Shetron Ltd Management Discussions

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on March 31, 2024.

The Food Cans market report presents a comprehensive analysis of market dynamics, encompassing growth drivers, restraining factors, opportunities, current trends, and value chain analysis. It provides valuable insights to stakeholders, investors, and businesses aiming to capitalize on the immense potential of the Food Cans market. By examining the factors influencing market growth and understanding the value chain, the report equips readers with the necessary information to make informed decisions and seize opportunities in the evolving Food Cans industry.

The global Food Cans market size was valued at USD 10021.32 million in 2022 and is expected to expand at a CAGR of 5.79% during the forecast period, reaching USD 14047.25 million by 2028. Food cans are leakage, tamper-proof and maintain the nutritional value of the product. Food cans are highly preferred by the consumers especially for dry and granular food products. Food cans are impeccable choice for the customers due to its high barrier properties.

The India Packaging Market size is estimated at USD 84.37 billion in 2024, and is expected to reach USD 142.56 billion by 2029, growing at a CAGR of 11.06% during the forecast period (2024-2029).

Global economic growth has been 3.2 per cent in 2023 as per the April World Economic Outlook. Diverging growth patterns have emerged among countries. The stark difference in the growth performance of countries has been on account of domestic structural issues, uneven exposure to geopolitical conflicts and the impact of monetary policy tightening. Indias economy carried forward the momentum it built in FY23 into FY24 despite a gamut of external challenges. Indias real GDP grew by 8.2 per cent in FY24, exceeding 8 per cent mark in three out of four quarters of FY24. The focus on maintaining macroeconomic stability ensured that external challenges had minimal impact on Indias economy.

Indian economy has recovered and expanded in an orderly fashion post pandemic. The real GDP in FY24 was 20 per cent higher than its level in FY20, a feat that only a very few major economies achieved. Prospects for continued strong growth in FY25 beyond look good, subject to geopolitical, financial market and climatic risks.

The Food Cans Market size is estimated at USD 26.65 billion in 2024, and is expected to reach USD 31.52 billion by 2029, growing at a CAGR of 3.20% during the forecast period (2024-2029). Food cans are a widespread option for maintaining the freshness and nutritional content of food products. An increase in the canning process to enhance the shelf life of packaged food is expected to strengthen the food cans market. The rise in the utilization of steel as the material for cans for packaging beverages and frozen dairy products presents significant opportunities for companies operating in the market.

On the other hand, metal cans are infinitely recyclable, which is anticipated to fuel the growth of these cans among food packaging companies. According to the American and Iron Steel Institute, over 90% of the co-products from the steel-making process are reused or recycled.

Rapid urbanization, changing food habits, increased income levels, and increased consumption of ready-to-eat food are fueling the demand for canned food cans across the world. Moreover, the rise in concern over food quality and increased demand for hygienic food are expected to contribute to the market growth. Significant demand for food packaging solutions in developing countries offers lucrative opportunities for market players. Source. The increase in the popularity of canned food to preserve a wide variety of food, such as fruits, vegetables, beans, soups, meats, and seafood, offers significant market opportunities for packaging companies. The surge in demand for ready-to-eat canned food products in developing countries is expected to boost the market value.

Metal can be packaging faces much competition from other packaging solutions such as plastic, paper, or glass. Plastic packaging continues to be the main competitor of metal packaging. The food industry, the primary user of metal cans, has started adopting recyclable plastic packaging solutions. Plastic cans are transparent, which helps brands to show their foods quality. Plastics transparent and cost-effective properties might limit the metal food cans market.

OPPORTUNITIES, RISKS, THREATS AND CONCERNS:

The environmental advantages of metal cans and their easy and quick recycling, along with the growing demand for canned products, are anticipated to positively affect the market growth in the region. Increasing government restrictions on plastic packaging products for packing vegetables, noodles, meat, etc., are creating opportunities for market growth. Growing demand for the utilization of natural resources in the region has revved recycling activities and increased the reuse of metals in the Asia-Pacific. There are substantial variations in the recycling rate of aluminium cans across the countries in the region.

Increased urbanization, higher disposable incomes, the growth of nuclear families, and a preference for convenience goods are driving the demand for processed food products. Selling food in processed form allows one to charge a more significant price and capture a more considerable economic value. For instance, according to an estimation by the RBI, manufacturing prepared meals adds 30% value to the product, whereas processing meat adds 12.7%.

