Dear Shareholders,
“IN MY LAST LETTER TO YOU, I HAD DWELT EXTENSIVELY ON HOW THE RELENTLESS PURSUIT OF EXCELLENCE HAS BEEN A VALUE MULTIPLIER FOR US FOR OVER SIX DECADES. THIS YEAR TOO, I INTEND TO REITERATE ON THE SAME GUIDING PHILOSOPHY AND INSPIRATION. YOU MAY ASK, WHY IS THAT SO? MY SIMPLE ANSWER IS THAT AS A COMPANY, WE FOLLOW AN ABIDING COMMITMENT TO EXCELLENCE.”.
Our strategies over the years may differ, as the macro environment suggests, but the commitment to excellence remains enduring. At HSIL, we are crafting an inspiring legacy of excellence, which when looked at a granular level translates into an urgent call to ceaseless action, innovation and forward movement.
We know our journey will seldom be smooth sailing; there will always be unpredictable storms trying to deflect our course. We are operating in a sluggish macroeconomic environment, where global growth prospects will continue to remain fragile to downside risks. Headwinds, however, can be best addressed by concerted efforts and measured optimism. Measured because we must constantly assess where our Company is heading towards, or if there is a need for course correction; and optimism, along with dynamism is the only Holy Grail to move forward.
We are all aware that the COVID-19 outbreak has impacted global economies and businesses in a manner that we have not seen before. There are going to be further hurdles in the coming few months, before the economy reboots and revives itself. We wholeheartedly welcome the Government of India’s economic stimulus package of ~` 20 lakh crore to help support businesses and the lives and livelihoods of millions of people, especially the disadvantaged sections of society. I must also praise the Reserve Bank of India’s (RBI’s) role in enhancing the liquidity in the economy through aggressive interest rate cuts and temporary moratorium on loans to help cushion the hardship faced by citizens and small businesses.
Although the nation-wide lockdown has impacted our businesses, we are keeping a close watch on the evolving scenario, and I can assure you that based on current market conditions, the Company currently has enough liquidity within its undrawn banking limits to service its debt and other financing arrangements.
Other than the sudden COVID-19 challenge, the financial year 2019-20 was a rather satisfying year for us. Our customer centricity continued to be the cornerstone of our success during the reporting period. We delivered value with speed and cost-efficiency, along with sustainable resource management.
At HSIL, sustainability and operational priorities are closely interwoven. Our manufacturing capabilities remain best-in-class and can match efficiency benchmarks of any advanced country of the world. We are consistently working on surpassing our quality benchmarks, incorporating global best practices in manufacturing and upskilling our team members.
Most of you are already aware that our plastic pipes and fittings and counterfeit-resistant security caps and closures manufacturing plants at Telangana comply with green building norms and have received the platinum rating by the Indian Green Building Council (IGBC). Our plants have achieved a very high watermark benchmark in terms of manufacturing capabilities, waste management and water management (zero-water discharge). You will be glad to know that we have embedded sustainability even in our factory design. Our other measures comprise ensuring energy and water conservation with process waste being collected and reused.
As you know, our demerger was a strategic move to enhance capabilities, create future-focused institutions of excellence and unleash stakeholder value. The aim is to accomplish the next orbit of growth. Following the demerger which got approved by the Hon’ble Kolkata Bench of National Company Law Tribunal vide its order dated 26 June 2019, HSIL is now manufacturing and selling Packaging Products, which offer a comprehensive basket (glass containers, PET bottles and products and security caps and closures); and also houses the manufacturing of Building Products businesses (sanitaryware, faucets and plastic pipes and fittings).
Our Packaging Products division saw encouraging growth on the back of growing sales volume and pricing, while effectively managing costs. Through pricing, product innovation and ongoing efficiency efforts, we could offset higher-than-expected raw material and logistics cost. At the heart of our success is our value proposition – the best results at the lowest total cost and environmental impact for our customers. During FY 2019-20, we witnessed growth across both our packaging and plastic pipes and fittings manufacturing businesses, along with better realisations.
Going forward, we see significant opportunities for our Packing Products businesses to create value for our discerning customers by offering efficient packaging solutions aligned to their needs. In the Building Products manufacturing businesses, our focus remains relentless on achieving optimum utilisation of capacities and better efficiencies. We will continue to invest to deliver more value to our customers and communities and sharpen our focus on our core businesses.
Our core purpose is to passionately strive to enrich the customers’ quality of life; and over the years we have evolved a talented team of highly motivated go-getters, who continue to deliver on our purpose, keeping the customer at the heart of all initiatives. We are investing proactively in nurturing our talent pool and enabling them to shoulder more responsibilities and embrace a greater measure of challenges. Our people provide us with the best competitive advantage; and we will continue to sharpen the skills of our human assets, as we equip ourselves for the third decade of the twenty-first century.
Holistic excellence cannot flourish without the participation of the community. Our approach is participatory growth that takes into account the interests and addresses the concerns of community stakeholders. We are committed to community welfare and undertake various programmes around hygiene and sanitation, healthcare, skill development, women empowerment, education and disaster management.
Before I conclude, it is pertinent to mention that our initiatives for decades have made us an even more efficient, effective company for the long term, and improved our profitability curve and growth potential. Over the years, we have accomplished many milestones, but the journey continues. HSIL’s message is simple: Excellence can’t wait. HSIL celebrates excellence every day, and I am happy to know that we remain a company that our shareholders, customers, our team, can count on, today and in the years to come.
Thank you for your trust.
Warm regards,
Dr. Rajendra K Somany
Chairman and Managing Director
HSIL Limited