Dear shareholders,
It is with great pleasure that I present to you the annual report for
the fiscal year 2022-23. Over the past three years, as the world recuperated from the
unprecedented trials posed by the Covid-19 pandemic, it also faced geopolitical conflicts
in the previous year. These conflicts introduced a new set of challenges, including global
tensions, disruptions in supply chains, escalating energy costs, surging inflation, and
assertive monetary and fiscal policies.
Despite the various measures taken to address these challenges, our
company's performance was affected. The combined revenue from ongoing and discontinued
operations amounted to '1,213 crores with '197.5 crores from the Specialty Polymers
business and 916.6 crores from the Polyester chips and Film business. EBITDA stood at '136
crores, down from Rs 252 crores in the preceding year.
Our Specialty Polymer division exhibited growth, achieving a 14%
increase in revenue with profitability in absolute terms almost in line with FY22. While
H1FY23 turned out to be very good, H2FY23 was impacted by headwinds caused by recessionary
trends in the US. It is expected that the performance of this division will continue to be
affected for the next 2-3 quarters, pending an economic recovery in the USA. Nonetheless,
the business holds promising prospects due to the introduction of innovative products that
have already been launched, as well as those expected to enter the market soon. our
dedicated R&D team's continuous efforts to enhance our innovation pipeline and
processes have enabled the development of a robust product portfolio.
The Film business faced challenges during FY 22-23 due to demand-supply
imbalance, higher input prices, and the temporary shutdown of Film Plant#3 caused by a
breakdown in the continuous polymerization process for a month. While margins may
experience pressure in the short to medium term due to capacity expansion, the long-term
outlook for the business remains favorable. ester's goal is to elevate the proportion of
value-added and specialty products in the overall product mix to 30%, driven by the
implementation of an additional offline coater, as well as ongoing innovation and R&D
initiatives.
A major achievement during this period was the commencement of
commercial production by ester Filmtech Limited, a wholly-owned subsidiary of ester
Industries Limited, on 20th January, 2023. This new manufacturing plant, located in
Telangana, produces Polyester Film with a capacity of 48 KTPA and Metallized Polyester
Film with a capacity oRs 10 KTPA. In FY23, the plant generated a revenue of '49 crores and
it is anticipated to contribute approximately '500 crores in revenue upon reaching optimal
utilization.
As part of our strategic direction, ester has divested its engineering
Plastic business to Radici Plastics India Private Limited through an all-cash transaction
amounting to '263 crores. This move significantly enhances our cash reserves and debt
servicing capabilities, enabling us to focus on the expansion of our specialty polymers
and film businesses.
As the forefront runner in the market, it is incumbent upon us to
prioritize sustainability endeavors. We are committed to persistently developing films
that leave a reduced environmental impact. our objective is to nurture the concept of the
'Circular economy,' actively reintegrating waste materials into the economic cycle
We remain confident that all of our business divisions are
well-positioned to embark on their next phase of growth. Our company is committed to
enhancing operational efficiency through digital innovations, Business Process
Re-engineering, and data analytics to prepare for future opportunities and challenges. At
the core of our mission is the creation of value for our customers and stakeholders,
driven by our commitment to innovation and the strengthening of our product portfolio.
On behalf of the board and management, I express sincere gratitude to
our shareholders, investors, partners, and institutions for their continued support. I am
confident that our strategic approach will yield lasting and sustainable value for all of
our stakeholders.
With regards Arvind Kumar Singhania
Chairman & Ceo