Businesses
SRF Limited is a chemical-based, multi-business conglomerate engaged in the
manufacturing of industrial and specialty intermediates. The Company is widely recognised
and well respected for its R&D capabilities globally, especially in the niche domain
of Chemicals. SRF Limited is a market leader in most of its business segments in India and
overseas. The Company has operations in four countries namely, India, Thailand, South
Africa, and Hungary. SRF has commercial interests in more than ninety countries and
classifies its businesses as Technical Textiles Business (TTB), Chemicals Business (CB),
Packaging Films Business (PFB), and Other Businesses.
Technical Textiles Business
Despite challenges, FY23 has been a stable year for the Technical Textiles Business. In
the first half of the year, the TTB witnessed the easing of global supply chain issues.
However, the Business faced headwinds in H2 due to cheap imports from China, which
impacted business results.
Tyre Cord Fabrics (TCF)
The demand for Nylon Tyre Cord Fabric (NTCF) remained weak during the year due to
several factors, including impact of increased radialisation in commercial vehicle
Original Equipment (OE) segment, decline in two-wheeler tyre sales, and high imports. In
addition, exports were impacted due to unfavourable economic situation in Sri Lanka &
Bangladesh.
Having said that, the Business was able to partly offset the drop in NTCF sales volumes
with a successful foray into Nylon Yarn sales in the domestic and overseas markets.
In terms of the environmental and social responsibility initiatives, the Business
commissioned solar power plants, totalling a capacity of 8.5 MWp, further supporting
sustainability and cost reduction.
Belting Fabrics (BF)
With healthy growth witnessed in core sectors of coal, steel, cement, and power
generation, the demand for Belting Fabrics was strong during the year, registering record
production and sales. While cheap imports from China remained a challenge, the BF segment
could largely remain insulated due to an increase in the sales of high-end, Value-Added
Products (VAPs) and expanded sales to tier-2 customers.
During the year, the BF segment commissioned its Solid Woven plant, further enhancing
its product portfolio. In addition, the Board approved a capex for BF capacity expansion
from 1,100 to 1,800 Metric Tonnes Per Month within the next three years.
Polyester Industrial Yarn (PIY)
During the year, the demand for PIY remained weak due to aggressive pricing from
Chinese manufacturers, resulting in a severe pressure on margins.
In the ensuing months, the PIY segment is looking to consolidate its product mix and is
also expected to gain from the projected capacity expansion in FY24.
Outlook
While we expect to see some green shoots on the back of a resilient Indian economy, the
margins of the Tyre Cord Fabrics segment will remain under pressure due to cheap imports
from China. We will focus on building our volumes. Having said that, we remain optimistic
about the growth of the Belting Fabrics segment as additional capacity comes on stream.
Chemicals Business
The Chemicals Business comprises two different product segments, namely Fluorochemicals
and Specialty Chemicals.
Fluorochemicals
Refrigerants, Propellants and Industrial Chemicals
FY23 began on a volatile note, with uncertainties on account of raw
material and energy prices, bottlenecks in supply chain and high inflation rate.
Having said that, the Business achieved significant growth across all its product
segments due to surge in the post-pandemic domestic demand. Demand in international
markets was healthy, despite the cheap prices offered by the Chinese manufacturers. In
addition, commodity prices eased out in the latter part of the year, aiding further
growth.
Industrial Chemicals market remained stable, however prices dropped due to an
oversupply situation resulting from additional capacities kicking in. The
Dymel?/Propellants segment performed well because of increased market share, due to
healthy demand and expansion in new geographies.
During the year, the Business witnessed safe and stable plant operations, with
highest-ever production in most plants. The Business also commissioned new plants, namely,
chloromethanes, calcium chloride and a Captive Power Plant (CPP) at its chemical complex
in Dahej, India.
Overall, it was a year of stabilisation and growth post-COVID. The business performance
was healthy and higher than last year.
