MD & CEO’s message

Dear Shareholders,

At the outset, I hope you and your family are safe. We are indeed living through very unusual times and your Company has faced the challenge of COVID-19 pandemic by immediately mobilising efforts to protect employees and our immediate communities. In line with the Tata philosophy of community being a key stakeholder in the business, we proactively pivoted our assets to serve our communities to face the pandemic. We stepped up our efforts to produce and supply disinfectants and masks, ensure food security and ramp-up medical facilities in and around our plant at Mithapur, Gujarat. Our subsidiary, Rallis, temporarily transformed its chemical units to supply hand sanitisers across Maharashtra, Gujarat, Telangana and Karnataka.

Our approach to the pandemic was centred around four key actions of:

Safety of our employees, communities, partners and assets

Rapid pivot to digital to ensure business continuity

Conservation of cash through cost control, working capital and capex reduction

Ensuring continuous support to our customers and supply chain partners

At this point of time, all our plants and R&D centres are operational. I take this opportunity to thank our teams for their resilience and agility. While this pandemic has impacted economic activity, we are confident of emerging stronger as we come out of this challenge.

Advancing Science, Creating Value

This year, we made significant progress in our strategy by becoming a sharply focussed science and chemistry-led organisation, with the smooth transition of our consumer business as a merged entity with Tata Consumer Products Limited. I want to thank all our stakeholders for their support and guidance through this process to create value for all our shareholders.

Our strategy going forward will be to build scale and value in the businesses of:

Performance Materials (Soda Ash, Marine Chemicals, Silica and Nano Products)

Nutritional Sciences (Food and Pharma grade Salt and Bicarb, Ingredients and Formulations, Prebiotics, Probiotics and Natural Extracts)

Agri-Sciences (Crop care, seeds – through our subsidiary Rallis)

Energy Sciences (Battery recycling, actives and battery storage)

During the year, we acquired the balance 25% stake in Tata Chemicals (Soda Ash) Partners in North America for US$ 195 million. It is now our fully-owned subsidiary, resulting in a simpler organisation structure and greater degree of strategic freedom. Our Soda Ash units in India, UK and USA delivered to the plan. The Kenyan unit has since overcome operational issues. Our Silica unit at Tamil Nadu launched new Technical and Food grades for diverse applications. Our supplies of Salt kept pace with demand in India and the UK. We will continue to accelerate capex to support growth in these markets. Our expansion and investments in Food and Pharma grade bicarb is progressing on schedule in the UK and India. Our Prebiotics FOS manufacturing plant at Andhra Pradesh began its commercial production in the last quarter of the year. Rallis delivered a strong performance and our focus is on new product launches and scheduled capex completion. Rallis completed the merger of Metahelix, thereby having a complete portfolio of products including seeds, crop care, etc. in its portfolio. We moderated our investments in EV Battery in tune with the pace of transition to electric in the auto sector, even as we began operations of battery recycling unit.

On the financial front, consolidated revenue from operations was flat at ₹10,357 crore in FY 2019-20. EBITDA increased by 9% to ₹1,949 crore, while PAT was ₹1,028 crore. Our business continues to generate robust cash flows at ₹1,780 crore which supported the Capex to the tune of ₹1,199 crore during the year. The total cash and current investment was ₹3,681 crore as on March 31, 2020.

We will continue to drive value through innovation, digitalisation and sustainability across our five business units. We will continue to invest in our R&D labs in Pune and Bengaluru to bring new products and offerings to our customers. The current pandemic has brought the importance of digital thrust and sustainability focus. Our newest plant in Andhra Pradesh has been designed with digital thread as a central core along with sustainability embedded in its operations. We see this as our future design and operational principle.

Going forward, we expect immediate market conditions to be challenging and your Company is well positioned to emerge stronger by leveraging the rethink in supply chain strategies around the world. I take this opportunity to thank you all for your continued support and trust in us.

Best regards,

R. Mukundan

Managing Director & CEO