mitsu chem plast ltd share price Management discussions


In 2022, the global economy witnessed a remarkable resurgence, fuelled by a strong surge in consumer demand and the relaxation of COVID-19 restrictions, along with a reduction in geopolitical tensions compared to the previous year. This positive the worlds economies. However, advance men marked a significant the year posed its own set of challenges, which were effectively addressed by proactive measures taken by various stakeholders.

The persistently high inflation, which reached its highest point in several decades at 9% in 2022, presents additional challenges for achieving sustainable development. The chemical industry continues to face challenges, including volatile raw material prices, geopolitical tensions, and evolving regulatory requirements. However, the rapidly developing economies in Asia, Latin America, and Africa offer significant growth opportunities for various sub-sectors in the industry.

The global economy showcased outstanding resilience and attained noteworthy growth rates across major economies, despite encountering numerous challenges. The this hurdle United States economy demonstrated a growth rate of 1.6%, while Chinas economy exhibited a growth rate of 5.2%, and Indias economy expanded by 5.9%. a sluggish US These statistics underscore the concerted and sustained efforts made by Governments and organizations worldwide to overcome obstacles and promote economic growth.

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According to the World Economic Outlook, published in April 2023, the forecasted global growth rate for 2023 is 2.8%, with an anticipated increase to 3.0% in 2024. Additionally, the report suggests that global headline inflation 2022 to 7.0% in 2023. This decline will primarily be driven by the projected decrease in commodity prices. Given the expectation of significant decline in inflation, central banks at that time may consider adjusting their monetary policies by ceasing the ongoing cycle of interest rate hikes.


In spite of numerous global obstacles, Indias economy has exhibited exceptional resilience, emphasizing its significance has been acknowledged as one of the fastest-growing economies in the world. As of

March 2023, India currently holds the fifth spot in terms of size, with a gross domestic product of around US$ 3.5 trillion.

During the financial year 2022-23, the GDP growth rate stood at 6.8% as per the Survey 2022-23. The capital expenditure of Central Government and crowding in the private Capex, led by strengthening of the balance sheets of the corporate, is one of the growth drivers of the Indian economy in the current year. The growth was also driven by private consumption and investment, facilitated by Governmental policies aimed at enhancing the transportation infrastructure, logistics, and overall business ecosystem. These measures established a more favorable environment for businesses to operate, hence making a substantial contribution to Indias consistent economic progress. in the form of inflation On the challenges front, India faced a significant year, and its rise has been attributed to multiple factors, including the ongoing Russia-Ukraine conflict, a worldwide banking crisis, and the resulting escalation in global commodity prices. India has made strides in controlling inflation, with the latest report indicating a 16-month low of 5.66%.

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According to the April 2023 World Economic Outlook published by the International Monetary Fund (IMF), the Indian economy is anticipated to experience a deceleration in the upcoming fiscal year as a result of the global economic downturn. The growth is expected to decrease from 8.7%in projection has been reduced to 5.4% for 2023, although Indias economy is expected to be comparatively less affected than other nations due to its resilient domestic demand. However, the economy is projected to recover and achieve a grow rate of 6.8% in 2024.

INDUSTRY OVERVIEW Plastic & Packaging Industry

Plastic packaging finds widespread application across various industries, including food & beverages, and oil, owing to its durability, cost-effectiveness, and excellent performance. With a favourable demographic profile, factors, such as increasing disposable income levels, rising consumer awareness, demand for processed food, and multinational giants taking rapid strides in the food & beverages, cosmetics, toiletries and pharmaceuticals space are key drivers for the packaging industry growth. These factors are compelling both packaging suppliers and end-user industries to shift from bulk packaging to retail, unit-level and small-sized packaging. The retail sectors significant in retail and other sectors are likely to bring favorable conditions bode well for the packaging industry. As a result, the plastic packaging industry is growing rapidly, and stands as one of the fastest-growing sectors with great product diversification. It holds significant importance in the modern economy, providing essential products for a variety of sectors, such as food & beverage, pharmaceuticals, and electronics among others.

