Plastiblends India Ltd Management Discussions.


At time of writing of this report the world is in the recovery mode after being hit by the worst health and economic crisis after world war II. All the economic growth estimates made so far have been dampened by the global outbreak of COVID-19 pandemic and many countries had to declare countrywide lockdown leading to almost complete halt of the economic activity. Almost all Industries had suffered temporary shutdown and manufacturing activity resumed slowly. Capacity utilization is returning to its optimum as the various regions are resuming operations.

As per world economic outlook projected by International monetary fund global economy is expected to contract by 3% in the year 2020-2021. World bank projects that the world economy will shrink 5.2% due to coronavirus impact. Economic activity among advanced economies is expected to shrink 7% in 2020-2021 due to severe disruption caused by pandemic. Much of the world is expected to come out of slowdown caused by corona pandemic in the second quarter of FY 2020-2021. Even before the Corona virus impact a slowdown in world economy was anticipated due to tension in US-China trade relations and concerns over Brexit.

As per GDP estimates by National Statistical Organisation (NSO) Indian economy has slowed down from 5.9% growth in January - March, 2019 to 3.1% growth in January -March, 2020. Fitch has also downgraded Indias ratings from stable to negative due to COVID impact. In order to counteract these impacts on economy Government has introduced various reform measures for the Industry, which are designed to boost local consumption and industrial output.


Plastics remain to be a material of choice for various applications and once again with the worldwide crisis caused by coronavirus prove to be life saver than a nuisance material. We have seen the use of plastics everywhere in this covid pandemic right from the diagnostic tools to the ventilators. Use of plastics packaging boomed in the pandemic situations due to sanitation requirements and many plastics units were granted permission for operating in the lockdown time as an essential commodity. This proves how indispensable plastics are for the modern lifestyle and are found to be very useful in our day to day life.

Indian plastic Industry has over 35,000 plastic processing units employing more than 4 million people across the country. Almost 80 to 90% of the total manufacturing units are in small & medium scale sector. The Industry is very fragmented and majority of the manufacturers are from unorganized sector and very few are from organized sector. Plastic industry consumes around seventy five percent of the petrochemicals production, which is quite significant.

One of the vital components of plastics industry worldwide is masterbatch, which consists of pigments and additives used for imparting required color and characteristics to the end products. It is a concentrated mixture of pigments and additives encapsulated during a heat process into a carrier resin, which is then cooled and cut into a granular shape. It imparts various properties like Ultraviolet light resistance, Flame retardation, Anti-fouling, Anti-static, Lubrication, Anti-slip, Antimicrobial, Anti-oxidant etc to end products. Use of Masterbatches in production process offers many benefits like cost-effectiveness, easy to use, helps achieve the desired color and ensures a dirt-free production environment. Your Company is leader in manufacturing of Masterbatches and has presence in practically all segment of Masterbatch i.e. White/ Black / Colour / Additive / Polywhite (filler) unlike most of other competitors who are not present in all segments.

Masterbatches find applications in various plastic processing industries, such as Flexible Packaging (FMCG, consumer durable and pharmaceuticals), Agriculture, Irrigation, Piping, Infrastructure, Consumer Durables etc. Global masterbatch market is projected to rise to USD 14 to 15 billion by 2025 and Indian masterbatch market is expected to grow at a CAGR of over 11% through 2025, on account of strong growth in the packaging and automotive sectors, favorable government regulations, rapid industrialization, and commercialization. Furthermore, there is a growing demand for light-weight and fuel-efficient vehicles, which will further fuel the growth of the Indian plastic masterbatch market.


The revenue from Operations was 60,849 Lacs for FY 2019-20 as against 60,804 Lacs for FY 2018-19, down by 3%. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) increased from 6,149 Lacs in FY 2018-19 to

7,007 Lacs in FY 2019-20, an increase of 14%. Profit before Tax increased from 4,161 Lacs in FY 2018-19 to 5,154 Lacs in FY 2019-20, increase of 24%. Profit after Tax increased from 3,117 Lacs in FY 2018-19 to 3,718 in FY 2019-20, an increase of 19%. Other financial details are as given in the Directors Report.


Your Company operates in one segment only - masterbatches.


As we are already aware there is a huge potential for growth in the masterbatch industry due to rising demand for light weight, durable and environment friendly materials by end user industries like automobile, agriculture etc. With the current pandemic situation faced by the world one other area that has come to the forefront is the medical plastics. We have witnessed multiple uses of the plastics right from the virus protection masks, PPE kits , testing swabs to most critical ventilators. Plastics have proved to be a very convenient and helpful hand, in humanities fight against COVID-19 and has proved to be a helpful companion of humanity in this world crisis.

There is a huge amount of investment to the tune of 8 Lacs Cr for plastics capacity and government has a huge plan of setting up eight plastic parks throughout the country. Indian plastic consumption remain at 11 kg which is one tenth that of what is consumed by per person in developed countries and there is huge potential for growth.

