JK PAPER Chairmans Speech

Most of the others in the developed world remain marred in a low-growth phase, and so provide little assistance to growth. Meanwhile growth in the emerging world is still hovering around sub-5% and from the pre-2010 levels of 7-8%. The picture is starker if we look at only developing Asia, where growth has slumped to around 6% from pre-crisis levels of over 11%. This is mainly due to a pull-back by China, where growth is perched at 6.5%, and ASEAN, the other high growth area, now growing at below 5%. The other major economies of the emerging world yet to fully recover from the recent downturns, namely Brazil and Russia reported growth of only 1-2%, with some pullback also expected in the Middle East, mainly the oil producing majors (Saudi Arabia, Iran, UAE) and Turkey (political upheaval).

Amongst such disarray, only India provides some comfort as it has overcome the temporary disruption caused by the demonetization (when growth slipped back to 7.1%) and set to grow by 7.2% this year and 7.7% next year. This will be primarily driven by the government''''s infrastructure spending and a concerted effort to improve the ease of doing business in the country, mainly through GST and an early resolution to the NPA problem. The economic stability is further reinforced by the government''''s commitment to stick to fiscal consolidation and keeping inflation within acceptable levels. Also the ''''reform'''' focus of the government led to record annual FDI inflows ($43 billion in 2016-17) in addition to FPI inflows of over Rs 1 lakh crore ($6.8 billion) so far in 2017.

But India''''s growth potential is yet to be unleashed, as most manufacturing capacities remain underutilized by about 25-30%. This is also reflected within our own industry, which makes our performance even more commendable. JK Paper not only managed to achieve a turnover of around Rs 3,000 crore, but achieved better profitability with an EBIDTA of over Rs 539 crore. Our strong distribution reach made a big difference in this regard. With a team of 191 distributors operating out of 14 depots, we were able to maintain a leadership in the copier segment with a 24% market share and amongst the top two positions in the coated paper and packaging board segments. We are also actively involved in market expansion outside India, exporting our products to more than 40 countries.

JK Paper has been a pioneer in adopting the latest environment friendly process and technologies from time to time. This has enabled us to undertake sustainable development by bringing about a perceptible change in efficiency parameters, in energy and water usage, which in turn helped us improve our operating margins.

Our CSR activities are well-focused and done in an organized manner, and are all geared to be position us as an assiduous corporate citizen. The efforts encompass areas like Swacch Bharat, adult literacy, healthcare camps and skill development initiatives through self-help groups and adopting ITIs to usher in positive change.

India''''s unique position as a growing economy coupled with enablers like organized retail, quality packaging and rising preference for ready-to-eat foods and host of other preferences that come with rapidly changing lifestyles bode well for the Indian paper industry in the medium-to-long-term. The macro fundamentals, set to emerge stronger following the implementation of GST, enhanced digitization and an upbeat consumer sentiment are perfectly aligned with your Company''''s thrust on quality and valued-added products and empowering us to take the ''''front-seat'''' of that growth drive. Your continued support over the years has given us the strength and I look forward to the same as we make the most of the opportunities on offer.

Bharat Hari Singhania

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

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