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Chairman's AGM Speech |
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Chairman’s Speech delivered at the 24th Annual General Meeting of the
Shareholders of Praj Industries Limited.
23rd July, 2010 |
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Good Morning. On my behalf and on behalf of the Board of Directors, I
welcome you all to this 24th Annual General Meeting of your Company.
By now you have received copies of the Annual Report for Fiscal 2009-10. It
gives me great pleasure to share that we have incorporated some green
initiatives in this area too. You would have noticed that we have printed an
abridged format for standalone accounts. The non-abridged versions are
available online. Also, for those who had registered their online contacts , we
have sent an online link to the Annual Report, well in advance.
application of technology and the green intent has helped your Company
lower its carbon footprints, albeit in a small way. I thank all shareholders for
co-operating with us in this initiative. Many of you have appreciated this, but
for those who may not be in agreement, please do write in with your
observations to our Secretarial Department.
I assume you have gone through the Annual Report and consider it as read.
The fiscal 2009-10, from the feedback received from some of you, has been
disappointing for many. The performance has gone down 19% on the topline
and in response the profit margin has shrunk from 20% to 19% or 100 basis
point. I understand the concern you may hold.
Let me reiterate, growth is always expected from a Company and it should
deliver on the growth expectations.
However, many times, in the face of
severe crisis like the adverse economic situation prevailing since 2008
globally, it also becomes imperative to preserve the core. We did just that.
The year also saw us reaffirm our commitment to existing businesses
including solutions for ethanol and alcohol plants, beer production plants etc.
We have strengthened our commitment to our customers in these sectors,
thereby ensuring that we remain the Company of choice in these areas.
We decided to strengthen our focus on areas which can be built around the
core capabilities of the Company, namely engineering, world class equipment
manufacturing, biotech led processes which includes advanced biofuels,
bioconsumables and address clean technology solutions more vigorously, like
water & wastewater treatment.
This has seen us introduce new businesses around customized equipment
manufacturing which leverages our present manufacturing capabilities,
termed world class. The introduction of water & wastewater treatment area
was also brought forward. All these initiatives are expected to yield results in
the near term.
Bio based solutions continue to draw a lot of attention around the world.
Green Chemistry embodies a science which employs biotech for production of
bio based products like chemicals, plastics and fuels. A huge opportunity is
being projected. I am truly excited about this opportunity, not just because of
the huge numbers being projected, US$ 450 bln by 2020.I am also excited
about the application of science to world’s most difficult but common uses. It
calls for not just basic R & D, but also pushes the frontier of human
intelligence to a new high. The sheer opportunity for innovation is something
Praj is always interested in.
This also vindicates our decision to invest into a state-of-the-art R & D center,
Praj Matrix. Praj Matrix has been working on several fronts including green
chemistry. Yet another aspect of the entire business of green chemistry is that
our current business opportunities which involve sugary feedstock and
ethanol, can be scaled up and extended. This would lead to ‘biorefinery’
concept which will not only produce alcohol of various grades, but value
added bio-chemicals too. One such product and a couple of processes are
nearing completion for commercial applications in the near future. Due to IP
regulations, I am not in a position to give you any further details on the same.
Emerging economies like India stand to gain from such developments, not just
because these innovations can take place in such countries, but also because
they present a vast opportunity for installation of such assets.
Your Company has a strong recognition in this space which should see your
Company creating distinctive mark for itself.
In our core area of biofuels, some structural changes continue to take place.
While USA and Europe markets continue to attempt economic recovery, the
long term biofuels projections, as made by FAO and OECD remain buoyant
largely on the back of unmet mandated requirements laid down by various
countries, including EU nations. The figures, which may sound very ambitious
at 150 bln litres of ethanol consumption by 2020 from current 85 bln litres, are
not unreachable. Technology is making good headway. Even though US has
lowered cellulosic ethanol targets in the immediate future, the fact that
production is targeted is an achievement in itself. As you know, Praj is also
engaged in development of technology for the same.
As economies recover and environmental concerns strengthen at the back of
oil related environmental damages, biofuels will
momentum.
In India, the mere revision of oil prices are making biofuels
attractive. The true price you pay for hydrocarbons is much more than the
actual cash you payout for the same. The cost of environmental degradation
is usually ignored. We feel, the world is waking up to this.
We have made environment a big concern and woven this into our business
offerings. Into our internal processes as well. You will be happy to know that
your Company has intiated ISO 9000:2008 efforts which will enhance its
environmental performance. A detailed sustainability report is already with
you.
In the short term, challenges may continue. But, our core remains strong.
We will be alert to opportunities. The management of your Company has the
vision and strength to take the Company towards the growth path. We will
continue to build upon our capabilities to sustain and take the leap into
another orbit.
Before closing my speech, let me share with you our CSR initiative promoted
through Praj Foundation at local city level in area of waste management.
Presently Praj Foundation promoted projects are processing more than 4
Tons of garbage into high quality vermicompost each day.
compost acts as perfect nutrition to soil for growing organic vegetables and
other plants. We have kept samples of this vermicompost produced at Girls
Sainiki School nearby – along with plants fed on the same for you to carry
home - token of our commitment. Ofcourse it is no compulsion if it is
inconvenient but we are confident you would like to participate in our efforts to
promote Clean and Green environment around us.
Thank you for your presence and patient listening.
Pramod Chaudhari, Chairman
Praj Industries Limited
Place: Pune
Date: 23rd July, 2010.
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