However, the rapid growth of the plastic packaging industry has led to a substantial environmental impact. This has prompted the need for sustainable packaging solutions. To tackle this issue, manufacturers are increasingly turning to recycled plastic resins.

Despite some difficulties and restrictions, this strategy is crucial in the direction of lowering the environmental impact of plastic manufacturing and advancing towards a more sustainable future. The Indian plastic packaging industry is one of the leading sectors in the countrys economy, providing direct or indirect employment to over 3 million people.


Rigid plastic packaging is a popular type of container comprising durable and inflexible plastic materials and is used to protect and store products during transportation, storage, and distribution. It comes in various shapes and sizes and is widely used in industries, such as food & beverage, pharmaceuticals, cosmetics, personal care, and household chemicals. The most commonly used plastics for rigid plastic packaging are polyethylene (PE), polypropylene (PP), polystyrene (PS), and polyethylene terephthalate (PET), chosen based on their properties, such as stiffness, clarity, and resistance to temperature changes and chemicals. The growing demand for sustainable and eco-friendly packaging solutions is a key driver of the rigid plastic packaging market. Health care plays significant role as it seeks reliable packaging solutions to ensure the integrity and safety of pharmaceutical products. The qualities of rigid plastic, including durability, lightweight nature, cleanliness, and transparency, make it an ideal choice for various applications. These applications range from medicine bottles and bottle caps to closures and containers for products like ketchup and syrups. Polypropylene, a type of rigid plastic, is increasingly used in these applications.


The Indian plastic packaging industry is expected to experience robust growth, with a projected CAGR of 8.01% from 2022 to 2027. challenge is the heightened awareness overThe overall packaging industry is also anticipated to reach US$ 200 billion by 2024-25, primarily driven by the food & beverage, and consumer goods sectors. Additionally, the increasing interest in health and well-being, coupled with growing awareness of waterborne diseases, is fuelling the global demand for packaged drinking water, especially single-serve consumer packaging. To meet this demand and provide effective storage and transportation options, plastic packaging manufacturers are focussing on developing innovative packaging solutions. However, the industry faces sustainability challenges, with plastic waste causing negative impacts on the environment. The growing demand for sustainable and environmentally friendly packaging solutions is driving the rigid plastic packaging market. Despite these challenges, the plastic packaging market worldwide is predicted to continue to expand, with a projected CAGR of 3.6% from 2023 to 2030, driven by high demand from end-user industries and major markets, such as India and China.

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The industry, with its evolving nature, presents is continuously evolving, and there continuous demand for innovative packaging materials, designs, and technologies. As Indias healthcare investment increases, resulting in the establishment and improvement of hospitals, there is now a market for hospital furniture suppliers, driven by patients seeking more appealing and comfortable furnishings. Furthermore, companies can seize the to develop sustainable packaging solutions that are biodegradable, compost able, and recyclable. This shift towards sustainable packaging offers an opportunity for companies to stand out from competitors and meet the increasing demand for eco-friendly products. Automation, digital technologies, also present possibilities for enhancing efficiency, reducing costs, and improving quality control in manufacturing processes. Furthermore, the industry also offers prospects for customization and personalization in response to the surge in e-commerce, which demands unique packaging solutions. By incorporating technology and innovation into manufacturing processes, companies can create distinctive and personalized packaging options for their customers, thus enhancing their experience and building brand loyalty, and capitalize on these opportunities.


The plastic industry encounters several challenges, both internally and externally. One the environmental impact of significant plastic waste, leading to a growing demand for more sustainable and eco-friendly alternatives. This transition to sustainability can result in higher production costs, impacting profit margins. Additionally, the industry is grappling with ongoing supply chain issues, including disruptions in transportation and raw material shortages. These challenges can cause production delays, increased costs, and difficulty in meeting demand promptly.

Furthermore, the industry faces regulatory challenges, with Governments worldwide introducing measures to reduce plastic waste and promote recycling. Further, the escalating costs of raw materials and energy intensify the pressure, requiring companies to constantly adapt and innovate to remain competitive in a global market. All these factors collectively contribute to the complexity of the plastic industry.


