raj packaging share price Management discussions

Indian plastic industry market is one of the leading sectors in the countrys economy. Use of Plastic is becoming important in various industries and its consumption is on rise. The industry is showing rapid progress with new technologies and processing equipment, cost-effective manufacturing and new generation raw material. The India Plastic Packaging Market size is expected to grow from USD 21.12 billion in 2023 to USD 24.59 billion by 2028, at a CAGR of 3.09% during the forecast period (2023-2028)*. In the packaging segment flexible plastic packaging industry has seen continuous growth and accounts for more than 60% of the market. Plastic has been preferred choice for flexible packaging globally and in India due for various reasons. Its inert properties and enhanced durability helps to increase products shelf life thus aid in transportation/portability. It is light weight and has ability to be moulded to any shape or size and all these factors make it cost effective. In India we are witnessing a rise in demand due to rising population along with rise in income level and changing lifestyle, growth in retail business, growth in exports and rising e-commerce all have given new dimension to the packaging industry. In India the growth in the flexible industry is synonymous with growth sector like FMCG, Automotives, Pharmaceutical, Agriculture etc.

Flexible industry is witnessing major changes. With post- pandemic era, safety and hygiene have become key factors. Industry, consumers, government and society in large all want to strive to work to reduce plastic waste and make recycle and sustainability common goal.

Year 2022-2023 was a difficult year for the global economy, with the effects of Russia and Ukraine turmoil, global energy crisis, supply chain disruption and high inflation. The Company with its vast experience is working to provide the customized solution to the customers and working to tap opportunities that are available to its fullest potential. However, there always continues to be opportunities, threats, risk and concerns.

Raw material costs: The raw material prices started to fall at the end of 2022 and continued to do so in 2023. Since raw material price is the major cost involved, people in the plastic industry are on a watch out as to how things will shape up.

Recycling and Sustainability challenges:

The flexible packaging industry or the plastic industry on whole has been facing criticism from governmental organizations, consumers, and environmental groups due to the plastics waste. In present form the packaging used today is often non-recyclable in the existing recycling systems. With increased awareness among the consumer about plastic waste and its effect on environment and Government all over bringing in new laws on Plastic waste Management; industry has been given more responsibility along with more compliance. Flexible packaging companies are working to address these issues.

The year is under review has not been good. The company has achieved total revenue of Rs. 4720.77 lakhs and net loss of 49.88 lakhs as against total revenue of Rs. 5089.21 lakhs and Net Profit RS.207.32 Lakhs in the previous year.

The Company has gone into losses for the first time after a decade of good performance for various reasons. First and foremost reason has been too steep and drastic fall in prices of raw materials thus we lost heavily on stocks of particularly imported material. Every company has to carry inventory as there is time gap in getting the material. The volatility in prices of polymers is throughout the globe and its expected to continue in 2023-24.However, management is trying the best to neutralize the volatility in prices by better inventory management and change in procurement policy.

In present scenario there is huge challenge on the company to improve its performance.

The Company adheres to corporate governance best practices and this is achieved through a combination of internal audits, management reviews and audit committee. The Company is thus able to secure and validate its business transactions on an ongoing basis and thereby maintain the accuracy of its financial records and the safety of its property.

NOTE: Reasons for more than 5% difference in Return of Net worth: Please refer above notes on Business performance.

The return on net worth is negative during the year for reasons explained above.

There is no change in Accounting Treatment on Financials of the Company.

The Company has not declared Dividend for the Financial Year 2022-23.

There are no material developments in human resource/ industrial relations front, including number of people employed.