Increasing substitution for natural rubber, wood, metals, glass, and concrete by
plastic is expected to drive the growth of the plastic compounding industry over the
coming period. The demand for plastic is rising due to its use in various industrial
applications on account of its ability to form desired shapes and easy molding. Plastic
fittings are considered to be very easy to install as compared to metal or wood fittings.
These fittings are available in a wide range of color combinations, which adds to their
aesthetic appeal.
Moreover, plastic fittings can be sealed very tightly, thus creating a barrier to
external unwanted factors like dust or water. The properties of plastic compounds can
drive its market growth in the coming years. Plastic compounding involves an elaborate
process with various stages such as determining additives ratio, high-speed mixing via
twin screw extruders, melt mixing, and cooling, before final pellet cutting and packaging.
Indian Economic Overview:
Indian plastic industry market is one of the leading sectors in the countrys economy.
The history of the plastic industry in India dates to 1957 with the production of
polystyrene. Since then, the industry has made substantial progress and has grown rapidly.
The industry is present across the country and has more than 2,000 exporters. It employs
more than 4 million people in the country and constitutes 30,000 processing units; among
these, 85-90% belongs to small and medium enterprises. India manufactures various products
such as plastics and linoleum, houseware products, cordage, fishnets, floorcoverings,
medical items, packaging items, plastic films, pipes, raw material, etc. The country
majorly exports plastic raw materials, films, sheets, woven sacks, fabrics, and tarpaulin.
The Government of India intends to take the plastic industry from a current level of Rs. 3
lakh crore (US$ 37.8 billion) of economic activity to Rs. 10 lakh crore (US$ 126 billion)
in four-five years.
Industry Overview:
Plastic compounding is a specialized method that comprises the blending of additives,
fillers, and reinforcing materials with base polymers to create plastic compounds with
enhanced properties. It has the ability to improve strength, impact resistance, flame
retardancy, and chemical resistance. It benefits in optimizing the performance,
durability, and aesthetic appeal of plastic materials. As a result, plastic compounding is
widely utilized in the automotive, construction, aerospace, medical, electronics, and
packaging industries around the world. At present, the increasing demand for lightweight
materials in the automotive industry that aids in enhancing fuel efficiency and reducing
carbon emissions represents one of the key factors impelling the market growth. Apart from
this, the rising focus on utilizing sustainable and environmentally friendly products that
are developed through bio-based and recycled plastic compounds is bolstering the growth of
the market. Moreover, the increasing utilization of plastic compounding in the aerospace
industry for producing air ducts, cabin partitions, overhead luggage bins, avionics sensor
plates, and ventilation impeller blades is contributing to the growth of the market.
However, at present the Company does not have any revenue from operation and that the
revenue mainly comprises of other income.
Segment wise or Product wise Performance:
The Company operates in single business segment of plastic compounds. However, the
company has not undertaken any operation during the Financial Year 2022-2023.
Companys Financial Performance:
(Rs. In Thousand)
| Particulars |
2022-2023 |
2021-2022 |
| Total Revenue |
4689.46 |
4612.39 |
| Profit/ (Loss) before Depreciation, Interest & Tax |
(4761.50) |
(445.31) |
| Profit/ (Loss) before Tax |
(4785.68) |
(512.74) |
| Profit/ (Loss) After Tax |
(4785.25) |
(571.92) |
Important Ratios in respect of the year ended March 31, 2023 are as below:
a) Debt Equity Ratio: 0.00% in Financial Year 2022-2023 (it was 0.00% in Financial Year
2021-2022)
b) Current Ratio: 99.98% in Financial Year 2022-2023 (it was 92.72% in Financial Year
2021-2022)
c) Interest Coverage Ratio: 0.00% in Financial Year 2022-2023 (it was 0.00% in
Financial Year 2021-2022)
d) Debt Service Coverage Ratio: 0.00% in Financial Year 2022-2023 (it was 0.00% in
Financial Year 20212022)
e) Stock Turnover Ratio: 0.00% in Financial Year 2022-2023 (it was 0.00% in Financial
Year 2021-2022)
f) Return on Equity (ROE): -7.76% in Financial Year 2022-2023 (it was -0.85% in
Financial Year 20212022)
Future Outlook:
The plastic compounding industry is anticipated to develop as natural rubber, wood,
metals, glass, and concrete are increasingly replaced by plastic. Both domestic production
and vehicle sales have increased due to economic expansion in lower-income and emerging
nations. Plastic usage in transportation components is expected to increase significantly
over the projected timeframe due to rising sales of personal and commercial vehicles.
