||PRAJ CIN NO. - L27101PN1985PLC038031
Chairman’s Speech: 28th Annual General
Meeting of Praj Industries Limited
28th July, 2014
Welcome to the 28th Annual General Meeting of Shareholders’ of Praj Industries. It is a
great pleasure to welcome you to the new office of Praj Industries. This is the first AGM
since we shifted to the new premise and hence very significant. I am also happy to share
with you that this year, your Company completes 20 years of being a Public Company.
It has been a long wait of over five years since the world first got hit by the subprime crisis
and the resultant global meltdown. We have been watching the gradual economic
resurgence around the world. Some green shoots are visible in pockets. There is a
rebuilding of hope and aspiration especially in India which is definitely on the move, with
her new Government. With the Indian investment cycle kicking off and the promise of
business friendly regulatory climate for new investments, the nation building exercise is on
to a good start.
Ofcourse, there are challenges like delayed monsoon, conflicts in middle east, the Ukraine
and Russia stand-off and slower economic recovery in some of the developed economies.
But, amongst all this, we see the emergence of a new global trend.
The year 2014 is a bell-weather year in the making of paradigms. The world is getting
redefined with new centers of globalization, application of technology for the larger
good, rapid innovation, higher level of transparency, better governance, social
responsibility and sustainability as a measure of success of corporate strategy.
In the last fortnight we saw the resurgence of global hub in the form of the BRICS with
India playing a more significant role. While they have been in existence, we see a new resolve with stronger leadership in each of these countries providing a reason to believe that we will see faster growth in these economies.
Over the next 15 years, the global population will likely increase by more than a billion. It is
estimated that emerging markets will also see doubling of the middle class population.
This includes new markets in Africa, Asia and LatAm. Food and energy requirements are
both forecast to rise by about 50%; and water requirements will increase by around 30
percent. Each of these challenges will be compounded to an unknown degree by climate
change—which is in part caused by current carbon-intensive, fossil-fuel-based energy
sources, and which will almost certainly impact water availability.
Your Company is gearing up to take on opportunities presented by the changes in the
external environment. Transformation is the motto at Praj. Accelerating transformation
is the mantra.
While first generation ethanol has become an integral part of the renewable fuels mandate
in many countries, 2nd Generation will assume greater importance. As you have been
informed, your Company is currently in the penultimate stage of commercialization of this
technology. In India too, the new Government has already made its intention clear for
10% blending of ethanol in gasoline. We feel India has a great chance at integrating
renewable fuels with fossil fuels resulting into savings in forex and environment.
Recently, the Government of India announced the ambitious Ganga cleaning project with
an outlay of Rs. 2000 crore. We see a large role that can be played by technology,
especially in treatment of industrial wastewater streams, forming 15% of the pollutants
flowing into the river.
Throughout the developingworld,water, sanitation, and hygiene arematters of
life and death. Eighty percent of diseases are related to contaminated water, and majority population does not have access to clean drinking water. Praj, through its industrial water & wastewater systems is doing its bit towards ensuringwater availability.
Given the water stress on communities, technology can play a large role in
overcoming the same. Our EcoPhotox technology can be employed to treat
wastewater from urban housing complexes which can be safely recycled for other
uses. This is yet another example of how technology can respond to urban water
stress for larger good.
Innovation is becoming even more critical as global changes create volatility in the
operations of organizations. Your Company is known for innovative technologies. We are
enhancing rapid innovation for quick deployment of technologies. An innovation council
has been launched to embark on road map for the next generation technologies which are
already providing us with a pipeline of solution suites. In the past 2 years we have filed
for more than 12 patents. We now wish to quicken this pace in order to increase
differentiated value in our offerings. We see a growing role of innovation in the area of
efficiency – feedstock, energy, water. We have formed a separate team to monetize our
innovations in these areas. This will usher a service led revenue model from modernization,
O & M and spares. Building on the vast reference base, this initiative will also help expand
business as well as enhance sustainability and profit for the customer.
A strong governance is emerging as another differentiators for organizations. An involved
board is a definite strength. It not only conducts various review through committees on
audit, remuneration, shareholders’ grievances and corporate social responsibility but also
guides the management on strategizing and various aspects of corporate governance. Your
Company is committed to a robust compliance policy related to its operations.
With the amendment in Companies’ Act, corporates will now have to mandatorily give
away a portion of their Profits for the benefit of the society. We are proud to share that,
caring for the society comes naturally to us. Praj Foundation along with Praj CSR has been
doing a lot of commendable work in the fields of education, health, rural development
and environment. Also, Praj employees are encouraged to take up sustainable projects in
the field of their choice. A separate report on sustainability is available on our website
for your reference.
Just to sum up, your Company’s businesses are responding to opportunities and challenges
in the environment in many ways such as,
- Replacement of fossil fuels in transport sector with projects of renewable energy
- Applying technology for reduction of water stress through our water & wastewater
- Reliable Engineering Systems and Equipment for the Hydrocarbons & Chemicals
sector through critical process equipment & systems
- Quality of life to ensure better health & wellness through our solutions for pharma,
biotech, health & well ness industries
- Securing food and secondary agricultural resources through livestock health &
- Efficient systems for high quality beverages in brewery and distillery industry
Each one shows our play in a different industry segment. Gradually, we see ourselves
getting evenly balanced on all the pillars of growth - energy, water, health & wellness,
agriculture and quality of life. Over a period of time, we will aim to earn our revenues in a
more equitable manner, with each business claiming a pole position.
Your Company is strong, resilient and well poised! I am confident that, with adequate tail
winds, we can make accelerate the pace of growth.
We have already begun the process. With a new identity, a new office we have also
engaged a multinational consulting firm to advise us on growth strategy that will enable
value maximization for all stakeholders, in coming years. Blue print of our 2014-17
strategy action plan is expected to delivery enhanced value to all stakeholders. I thank our
Board members for their continued inputs and our employees for their continued
In this 30th year of our operations, I would like to end with a note of appreciation for your
support. As you know, your Board has declared an interim dividend of 30% to
commemorate the 30 years. Together with the final dividend of 81% the total dividend
would be 111%. I trust you will provide us your continued support and well wishes as we
accelerate the transformation process.
Pune, 28th July, 2014