Mitsu Chem Plast Limited (also referred to as ‘Mitsu Chem Plast or ‘The Company) is a leading manufacturer of high-quality plastic products, offering blow moulding, injection moulding, and customized molding solutions. Even with the Companys growth since its establishment in 1990, it remains committed to its core philosophy of customer success as the driving force behind everything it does. Today the, Mitsu Chem Plast has more than 500 plus SKUs and caters to more than 30 plus Fortune (India) 500 customers in India. The Company has a strong R&D team that has developed many sustainable, unique and import substitute products and helped in the Make in India initiative.

The Company has expanded its capacity with manufacturing units in Tarapur and Khalapur, which has enabled it to cater to niche products and deliver exceptional value to clients. It takes pride in its ‘Made in India products, with an installed capacity of

24,000+ MTPA spread over 1,52,000 sq. ft. across three certified manufacturing units.

Mitsu Chem Plast has become a renowned entity, due to its well-equipped operating units, advanced technologies, and skilled team, while remaining dedicated to providing superior-quality solutions.


Mitsu Chem Plasts product offerings can be classified into the following verticals:



Molded Industrial Packaging

Blow-moulded and injection-moulded articles, such as containers, bottles, jars carboy, full open top drums from 100 ml to 250 litres and injection molded pails from 500 grams to 20 kgs.

Hospital Furniture Parts Others

Hospital bed parts, hospital bed accessories, side trolleys, over bed tables, and spine boards, among others Plastic parts of chairs used in school, bus and sports stadiums, medical devices, such as pregnancy kits, malaria kit, HIV kit, inhalers and automotive components


Mitsu Chem Plast offers a wide range of molded industrial packaging products customised to cater to the unique needs of its clients. The Company creates packaging solutions by molding top-quality materials, including plastics and composites, into various sizes and shapes that are suitable for industrial use. Its product portfolio comprises blow molding products like drums (wide mouth, narrow mouth, open top), bottles, jars (ranging from 100 ml to 250 litres), jerry cans, and barrels. It also includes injection molded products, such as caps, lids, closures, handles, , measuring cups and pails from 500 grams to 20 kgs.


Mitsu Chem Plast is a manufacturer and supplier of hospital furniture parts, known for their high-quality and durability. The Companys wide product spectrum includes bed side locker parts, spine boards, CPR boards, bed head panels, footboards, side rails, and IV stands, all among others. All of these products are made from robust materials, such as ABS plastic and stainless steel. These products known for their reliability, safety, and ergonomic design, are popular choices for healthcare facilities due to their ease of installation and maintenance.


Mitsu Chem Plast specialises in manufacturing plastic parts to meet the polymer-based product needs of various industries, such as the automobile and infrastructure sectors. These plastic parts are used in various areas, including school chairs, bus seating, sports stadium seating, and medical devices, such as pregnancy kits, malaria kits, HIV kits, and inhalers. In addition, the Company also produces automotive components.


Revenue (in lakhs) %
Molded Industrial Packaging 26,135.57 84.59%
Hospital Furniture Parts 2,700.77 8.74%
Others 2,061.11 6.67%



2021-22 2022-23 % Change Reason for Change

Return on Net Worth

22.59 18.90 (16%) Margin drop due to
rising input cost.


Mitsu Chem Plast acknowledges the significance of proactive risk management to secure its operations and promote sustainable growth. Companys action of a comprehensive risk management framework helps it remain vigilant in the dynamic business environment, enabling it to identify and address potential uncertainties that may affect its overall performance. Its firm dedication to effective risk management empowers it to mitigate potential threats and capitalise on opportunities for the benefit of the organisation and its stakeholders.

To safeguard Mitsu Chem Plasts business from potential risks that may impact its operations and revenue, it has proactively identified several such risks. In order to effectively mitigate these risks, the Company has taken specific actions designed to minimize their plausible consequences. These actions are outlined below: Supply Chain Risks: Mitsu Chem Plast has implemented mitigation strategies, such as diversifying the supplier base, using advanced forecasting tools, maintaining buffer stocks, and ensuring transparency and communication with suppliers. These measures enable the Company to reduce the probable downsides of the supply chain disruptions. Concentration Risk: Concentration risk refers to the dependence on a limited number of customers or suppliers. Mitsu Chem Plast, with a presence across various industries, caters to more than 30 customers with its high-quality products. Further, with the Companys upcoming product launches and go-to-market strategy, it plans to acquire new customers, retain existing clients, and strengthen its supplier network.