Indian plastic industry is also expected to benefit due to the growing sentiment against China and many industries are expected to shift their base to India. Government is already working on offering incentives for these industries to setup their manufacturing units in India. The campaign of "Atmanirbhar Bharat" announced by our Honble Prime Minister Shri Narendra Modi ji is also expected to boost investment in plastics Industry. Therefore plastics consumption is expected to witness a significant boon in the coming period once the normalcy returns after the disruption caused by coronavirus.


Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee.

Pursuant to the Companies Act 2013 and the SEBI Regulations, the Board has authorized the Audit Committee to review the risk management systems of the Company from time to time. Apart from the usual risks and concerns that affect any commercial, manufacturing operational, the key business risks and concern areas identified by the Company are as under :

a. Operational Issues

The Company has long term raw material supply contracts and majority suppliers of the Company are regular in nature.

b. Financial Risks:

i) Currency value and interest rate fluctuations The Companys policy is to actively manage its foreign exchange risk. The Company actively manages the interest rate risk by adopting suitable strategies to minimise the impact of interest rate fluctuations, including maintaining an optimal balance of different loan types and maturities.

ii) Credit Risk The Company sell their products by extending credit to customers, with the attendant risk of payment delays and defaults. To mitigate the risk appropriate measures like periodic review and rigorous follow-up are put in place for timely collection of dues from the customer. In last 2 years the debtors balance has reduced significantly. Credit availability and exposure is another area of risk. However all exports and domestic sales of the Company are covered under receivable insurance Policy which further mitigate the risk.

iii) Liquidity Risk

The Company realizes that its ability to meet its obligations to its suppliers and others is linked to timely and regular collection of receivables and maintaining a healthy credit rating. Review of working capital constituents like inventory of raw materials, finished goods and receivables are done regularly by the respective Divisions and closely monitored by Corporate Finance.

c. Strategic risks

Emerging businesses, capital expenditure for capacity expansion etc, are normal strategic risks faced by the Company. However, the Company has well-defined processes and procedures for investments in capacity expansions and is focused on its core activity.

d. Regulatory risks

The Company is exposed to risks attached to various statutes, laws and regulations. The Company is mitigating these risks through regular review of legal compliances. The Company has implemented an enterprise-wide compliance management system, capable of effectively tracking and managing regulatory and internal compliance requirements.

e. Cyber risk

The failure of Information Technology (IT) systems due to malicious attacks and / or non-compliance with data privacy laws can potentially lead to financial loss, business disruption and / or damage to the Companys reputation. The Company has in place a data protection policy. It maintains a cyber security infrastructure. The Company uses standardised backup tools, services and procedures to ensure that information and data are stored at two or more diverse locations.



There was no significant change (i.e. change of 25% or more as compared to the immediately previous financial year) in the key financial ratios.



There has been increase in return on net worth from 11.81% for FY1819 to 13.10 % for FY1920.


Your Company has a system of internal controls which is commensurate with the size and nature of operations. These controls ensure that all the assets are safeguarded and protected against loss from unauthorised use or disposition and that the transactions are authorised, recorded and reported diligently. There are well established policies and procedures in place across your Company.

Internal Audit Team consists of well experienced members, which constantly review various aspects of control systems and conduct audit under well laid down audit programmes to ensure effectiveness of the controls. The said internal audit team continuously review the control system and undertakes audit of special areas in-depth.


"People are an organizations most valuable asset and the key to its success.- Dave Bookbinder"

Manpower is given utmost importance in our Organization and in this time of this unprecedented crisis, we are taking utmost care of our manpower ensuring their safety and health on every step of the way. Our employees are a diverse mix of varied skills, knowledge, experience levels working with commitment and drive that makes our Organization what it is.

We are dedicated towards making our employees better at what they are doing so that we can deliver to our customers in way that delights them. Training and development is what we are involved with day in and day out.

Among the trainings conducted are 5S, Interpersonal Skills and Team work, Good Work Habits, Managing Absenteeism. Also an extensive workshop "Together towards Tomorrow" was conducted for the Sales Team. We have also arranged a comprehensive "Talent Assessment and Individual Development Plan" for the High potential employees in the organization.

We regularly organise trainings pertaining to IMS - ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 and 5S. Our efforts are to educate, make our employees aware and continuously update their knowledge base to ensure that IMS is followed in letter and spirit.

We have also started an Internal Capability Development Program, "Gyanoday" which encourages employees to share their knowledge with other employees. This initiative has enabled us to develop internal resources which can be contacted by the team members in the course of their daily work and get real-time solutions for problems faced.

We also focus on Employee Engagement activities like our Annual Day which brings together all employees and their families for a fun filled day and regular birthday celebrations, annual picnics for locations to keep the "Happiness Quotient" of our employees and their morale high. Reward and Recognition in the form of Gift Cards is another way we celebrate the wins of our employees. No. of people employed on the rolls of the company is 501.


Estimation and expectation made in the Report may differ from actual performance due to various Economic Conditions, Government Policies and other related factors.

For and on behalf of the Board
Place : Mumbai S. V. Kabra
Date : June 29, 2020 Chairman
(DIN : 00015415)