Outlook
In FY24, the Indian economy is expected to grow, and global inflation is likely to come
down. Hence, the demand momentum should continue in the coming year especially in the
domestic market for all products. With the addition of new capacities and better
utilisation, the Business is poised to grow in the coming year. Furthermore, we expect to
commission new plants and increase our overall HFC
capacities. In addition, we will also commission our new Fluoropolymers plant at Dahej
in FY24.
Specialty Chemicals Business
FY23 has been a good year for the Specialty Chemicals Business (SCB). The Business
maintained its growth momentum, despite being impacted by high input costs and global
shortage of some key raw materials. The growth was primarily driven by an increase in
demand for crop protection chemicals.
During the year, the Business focussed on the customersRs key products and their
developmental project requirements, while ensuring the production capacities were
optimally utilised. This ensured continuity of customersRs supply chain amid an uncertain
environment of raw material availability triggered by disruptions in Europe. The combined
effort of all the teams ensured that the Business maintained its growth trajectory and
continued advancing on its key strategic priorities.
The SCB is committed to continue investing in setting up new plants to cater to the
emerging demands from customers. Both sites at Bhiwadi and Dahej delivered improved
operational efficiency from existing plants while managing an expanded portfolio of new
products.
Furthermore, our Innovation and Technology LeadershipRs journey continued with the
launch of several new Agrochemical and Pharma Intermediates. In addition, production
capacities of several plants were enhanced, while working on continuous improvements in
the plants at both the sites.
The Business continued to focus on increasing sourcing of raw materials from
sustainable and environmentally responsible sources. The Business also implemented various
initiatives to reduce its carbon footprint, such as optimising energy consumption and
reducing greenhouse gas emissions.
The efforts of the Business in strengthening its capabilities and developing expertise
in new chemistries have helped it to differentiate itself from its competitors. To address
some of the future product requirements and to keep pace with the market opportunities,
the fourth state-of-the-art Multipurpose Plant and a new Pharma Intermediates facility
were commissioned apart from other Intermediates Plants.
During the year, the Board approved the construction of a number of plants for upcoming
products and some of the critical feedstocks at Dahej. The Board also approved a Kilo-Lab
at Bhiwadi to supply small quantities to customer for scale-up and product qualifications.
The Business continues to make investments toward safer, cleaner, and leaner operations,
and further strengthen its sustainability initiatives.
Outlook
The Specialty Chemicals Business continues to remain focussed on Agrochemical and
Pharmaceutical segments, where it collaborates with major global innovators for process
development, commercialisation, and production of complex, new age molecules. The Business
expects to continue
The Business continued to focus on increasing sourcing of raw materials from
sustainable and environmentally responsible sources. The Business also implemented various
initiatives to reduce its carbon footprint, such as optimising energy consumption and
reducing greenhouse gas emissions.
s/
expanding its product portfolio on the back of sustainable value chain and remain
focussed on strengthening its position in the existing markets.
With sustainability and environment at the heart of product development, the Business
will continue in its endeavour to deliver better value to its customers. It remains
committed to invest in emerging and futuristic technologies, while focussing on
operational excellence to grow sustainably.
Chemicals Technology Group
The Chemicals Technology Group (CTG) is committed to introducing new
technologies and developing cost effective routes for existing and next generation
products for the growth of the Specialty Chemicals and Fluorochemicals Businesses.
During the year, CTG continued to boost its capabilities and added new
technologies, to support the Businesses. The centerpiece of the sustained growth momentum
was technological advances and breakthroughs achieved by our team of researchers and
scientists. CTG continues to transform innovation in new product/process development and
implement cutting edge technology at SRF, spearheading both the Specialty Chemicals and
Fluorochemicals Businesses into next-level technology play.
For over two decades, CTG has enabled the Business growth in Fluorinated molecules and
now it is increasingly engaged in introducing new chemistries and development of complex
non-Fluorinated intermediates. It is crucial to keep on enhancing CTGs capabilities and
support systems with rising complexity in developing products and reducing timelines for
delivery-to-market. CTG is committed to the journey of continuous process improvement and
developing more efficient processes by tapping novel chemistries and scaling them up for
successful commercialisation.
