Press Release Details
The 101st Annual General Meeting of Balmer Lawrie 12 September 2018
The 101st Annual General Meeting of Balmer Lawrie & Co. Ltd. was held at Kolkata on 12th September, 2018.
Below is an extract of the Chairman’s Speech:
In an era, when the average life span of companies is shrinking rapidly world over, Balmer Lawrie completed 151 years of its existence and is still going strong. There are very few corporate houses in India, perhaps across the globe that could stand the test of time that this Company has endured. During this journey of over 150 years, Balmer Lawrie has survived myriads of challenges, reinvented itself and adapted to various changes, in order to stay ahead. Balmer Lawrie leveraged every change as an opportunity and remained profitable by strengthening core businesses, foraying into new businesses and exiting those which were not doing well.
Overall Financial Performance
Balmer Lawrie recorded net turnover of Rs. 1,797 Crore during 2017-18 as against Rs. 1,779 Crore in 2016-17 registering an increase of approximately 1% above last year. Further, the Company recorded a Profit Before Tax of Rs. 261.12 Crore in 2017-18 as against Rs. 254.11 Crore in 2016-17, the increase being attributable to improved performance of various SBUs, particularly, SBU: Travel & Vacations and higher dividend income earned during 2017-18.
Performance of Strategic Business Units (SBUs)
Balmer Lawrie is a diversified PSU with a presence in both manufacturing and service sectors.
Industrial Packaging (SBU: IP) – The SBU has shown consistent growth in volume, turnover, profitability and profits. Despite the shrinking of almost 15% of the addressable market due to MSME / Government regulations, the SBU has managed to increase its volumes over the last few years. A new manufacturing facility is being set up at Vadodara which is expected to be commissioned shortly and will provide a significant edge to the SBU for further growth.
Greases & Lubricants (SBU: G&L) – Due to increased thrust in Channel Sales (Automotive and Industrial), this segment achieved an excellent growth of more than 25% in sales volume during 2017-18. During the current year, SBU: G&L has been able to maintain its overall performance in terms of production and sales as compared to last year. There has been marginal improvement in the bottom-line performance. SBU: G&L has worked out strategies in the perspective of substitution, cost effective formulation, value addition, bio-degradable products etc. to combat the challenge of margins in the coming financial year.
Leather Chemicals (SBU: LC) - The SBU achieved higher revenues and remained profitable in spite of the escalating raw material prices through cost reduction, efficiency improvement in planning, manufacturing, sales & marketing, technical services and product development. Overall, the SBU delivered growth in volume and revenue. Both fatliquor and syntan segments witnessed healthy growth. SBU: LC is optimistic about the business scenario and with concerted market development activity, is hopeful of better performance in the coming years.
Logistics (SBU: L) - Under this SBU, there are two verticals viz., Logistics Infrastructure and Logistics Services.
Logistics Infrastructure (LI) – The warehousing activity continued to perform well during the year due to better utilization of space. Balmer Lawrie successfully bid and bagged a contract for providing warehousing and distribution facility for the medical equipment manufacturing units being set up at Andhra Pradesh MedTech Zone Ltd. (AMTZ) on Build, Operate, Manage and Maintain (BOMM) basis.
Considering the potential in cold chain logistics, the Company has set up two Temperature Controlled Warehouses one at Hyderabad and other at Rai, Haryana. The third one at Patalganga near Mumbai is expected to be ready for commercial operation by end of 2018. Further, the Company is in the process of commissioning the Multi-Modal Logistics Hub (MMLH) at Visakhapatnam in partnership with M/s Visakhapatnam Port Trust (VPT) for handling Exim and domestic cargo.
Logistics Services (LS) – Due to stiff competition in the air and ocean freight segments, LS suffered a de-growth of 9% in the top-line. As a consequence, the bottom-line also got affected marginally compared to the previous year. LS was able to increase its business from the private sector by 3% on year-on-year basis, with the major increase coming from ocean export freight from Chennai, Mumbai and Kolkata branches. The Project Logistics team was able to bag prestigious orders and executed them very efficiently earning accolades from the customers.
Travel & Vacations (SBU: T&V) – This SBU has two verticals viz., Travel and Vacations
Travel - This business vertical has shown remarkable progress in turnover and profit in 2017-18, inspite of constant decrease in IATA commission being paid by all leading domestic and international airlines to the booking agents. This vertical is further driving growth by offering Self Booking Tool (SBT) facility to PSUs, a facility that helps in seamless booking and cancellation of tickets, payment and its appropriation against specific invoices. Travel vertical has registered an increase of 22% in net sales and over 100% in profits. The growth in turnover brings better Productivity Linked Bonus to the Company.
Vacations - The Vacations vertical during 2017-18 reported lower turnover due to reduction in NRI business, lower GIT and FIT. However, there is buoyancy in bookings for the FY 2018-19.
The SBU is presently undergoing a technology upgradation to further increase its efficiency. This up-gradation will aid in further streamlining the services and provide better interface to the valued customers and associates. ‘Vacations Exotica’ is being repositioned with a new theme and tag line of ‘Collect Stories’ and the website is being revamped to give the brand a much younger and new age look to target wider customer segments
Refinery and Oil Field Services (SBU: ROFS) – The novel process of hydrocarbon recovery from oil sludge has gathered momentum due to the high crude oil prices across the globe. The SBU is the pioneer in mechanized in-situ sludge processing and maintains leadership position in India with nearly 70% market share. The SBU is considering necessary technology upgradation, in not only maintaining its market leadership but also its superiority in terms of technology.