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Chairman's AGM Speech |
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Chairman's Speech delivered at the 23rd Annual General Meeting of the Shareholders of Praj Industries Limited.
9th July, 2009 |
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Twenty Five years of Value Leadership
The calendar year 2008 till mid- year of 2009 will go down in the annals of time as the year of unprecedented changes - economically and politically.
It has been a period of great turbulence which saw the economies of many countries, big and small, on the brink of collapse. The GDP growth figures were revised almost overnight, country ratings swung in the opposite direction, unemployment rates hit a new high, stock exchanges saw the bears taking over. Few months is all it took to show how connected the world is and how one event can change the fortunes world over.
We also saw how negative sentiments were spiraling out of control. It was time for bold decisions and brave actions. And, then we did see the hint of 'green shoot'.
We saw a historic change in the leadership of world's oldest democracy, USA. We also saw winds of change giving the message of stability to world's largest Democracy, India. 'Change' is the operative word.
In terms of climate and environment we saw increased commitments by some countries. The EU Parliament voted boldly in favor of GHG emission reduction by setting a mandate for 10% renewable energy mix. The US Senate voted in favour of climate change mitigation bill. This just goes to show that the world no more belongs to the faint hearted.
Back home, in the 2009 Union Budget presented recently by the Government of India, there is a move to promote use of biodiesel in petro-diesel. Some concessions are offered. This is certainly a beginning. The budget also talked of substantial increase in outlay for rural and social development.
It is also the Year in which your Company completed twenty five years of existence. Completing twenty five years in itself is not the major achievement. It is a mere timeline. But, it is the creation of value leadership, spread across five continents, which is our contribution over the years.
The year 2008 saw the single largest jump in biofuels production (year on year) largely led by bioethanol. At 81 bln litres, it defied earlier predictions of 72 bln litres that too by 2010. This was backed up by legislative support from Americas - both North and South, Europe and much of South East Asia & Far East. Mandates do play an important role in kick-starting the programs and Government buy in is an essential part of the entire exercise. We did see some disconnects in countries like India. However, the world at large recognizes the benefits of biofuels towards mitigating climate change.
In order for biofuels to become sustainable, the next step would be to create economic sustainability - non-food energy crops, robust processes, better business models, mainstreaming of biofuels, etc. As you know, Praj is already developing non-food biofuels process. It is also integrating with Agri-solutions for the same. A pilot plant for lignocellulosic biomass for ethanol production process is testing various parameters for further scale up. Algae based biofuels is another agenda being pursued at our R & D Center.
Working on biofuels has given the confidence that your Company can pace up in the area of industrial biotech. Praj has the infrastructure. It has the resources in terms of manpower and management span. Industrial Biotech offers unexplored areas of growth where Praj can add definitive value. Tough times will pass, but we should not lose sight of growth.
Water,Power,Food,Land Use and mobility will determine how nations progress. Ours is a fairly young nation. We have to think of sustainable solutions which will not only provide economic prosperity, but will also create environmental prosperity. This is where we see green and clean technologies making a mark. Industrial Biotech will help us address these areas.
In the past few years the renewable energy sector has seen a lot of interest. Over $ 120 bln have been invested for building capacities in 2008 alone. Biofuels formed around 13% of these investments. This is likely to grow ten fold in another ten years. However, this growth demands commercialization of technologies. Investment into R & D needs to be intensified. At Praj, we have already taken note of this and are pushing through R & D programs which will make a difference in the long term. We also see a potential for job creation with many more green industries being set up.
However, while pursuing these growth opportunities in biotech and biofuels sectors, we need to simultaneously leverage our expertise and strengths in synergistic areas to maximize shareholder value.
We see many challenges in the coming period. The management of your Company will make every effort to minimize the impact of the times. As we move forward, Praj will endeavour to attain pole position in responsible greentech and cleantech and be back on the growth path. This is the crux of value leadership.
Thank you for your patient listening.
Pramod Chaudhari, Chairman
Praj Industries Limited
Place: Pune
Date: 9th July, 2009.
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