Chairman & CEO Address

Dear Stakeholders,
FY 23-24 continued to be a year of challenges for the Polyester Film industry. New capacities commissioned in China and India over the last 2-3 years, created a situation of oversupply and heightened competition, putting pressure on margins. This, coupled with other factors, such as the Global economic slowdown, rising interest rates, inflationary pressures, the Red Sea shipping crisis, destocking in the supply chain and constrained demand in certain downstream businesses has collectively resulted in an overall sharp decline in the Company’s profitability in this year.

Aligned with the market dynamics, there was a 6% drop in volumes for the year under review. Sales revenue has declined by 18% as compared to previous year due to lower volumes as well as fall in selling prices owning to prevailing market conditions and lower raw material costs. However, the Company was able to outperform most of its industry peers driven by its diversified manufacturing presence, integrated operations, widespread customer base, attractive product offerings with a high share of specialty products and continued focus on cost and operational efficiencies. Normalized Operational EBITDA for the FY 23-24 was H 50,464 Lakh (after adjusting the impact of unrealized FX gains/(losses) on long term loans).

Market Opportunities
The long-term prospect for the BOPET films industry remain positive with a robust demand growth outlook of 4-5%. Demographic shifts, continued shift from rigid to flexible packaging, evolving retail formats, and the rise of e-commerce have increased per capita packaging material consumption, which combined with accelerated demand growth in electrical and industrial applications besides newer applications in lithium-ion batteries for EVs are expected to contribute to the industry’s growth. The Company strives to build on its position in the industry by being a preferred supplier with differentiated pricing power, catering to local market needs through global-local manufacturing capabilities and a diversified portfolio.

Building Strengths
The Company continues to invest in expanding its specialty films' capabilities and assets and remains confident on the likely positive impact on the bottom line in the coming years. The Company’s asset configuration strategy emphasizes cost efficiency by leveraging modern assets for standard products and repurposing older lines for efficient specialty film production, achieving economies of scale with a streamlined asset base at each location.

Global Presence and Capacity Expansion With a globally integrated manufacturing setup, the Company has a distinct strategic advantage in the industry. It provides a comprehensive suite of products at each manufacturing location while ensuring a reliable supply chain through forward and backward integration. This flexibility allows us to meet the changing needs of CPGs and OEMs, offer quick turnaround on small orders and respond to unplanned requirements. Despite delays, the ongoing expansion project in the USA which is expected to start commercial operations by Q4 FY 25 will further help fortify its position.

Differentiation through Consistent Innovation Over the years, Polyplex has expanded its product offerings beyond the standard and specialty base films into high value downstream products. Polyplex’s D-PAC (Differentiated Product, Application, and Customer) strategy enhances its specialty portfolio. Polyplex maintains strong relationships and ongoing engagement with anchor customers for iterative product development. The Company’s differentiated product offerings have driven healthy growth in its specialty portfolio by addressing unique customer needs and niche applications.

Strategic investments focus on strengthening our competitive edge through near-shore and on-shore manufacturing locations, thereby leveraging logistical advantages and trade duty differentials. The Company maintains robust capacity utilization across all its plants, while continuously seeking opportunities to debottleneck plants for maximum productivity.

Cultivating Sustainability Sustainability is a key element of our business strategy and we have been driving many such initiatives, even before any regulatory impositions were put in place in some countries. The various investments made by the Company and in particular the investment in the recycling subsidiary in Thailand, EcoBlue Limited in 2012, further enhanced by expansion into recycling post-consumer PET and Polyolefin waste in 2022 besides other recent investments in chemical recycling capability at Turkey and Thailand demonstrate the Company’s continued commitment to Sustainability & Innovation. The Company strives to be the preferred and chosen partner to all its customers in jointly working to develop sustainable and innovative solutions and to co-create a better future.

Looking Ahead Our robust balance sheet, low gearing ratio, and ample liquidity ensure stability even in turbulent market conditions. Confident in our industry's long-term prospects, we plan to explore new investment opportunities in base films and downstream applications, particularly in new-age industrial sectors. On behalf of the Board, we extend our heartfelt thanks to all our shareholders, business partners, and employees for their continuous support throughout the ups and downs of over three decades of operations.