The dedicated R&D facilities, developmental labs, and pilot plant facilities,
having many scientists and engineers are working together to achieve the innovation and
technology leadership at SRF. SRF continues to invest in R&D for creating propositions
for the future and Capital and Revenue expenditures of 120 crore was spent during FY23.
R&D worked on over 50 molecules and many products were successfully taken up for
process development. More than 20 molecules were taken up for the scale-up studies and 70%
were commercially produced in multipurpose and dedicated plants.
In FY23, CTG filed forty-two patents, taking the total count to four hundred and six
patents filed so far. Eighteen patents were granted in FY23 taking the total count of
patents granted to the Company to one hundred and thirty-two.
Packaging Films Business
FY23 has been a roller-coaster ride for the Packaging Films Business (PFB). During the
first quarter of the FY, the Business made its highest-ever quarterly EBITDA. In Aug 22,
PFB commissioned its new 10.4m BOPP line at Indore, India and managed to ramp it up
vertically during the year. However, market conditions were extremely difficult from
second quarter onwards as several new lines of BOPET and BOPP got commissioned during the
period.
Overall, the Business achieved its highest-ever packed production of approximately
3,20,000 MTPA during the year while also focussing on intensive cost
rationalisation as the business environment remained difficult. Enhancing business
profitability through the development of VAPs has been a major thrust area. Our
manufacturing capability in VAPs has been enhanced with the addition of paper
metallisation, Alox Coating and Offline Coating assets and the new BOPP line, which has
given us the flexibility to manufacture a wider BOPP portfolio. The Business successfully
commercialised 10 new VAPs, 4 in BOPET and 6 in BOPP during the year, strengthening its
VAPs portfolio.
Work on the upcoming Aluminium Foil project in India is progressing well and timely
vertical start-up of the rolling mills will be an important focus area for the Business in
the coming Financial Year.
The Business is driven by its philosophy of - Easy To Do Business With (ETDBW), and the
team remains focussed on serving customers every day. Additionally, sustainability
continues to be amongst the top priorities for the Business. Further development of
sustainable products and compliance with the new Plastic Waste Management rules will be a
key focus for us going forward.
Outlook
Margins in both BOPET and BOPP are likely to remain under pressure as new lines have
been added and several more lines are in the pipeline. In FY24, SRFs primary focus will
be on profitability enhancement and further rationalisation of operating cost and working
capital in the Packaging Film Business. We will commission our new Offline Coating machine
in Thailand and leverage our capabilities fully to further enhance our VAPs portfolio.
Efforts will be directed towards vertical start-up of production and sales of Aluminium
Foil in India. With the commissioning of our new Aluminium Foil plant, we will be amongst
very few players globally who offer a wide portfolio of packaging substrates - BOPET, BOPP
and Aluminium Foil under one roof. We will continue our work on various sustainability
initiatives driven by the 3RRs approach - Reduce, Reuse and Recycle. During the year, we
will keep a close watch on the macro scenario and will be flexible to adapt our strategy
accordingly.
Other Businesses
Coated and Laminated Fabrics Businesses
FY23 has been a good year for the Coated Fabrics Business. Domestic demand,
particularly for VAPs
With the commissioning of our new Aluminium Foil plant, we will be amongst very few
players globally who offer a wide portfolio of packaging substrates - BOPET, BOPP and
Aluminium Foil under one roof.
remained strong, which helped the Business achieve its highest-ever domestic sales.
Business made highest-ever EBITDA during the year. SRF continued to maintain its domestic
market leadership in Coated Fabrics. Business also continued its price and volume
leadership in the Laminated Fabrics Business by selling at full capacity and achieving its
highest-ever sales during the FY. However, margins remained under pressure in Laminated
Fabrics as costs increase could not be passed on completely to the customers due to excess
supply.
Outlook
In FY24, we expect demand to remain strong for both Coated Fabrics and
Laminated Fabrics. In Coated Fabrics, the focus will be to enhance capacity and increase
sales during the year. The Business will also continue to work on various cost reduction
initiatives for both the businesses.