Quality Risk: Quality risk pertains to the possibility of defects, recalls, or safety issues associated with the manufactured products. Mitsu Chem Plast places paramount importance on delivering premium products and has implemented stringent quality control processes, regular testing, and industry standard adherence to ensure that its reputation remains intact. The Companys risk mitigation strategies include obtaining ISO certifications, continuous monitoring, and feedback from customers.

Human Resource Risk: Human resource risk refers to the potential challenges related to workforce management, such as skills shortages, employee turnover, or labour disputes. Mitsu Chem Plast recognises the crucial role of employees in its success and aims to retain key management personnel to avoid any adverse effects on its business, financial condition, and results. To accomplish this, the Company implements effective recruitment, retention practices, competitive compensation strategies, and recognition programmes to retain and motivate top talent.

Compliance Risk: Compliance risk relates to the failure to adhere to relevant laws, regulations, and industry standards. Mitsu Chem Plasts non-compliance with these rules can result in legal penalties, reputational damage, and operational disruptions. To mitigate this risk, the Company has established a comprehensive compliance programme that regularly monitors and updates policies and procedures, conducts internal audits, and provides appropriate training to employees. It also engages with legal and regulatory experts to ensure compliance with applicable regulations. Environmental, Health & Safety Risk: Environmental risks encompass the potential impact of manufacturing processes on the environment, such as pollution, waste generation, and carbon emissions. Mitsu Chem Plast is well-aware of environmental risks and is committed to protecting the environment in which it operates. To address this risk, the Company has adopted sustainable manufacturing practices, minimised waste and emissions, complied with environmental regulations, and is exploring eco-friendly alternatives and technologies.


Mitsu Chem Plast prioritises investing in human capital as a vital aspect of its business strategy. To achieve this goal, the Company utilises various approaches, such as intellectual nurturing, motivational and inspirational nurturing, and emotional nurturing, to develop and enhance this valuable asset. The objective of implementing these approaches is to foster a motivated, inspired, and emotionally intelligent workforce capable of driving the organisations success. The Company organises training and development programmes to constantly enhance work practices, technological advancements, technical skills, and employee productivity. These initiatives aim to bring about continuous improvement and growth. In addition, the Company has established an HR department to provide structured support for addressing queries and implementing suggestions. This department serves as a resource to facilitate effective communication and foster a collaborative work environment. The Company adheres to

7 core values: Employee welfare, Quality Consciousness, Customer Delight, Innovations, Cost Cutting Without Cutting Corners, Value Engineering, and Environment Friendliness.

These values are instilled in every member of the organisation and serve as a driving force for enhancing the performance of employees across all operational levels. 391 - Total number of employees associated with Mitsu Chem Plast. (Figures as of March 31, 2023)


Mitsu Chem Plast has implemented a robust system of internal controls. The

Companys objective with this system is to ensure that its operations run efficiently and effectively, its financial reporting is reliable, and it is compliant with applicable laws and regulations. It is a comprehensive system that encompasses all divisions, functions, and departments of the organisation. Mitsu Chem Plast has established clear policies and procedures for all financial transactions, which include segregation of duties, proper authorisation and approval processes, and continuous monitoring and reporting of financial activities. Moreover, the access controls and regular system backups, to protect against unauthorised access and data loss. The Company regularly reviews and conducts assessments to ensure the internal controls effectiveness and preserve stakeholders trust and confidence.


Statements in this Management Discussion and Analysis Report describing the Companys objectives and estimates, among others, may be ‘forward-looking statements within the meaning of applicable laws and regulations. The statements in this Management Discussion and Analysis Report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, forex markets, economic developments within India and the countries with which the

Company conducts business, and other incidental factors. The Company takes no responsibility for any consequences of the decisions made based on such statements and is under no obligation to update is equipped with robust IT controls, such as them in the future.