SPP Polymer Ltd Management Discussions

BUSINESS OVERVIEW

Our Company is in the business of manufacturing of HDPE/PP woven fabric & bags, nonwoven fabrics & bags and PP Multifilament yarn. We offer packaging solutions to Business to Business (“B2B”) manufacturers catering to different industries such as cements, chemicals, food grains, sugars, polymers, agriculture, and others for the packaging of goods in big quantities. We believe that we have well equipped production facility with well versed quality section which help us to deliver consistently highquality products to the customer at the most competitive price. Our manufacturing facility employs an extensive and stringent quality control mechanism at each stage of the process to ensure that our finished product conforms to the exact requirement of our customers.

Our manufacturing facility is situated at Plot No. 4, SectorI, IIE SIDCUL, Pantnagar, Udham Singh Nagar, Uttarkhand263153, India, which is spread over a total land area of 13650 Sq. mts. We have achieved installed capacity of HDPE/PP Woven Fabric and bags 9125 MT and NonWoven Fabric 3600 MT. Our manufacturing facility employs an extensive and stringent quality control mechanism at each stage of the process to ensure that our finished product conforms to the exact requirement of our customers. Our infrastructure and team of experts also allow us to provide a comprehensive range to our clients as per their needs and requirements. We also provide customized solutions as per the specifications detailed by our clients.

At our manufacturing facility, we have an inhouse quality testing laboratory to ensure the compliance with global standards at all the levels of production. We have our testing labs with latest equipment in our premises. Raw Material used for our production are sourced from the most reliable vendors and quality of the raw material is tested in our laboratory before taking them for further production. We strive to meet all the environment, health and safety standards in our manufacturing process.

The HDPE/PP woven fabric and bags industry in India plays a crucial role in the broader packaging sector, thanks to its versatility, durability, and costefficiency. These products are extensively used across agriculture, cement, fertilizer, chemicals, food grains, and retail packaging. India ranks among the largest producers and exporters of woven sacks. The industry has maintained a healthy growth trajectory with a CAGR growth in the past decade, driven by a shift from traditional jute to plastic packaging and rising demand from bulk logistics and exportoriented sectors. Cement Bags, mother bags flexible Intermediate Bulk Containers (FIBCs) and BOPP laminated woven bags represent the fastestgrowing segments. Indias export footprint continues to expand, reaching countries across Europe, Asia, the Americas, and Africa. These woven products find applications in everything from agricultural packaging and construction materials to industrial chemicals and technical textiles. The manufacturing process includes extrusion of plastic tapes, weaving via circular looms, optional lamination for waterproofing, and final conversion through cutting, stitching, and printing. Financially, the sector presents solid investment potential, as exemplified by project estimates showing capital outlay of Rs.234.4 lakhs against an annual turnover of Rs.727.92 lakhs and a breakeven point at 72% capacity utilization. The industrys strategic advantages—recyclability, high tensile strength, moisture resistance, and customizability—position it for sustained growth, aligned with global trends in ecoconscious and efficient packaging solutions.

The nonwoven fabric and bags industry is experiencing robust growth globally, driven by increasing demand for sustainable and costeffective alternatives to traditional packaging materials. Nonwoven fabrics, typically made from polypropylene, are manufactured using processes like spunbond and meltblown techniques, resulting in lightweight, durable, and versatile materials. These fabrics are widely

used across sectors such as healthcare, construction, automotive, and agriculture due to their properties like absorbency, flame retardancy, and bacterial resistance. The market for nonwoven fabrics is projected to reach USD 81.96 billion by 2030, growing at a CAGR of 6.11%. Simultaneously, the non woven bags segment is gaining traction as governments worldwide impose bans on singleuse plastics, prompting a shift toward reusable and biodegradable options. Valued at USD 4.5 billion in 2024, the non woven bags market is expected to grow at a CAGR of 7.2%, reaching USD 8.2 billion by 2033. Asia Pacific leads both markets due to largescale manufacturing, favorable regulations, and rising consumer awareness, with India emerging as a key player thanks to its booming retail sector and sustainability initiatives. Innovations in automation, ecofriendly materials, and customizable designs are further propelling the industry, making nonwoven fabrics and bags a cornerstone of the global movement toward greener packaging solutions.

