A challenging time.
Moving ahead with confidence.
We have undertaken significant strategic initiatives over the last two
years. We are embarking on a major expansion in Gujarat—right at the centre of our
market and supply sources. We are also making a significant investment in the US in
petrochemicals and food ingredients.
Dear Shareholders,
I present to you our annual report for FY 23-24. The year has been a
period of great challenge, and our performance as a company has been far below our
expectations and plans.
We have gone through over three years of great volatility. The pandemic
left behind a trail of disruption: we handled that well, improved performance in volumes
and margins, and became a debt-free company 18 months ago despite major capital
investments in 2018 and 2019.
In the last year and a half, we have faced another major shock: the
Ukraine war, which has caused severe inflation in commodities and inputs. Interest rates
are very high, propelled by inflation. Neither the war in Europe nor the more recent
Middle East crisis show any sign of resolution. The logistics upset in the Red Sea affects
Indian industry and trading costs seriously; the causes for these will not settle down in
the near future. We in TCL are lucky that exports to and imports from the West are only a
small part of our business.
This has been an extended period of back-to-back crises and extreme
uncertainty, making business planning extremely difficult. However, India has been a
region of hope, and we can be thankful that it remains our major market. Investment,
consumption, and incomes are growing. Our present and long-term prospects are extremely
good. The smooth, peaceful completion of the recent elections—a mammoth exercise of
democracy—is a cause for great pride and confidence in our country and its people.
We can expect growth to continue on a sustained basis at 6.5 to 7.5%.
This augurs well for our company, as our products are primary inputs for construction,
truck and train infrastructure, households, electrical, and food and beverages—all
with good and long-term prospects driven by our young population and their improving
aspirations and standards of living.
During this difficult period, we have seen clear proof of the
resilience of our company, built on foundations of world-scale capacity, best-in-breed
technology, continuous improvement, and outstanding management and operating teams. This
recent period has been the worst we have seen in over 50 years in terms of margin
pressures and deeply adverse trading conditions. We have used this opportunity to
aggressively improve efficiencies, maximise capacity utilisation, and drive down costs.
These efforts will continue.
Despite the adverse trading situation, we have managed to operate at
high capacity and will now push beyond these boundaries of capacity and costs further.
Improving operating reliability and safety remains our constant effort. Our cash flows,
even in this difficult time, have been reasonable.
Our ESG commitments reflect our dedication to environmental stewardship
and a more sustainable future. Already, our consumption of water and energy is extremely
low. We have been a Zero Liquid Discharge company since 2006, the first in India. Our
greenhouse gas (GHG) emissions are correspondingly low. In spite of this, we are now
setting targets for ourselves to further improve on these through innovation, careful
plant management, and improvements.
We have set a robust target to reduce our Scope 1 and 2 greenhouse gas
(GHG) emissions by 25% by the year 2030. This commitment signifies our dedication to
mitigating the impacts of our operations on the environment and aligning with global
efforts to limit global warming. Similarly, we have taken up efforts to reduce our water
consumption by a further 10% by 2030.
We have set a robust target to reduce our Scope 1 and 2 greenhouse gas
(GHG) emissions by 25% by the year 2030. This commitment signifies our dedication to
mitigating the impacts of our operations on the environment and aligning with global
efforts to limit global warming. Similarly, we have taken up efforts to reduce our water
consumption by a further 10% by 2030.
We have undertaken significant strategic initiatives over the last two
years. We are embarking on a major expansion in Gujarat—right at the centre of our
market and supply sources. We are also making a significant investment in the US in
petrochemicals and food ingredients. The Gujarat expansion will start up during the
current year, while the US plants will start operation by early next year. The latter is
within a very advantageous cost location and will help us serve the largest addressable
markets globally—North America, Europe, and Latin America.
We hope to build on this platform with more capacity and more products
in the coming years.
In this turbulent and difficult year, the dedicated and outstanding
efforts of our staff and management teams and the support from our directors have been
invaluable.
I thank our shareholders, customers, suppliers, bankers, government and
local authorities, and the communities we operate in for their confidence and support.
MR. R. PARTHASARATHY
Chairman