AN ECONOMIC OVERVIEW
Global Economy: The global economy braved the havoc wreaked by the
Russia-Ukraine war clocking in a GDP growth of 3.2%. This unexpected output in adverse
times was supported by strong consumer spending and the waning economic impacts of the war
in some of the developed economies and resilient emerging markets in some of the
developing economies during the second half of the year.
Business investment rose to meet demand, furthering the strength of the
GDP amidst the headwinds. The World Trade Organisations initial report estimated
that the trade growth for the year would fall somewhere between 2.4% and 3.0%.
The worlds merchandise trade rose 12% to US$ 25.3 trillion in
2022. The value of world commercial services trade increased by 15% in 2022 to US$ 6.8
trillion. Digitally delivered services exports were worth US$ 3.82 trillion in the same
year.
Despite supply chain issues and inflationary pressures weighing on
global progress, the manufacturing sector output growth rate reached
3.8% in 2022. While growth in Europe has not been steady, U.S and APAC
have shown better resilience in the year in question.
In 2023 the growth is expected to be 2.9% - especially in advanced
economies - considering the rise in central bank rates to _ght inflation as well as the
ongoing war in Ukraine. However, the growth is expected to pick up with the re-opening in
China.
Indian Economy: Indias economy stood firm against the
conflict between Russia and Ukraine that prompted a rise in inflation while also
exacerbating supply chain pressures. It grew at 7.2% in FY 23 owing to robust domestic
consumption and lesser dependence on global demand.
In FY 23 Industrial Production in India (IIP) recorded a growth of
5.1%.For the 11-month period from April 2022 to February 2023, manufacturing rose 4.9%
year on year, mining 5.7% and electricity surged 10%.
A strong trade performance has driven export numbers by registering a
growth of 13.84% to a record US$770.18 billion in 2022-23, while overall imports increased
by 17.38% to US$892.18 billion over the previous year.
In FY 24, Indias GDP is expected to moderate to 6% on account of
weak global demand and monetary policy tightening. Households have turned more optimistic
about future earnings considering the gradual slowing of inflation. Also,the
Governments effort to increase capital expenditure, moderate commodity prices, and
upward-looking credit growth are expected to support investment.
Plastic Bag Industry: The plastic industry is a major contributor
to the Indian economy. For decades now, plastic has played a vital role in industries as
diverse as Agriculture, Healthcare, Packaging, Construction, Electronics, Transportation,
and Machinery. Plastics popularity can be attributed to its remarkable properties
like lightweight, durability, chemically stable, and capability of being molded into a
variety of shapes and sizes. Additionally, plastics are also cheap. FIBC space:
Indian manufacturers prefer to lower the total weight of bulk packaging that flexible
intermediate bulk containers (FIBC) can provide. Their load-carrying capacity,
versatility, re-usability, cost-e_ectiveness, and eco-friendly material are increasing the
demand. There are four main types of FIBC bags - A,B,C, and D. D is the safest option if
one is working with _ammable solvents and gases or other combustible substances.
Domestically the utilization of bulk packaging (FIBCS) is less
compared to European and American markets. The demand in these countries is primarily due
to the pharmaceutical industry, whereas in emerging economies agriculture and food
processing are responsible for the demand. Persistent growth in these industries across
the world is positively impacting the demand for FIBC.
India is the largest exporter of FIBC jumbo bags in the World. The top
three exporters of FIBC jumbo bags are India, followed by Turkey and China. As of August
22, 2023, FIBC jumbo bags export shipments from India stood at 10.7K, most of which goes
to the United States, Spain and the United Kingdom. This shipment number is enormously
higher than both China and Turkey.
The bulk packaging market is growing steadily in India and in this
sector, flexible bulk packaging is the fastest-growing segment. But mostly in India,
overall awareness about the usage of FIBC products is inadequate among the consumers.
Hence, it presents a significant opportunity to grow awareness and generate interest in
the Indian market.
With increasing awareness about FIBC and growing investment in R&D
to improve the efficiency of the product to stay competitive, the market is likely to grow
further with different segments like food, pharma, chemical, dairy (milk powder) etc.
Going forward, the North American region is expected to be the dominant
position in the bulk bag market worldwide owing to the high use of packaging materials by
end-use industries and the growth of the fertilizer and chemical industry in this region.
Europe is expected to grow at a substantial rate as well due to the involvement of bulk
bags in the mining and pharmaceutical sectors in this region.
The global FIBC market is anticipated to touch a valuation of US$ 12.8
billion by 2033, with a CAGR of 5.4%.
India holds a substantial market share for FIBCs in the US and Europe
markets. As per an industry expert, India has a 75% share in the European
FIBC imports and a 72% share in the US import market and is now looking
at the Japanese and South Korean markets to drive the growth.
