversification into other allied areas is being explored.
Increased competition in the market can put downward pressure on market
share as well as profit margins for SBU: ROFS. Other risks include adoption of modern
technologies in refineries, which would reduce generation of oil sludge in the storage
tanks, thereby limiting the need for sludge processing in the long run.
SBU: ROFS is working towards mitigation of the risks through
upgradation of technology, as well as expansion and diversification of service offerings
and client base.
OVERALL FINANCIAL PERFORMANCE
The Company recorded a net turnover of Rs.2,40,416.53 Lakhs during FY
2023-24 as against Rs.2,38,309.16 Lakhs in FY 2022-23, which is an increase of 0.88% over
last year.
The Company recorded a Profit Before Tax of Rs.27,865.34 Lakhs in FY
2023-24 as against Rs.21,130.23 Lakhs in FY 2022-23 which is an increase of 31.87% over
last year. The increase is attributable to the remarkable performance by all the
manufacturing businesses as well as the Travel vertical. The Reserve and Surplus of your
Company increased to Rs. 1,25,621.43 Lakhs as on 31st March, 2024 as compared
to Rs.1,18,524.12 Lakhs as on 31st March, 2023.
CORPORATE GOVERNANCE
Corporate Governance essentially involves balancing the interests of
your Company's various stakeholders, such as shareholders, management, customers,
suppliers, financiers, the Government and the Community. Your Company‘s culture,
policies, relationship with stakeholders and loyalty to values are reflected in the
Corporate Governance Report.
The Companies Act, 2013 is being amended almost regularly. Similarly
Listing Regulations, are also amended frequently. Your Company is making its best efforts
to adapt and comply with the changing statutes and continues to comply with the Corporate
Governance guidelines/ norms to the extent within its control.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Balmer Lawrie, as an organisation, is deeply committed to conducting
its business in a socially responsible manner and being responsive to the needs of society
as a whole. Over the past few decades, the Company has consistently undertaken various CSR
initiatives, driving sustainable development and growth for its stakeholders. Balmer
Lawrie has independently spearheaded numerous projects across its units and establishments
throughout the country, in addition to supporting Government initiated programs such as
the Clean India Mission and Skill Development Institutes. Balmer Lawrie's CSR
initiatives are primarily driven by two flagship programs: Balmer Lawrie Initiative for
Self-Sustenance (BLISS) and Samaj Mein Balmer Lawrie (SAMBAL). The Company has
successfully delivered on its CSR commitments and continues to make progress for the
betterment of communities. Recognising the importance of national flagship programs
launched by the Government, Balmer Lawrie seeks partnerships with organisations that can
identify community needs and effectively execute the Company's CSR objectives. By
engaging with impactful specialised organisations and adhering to guidelines such as the
DPE guidelines, the Companies Act, 2013 read with Schedule VII thereto. Balmer Lawrie
takes pride in advancing initiatives falling under the purview of CSR.
During the FY 2023-24 a total sum of Rs.441.64 Lakhs was spent on
various CSR activities by the Company.
ACKNOWLEDGEMENT
On behalf of the Board of Directors, I would like to convey to you our
sincere gratitude.
I acknowledge the continued support of our Administrative Ministry, the
Ministry of Petroleum and Natural Gas, Government of India for the guidance and
encouragement provided to your Company. I also wish to thank other Ministries of the
Government of India and other Governmental authorities for their co-operation.
I would also like to thank our holding company, Balmer Lawrie
Investments Ltd., our valued shareholders, customers, vendors, business associates,
bankers, financial institutions and other stakeholders for their continued support and
co-operation.
Finally, I must convey my gratitude to my colleagues on the Board for
their wise counsel and valued involvement. We look forward to counting on your continued
support and co- operation.
Thanking you,
Adhip Nath Palchaudhuri Chairman & Managing Director and Director
(Service Businesses) - Additional Charge (DIN: 08695322)