Page 154 - Tata Chemical Annual Report_2022-2023

Integrated Annual Report 2022-23 01-83 84-192 193-365
Integrated Report Statutory Reports Financial Statements
Management Discussion
& Analysis

key result areas. Generating free cash flow and prepaying In Bicarb, capacity addition by competition and the Using technology for digitalisation of the plants, and Adherence to more stringent environmental and regulatory
debt remains a critical area of focus. Company itself may lead to temporary oversupply. making processes smoother for customers and internal norms, and sustainably improving safety performance
Threat of substitution from sodium sulphate in animal feed, stakeholders is going to be crucial as the Company heads are other key issues for the business. A focus on these
For Rallis, manufacturing capacity and introduction of which is a cheaper variant, also needs to be considered. into a digital age. Multiple projects around plant and initiatives, including investment and resource prioritisation,
new products will provide a growth platform for both Bicarb use in the flue gas segment continues to be a supply chain automation, as well as customer relationship form a mitigation strategy to systematically address them.
exports business and domestic sales. Rallis is augmenting promising opportunity, but there still remains uncertainty management are being implemented.
its product portfolio through co-marketing and in- in consistent off-take by power plants. The Company had TCE, UK continues to address the inflationary environment
house research & development (R&D). Manufacturing started supplies in FY 2020-21, and expects the engagement Rallis has a robust and comprehensive framework to and higher energy costs with a focus on reduction of fixed
capacity is being augmented, marketing activities are to continue as the regulations are implemented. address the vagaries of monsoon and its impact on India’s costs and customer engagement. TCE UK continues to work
being intensified and distribution networks are being The Government’s push towards renewables will agriculture sector through deeper engagement with on growth opportunities of Ekokarb® in the global market
strengthened in key states. Seeds business will address accelerate consumption of various products in India in farmers. In addition, the steep increase in input costs and leverage the new warehouse to enhance customer
challenges to stabilise operations in FY 2023-24. is being addressed through combination of localisation experience and quality. The proposed pharma salt project
a significant manner. Its focus on 'Atmanirbhar Bharat' of intermediates, and appropriate engagement and will give a boost to offering premium grade products
6. Risks and Opportunities opens up opportunities in terms of kick-up of demand contracting with suppliers. Increased domestic usage of to customers.
from infrastructure development, boost to domestic
India manufacturing through several initiatives like PLIs, import agrochemicals and exports out of India are immediate
opportunities. The long-term trend of shift to biologics
Higher energy costs due to higher coal and fuel costs is a restriction measures, and softer finance facilities. This will remains an area of product development focus. In Kenya, the focus is largely on quality and capacity
utilisation. To maintain a niche in the container glass
significant risk to the Company’s business performance. have a positive impact on soda ash, bicarb and cement and silicate sector, the quality of soda ash needs to be
Other risks include pricing risk on account of capacity consumption, either directly or through increase in demand Overseas maintained, which remains a challenge. This shall be
additions in US & China, higher inflation and recessionary of the end segments. TCNA, US is well prepared to address the short-term export mitigated with stringent quality controls. Energy saving
pressure (both global and domestic) leading to demand Coming to silica, delay in product approval from major risks subsequent to the exit from the American National Soda through solar power and innovation shall continue to
slowdown, currency devaluation, and changes in the tyre and non-tyre customers will negatively impact Ash Corporation (‘ANSAC’) in December 2022. ANSAC exit help reduce the cost of production, which is critical in
export sector or imports from global markets. The Company the plant utilisation rates. Both R&D and business allows the Company to drive direct customer engagement helping the Kenya operations remain favourable on
continues to remain focussed on keeping the costs low, development teams are engaging with critical customers and to better align the strategic goals of the business with cost leadership.
including variable costs like fuel, salt and limestone through on a constant basis to fast track product approvals the market.
raw material securitisation, and continuous improvement and increase commercial sales. The Company’s HDS
programmes to help mitigate the adverse impact of these (Highly Dispersible Silica) has gained approval among 7. Financial Performance (continuing operations)
risks such as diversifying energy sourcing in addition to large tyre manufacturers like CEAT, with whom TCL is (A) Standalone performance for the year ended March 31, 2023
current sources to improve sourcing flexibility, working working closely to scale in the high margin business. The ` in crore
on changing fuel mix, maximising use of alternate energy Company is working towards reducing the variable cost Particulars FY FY Change % Remarks
sources, different contracting strategies and continuing with of production of silica through local sourcing of low-cost 2022-23 2021-22 Change
strategies like commodity hedging / advance fixing of prices. raw materials, and enhancing plant efficiencies through Revenue from operations 4,930 3,721 1,209 32 Basic Chemistry Products:
better process control. Higher realisation in soda ash and salt, and increased
Execution of expansion project, adherence to more stringent volumes of salt have contributed in higher revenue
environmental norms, packaging and improving safety In FOS, lower sales off-take are resulting in low plant for the Company.
performance in a sustainable manner are other key areas utilisation. Margin erosion can happen due to escalating Specialty Products:
that the Company continues to focus on during FY 2023-24. raw material costs, primarily sugar and rice husk, Growth is due to increase in sale of nutrition products.
and softening of selling prices of FOS. However, the Other income 301 278 23 8 Other income has increased mainly on
El Niño effect on weather and monsoon, and supply chain favourable regulatory landscape of certain countries will account of higher dividend received from
disruptions due to rake availability etc. are some other work as a growth lever, to open more territories where non-current investments.
risks which need to be considered. Excessive rains are FOS can be sold. The Company is using data from third Cost of materials consumed 1,138 814 324 40 Cost of materials is higher due to higher input costs
resulting in dilution of brine, which is affecting captive party data aggregators to directly target the existing of raw materials.
solar salt availability, leading to rise in cost of production as users of FOS. This can help the Company in achieving Purchases of stock-in-trade 130 160 (30) (19) Purchases of stock-in-trade decreased mainly
there is an increased need to purchase salt. The Company quicker conversions. GRAS (Generally Recognised as on account of lower opportunities for nutrition
is enhancing production capacity of salt through joint Safe), Halal & Kosher certifications for FOS from a fungus solutions related business.
development projects with TCPL, including working with called Aspergillus Niger can open additional markets for Power and fuel 1,188 670 518 77 The increase in power and fuel cost is mainly on
TCPL on logistics options to maximise movements. Changes the Company. account of higher coal prices and other variants.
in monsoon pattern may also have adverse effect on the Employee benefit expenses 274 249 25 10 Overall employee costs have gone up mainly due
agrochemicals demand. In addition to enhanced ease of doing business, to higher actuarial valuation impact as compared to
customer partnerships around themes of innovation and FY 2021-22.
Carbon emissions taxation will impact the cost of production. sustainability continue to offer opportunities for stronger Freight and forwarding expenses 527 460 67 15 Freight and forwarding charges have increased
The Company is developing a holistic carbon abatement customer connect. Increasing value-added products and majorly due to higher sales volumes of soda ash
strategy at a corporate level, which will help in mitigating sustainable supply chain practices like bulk material are and salt.
this risk. some steps the Company will continue to focus on. Finance costs 26 19 7 37 Finance costs increased majorly on account of
interest on acceptances.

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