Press Release Details

AGM Press Release 28 September 2021

The 104th Annual General Meeting of Balmer Lawrie & Co. Ltd., a Public Sector Enterprise under the Ministry of Petroleum & Natural Gas, Government of India was held on 28th September, 2021.

Below is an extract of the Chairman’s Speech:

In view of the COVID-19 pandemic, like the last year, this year also the AGM is conducted virtually. COVID-19 is “Once in a Century Crisis” and the virus has posed an unprecedented challenge before the whole world. The global health crisis prompted by COVID-19, in addition to the enormous human toll, has engendered the largest economic shock the world economy has witnessed in the last century. The pandemic and associated lockdown measures led to a de-facto shutdown of a significant portion of the global economy, thereby triggering a global recession this year.

Overall Financial Performance

Balmer Lawrie recorded net turnover of Rs.1593 crore during Financial Year 2020-21 as against Rs.1612 crore in Financial Year 2019-20, which is decrease of approximately 1.20% over last year. The Company recorded a Profit Before Tax of Rs.157 crore in Financial Year 2020-21 as against      Rs. 232 crore in Financial Year 2019-20. The decrease is attributable to the COVID-19 pandemic and the performance of SBU: Travel & Vacations which has been affected due to the same.

Performance of Strategic Business Units (SBUs)

Balmer Lawrie is a diversified PSU with a presence in both manufacturing and service sectors.

Industrial Packaging (SBU: IP) – The SBU has been showing consistent growth in volume, turnover, profitability and profits. However, COVID-19 led to overall compressed demand across industry segments with sales volumes under pressure. In spite of the adverse market situation, the SBU was able to close Financial year 2020-21 with healthy profits. The SBU improved its overall efficiency through continuous Operational Excellence across various manufacturing units. The SBU anticipates significant growth in the coming years with the biggest drivers being the chemicals, transformer oils and lubes segments. The SBU has plans to aggressively expand in the Exports segment.

Greases & Lubricants (SBU: G&L) – The small pack sales have registered growth over Financial Year 2019-20 and there has been an increase in Retail Outlets selling the Balmerol brand, which has contributed to better profitability. The SBU witnessed a marginal de-growth in its top-line as compared to last year, triggered by the countrywide lockdown on account of the COVID-19 pandemic in April and May 2020. Consequently, there has been a de-growth in its bottom-line, which has also been adversely impacted by an unprecedented spike in base oil prices and other raw materials in the second half of the year. The SBU has worked out strategies in the perspective of product substitution, cost effective formulations, value addition, bio-degradable products, etc., to combat the challenge of margins in the coming financial year.

Chemicals (SBU: Chemicals) – The SBU launched important new products in finishing chemicals - mainly Binders, Lacquers and Hot Melt Wax. The SBU also entered into the leather tanning process with marketing of Basic Chrome Sulphate and based on good response from customers it targeted the high end of this segment successfully. The SBU also forayed into textile chemicals by launching synergy products like textile binder, wetting agent etc. It is in the process of including major range of textile chemicals in its product basket and is now establishing infrastructure for textile chemicals.
In spite of low demand of leather / leather products / footwear due to the COVID-19 pandemic (Indian Export down by 27%), the SBU was able to reach 97% volume of previous year.

Logistics Infrastructure (SBU: LI) – Warehousing activity continued to perform well during the year due to better utilisation of space and the business segment of Temperature Controlled Warehouses has also started looking up. SBU: LI is planning to expand its footprints in the Warehousing and Distribution industry by setting up an additional Warehousing facility at Kolkata during the FY 2021-22. Balmer Lawrie has three Cold Chain Units operating at Hyderabad, Rai (Haryana) and Patalaganga (Maharashtra). A Cold Chain Unit has been set up at Bhubaneswar (Odisha) which will be commissioned shortly. The Company will provide Cold Chain Solutions under the brand LOGICOLD and the SBU will be termed as Cold Chain. Cold Chain, Hyderabad has been servicing Bharat Biotech and Dr. Reddy’s Lab as their storage and transportation partner for Covaxin and Sputnik-V vaccines respectively. 

Logistics Services (SBU: LS) – Despite severe disruptions on account of the pandemic, the SBU achieved top line and bottom line growth of around 40% and 38% respectively as compared to the previous year. The growth was driven by incremental business in nearly all activities of Freight Forwarding notably in Ocean Freight and Air Export activities. The SBU is now focusing on the private sector especially in Air Export and also eyeing the business of handling project cargo of private customers. With increased focus on healthcare and Government reforms to boost the infrastructure and manufacturing units, the SBU aims at pharma and engineering goods EXIM market in the coming years.
 
Travel & Vacations (SBU: T&V) – This SBU has two verticals viz., Travel and Vacations.

Travel – This vertical has been most severely impacted amongst all businesses due to the COVID-19 crisis. Despite the difficult times, Travel has strengthened its operation, sales and software capabilities, increased its clientele, bringing more clients on SSBT / SBT by offering holistic cost-effective customised services to corporate clients.  In order to reduce operation cost, the business has also tried to venture in the private sector by delivering superior service to its customers. SBU: T&V has also enhanced its visibility on the digital platforms and made its B2C site robust with all services available on the same platform. 

Vacations - Though there was a significant drop of about 81% in the overall business compared to the previous year, a relative growth of 20% in Corporate Business was achieved by Vacations to make up for the shortfall in Retail & MICE as a result of the challenging business environment / significant industry slowdown in FY 2020-21. The Vacations vertical tried to market virtual events and successfully entered in this segment.

Refinery and Oil Field Services (SBU: ROFS) – Due to the impact of COVID-19, there was a downturn in demand for sludge processing services in FY 2020-21. The same can be attributed to several factors such as overall downturn in demand for petroleum products, lower crude prices in the international market and also austerity measures employed by many clients, resulting in cutback in expenditures. The operational performance was at par with the previous year mainly due to advance order booking for the SBU. The new order booking was sluggish due to reduced demand in the market.

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