Dutron Polymers Ltd Management Discussions

INTRODUCTION

Dutron Polymers Ltd. was formed to manufacture Plastic Pipes and Fittings, as an organized supplier to the industry at Dist. Kheda, Gujarat. The company had a technical license from world leaders in the field M/s. Wavin Overseas, The Netherlands for manufacture HDPE, PVC pipes till 2006. Today, the Company has been recognised as one of the most reliable quality plastic pipes & fittings manufacturers in India. Its products HDPE, PVC & CPVC pipes and fittings cater to several market areas- agriculture, industries, building & construction and infrastructure projects. The Company is ISO 9001:2015 certified and has established as a quality brand in all parts of the country, especially in Gujarat and neighbouring states.

ECONOMIC REVIEW

During 2023-24, the global polymer market experienced a mixed bag of challenges and opportunities. While certain sectors, such as packaging and healthcare, witnessed steady growth due to increased demand for polymer-based products, others faced hurdles like supply chain disruptions and fluctuating raw material costs. Environmental concerns continued to shape the industry, with a growing emphasis on sustainability driving innovations in biodegradable and recycled polymers. Despite geopolitical tensions and economic uncertainties in some regions, the overall trajectory of the global polymer market remained positive, growing by about 3%.

INDIAS PLASTIC PIPE INDUSTRY

Indias plastic pipe industry experienced significant, double digit growth during 2023-24, driven by infrastructural development projects and a burgeoning demand for modern sanitation systems. The adoption of plastic pipes surged across residential, commercial, and industrial sectors due to their cost-effectiveness, durability, and ease of installation compared to traditional materials like metal and concrete. Government initiatives promoting clean water access and sanitation further fueled the market expansion. However, the industry also grappled with challenges such as fluctuating raw material prices and environmental concerns surrounding plastic waste.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The plastic pipe industry in India comprises a diverse range of players, including manufacturers, distributors, and suppliers, catering to various sectors such as agriculture, construction, infrastructure, and utilities. Several key developments like Market Growth due to government initiatives in infrastructure projects; Technological Advancement; Focus on Sustainability, and Regulations on quality and standards have shaped the industry in recent years.Global plastic pipe industry is growing at about 4-5% annually. In recent years, the demand is steadily increasing due to factors such as government schemes like Pradhanmatri Aavas Yojna and AMRUT.

BUSINESS OUTLOOK

The reduction in raw material prices of PVC and HDPE contributed to healthy growth of these pipes during the year 2023-24. HDPE pipes are gaining traction, particularly in sectors requiring superior resistance to corrosion and chemicals, such as municipal water supply, gas distribution, and industrial piping. With advancements in manufacturing processes and a focus on quality and sustainability, both PVC and HDPE pipe manufacturers are well-positioned to capitalize on Indias growing demand for efficient and durable piping solutions.

Dutron has been one of the early users of Japans Sekisui CPVC compound - ‘Durastream in India, and these CPVC pipes are established as quality products for the hot and cold-water plumbing system. The recent imposition of tariff on import of CPVC from countries like China will definitely help quality manufacturers of CPVC Pipes. HDPE pipe market growth largely depends on Agriculture season and Industrial projects. Hoping for good Agriculture season amid weak industrial growth will be critical to Dutrons growth in the current year.

OPPORTUNITIES AND THREATS

The Governments various welfare schemes in irrigation, drinking water, affordable housing and Smart City projects will give an excellent opportunity to increase the business of your company in the coming years. Replacement of metal plumbing pipes with plastic pipes is already taking place in India. Significant risks and threats to your company are related to Global economic situation, Volatile plastic raw material prices, War situations in Europe and Middle East. The situation of economic downturn, if it comes, may affect building and construction, farming and industrial sectors; and these may affect the demand of your companys products.

BUSINESS, OPERATIONAL AND FINANCIAL RISKS

The significant risks and concerns which may have an impact on the Companys business are as follows:

1. Indian Economy and International Economic trends

2. Foreign Currency rate fluctuations

3. Interest rate fluctuations and high rates on inflation

4. Unforeseen circumstances like natural calamities- pandemic, floods, earthquakes, closure due to violence

5. Delay in government spending on infrastructure and welfare schemes

Since the company is 100% dependent on import of raw material for CPVC pipes, fluctuations of foreign currency rate affect the most in profitability on CPVC pipes sales. However, it is expected that this fluctuation will decrease due to actions by RBI. Further, Plastic Pipes manufacturing industry is a competitive industry. It reflects with demand-supply chain, trusted quality, and customer confidence is directly linked with economic factors like consumer reliance, technology and its up-gradation etc.

INTERNAL CONTROL SYSTEMS

The Company has built adequate systems of internal controls towards achieving efficiency and effectiveness in operation, optimum utilization of resources, and effective monitoring thereof as well as compliance with all applicable laws. The internal control mechanism comprises of well-defined organization structure, documented policy guidelines, pre-determined authority levels and processes commensurate with the level of responsibility.

FINANCIAL PERFORMANCE

The highlight of financial performance is discussed in the Directors Report. The Audit Committee also reviews the financial performance of the Company from time to time.

HUMAN RESOURCES MANAGEMENT

Dutrons belief in trust, transparency and teamwork has yielded improvement in employee efficiency at all levels. The Companys commitment to harmonious industrial relations resulted in enhancing the effectiveness of operations and enabled the achievement of benchmarks in industry. The Companys ongoing objective is to create an inspirational work climate where talented employees engage in creating sustained value for the stakeholders. The Company has developed an environment of harmonious and cordial relations with its employees.

CAUTION STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, estimates etc. may be "forward-looking statements" within the applicable laws and regulations. Actual results may vary from those expressed or implied; several factors that may affect Companys operations include Dependency on telecommunication and information technology system, Government policy and several other factors. The Company takes no responsibility for any consequences of the decisions made, based on such statement and holds no obligation to update these in future.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO

During the year, there is no material change in the following rations. Kindly refer to the note 50 of the financial statements for detailed ratio analysis.

Debtors Turnover	Debt Equity Ratio
Interest Coverage Ratio	Operating Profit Margin
Current Ratio	Net Profit Margin
Inventory Turnover Ratio
	FOR DUTRON POLYMERS LIMITED
Place: Ahmedabad	S. B. PATEL
Date: 8th May, 2024	Director
	DIN: 00226676