Polypropylene woven sacks: The demand for polypropylene woven sacks
is increasing as it is a suitable alternative to PE (polyethene) considering environmental
risks associated with this material. The global polypropylene woven sacks market is
expected to surpass US$ 6.2 billion by 2032 growing at a CAGR of 4.1% from 2022 to 2032.
The interest in polypropylene packs and sacks from the concrete
business has expanded altogether over the most recent couple of years, because of an
expansion in urbanization and development in the modern area. Worldwide organisations are
peering toward fully expecting expanded requests from the structure and development
industry.
Developing economies, the rising population, and the subsequent
disposable income of people boost the market. Additionally, polypropylene is on the surge
as they are used for packaging a range of products like fertilizers, sugar, chemicals, and
various other products.
Polypropylene woven bags and sacks will see an increase in demand as
the cement industry continues to expand. During shipping and transportation, polypropylene
woven bags and sacks provide excellent material handling and superior strength. Lately, it
has been seen that the quantity of polypropylene woven packs and sacks makers for modern
applications has expanded decisively.
HCP Plastene Bulkpack Limited in manufacturing plastic packaging (HPBL)
(Formerly known as Gopala solutions with an expansive product Polyplast Limited) is a
thirty-eight- portfolio comprising FIBCs, small bags, year-old Company that specializes
and AD star bags.
In the year 2001, it started manufacturing woven bags.
The Companys target markets are the EU and the US, which have
stringent quality requirements.
In 2019, Gopala Polyplast Limited was admitted to CIRP under the
provision of IBC, 2016 due to default in payment by its erstwhile promoters to Financial
and Operational Creditors. Subsequently, M/s Plastene India Limited submitted a Resolution
Plan and the same was approved by Honble National Company Law Tribunal at Ahmedabad
Bench. Under the new ownership and management of Plastene India Limited Group, Gopala
Polyplast Limited was renamed as HCP Plastene Bulkpack Limited (HPBL). Presently HPBL is a
part of Plastene Group, a reputed FIBC manufacturer and exporter with a robust product
portfolio range.
The Company produces PP fabric which is sold in the international and
domestic markets. The major product portfolio is small PP woven bags, FIBC Bags, AD start
bags. Major consumption of these bags is by Cement, Sugar, Food grains, and Fertilizer
industries.
During the year FY 23, Revenue from operations stood at 48.40 Crore
as compared to 49.33 Crore showing a fiat performance during the year.
OPPORTUNITIES l FIBC is an important product which could provide
interesting growth opportunities in the domestic market and exports l Our new
subsidiary in Malaysia promises to strengthen our international exposure
THREATS l Spike in raw material prices could impact business
profitability l Global economic slowdown could impact the demand for our products
OUR HUMAN RESOURCE DEVELOPMENT
Our priority has always been to create a future-ready workforce. We
believe that our company can maintain sustainable and profitable growth by focusing on
performance culture. Therefore, we encourage our people at every step so that they can
achieve organisational goals.
Our business places a strong emphasis on its people development
processes and works to update skill sets. Training is crucial for organisational
development and success. Our training programs are created to mould the intellect of our
employees so that it leads to quality performance of employees.
FINANCIAL PERFORMANCE
(H in Lakhs)
| Particulars |
FY 2022-2023 |
FY 2021-2022 |
| Income (including other income) |
4863.00 |
4949.07 |
| Total expenses other than finance cost and
depreciation |
5596.19 |
5437.33 |
| Profit for the year before exceptional
items and tax |
(733.19) |
(488.26) |
| Exceptional items |
19.50 |
0.00 |
| Profit for the year before tax |
(713.69) |
(488.26) |
| Total tax expenses |
(178.69) |
(120.53) |
| Net profit for the year after tax |
(535.00) |
(367.73) |
| Total comprehensive income for the year |
4.74 |
0.00 |
| Gross block |
10841.39 |
10593.55 |
INTERNAL CONTROL SYSTEM
For any business entity to achieve its goals and objectives, internal
control mechanisms are crucial. According to the size and nature of its operations, the
Company has suitable internal control mechanisms. In order to ensure company integrity and
foster operational efficiency, there must be well-documented policies, guidelines, and
procedures in place to track business and operational performance. Financial and other
data are reliable for preparing financial information and other data, for maintaining
accountability of assets, and for preventing loss from transactions that are not
authorised, recorded, or reported correctly. All assets are safeguarded and protected
against loss from unauthorised use or disposition. A comprehensive programme of internal
audits and management review supplements internal control. The system has been created to
guarantee the accuracy of financial and other records for the preparation of financial
information and for maintaining asset accountability.
RISKS & CONCERNS
The Company has a robust risk management strategy to identify the
various risks and opportunities across our operations. Periodic reviews are conducted and
the summary is presented to the Board committee. It actions wherever necessary. The risk
landscape includes long-term strategic risks, short to medium-term risks as well as single
events. Senior executives work to achieve KPIs and targets, including the financial
and non–financial performance of the Company, to mitigate associated risks.
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