Paru M Jaykrishna-Chairperson and Managing Director, Asahi Songwon Colors

What factors helped you to register phenomenal results for the last financial year?
Asahi has made a lot of progress internationally.  We have set up our new R&D centre which now has started to yield rich dividends in technological improvements, thereby resulting in reduced costs and improved EBITDA. Also, our expanded capacity for Beta comes on stream during the year and the last two quarters reflected its utilisation.

What strategies are you adopting to enhance your overseas’ presence in terms of better export revenue?
We aspire to develop and launch new products through sustained R&D efforts to create a name and enhance our overseas presence. Our track record shows that our growth is based upon the global acceptance of our products. We will continue to focus on the global market. Our exports are more than 80 per cent of the total turnover.

What is your present manufacturing capacity? Is there any plan to expand it in this financial year?
Our present pigment manufacturing capacity is 14,000 TPA. We have planned to expand our capacity by another 5,000 TPA in our thrust to continue with forward integration. We also have a plan to pitch for more value-added products like Alpha blue and Beta 15:4.

How have the latest technologies and value engineering helped the company to create better margins?
Asahi Songwon has a state-of-the-art plant which is one among the best in Asia, duly equipped with cutting-edge technology that provides extra leverage in terms of quality compared to our competitors. The company has also started concentrating more on R&D to continuously keep on upgrading the product quality and its processes. Our philosophy  to choose  high-end technology has allowed us to become the preferred supplier delivering total customer satisfaction, thus improving our margins.

What is your present order book position?
Our capacities are fully sold out till December 2011. We  have annual contracts with our key preferential customers.

What kind of growth rate are you looking at in this financial year?
The company estimates YoY growth of 25 per cent in topline and 35 per cent in bottomline.

What is your view on the current outlook of the Indian pigment industry and its future?
The Asia Pacific region will lead the gains and increase its market share to half of the global demand by 2013 and considering the present industrial environment and the sentiments prevailing in the country, pigment manufacturing will continue to increase India’s share in the global pigment market.

How are you addressing the environmental concerns related to the pigment industry?
We have a state-of-the-art environment management system and continue to invest to upgrade the same so as to meet the future challenges of environment management. We have recently invested Rs 5 crore and plan to invest another Rs 10 crore this year to upgrade our environment management system and meet the challenges of the future.

Where do you see Asahi Songwon Colors in the next five years?
Asahi is positioned to take a big leap in the international arena of pigments. The business opportunities in the field of pigments are many and the company is planning to expand its existing capacity and add a few more value-added products over the next two years. The next five years look the most exciting and promising. There also are major plans to enter the field of AZO pigments as also leverage our R&D strength to propel the company forward.

What kind of risks and challenges lie ahead for the company?
With the shift in balance from the developed regions to the Asian countries, India and China are going to be the growth engines in the manufacturing segments that will drive the global economy forward. This has opened up many opportunities for us and therefore the company plans to further scale its capacity from 14,500 MT per annum to 19,000 MT per annum to unlock and tap opportunities. However, the Company is wary about rising raw material prices and the current trends in foreign exchange certainly pose greater challenge. 

Any message for your investors?
During the year under review the company has declared a total dividend of 30 per cent i.e. Rs 3 per share, including interim dividend of 10 per cent. Considering the company’s expansion plan and the valuation as compared to our peers, it is clear that at the current level we are undervalued, thereby implying huge growth potential and return expectations. Our efforts to achieve excellence in performance and reward our valued shareholders will continue as before.