Mr Rajesh Rathi interview with TV Channel ET Now
Our Deputy MD, Mr Rajesh Rathi gave an interview with a prominent TV Channel, ET Now, on the growth prospects of Sudarshan.
Considering the good performance of your Company during FY 2015-16, what are your plans for the future?
Company’s core business is manufacturing of Pigments which are Colorants used in Paints, Plastics, Printing Inks and Cosmetics industries. Our vision is to become the fourth largest pigment player in the World. Today, we are the largest pigment player in India and also have the largest market share in India. We are seeing significant traction in the three large overseas markets i.e. Europe, North America and Asia. The top three global plastic and paint customers have enrolled us as a strategic supplier. We are also amongst the top two suppliers in the Plastic Industry in Europe, India and Middle East.
Considering that the crude oil prices have risen, what could be the impact on your margins?
Inputs for pigments are raw materials which are much ahead in the supply chain. Hence, increase in crude prices even though it has a bearing on our costs, there are factors like demand and supply situation which is crucial. Currently, there is an excess supply of raw materials in China which will benefit the Company. We focus on improving our return on capital and EBITDA margins and we have several strategic initiatives to support the same.
Are you planning for any price increase considering the crude oil prices?
As explained in the previous question, we have several strategic cost reduction initiatives to offset the increase in raw material prices. Hence we do not plan to pass on the increase in raw material prices, if any, to customers.
You have signed an MOU with Maharashtra Government for a project with initial capex would be about Rs. 162 Crores. Will it be funded mostly from internal accruals, if so, by when it will be ready?
Company has signed MOU with Maharashtra Government under the Mega Project Scheme and we hope to make an investment of Rs.1,000 Crores over a period of 5 years. Investments will be made at our Roha Plant for augmenting capacities for manufacture of High Performance Pigments, Pigments for Automotive Industry, Paints, Cosmetics and Coatings which will cater to larger customers both in India and abroad. This will be funded partly from borrowings.
There is news that Sudarshan Chemicals will be signing a Joint Venture with Dupont. Is it so?
This is not correct and there are no such plans in the near future also. We are a strategic supplier for Axalta who is part of the Dupont Group.
What is your outlook for FY 2016-17?
We have a great focus on improving our return on capital and EBITDA margins and we have several strategic initiatives to support the same. As such, I am optimistic that the good performance of the Company should continue in the future.
What will be the impact on top line considering tie up with Global Players?
Considering the fact that top three global plastic and paint customers have enrolled us as a strategic supplier, we therefore expect growth in top line which is in line with our vision of becoming the fourth largest pigment producer in the World.