These developments are anticipated to drive the demand for plastic compounding in the
coming days.
Luxury items, consumer electrical and electronic equipment, automobile parts, aircraft
and construction are some of the end-user industries predicted to boost plastic
compounding market trends significantly. Consumption of thermoplastics is anticipated to
grow rapidly because of their general application requirements that may be instrumental in
propelling the market growth for plastic compounding.
Opportunity and Threats:
Opportunity:
> The use of plastic made products has gained considerable response from the
customers. In number of items of Retail and Industrial consumption, it is found that the
use of plastic made products has replaced many other products as the best substitute
products. The increase in the use of plastic products will open new areas for the plastic
Industries.
> Polymers are the foundation of plastic and are used in a wide variety of
applications, including packaging, automotive, construction, electronics, medical etc.
> Plastics exhibit a number of useful characteristics ideal for wire insulation,
including ductility, electrical resistance, UV resistance, and fire resistance and
therefore find use in cable and wire industry.
> Plastics used in Automative Industries are required to be lightweight, so as to
reduce fuel consumption.
> Government of India has launched many initiatives like Make in India, Atmanirbhar
Bharat Abhiyaan for making the country and its citizens independent and self-reliant in
all senses. This will have a positive effect on the growth of many industries.
Threat:
> One of the major factors that are expected to restrain the growth of the plastic
compounding market is the fluctuating raw material prices. Therefore, this is expected to
hinder the growth of the plastics compounding market.
> There has been the imposition of various stringent regulations on the use of
plastic with rising environmental concerns related to the toxicity issues, and this will
pose a major challenge to the growth of the global plastic compounding market.
> Possible restraints for the plastic compounding market include increasing concerns
about environment pollution and the need for sustainable solutions. Stringent regulations
on single-use plastics, recycling challenges, and a shift towards biodegradable
alternatives may limit the growth of traditional plastic compounds.
> The fluctuating raw material prices and supply chain disruptions could impact the
industrys profitability. The rise of alternative materials like bio-based polymers and
the growing preference for recycled plastics might pose a competitive challenge.
Furthermore, global economic uncertainties and geopolitical factors could influence
investment decisions and hinder market expansion for plastic compounding.
Risks and Concerns:
At Kkalpana Plastick Limited, management ensures that risks are adequately measured,
estimated and mitigated. Based on operations of the Company, new risks, if any, are
identified and steps are taken to mitigate the same.
> Risk identification is a set of activities that detect, describe and catalog all
potential risks to assets and processes that could negatively impact business outcomes in
terms of performance, quality, damage, loss or reputation. It acts as input for actual
risk analysis of the relevant risks to an organization.
> Risk Mitigation is the process of planning for disasters and having a way to
lessen negative impacts. It mainly focuses on the inevitability of some disasters and is
used for those situations where a threat cannot be avoided entirely.
> Follow Up: In case of risk which the company has identified, regular follow-up is
required. There is a procedural check in order to ensure that the risk, whose mitigation
plan is there, does not reoccur. However, if it reoccurs, there should be a suitable
mitigation plan ready for it.
Internal Control System:
The Company has a well-established internal control systems and procedures covering all
functional areas. It provides, among others, a reasonable assurance that transactions are
executed with management authorization and ensures preparation of financial statements in
conformity with established accounting principles and that the assets of the Company are
adequately safeguarded against significant misuse or losses.
The Audit Committee of the Board periodically reviews the terms of reference and the
adequacy of internal control system, significant observations and their disposals and
remedies if any.
Human Resources and Industrial Relations:
The Company appreciates performance of the employees for the year and anticipate the
much more for the years to come. Your Company believes in employee empowerment across the
entire organization in order to achieve organizational effectiveness. The Industrial
relations of the Company was cordial and there were no instances of employee disputes
arising during the year.
Cautionary Statement:
Certain statements made in the Management Discussion and Analysis Report relating to
the Companys objectives, projections, estimates, and expectations and others may
constitute forward looking statements within the meaning of applicable laws and
regulations. Actual results may differ materially from those expressed or implied.
Important factors that could make a difference to the Companys operations include
economic conditions affecting demand/supply and price conditions in the domestic and
overseas markets in which the Company operates, changes in the Government regulations, tax
laws, natural calamities and so on over which the company does not have any direct
control.
|
For and on behalf of the Board |
|
| Date: May 15, 2023 |
|
|
| Place: Kolkata |
|
|
|
Sajjan Kumar Sharma |
Rashi Nagori Mehta |
|
(DIN: 02162166) |
(DIN:09057989) |
|
Whole-Time Director |
Director |
+91-9892691696
