Atul-2009-10

Corporate Identity Serving Diverse Industries Purpose and Values Overview by the Chairman Operational Highlights Financial Analysis Research and Technology

Safety, HealthandEnvironment Serving the Society Directors’ Report

Management Discussion andAnalysis

Report on Corporate Governance Financial Statements

Products

Epoxy Resins, Hardeners, Rubber Adhesives, Polyurethane Adhesives and others

2009-10

2008-09

% change

Revenues (Rs Crores)

223

194

Share in total revenues (%)

The Division manufactures epoxy resins and hardeners

and formulations thereof and other components such as

air release agents, reactive diluents, rheological modifiers,

wetting agents, etc. These products are used in Aerospace,

Automobile, Construction, Defence, Electronics,Marine, Paint

and Coatings, Wind Energy industries. In value, domestic

sales increased by 22% and exports reduced by 19%. Brand

sales were up from Rs 12 crores to Rs 18 crores.

The world market for epoxy resins and hardeners is about

USD20 bn and is growing at the rate of about 1% per year.

The world leaders, generally, are backward integrated and

manufacture their own Epichlorohydrin and Bisphenol-A.

Furthermore, they have a much higher manufacturing

capacities which range from 1,00,000 tpa to 2,00,000 tpa. In

India, the Division is amongst the two largest manufacturers.

Almost the entire requirement of Bisphenol-A is met by

imports.

Even though the world market for epoxy resins and

hardeners is not growing significantly, the demand in India

is good being amongst the fastest growing economies of the

world. The consuming industries particularly Automobile,

Construction and Paint and Coatings are growing rapidly.

Cheaper imports will continue to be the main competitor,

and this will keep the contribution margins under pressure.

The Division will continue to de-bottleneck and expand its

manufacturing capacities of epoxy resins and hardeners and

has the possibility to substantially increase sales without

making huge investments. It will have a larger portfolio of

value added products in its total sales. It will endeavour to

grow its brand sales which it commenced three years ago

and leverage its marketing organisation for introducing new

products. The outlook in the foreseeable future is good.

Polymers