The government has launched the National Packaging initiative which focuses on the following measures to promote the sector:

Set up guidelines and certain requirements for design and material of packaging used

Promote the process of moving in bulk quantities

Focus on promotion of centralised industrial activity by encouraging application of necessary and sophisticated infrastructure such as specialised logistic parks with appropriate facilities as well as packaging labs to work on designs and carry out tests

Encourage processes to reduce packaging waste by establishing material recovery facilities (MRFs)

Support domestic business to manufacture sophisticated packaging materials

Develop training facilities and certified programmes of the highest order to maintain availability of skilled labour.

Opportunities in areas such as testing, certification and R&D infrastructure for leveraging the potential of the industry. Alternately, research spending for import substitutions is very low and there is an opportunity to increase. There are some factors impact the growth such as demand factors i.e. E Commerce Boom, Sustainable Packaging Initiatives, Changing Consumer Preference, Population Growth, Regulatory pressure, Heath and safety concerns etc. and some of are Supply factors i.e. Technological Advancement, Investments in Capacity Expansion, Global Market Dynamics, Raw material Availability, Focus on Sustainable Practices, Digitalization and Automation. Indias booming e commerce sector presents a significant growth opportunity for the paper and packaging industry. As more consumers opt for online shopping, there is a rising demand for innovative and sustainable packaging solutions tailored to the needs of companies. With increasing environmental concerns and regulations, theres a growing demand for biobased and sustainable packaging materials in India. This presents an opportunity for the paper and packaging industry to develop ecofriendly alternatives to conventional packaging materials. Indias rising middle class and increasing disposable income have led to a growing market for luxury goods. This creates a demand for premium packaging solutions that reflect the brands identity and enhance the perceived value of the product. Indias expanding retail sector, coupled with government initiatives such as "Make in India" and GST reforms, is driving the need for modern packaging infrastructure across the country. This presents an opportunity for the paper and packaging industry to invest in the expansion and modernization of production facilities and distribution networks. Our inability to provide quality assurance, maintain relation with stakeholders including customers or any other factors beyond our control may adversely impact the growth of the Company.

The outlook for the paper and packaging industry in India is optimistic. The global paper packaging market was valued at USD 410.5 billion in 2024, with expectations to reach USD 596.5 billion by 2034, growing at a CAGR of 3.8%. The rapid expansion of ecommerce is fueling demand for packaging materials, while a growing focus on sustainability is prompting the industry to innovate greener solutions. Government initiatives like "Make in India" and infrastructure development projects are expected to boost manufacturing activities and streamline supply chains.

Your Company conducts its business with integrity and high standards of ethical behaviour, and in compliance with the laws and regulations that govern its business. Your Company has a established framework of internal controls in operation, supported by standard operating procedures, policies and guidelines, including selfassessment exercises. The Company time to time seek evaluating the adequacy of all internal controls and ensuring that operating and business units adhere to internal processes and procedures as well as to regulatory and legal requirements.

The Board of Directors continues to challenge the management and push for higher targets. The Boards wellrounded experience comprises individuals with experience in industry. The Board continues to provide long term direction to the Company and engages actively towards initiatives inputs on the Companys longterm vision.

The Company recognizes the importance and contribution of its human resources for its growth and development and values their talent, integrity and dedication. With the focus to develop leadership talent from within, the Company conduct various programmes. Employee motivation is key to organization success. On these lines, the Company conducts its various social programs and motivate them. As on March 31,2025, the Company has 355 employees.

Your Company has achieved a total income of Rs. 10890 Lakh during the year under review as against Rs. 9381 Lakh in the previous financial year. The net profit after tax of the Company for the year under review is Rs. 113 Lakh as compared to profit of Rs. 104 Lakh for the previous year. The net profit before tax for the year under review is Rs. 196 Lakh as compared to profit of Rs. 143 Lakh for the previous year.

Statements in the Management Discussion and Analysis Report containing the objectives, expectations or predictions of the company may be forwardlooking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, tax laws, economic developments within the country and other factors such as litigation and industrial relations