Century Enka Ltd

#CSStart#

I hope this message finds you in the best of health.

With ‘service to society’ at the core of our operations under the Aditya Birla Group, I write to you this year with fervent excitement about a year that saw us triumph over the odds of the competitive global markets. With a firm resolve, we aim to grow each of our companies, including CEL, within the wider roots of the Group’s Purpose: ‘To enrich lives, by building dynamic and responsible businesses and institutions, that inspire trust across the globe.’

According to the International Monetary Fund (IMF), the world economy will continue growing at 3.2% during 2024 and 2025, maintaining the same pace as in 2023. A slight acceleration for advanced economies is expected to be offset by a moderate slowdown in emerging markets and developing economies in 2024 and 2025. The forecast for global growth five years from now is a mere 3.1%, the lowest in decades. Against this global backdrop, India continues to offer hope for investors due to its large market, the democratic dividend of a younger population, and promising demand and consumption. Specific to the industry in which we operate: the textiles industry contributes 5% to India’s Gross Domestic Product (GDP), 7% to India’s industrial production, and 12% to the country’s exports, employing more than 18 million people directly and over 20 million people indirectly.

With India’s production capacity being quite modest, the country remains dependent on the global market to meet its demand. The government is attempting to revive the textile industry with plans to offer subsidies and tax incentives to boost production capabilities and prime manufacturing units, enhancing the overall resilience of the textile sector in the country against international competition. However, within the sector, synthetic textiles occupy a small portion of the market despite demand from developed countries. The global synthetic yarns market size is projected to advance at a Compound Annual Growth Rate (CAGR) of 7.39% during 2021-25, with an estimated value of USD 85.07 billion. As a leader in synthetic textile in India, particularly Nylon, we perceive latent opportunities and will strive to harness these opportunities.

With a focused approach to tapping into the evident demand, we are building our production capacities. I am pleased to inform you that the Company has successfully completed CAPEX initiatives announced in May’21, including CAPEX for building capabilities for diversification in Polyester Tyre Cord Fabric (PTCF). On the operational front, the last year saw reduced margins and demand with tough competition from Chinese markets. Despite resistance, CEL continued to sail strong, registering Rs 17,442 Mn of revenue from operations and a net profit of Rs 428 Mn in FY 2023-24. As we move ahead, we continue to monitor our progress and work towards accomplishing our set objectives in the forthcoming year.

Sustainability will be the strongest pillar in our broader growth framework going forward. Prioritising environmental responsibilities, working on benefiting communities, addressing important matters around mental health and physical safety, education, and diversity and inclusion at work will reinforce our ESG and Corporate Social Responsibility (CSR) strategy. To support these causes, we have incorporated various aspects of governance, transparency, and accountability to build a reliable business.

At CEL, we remain committed to making the business sustainable, aligning with the pace and demands of the world. Being a ‘Force For Good’ we aspire to deliver value in every aspect – societal, environmental, and in favour of a noble society. With a heart filled with gratitude, I would like to thank all our stakeholders and the management for their dedication to making us who we are today, with dignity and grace.