Chairman's Message
Dear Shareholders,
It is a great privilege to be able to share my thoughts with you for the first time since taking over as the Chairman and Managing Director of SRF Limited in April 2022.
This year, we bid farewell to the patriarch of our Group, Mr. Arun Bharat Ram, who expressed his desire to step down as the Executive Chairman and Director of SRF Limited. The amount of value SRF has created under his leadership – is extraordinary, as he leaves behind a strong foundation for future generations. Having said that, SRF will continue to benefit from his valuable knowledge and wisdom from time-to-time as a mentor to the Board of Directors and the management.
As I take on the role of Chairman and Managing Director with a great sense of responsibility and humility, I look forward to leading SRF into the future with an outstanding team at my side.
Firmly rooted. Growing responsibly.
We chose “Firmly rooted. Growing responsibly” as the theme of our annual report this year as we prepare to shape our future growth journey based on a powerful combination of experience and energy. Experience of a Company that has succeeded for decades, and the energy of a young Company with fresh opportunities. SRF products touch millions of lives every day and we work hard to remain relevant and current to the customers we serve and respond appropriately to changes taking place in our environment.
As an organisation that continues to evolve, grow, and progress into the future, we are also making concerted efforts towards identifying our ESG (Environmental, Social and Governance) risks and opportunities. It was therefore imperative for us to adopt ESG as part of our Company aspirations. In March 2022, we introduced and launched our Company’s new ASPIRATIONS 2030. The five pillars of our ASPIRATIONS 2030 are:
We will continuously strive to be known for our:
Professional Reputation and Value System
Customer Advocacy
Innovation and Technology Leadership
Operational Excellence
Environment & Social Responsibility
Our efforts in ESG encompass management of water use, protecting ecosystems and reducing community impacts related to operations, among others. I invite you to read the ESG section of this report for more on our work towards our environmental responsibility.
Financial Performance
FY 2021- ’22 was an extraordinary year. Despite the ongoing COVID-19 pandemic, widespread supply bottlenecks, and increasingly higher energy and raw materials prices, we achieved robust operational and financial performance.
From a financial point of view, in FY 2021- ’22, the Company achieved a 58% increase in profit after tax at ₹ 1,889 crore compared to ₹ 1,198 crore last year. The Company’s revenue for the year stood at ₹ 12,434 crore as against ₹ 8,400 crore in the previous year, recording an overall growth of 48%.
Business Performance
Let me now talk about some of the milestones achieved by each of our business segments during the year.
Chemicals Business
Chemicals Business In FY 2021 – ’22, the Chemicals Business accomplished strong growth of 43.8% Year-over-Year (Y-o-Y) to achieve record revenues of ₹5,240.8 crore.
Our Specialty Chemicals Business performed remarkably well in the year, driven by strong demand in both the exports and domestic markets. Our new product portfolio is being enhanced continuously, which also helps us expand and strengthen our customer base further. Our customers are demanding more-and-more complex molecules, a demand that is being met by our robust in-house R&D team, giving the Company an overall edge in the marketplace. With rapid strides in the development of new products and process technologies, we launched four new products in the agrochemicals and two in the pharmaceuticals segment during the year. In addition, we are also seeing traction in the Active Ingredients (AI) space and building our capabilities on this front.
As we grow our revenues, we will continue to invest in this business to sustain healthy growth rates over the next few years. In this regard, I am pleased to share that the Board of Directors have approved the setting up of dedicated facilities to produce agrochemicals intermediates at Dahej, Gujarat, at a cost upwards of ₹ 200 crore. In addition to that, the Board approved a project to set up a Pharma Intermediates Plant (PIP) at a cost of ₹ 190 crore, which will strengthen SRF’s pharma capabilities. Similar investments alongside improved efficiencies, optimum utilisation of capacities, and other initiatives to reduce the environmental costs of manufacturing were also announced throughout the year.
Overall, as India’s largest specialty chemicals player, SRF, in FY 2021- ’22, continued to maintain its ‘preferred partner’ status with most of its marquee global customers.
Poised for sustainable growth, our Fluorochemicals Business delivered a strong performance during the year. This was largely on account of higher volumes in refrigerants, blends, and chloromethanes, in both the domestic and exports markets. Our capabilities on backward integration allow us to control costs as well as propel the business forward.
