Shri Jagdamba Polymers Ltd Management Discussions.

STRUCTURE OF THE INDUSTRY AND DEVELOPMENTS AFFECTING THE INDUSTRY:

The global geotextile market size was valued at USD 4.1 billion in 2018 and is estimated to expand at a CAGR of 12.0% by 2025 owing to increasing demand in drainage and erosion prevention applications.

Geotextiles have gained immense popularity in the industry on account of their functional and performance advantage over other materials. Increasing demand for these products owing to growing population, rising industrialization, and rapid urbanization have amplified the growth in the emerging markets, resulting in a marked increase in the adoption of geotextile. Asia Pacific is estimated to lead the global business over the forecast period, and is anticipated to account for 42.1% share of the overall revenue in 2025. Countries including China, India, and Japan are anticipated to influence the global geotextile industry during the forecast period. Growing investment by the governments in infrastructure development is expected to drive the demand for geotextile in the region.

Growing demand for functional and high performance textiles in agriculture, road construction and erosion control applications along with increasing development in construction industry is likely to accelerate the geotextiles market growth. These products have gained popularity owing to their superior benefits such as liquid repellency and mechanical strength. Global construction industry expenditure amounted over USD 10 trillion in 2016 which is likely to have a positive impact on the product demand. Rising investments by government in public utility infrastructures owing to increasing industrialization is likely to drive the market size.

Currently, Indias technical textile industry is based on producing commodity products that are not very R&D intensive and therefore unlike conventional textiles, technical textiles is an import intensive industry. The Indian government, in a response to capture this market, has pushed to shift the focus from the production of conventional textiles to technical textiles. It has developed a number of policies that are aimed to promote the development of the domestic technical textile sector.

OPPORTUNITIES AND THREATS:

Opportunities:

Geo-textiles market in India is forecasted to grow at CAGR 12% during 2016 - 2025. Ongoing and upcoming highway projects under green highway mission by Ministry of Road Transport and Highway (MORTH), coupled with increasing investments to improve and expand road and railway networks across the country are expected to fuel demand for geo-textiles in India through 2026. In FY2018, USD36.02 billion was allocated to the countrys transport sector, which includes shipping, road and rail. Whereas, budget allocation for highways in the road sector increased from around USD8.65 billion in FY2017 to USD9.68 billion in FY2018 Moreover, geo-textiles are also used to prevent soil erosion in coastal areas, which is further propelling demand for geotextiles in the country. The aforementioned factors are expected to drive demand for geotextiles in India through 2026.

Threats:

International fluctuation in petroleum products may affects prices of raw materials

No biodegradable

Competition from domestic players as well as international players.

The reasons for low penetration in this market are several, such as scattered production structure, inadequate research and development (R&D), lack of skilled personnel. Another major contributing factor is that there is lack of awareness about the benefits of using technical textile and therefore leading to low consumption. So, India still has to make its presence felt in the world technical textiles market, which earns that a highly unexploited market is waiting to be explored.

RISKS AND CONCERNS:

While the demand for the polymers continues to be strong however the polymers are petrochemical products. The fluctuation in crude prices may increased the cost of polymer production.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

The Company recognizes human resources as its biggest strength which has resulted in getting acknowledgement that the Company is the right destination where with the growth of the organization, value addition of individual employees is assured. The total number of employees as on March 31, 2019 is775.

INTERNAL CONTROL:

The Company has an adequate internal control system for safeguarding the assets and financial transactions of the Company. The strong internal control systems have been designed in such a way that, not only it prevent fraud and misuse of the Companys resources but also protect shareholders interest.

CAUTIONARY STATEMENT:

Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied therein.

By order of the Board of Directors of
Shri Jagdamba Polymers Limited
Sd/-
Place: Ahmedabad Ramakant Bhojnagarwalla
Date: 27/05/2019 (Chairman cum Managing Director)