Human Resources
At SRF, the Human Resources (HR) function has evolved significantly over time. The
function has always been determined to build best-in-class people processes that continue
to enhance creativity of people. Our focus remains on building and strengthening a culture
that keeps people at the core of all decisions while setting new benchmarks in
profitability and productivity. With this ambitious goal, the HR team has had yet another
successful year with a number of key accomplishments and initiatives being implemented.
The post pandemic world is different and in multiple ways; priorities have undergone a
sea change. As an organisation, weve always maintained sync with what people want. As a
step in this direction - the organisation focussed on implementing practices and policies
that encouraged people to place a higher importance on health and wellness.
This year also witnessed an enhanced focus on building a culture that allows diversity
to flourish and is inclusive in the truest sense. Making the organisation completely
inclusive is a long-term journey that we have embarked upon and there is no looking back.
Several changes were brought about that ensured
a safe and conducive environment for all people irrespective of their gender, sexual
preferences, caste, regional backgrounds, abilities, etc.
With years of continuous effort, weve been able to craft a unique and comprehensive
performance management system that helps teams work to their potential by providing them
necessary support and guidance. The system achieves a perfect balance between development,
growth, rewards, conversations and strengthens the manager-subordinate relationships. With
a high level of emphasis being placed on providing developmental and career growth
opportunities, the organisation is able to promote meritocracy and build fairness and
transparency. When it comes to salaries and benefits, SRF stands out for its competitive
position in the market.
Not just the HR function but also the use of technology in the function has evolved
over time. Today, a large majority of our people processes are completely automated.
Industrial environment
The organisations overall employee relations remained positive throughout the year.
This was a result of our consistent efforts towards keeping our employees
engaged, motivated, involved in the success story of the organisation and completely
committed to our cause. Various initiatives were implemented at the plants that encouraged
participation and collaboration of not just employees but also of their families. We
maintained a pleasant and cordial working environment across all manufacturing locations
and witnessed a high in productivity at most of our manufacturing locations.
The total number of permanent employees at SRF and its subsidiaries/parent company
stands at 7,971 at the close of business on March 31, 2023. Of these, 7,227 are based at
our India locations.
Information Technology
As SRF plans for future growth, it is essential for core operations systems to work
efficiently with increasing levels of automation leading to improved productivity and
competitiveness. The systems have been designed appropriately to extend seamlessly to new
factories with similar processes and standards.
In line with this vision, core systems like ERP, BPM-Business Process Management,
ASCP-Advanced Supply Chain Management system underwent a generational upgrade to extend
the support window by principals, leading to better availability, stability, and security.
Many process improvements were done using the new features and functionalities of recent
version releases, while also addressing pending operational issues of business teams. The
technical stack was also upgraded and optimised to consume lesser resources while
providing higher output at a faster pace. All this led to a substantial improvement in
time taken to do basic transactions leading to higher throughput of operations teams. This
enabled the staff to take on additional workload of our expansions.
SRF values its relationships with customers and vendors, continuously striving to
improve the efficiency of operations and interactions. Our customer portal helps customers
get an overview of their ongoing and past transactions with SRF. This solution was
An integrated CRM-Customer Relationship Management solution was rolled out in
Fluorochemicals Business and Technical Textiles Business aimed at helping the sales team
service their customers promptly. \/
improved further and extended to more businesses this year. An integrated CRM-Customer
Relationship Management solution was rolled out in Fluorochemicals Business and Technical
Textiles Business aimed at helping the sales team service their customers promptly. A
supplier procurement and portal solution was implemented in Specialty Chemicals Business
this year as a pilot. This platform was used to close a lot of deals and share information
to supplier related to their transactions with SRF.
Manufacturing operations stands to gain from advancements in Industrial Internet of
Things (HOT). Over the years, SRF has done multiple implementations of solutions using
factory systems data, sensor data, trend analysis, AI/ML algorithms. These projects helped
improve machine state visibility, efficiencies, throughput, and uptime. Process Input/
Output norms were also enhanced in some cases. Visual analytics is helping us detect any
defects in the manufacturing process. These are also helping us optimise energy
utilisation thereby helping us attain our sustainability and ESG commitments.
