Chairman Address

The year gone by was marked by normalization of economic activities across the Globe post the Covid-19 pandemic. However, it also witnessed various challenges like high level of inflation and interest rates impacting disposable incomes and commodity prices, swift reversal in freight rates, high energy prices arising from geo-political disturbances like Ukraine-Russia war etc. The Turkish economy was also impacted by the earthquakes in February’23.

Arising from the above, demand for plastic films has been impacted, mainly due to fear of recession, high food inflation and lower disposable incomes. The apparent demand has been further muted due to destocking across the value chain. Further, as anticipated, the bunching up of new capacity start-ups in the recent past, mainly in China and India, have created a situation of oversupply and the margins of all plastic film producers have come under pressure, across all geographies.

The diverse geographical presence of the Company along with an extensive product offering and wide customer base, focus on operational efficiencies and a competitive cost structure has helped the Company to perform better than the industry peers and would continue to help the Company to do so in the future as well. The investments made by the Company in expanding the Specialty films’ capabilities and capacity in the last 1-2 years are being ramped up and will help gradually improve profitability.

In comparison to the previous year, sales at 26.3 Billion THB have increased by 23% and Normalized Net profits of 2.1 Billion THB, after adjusting for the foreign exchange losses, is a decline of 35%.

Sustainability has been another key area of focus for Polyplex. We have been driving sustainability initiatives for a long time, way ahead of any regulatory requirements. The investment in Ecoblue limited in 2012, the recent start-up of the expansion for recycling post-consumer PET and Polyolefin waste in 2022 and the investments in chemical recycling capability at Turkey and Thailand demonstrate the Company’s continued commitment to Sustainability & Innovation.

Polyplex understands the importance of Corporate Social Responsibility and recently demonstrated its commitment to this cause by extending full support in cash and kind, to the relief and recovery measures for the earthquake victims in Turkey.

The expansion project in the US is progressing well and expected to start commercial operation in Q2 FY 2024-25. With this expansion, Polyplex would be the most cost competitive producer in the US.

Notwithstanding the difficult market conditions expected over the next few quarters and the necessity to conserve cash for the ongoing US project, the Directors have proposed a dividend of THB 0.84 per share for the year 2022-23 @ 35% of the Company’s consolidated profits on normalized basis.

The Company’s balance sheet remains strong with a low Debt-Equity ratio and sufficient liquidity. The Company continues to evaluate opportunities for further profitable growth as it is confident about the long-term potential of the polyester film industry.

On behalf of the Board, I would like to take this opportunity to thank all the shareholders, business partners and the employees of the Company for their constant support, without which, we could not have achieved all that we did, in the last more than 2 decades of our operations.

Mr. Manu Leopairote
Chairman-Board and Audit Committee