Dear Shareholders
It is my privilege to present the Annual Report for the financial year
2023-2024. In line with our vision of responsible growth, this report provides a
comprehensive overview of our business operations, financial performance, our strategic
approach to corporate governance and sustainability initiatives.
Let me mention the financial performance numbers briefly with a
comparison to previous year.
Your company in the FY '24 achieved a revenue of Rs 4,285.90 Crores In
FY '23, the revenue was Rs 4,303.87 Crores. Year on year basis the operating earning
EBITDA was Rs 239.15 Crores against Rs 231.98 Crores. The profit before tax PBT was 50.43
Crores against Rs 122.08 Crores. Net profit at Rs 110.66 Crores against Rs 89.90 Crores.
Production is 4,05,603 metric tons against 3,80,000 metric tons and sales 4,01,052 metric
tons against 3,82,000 metric tons.
In a dynamic and ever-evolving business landscape , we have managed to
navigate through various challenges that impacted our industry. There is marginal
improvement in operating profit and net profit. The margins remain under acute pressure
despite good capacity utilisation and sales volumes.
Indian Polyester manufacturers have been facing strong headwinds caused
by upheavals in the business climate across the globe. The long- extended war between
Ukraine and Russia, the Israel-Palestine conflict and choking of shipping lines have given
rise to a complex set of factors that have reshaped the market trajectory in unforeseen
ways.
As businesses navigated these geopolitical challenges, the textile
fibres market adapted to their evolving environment with brands, reevaluating their
marketing strategies to align with shifting consumer sentiment. Textile industry in each
country evolved its own policies and recipes to mitigate the uncertainties to save lives
and jobs. India's textile businesses have faced a rough weather in both domestic and
international markets for more than two years.
Textile Industry
At the global level, the textile fibres are growing at the rate 3%
CAGR. The demand for synthetic fibres in the domestic market has been good. The MMF
industry in India is witnessing rapid growth. MMF market in India is dominated by
polyester and viscose fibers, with polyester having a much larger share.
For growth of the polyester industry, the biggest hurdle is perennial
shortage of key raw material PTA from domestic suppliers as well as the high price.
The textile industry needs a level playing field at the global level.
At present, Indian polyester industry is still at a significant disadvantage in competing
against China. Indian manufacturers pay around $95-100/ MT more for PTA, which is in short
supply domestically. This being the key element of cost, obviously , it is difficult to
compete with Chinese prices in domestic market and the same holds true for exports.
This year too, the performance of Indian polyester industry has been
extremely challenging. It was a battle against Chinese imports in all forms, yarn, fabric
and made ups. The domestic market was flooded with cheaper imports of substandard
polyester yarn and fibres. Industry captains got together and fought for policy
intervention with facts and figures. The tidal flow of yarn import stemmed only after QCOs
on yarns were enforced. After the yarn issue, there was a sudden spurt in fabric imports
at ridiculously low prices. These too were brought to the notice of government officials
who acknowledged the unscrupulous imports of fabrics at un-heard of prices and put a cap
of $3.50 per kg as the minimum value.
Additionally, some new concerns have been raised regarding the textile
and fashion industry.
The fashion industry is labelled as the second most polluting in the
world after the oil industry. This segment is the biggest user of polyester.
The environment footprint of a manufactured garment comprises a trail
of multiple toxic processes from cotton planting (passing through processing and dyeing)
and transport to the point of sale and finally, disposal after use. "Fast
fashion", premised on low cost and high durability of polyester, has widened this
footprint by accelerating wasteful fashion consumption. The danger of polyester clothing
going to landfills is an issue being discussed globally as polyester is not biodegradable.
All major brands of textiles are committed to change from linear textile economy to a
circular textile economy.
To ensure sustainability and reduce environmental impact of the the
textiles and apparel industry, utilising a sustainable, "circular economy model"
is of utmost importance. Sustainability means meeting our own needs without compromising
the ability of future generations to meet theirs. The circular economy model is, in brief,
a systems' solution framework that tackles global challenges such as climate change,
biodiversity loss, waste disposal and pollution. It is one of our topmost priorities to be
a contributor to this model.