SRF increased its portfolio of security solutions in line with regulatory requirements
as well as to suitably address the enhanced threat perception. Security incidents and
events monitoring solution was implemented and is being monitored 24x7 by a specialist
security organisation. We are also implementing a Privileged Access Management solution
that will ensure that only authorised technical staff when authorised can reach the
technical layer of IT solutions.
We are enhancing our citizen analytics and development capability using low code/no
code tools. Many employees outside IT were able to develop insightful dashboards and micro
process automations to help streamline their department operations. We will now be
increasing our investments in Cloud technologies to plan for the next phase of growth.
Community Partnerships
Building upon its longstanding commitment to sustainable and inclusive community
growth, the SRF Foundation - the Corporate Social Responsibility arm of SRF Limited - has
expanded the scope of its work and taken concrete steps in compliance with Section 135 of
the Companies Act 2013 during FY23.
The Foundation continued to focus on the identified areas of Education, Vocational
Skills, Health Promotion, Environment, Disaster Management and Promotion of Arts and
Culture on a sustainable basis. Moreover, it strengthened its Public Private Community
Partnership (PPCP) model to positively impact peoples lives.
FY23 witnessed the strengthening of the Foundations Education Programs. SRF Foundation
transformed Government schools into dynamic centres of education, turning them into
"Model Schools" by working in the areas of physical-infra development,
digitalisation, academics, and school leadership development. Presently, we have reached
465 Government schools across 24 locations in 12 states directly and indirectly by
collaborating with like-minded partners, providing quality education to over 1,78,702
students, and training 3,397 teachers and 465 headmasters.
To promote digital inclusion, the SRF Foundation is working on KidSmart Centres, World
on Wheels & SmartShiksha Mobile Digital Labs, Common Services Lab, and Digital Smart
TV Classroom Programs in the intervention locations. In addition, the SRF Foundation is
committed to transforming schools into centres of innovation through future skills
programs such as the Tinker Coding Program, ATAL Community Innovation Centres, and ATAL
Tinkering Labs.
Apart from school education, this year, the SRF Foundation initiated the Anganwadi
Development Program/ aimed at improving the quality of Early Childhood Care and Education
in line with the National Education Policy (NEP) 2020, which had a direct impact on 10,905
children from 308 Anganwadis across 7 locations.
Regarding vocational skills, the SRF Foundation integrated school dropouts, unemployed
youth, and women into the mainstream workforce by equipping them with appropriate skills
to meet the demands of the supply chain. Through the vocational skills programs, such as
the Basic Electrician Training
Program, Basic Computer Literacy Program, Spoken English Program, and Nari Shakti
Program, we have trained 1,785 unemployed youth from 13 locations across 8 states, and 50%
of them have been placed in national and multinational companies. In addition, 7,235
people in rural locations have received training in digital skills and 259 women have been
trained in fashion designing and beautician trades.
SRF Foundation undertook several new initiatives this year to improve employability,
health, and digital skills among the community. We introduced SmartShikshaRs mobile
digital labs in Mewat, Bharuch, Kamrup (M), Dhar, and Kashipur, offering a mobility
solution to bridge the digital divide in rural locations. By partnering with Microsoft and
Shell, we introduced Skills for Livelihood - Digital Skills for m &. Polytechnics
(non-IT trades)/ which will benefit 5,000 m and Polytechnic students in skill development
and employability across various parts of the country.
To promote community health, we introduced two new programs, the Rural Health Program
(RHP)Rs and SRF Swasthya Seva/Through RHP, we adopted a primary health centre in Nalcha
(Dhar) to improve the medical practices as per kayakalp standard. Our mobile health van
SRF Swasthya SevaRs in Bharuch will visit 15 different villages around the Dahej plant
providing health awareness, diagnose issues, and cure diseases in the community. In
partnership with Amway and Opportunity International, we extended the Power of 5Rs
project in Sohna (Haryana) and Chennai (Tamil Nadu) to support child nutrition.
