SOLAR INDUSTRIES INDIA LIMITED
ANNUAL REPORT 2011-2012
I am delighted to report another year of outstanding results. Your Company
reported a 42.45% growth in topline to Rs.1,031.69 crore and 33.87%
increase in its bottomline to Rs.101.20 crore in 2011-12, our best
performance to date.
Seventeen years on, we at Solar are excited about our business as we are
sensing the opportunity in the existing market and new territories as well.
The year under review was marked by a number of challenges.
* The global economy deteriorated; the negative Eurozone crisis outweighing
improvements in the US economy.
* The mining and quarrying sector showed weakness emanating from a
combination of weak coal output growth and legal restrictions on iron ore
production in some parts of the country.
* The pressure on the balance of payments (BoP) - both in relation to a
larger than expected current account deficit (CAD) and lower-than-expected
net capital inflows - resulted in a sizeable depreciation in the external
value of the Indian rupee.
* The interest rate was raised 13 times between March 2010 and December
Solar Industries addressed these challenges through a number of
* The Company widened its customer base, leveraging its reputation to
provide material according to schedule and assisted customers with
technical on-site assistance to maximise product utilisation.
* The Company expanded its global footprint with an export presence in 19
countries, two international manufacturing plants (soon to be followed by a
* The Company is continuing to drive topline growth through successful new
product development, moving closer to customers and increasing focus on
The Indian government can express itself most powerfully through the
accelerated creation of infrastructure - power, roads, railways, ocean
ports, and airports. The inadequacy of infrastructure continues to act as a
constraint for the expansion of economic activity across the country.
We are hopeful that the government will accelerate capacity creation in key
infrastructure areas like the coal sector, to catalyse economic activity in
2012-13 (first year of the Twelfth Plan). Despite India being the third-
largest producer of coal globally, there is a growing concern related to
coal deficit. The government is making rigorous efforts to enhance
indigenous production; Coal India Limited, the world`s largest coal
producer is looking to develop underground mines and restart abandoned
mines through a joint venture with private companies. The implementation of
the New Coal Distribution Policy is beginning to show a positive effect in
relation to the growth of the country`s coal sector. However, the future of
the coal industry will depend on the investment and development of national
infrastructure, start of private mines, pricing reforms, production growth
of CIL, and structural measures to expedite the reform process.
Inadequate infrastructural development continues to curtail the expansion
of India`s economy. The Government of India`s proposed an outlay of USD 1
trillion in infrastructure development in the 12th Plan covering power,
mining, roads, ports and housing, presents an attractive case for the
explosives industry. Further, the government plans to introduce Rajiv Awas
Yojana for slum dwellers under JNNURM with an estimated expenditure of
Rs.50,000 crores, which again will catalyse quarrying and explosives
The Company`s order book for the first quarter of 2012-13 has been
encouraging and while it is still early, we expect the year to be one of
progress. In the long run, our focus on customer satisfaction, innovation,
technology and widening global presence provide confidence.
We commenced commercial production in Nigeria in 2011-12. Our optimum plant
utilisation in Zambia, combined with the acceptability of our products and
growing demand, provides the basis to expand capacities. We are adding
another 10,000 TPA bulk capacity in addition to our existing 10,000 TPA and
installing 5000 TPA of cartridge unit. This will enable us to serve the
mining needs of Central and East African countries. We are also working
hard to commission manufacturing facility in Turkey where construction is
We possess a strong business model, clear strategy, robust balance sheet,
talented people, and a strong product pipeline. Together, these provide us
with a robust platform to enhance customer satisfaction, meet our ambitious
performance targets and enhance shareholder value.
I look forward with confidence to lead Solar`s continued growth towards