It is my privilege to present the Annual Report of Your Company for FY 2016-17. This was an important year, as it marks the beginning of a revolutionary era in the field of biofuels, not only for Your Company but also for our country.
Development of the 2nd generation cellulosic ethanol technology, subject close to our heart, has arrived at an important milestone with successful completion and startup of Your Company''''s Smart Biorefinery demonstration plant in Maharashtra, India. The red letter day was on 7th May, 2017 when Mr Nitin Gadkari, Union Minister of Road Transport, Highways & Shipping formally inaugurated the demonstration plant.
Availability of 2nd generation ethanol is going to play a vital role in advancing India towards higher self-sufficiency in transport energy sector. Use of agri-residue as feedstock provides an avenue of utilization to this otherwise non-capitalized resource. It will not only become an additional source of income to the farming community but also attract rural youth towards entrepreneurship. Blending of 2nd generation ethanol with petrol is imperative for a low carbon emission pathway while achieving India''''s developmental aspirations.
FY 2016-17 witnessed a host of collective initiatives by ministries of road transport, petroleum, renewable energy and various industry participants. National Oil Marketing Companies (OMCs) will spearhead the first set of 10-12 nos. of 2nd generation ethanol projects in the country. It gives me immense pleasure to share that OMCs have put faith in Your Company for changing the face of Indian transport sector with this cleaner liquid fuel. For as many as three projects, Your Company has been chosen as technology partner and MOUs have been signed to that effect. It is heart-warming to be part of this energy revolution in the country.
In my opinion, this is the beginning of a new, challenging and equally exciting journey. Further R&D is underway to develop other renewable fuels and chemicals from the biorefinery technology platform. Configuration of bio-CNG, which is increasingly being used as a clean, renewable transportation fuel is also under development. On another front, successful trials have been carried out for biobutanol production from molasses based on technology platform of Gevo Inc. of USA. Commercialization of biobutanol to bio jet fuel process is under discussion.
FY 2016-17 has been challenging for growth of Indian economy in light of the geopolitical developments and unleashing of financial reforms. Growth in overall demand and consumption across the economy is gathering momentum, albeit slowly. This has impacted capacity expansion, especially in the private sector. Further, stringent assessment of new proposals given the risk aversion of banks has resulted in delayed financing of projects. Teething troubles, following policy reforms have slowed down the pace of economic recovery.
India Inc. has welcomed the move to Goods and Services Tax. Your Company has undertaken a detailed assessment of its impact on the business operations, which is estimated to be neutral to positive. In conjunction with preparedness for GST, Your Company is also exploring digitization and its relevance to the business.
While closing, I will reiterate that Your Company will persistently pursue various opportunities in its chosen business segments. Your Company is confident of the proposition given that sustainable fuels is the need of the hour. I truly believe that strong technology backbone and engineering fundamentals will enable it to create value for all stakeholders in the years ahead.
I thank you for your continued support to Praj and confidence in its capabilities.
30th June, 2017