Furthermore, in our constant endeavour to offer cutting-edge products to our customers, we enhanced our portfolio by introducing Anhydrous Hydrogen Chloride (AHCL) for pharmaceutical applications and ramping-up production of other key products in the Industrial Chemicals segment. Our Pharma propellant, which is sold under the brand name of Dymel® HFA 134a/P witnessed a significant increase in sales, expanding to new geographies and consolidating its customer footprint across the globe.
With large capex such as Polytetrafluoroethylene (PTFE), chloromethane (CMS), etc. likely to capitalise in the next few quarters, we are looking forward to exciting times ahead in the Fluorochemicals Business.
As an
organisation that
continues to evolve,
grow, and progress
into the future, we are
also making concerted
efforts towards
identifying our ESG
(Environmental, Social
and Governance) risks
and opportunities.
Packaging Films Business
In FY 2021 – ’22, our Packaging Films Business witnessed robust growth of 45.2% Y-o-Y to achieve record revenues of ₹ 4,779.2 crore. Both our domestic and international facilities delivered strong performance and contributed to the overall growth. Over-the-years, SRF’s Packaging Films Business has established itself as a renowned player in the worldwide packaging industry, with a growing market presence across 100+ countries with multi-country and multi-substrate presence. This is a result of the Business’ ‘Easy to do Business with’ philosophy, our geographical spread, along with continued focus on enhancing efficiencies, innovative practices, and cost-competitiveness.
During the year, the Company made an important announcement to further enhance our leadership position in this segment. We have allocated a capex of ₹ 425 crore to set up an Aluminium Foil manufacturing facility near Indore in Madhya Pradesh, India, which is expected to be commercialised in approx. 20 months. Our new BOPP film line, which is currently under construction in Indore is also on track and expected to be commissioned in the forthcoming quarter.
I am also happy to share that during the year, our Packaging Films Business was recognised with two prestigious awards. Our facility at Indore was conferred the Quality Sustainability Award at the international convention, organised by the International Academy for Quality (IAQ). SRF FLEXIPAK, our South African facility received the ‘Sword of Honour’ from the British Safety Council, demonstrating our emphasis on superior Environment, Health, Safety (EHS) practices.
As a market leader, our focus on sustainability initiatives is our responsibility and we will continue to work towards innovating films that have a lower environmental footprint. We aim to foster the ‘Circular Economy’ where we increasingly bring waste materials back into the economy.
Technical Textiles Business
In FY 2021 – ’22, our Technical Textiles Business demonstrated promising results of 68.1% Year-over-Year to achieve healthy revenues of ₹ 2,085.2 crore. This was achieved on the back of highest-ever sales volumes from the Belting Fabrics and the Polyester Industrial Yarn segments. This contributed to partially offsetting the weak demand for Nylon Tyre Cord Fabrics. Overall, the Company is actively focusing on improving its operational efficiency and productivity paraments in this segment.
Other Businesses
In our Other Businesses, SRF continues to maintain market leadership in the Coated Fabrics Business, with a high-volume share driven by improved sourcing initiatives and plant efficiency. In the Laminated Fabrics Business, SRF retained its price & volume leadership, with the facility operating at full capacity, achieving its highest-ever sales in the fourth quarter. However, realisations in this segment were adversely impacted by the continuing surplus supply situation.
Our People are our Real Assets
I would like to emphasise at this point that our passionate workforce is our core business asset. I want to thank the employees of SRF for their hard work, dedication, and resilience in scripting our success story.
As most of our teams have now returned to our offices, I have had the opportunity to rediscover the collaborative culture that makes us such a unique and extraordinary Company.
Expanding our Community Impact
SRF Foundation, the CSR arm of SRF, has deep expertise in supporting transformative education initiatives at local and grassroot levels, including improving student-learning outcomes for more than one lakh fifty thousand students in India. We also go beyond traditional education by imparting vocational skill training to the youth, making them employable and contributing citizens of our country.
More importantly, our employees worldwide share our passion for community service. They volunteer and leverage their skills and experience to make a difference in the world. I am grateful to my team for their commitment towards making a positive change in our society.
In closing
On behalf of the Board and management, I thank you, our shareholders, for your continued support. I am confident that, with the actions we have outlined to continue driving growth, we will create long-term and sustainable value for our stakeholders.
Stay well.
Sincerely,