According to the IBEF, India has significant potential to become a global processed food export powerhouse. It includes an affluent agricultural resource base, strategic geographic location and proximity to food-importing countries, and an expansive network of food processing training, academic, and research facilities. With a market size of USD 866 billion in 2022, the food industry was projected to be critical to the economys growth. In 2023, the food market was expected to generate USD 963 billion in revenue.

Inflation-fueled higher prices are a core trend that began in 2022 and is continuing in 2024, albeit at a slower rate. Supply challenges, higher ingredient and energy prices, and rising labor costs have combined to test suppliers, retailers, and consumers. This has led to consumers seeking value, whether that means in comparison to the price of dining out or in comparison to routine grocery items, with private label options seeing surges across all categories and even beyond the basics to items with trendy flavors and ingredient compositions.

With a focus on growth opportunities and "whats next" along with bringing decades of food and beverage market perspective and analysis to the table U.S. Food Market Outlook 2024: Opportunities & Challenges with Pricing, Convenience, Sustainability & More is packed with actionable insights about consumer trends, behaviour, and motivations. This report delivers predictions and recommendations designed to guide retailers, service providers, wholesalers, food processors, packaging firms, and investors in making business decisions about the food market.

The Company products constitute metal packaging and hence there is no separate disclosure on segment reporting.

The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded, and protected against loss from unauthorized use or disposition. Various Checks and balances ensure that transactions are authorised, recorded, and reported correctly. The Company has an extensive system of internal controls which ensures optimal utilization and protection of resources, accurate reporting of financial transactions and compliance with applicable laws and regulations and internal policies and procedures.

The internal control system is regularly reviewed by the Audit Committee and has well documented policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data.

The Company maintains a cordial relationship with its employees by creating a positive work environment, with focus on improving productivity and efficiency. The Company has a team of qualified and dedicated personnel contributing to the better performance of the operations and processes of the company. Constant training continues to be the focus for developing and honing the skill sets and competency levels of employees in the organization in line with the business standards and requirement. The company firmly believes that well trained man power at every level provides the true competitive advantage in its business and hence the Company invests resources in training. The companys endeavor is to offer fair and reasonable compensation to its employees based on the market benchmarks.

Your Company has completed the eighteen year of TPM (Total Productive Maintenance) programme to sensitize employees in safe and clean working environment enabling, zero accidents and breakdowns, highly skilled teams with high OEE rates and customer are clear through good quality, less cost and timely delivery.

Your Company is ISO 9001:2015 certified for Quality Management Systems (QMS). The ISO version is upgraded from ISO 9001:2008 to ISO 9001:2015 by stringent audits from TUV-Rheinland. Through this your company is committed to be competitive and efficient ensuring to achieve customer satisfaction with Continual process improvements. Your company is making continuous efforts for improvement in the processes, Quality Management Systems (QMS) and skill building.

In addition to Quality Management Systems, your Company is also FSSC-22000 certified for Food Safety Systems Certificate (FSSC) which was received in the financial year Dec-2022. This will help in maintaining and monitoring of Hazard and Critical Control Points (HACCP) during the process of manufacturing metal cans for food packaging. The certification helps to set standards for hygiene of employees and the surroundings which will impact in hygienic packaging for processed food. As the companys policy of FSMS speaks, it prevents contamination in source and ensures product safety, while also complying with the applicable statutory and regulatory requirements.

Statements in this report describing the companys objectives, expectations or forecasting may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and price conditions in the domestic and also international markets, changes in the Government regulations, tax laws, other statutes and also many exogenous variables. The Company assumes no responsibility to publicly amend, modify and revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.

SIGNIFICANT CHANGES IN KEY RATIOS: In Accordance with SEBI (Listing Obligation and Disclosure Requirement Regulations 2018) Amendment regulations 2018, The Company is required to give details of significant Changes).

For and on behalf of the Board

To

The Members Shetron Limited Bangalore

I have examined all the relevant records of Shetron Limited ("the Company") for the purpose of certifying the compliance of the conditions of Corporate Governance by the Company for the financial year ended 31st March, 2024 as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. My examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In my opinion and to the best of my information and explanations given to me, I certify that the Company has complied with the conditions of Corporate Governance as stipulated in the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

I further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.