Through the Natural Resource Management (NRM) program, the SRF Foundation continued to
support economically weaker families in the vicinity of its Bhiwadi, Rajasthan
manufacturing plant by adopting a watershed-based livelihood and environmental
conservation approach. In FY23, this program
SRF Foundation undertook several new initiatives this year to improve employability,
health, and digital skills among the community. We introduced SmartShikshaRs mobile
digital labs in Mewat, Bharuch, Kamrup (M), Dhar, and Kashipur, offering a mobility
solution to bridge the digital divide in rural locations. sy
directly benefited over 5,249 families and indirectly supported 1,705 from 35 villages
in the Tijara block surrounding the SRF Bhiwadi plant. This region receives below-normal
rainfall, but the NRM program has helped maintain 206 earthen dams, ensuring their proper
utilisation and providing sustainable benefits.
Furthermore, we undertook Assam flood relief work in several locations, including
Nalbari, Bajali, Kamrup, and Barpeta. We provided 171 tents to 772 individuals affected by
the floods. During FY23, the SRF Foundation funded fourteen NGOs for sixteen social
projects in education, sports, health, and environment.
In recognition of our efforts in education programs, the SRF Foundation was honoured
with three prestigious awards during the year, including the Mahatma Award 2022 for social
impact in promoting quality education, the Bhamashah Award 2022 for CSR intervention in
Education (Rajasthan), and the ICC Social Impact Award 2023 for the promotion of
education.
Internal Control System and Internal Audit
The Company has a well-documented system of internal financial controls in place
commensurate with its size, scale, and complexity of operations. These controls have been
designed to provide reasonable assurance with respect to recording and providing reliable
financial and operational information, complying with applicable laws, safeguarding
assets, executing transactions with proper authorisation, and ensuring compliance with
corporate policies.
The Company has a well-established independent Internal Audit & Risk Management
function which drives and coordinates for the Internal Audits, Internal Financial Controls
and Enterprise Risk Management System. These frameworks are supported by a well-defined
organisation structure, roles and responsibilities, documented policies and procedures,
financial delegation of authority, ERP controls, among others.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internal
control systems in the Company, the ERP solutions, the accounting procedures, and policies
at all locations.
Internal Audit reviews are conducted on an ongoing basis, based on a
comprehensive risk-based audit plan commensurate with the size and nature of business
activities of the Company. The Internal Audit plan is approved by the Audit Committee,
which also reviews compliance to the said plan. Any significant audit observations and
corrective actions thereon are presented to the Audit Committee which reviews the reports
submitted by the Internal Auditors (both internal and external) in each of its meetings.
Based on the gaps reported in the internal audit report, process owners undertake
corrective actions in their respective areas and thereby strengthen the internal control
framework. In addition, the statutory auditors also obtain reasonable assurance on the
adequacy and operating effectiveness over the Companys internal financial controls with
reference to financial statements as a part of their annual audit exercise.
A robust Control Self-assessment (CSA) process enables process owners to perform
self-assessment and promote self-compliance in accordance with laid down policies and
procedures, regulatory environment through IT-enabled platform such as CSA tool and
Compliance Manager.
Risk Management
The Company has developed and implemented a Risk Management Framework, which is
approved by the Board. Further, Board has constituted a Risk Management Committee (RMC) to
oversee key risks and assist the Board in efficient management of risk management process.
The Risk Management Policy, inter alia, includes identification therein of elements of
risk, including those, which in the opinion of the Board/RMC may threaten the existence of
the Company or may have material impact. Risk management process has been an integral part
of the Company strategy and planning process. The Company has established a risk
management framework to identify, assess and frame a response to threats that can affect
its business objectives and stakeholders. Further, it is embedded across all the major
functions and revolves around the goals and objectives of the organisation. The
responsibility of tracking and monitoring the key risks of the business/function
periodically and implementing suitable mitigation plans proactively is with the senior
executives of various business/ functional units.
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