Annual Report 2007 - Clariant

Management Discussion and Analysis25Our focused Technical Service laboratories at Balkum enable usto provide the cutting edge technology and an innovative palettespecific to our customer needs.The total sales under this segment for the year were Rs. 3,247Million. Margin continued to remain under pressure due tocompetition and volatility in material prices.(b) Dyes and Specialty ChemicalsClothing, colour, fashion, durability and comfort are everyday termsfor every one. Clariant’s specialty chemicals make a decisivecontribution to enhance the performance, look and feel of the finalproducts of our customers and also add protection and strengthto such products.Textile, leather, paper, detergents and cleaning, personalcare products, are amongst the numerous industrieswherein your Company has varied range of specialty chemicalsproducts.The total sales under this segment for the year was Rs. 5,079million. Sales were affected especially of textile chemicals due toimpact of rupee appreciation which lowered sales of ourcustomers.The Company is developing competence in Technical Textiles asthis is becoming an upcoming segment where the usage of fluorochemicals and coating based products will be in focus. DenimSegment is looking for more innovation finishes and color effectsand ecology friendly concepts for which Clariant will be in focuson Sulphur Dyes and breathable coating.The trend towards the home textile market development inIndia and economical mass market of apparel is leading to amore continuous operations where our business has specificpackages to offer in the preparation dyeing and finishing.Also with the home textile boom, the printing segment is alsounder focus.High cost factors in China are forcing top global paper companies tolook at opportunities in India. Strong growth is expected in surfaceand coating chemicals. The Company has developed customizeddirect dyes for customers. The Government is recognizing thesignificant impact of the paper industry on the environment andhas intensified environmental regulation.(c) MasterbatchesThe market in India continues to be in the growth phase. In general,many of the manufacturers, are in an expansion mode. Thedemand from the customer and packaging sector is growingthereby garnering more business. However, intense competition,especially from local players, are putting our margins underpressure.Segment-wise performance(Rs. Million)Segment 2007Rs. inMillionIntermediates &coloursDyes & specialtyChemicals% tototalsales9 monthperiod-April-Dec.2006% toTotalsales3247 37.7 2556 37.25079 59.0 4135 60.2Masterbatches 288 3.3 179 2.6Total 8614 100 6870 100Your Company continues to focus – (a) onimproving efficiency in operations, (b) on marginimprovement, (c) on net working capital toimprove cash flow.Cautionary StatementStatements in this Report particularly thosewhich relate to “Management Discussion& Analysis” may constitute forward lookingstatements within the meaning of applicablelaws and regulations. Actual results maydiffer materially from those expressed orimplied in the statement since the Company’soperations are influenced by many externaland internal factors beyond the control of theCompany.Threats, Risks and ConcernsThe risk framework involves identifying risksacross each of the business processes of theCompany. As with any business organisation,the Company’s activities expose it to a variety ofrisks.(a)Product and environmental risksRisk arising from product liability is protectedthrough insurance policies or limited throughcontractual agreements wherever possible.Risk associated with protection of environment,safety of operations and health of people at workis monitored regularly with reference to statutoryregulations prescribed by the governmentauthorities and guidelines defined by Clariant.The Company does not merely fulfill the legalrequirements concerning emission, waste waterand waste disposal, but actually works to evenstricter self imposed standards.