Sustainability is a survival mantra for human lives, businesses, and
our planet. Imbibing this is not as a mere compliance of some key parameters but also a
way forward to grow business.
In line with this thinking, we have been carrying out R & D for
Textiles- to-Textiles recycling. Our initial efforts at lab scale in utilising plant waste
encouraged us to explore the process of utilizing polyester textile waste and textiles at
the end of their life cycle. Mechanical recycling has been there for a couple of years
wherein used polyester bottles are cleaned and processed to manufacture fibres. This
process , however, does not close the loop as the fibres produced can't be reprocessed
further and end up in landfills. We have developed and patented a process based on
Molecular regeneration of polyester which can be recirculated infinitely .We are running a
pilot plant to use miscellaneous types of textiles, garments, home linen of pre consumer
waste and post-consumer waste. Simultaneously, we are in advanced stage of discussions
with equipment suppliers for a 26,250 TPA capacity plant. Our future path for growth is
likely to be through recycling of polyester, generally expressed by acronym T2T.
Such plants could be located near all textile manufacturing hubs
initially and once "End of life" collection system of collecting polyester
textile waste is established, the locations would be chosen based on transportation
convenience.
Several companies all over the world are experimenting to develop
commercially viable technologies.
We are of firm belief that though sustainability in textiles may sound
difficult, it would the way forward.
I think many people assume that a company exists simply to make money.
While this is an important outcome of a Company's existence , we need to introspect deeply
and try to understand our real reason for our being .We have, over the years, come to
conclusion that Companies are nothing but a group of people who get together and exist as
an institution that we call a company, so that they are able to accomplish something
collectively which they couldn't have accomplished separately. And that they are able to
do something worthwhile - they make a contribution to the society. An emphasis on
Sustainability strengthens our thought process. Human potential to do something is
infinite because no matter how many thoughts you have, how many actions you perform, or
words you utter, there are infinite more waiting to be expressed.
Going forward, in our quest , our objectives are being achieved by
people who understand what they are doing and can utilize their own capabilities to do
them. Management is not a job of just giving orders. It is a job of providing the
opportunity for people to use their capabilities efficiently and effectively. All they
need is to understand what the agreed objectives are.
To reduce GHG emissions, we have focused on improving the energy
efficiency of our existing operations. Increasing energy efficiency is an effective &
well-recognized way to reduce carbon footprint. We currently source power from rooftop
solar power plants - 1 MW at Dahej and 0.91 MW at Dadra, 0.9 MW from a third-party hybrid
wind solar plant and have partnered with a reputed renewable power generation company for
a hybrid wind and solar power plant with a capacity of 10.8 MW. Additionally, we are
planning to procure 20MW of solar power from the inter-state transmission system for
captive consumption.
In summary, our company envisions a future where sustainability is at
the core of our operations.
We are committed to making substantial progress in reducing our
environmental footprint while fostering social responsibility. Our commitment to
excellence, combined with our ability to adapt swiftly will continue to be our guiding
stars. Our focus remains firmly fixed on seizing emerging opportunities, harnessing
technological advancements and aligning with sustainable practices.
May I, on behalf of the board and myself express my heartfelt gratitude
to all our stakeholders i.e. our valued investors, loyal customers, committed bankers, and
other supportive partners.
Your steadfast (consistent) trust in our vision and mission has been
the cornerstone of our achievements.
This journey wouldn't have been possible without your continuous
support. Thank you for being an integral part of our success.
I eagerly anticipate another year of collaboration, growth and
accomplishments together. No words would be enough to record my special appreciation to
Team Filatex for their dedication and commitment to delivering the highest quality of
service to every one of our valued customers even in these difficult and challenging
circumstances.
Madhu Sudhan Bhageria
Chairman & Managing Director