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FIGURE NO. 3Weekly Production of Day-Old-ChicksNumber10,000,0008,000,0006,000,0004,000,0002,000,0000Weekly BroilerDOC ProductionWeekly LayerDOC Production200820092010Year20112012Below is a brief yearly summary of our core businesses:The silver-lining to this bleak picture is that the Governmenthas finally approved the use of vaccination to combat AvianInfluenza. The poultry industry has welcomed this bold moveand is hopeful that AI can be significantly reduced in thecoming years, resulting in the Industry resuming its highgrowthtrajectory 2013 onwards.As you are all aware, Renata has been investing aggressivelyover the last few years to increase production capabilities andcapacities. While such investments are essential to securingfuture growth prospects, the immediate impact is manifestedin higher borrowing costs. Relying solely on plain vanillacommercial bank borrowing is no longer feasible. As such, wewidened our financing options in two significant ways. First,we raised Taka 1 billion through the private placement of acorporate bond. The bond carries a coupon of 12%, is unsecuredand subordinated to our normal bank loans. Second,we have started utilizing Usance LC with Payment At Sight(UPAS) extensively to effectively convert our large importpurchases into low-interest bearing foreign loans. We expectthe full effect of these new financing options to be felt in 2013.Animal Health. Renata retained its pole position in the market. Revenue growth was 1.32% against market growth of 1.58.The gap between the proxime accessit widened in both absolute and percentage terms.We signed agreements with Indian Herbs Overseas and Blue Seas Life Sciences, India to widen our product portfolio.Since AI vaccinations are now permitted in Bangladesh, we expect a turnaround in the poultry industry to drive recovery inAnimal Health in 2013.Pharmaceutical. We continue to be the fifth largest pharmaceutical company in Bangladesh. Our revenue growth was 21. 11%as against market growth of 11.91%. Despite a marked slowdown in the industry, we maintained our focus on prescriptiongeneration and brand-building, as opposed to trying to obtain quick sales through deals and discounts, a strategy which manyof our competitors continue to rely on. We strongly believe that our approach is the best strategy for long-term growth even ifit sacrifices short-term sales.While we introduced quite a few new products, we are particularly excited by the prospects of Paradote, which is a combinationof paracetamol and methionine. We are hopeful that this new product, licensed from a company in the UK, will help us acquirea respectable share of the large and growing Paracetamol market.Contract-Manufacturing: The Social Marketing Company (SMC) continues to be our largest customer in this businesssegment. In addition to our existing business, we signed contracts for producing 10-million cycles of Femipill, 40 million ORSsachets, and 0.5 million cycles of Norix.UNICEF continued to procure Sprinkles from Renata.Outlook for 2013: We remain pessimistic about the outlook for growth in 2013 mainly due to the deteriorating political scenarioin Bangladesh. Frequent hartals prevent patients from visiting their doctors’ chambers thereby dampening demand for pharmaceuticalproducts. So, if the political situation does not improve as the year progresses, we have no reason to believe that 2013will be a significant improvement from 2012.S.H. KabirChairmanApril 30, 20137 •renata annual report 12