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Dear
Shareholders,
The
financial year
2006-07 for DNL was
quite eventful and
challenging. I am
grateful to the
shareholders for
their trust and
support shown by the
way of subscription
of rights issue. The
funds raised were
used for acquisition
of diamino stilbene
disulphonic acid (DASDA)
business of Vasant
Chemicals Limited.
The Rs 55 crore
acquisition will
enable DNL to move
up the value chain
in its nitro toluene
business as well as
to expand its
international market
presence. This is
one of the most
significant
acquisitions and
will undeniably
enhance shareholder
value. The acquired
business has been
named as
“Hyderabad
Specialities
Division – DNL”,
and we will
introduce newer
technologies there
to add value and
improve return on
assets.
The
company is expanding
its horizons by
de-bottlenecking its
operations and
putting up one more
multi-purpose
nitration stream at
Vadodara. This shall
enhance the total
capacity of
nitration to 45,000
tonnes. Newer fine
chemicals for pharma
are also being
planned at Vadodara
and Roha. We have
also set up a
multi-purpose pilot
plant at Roha to
develop a wide range
of fine chemicals.
During the year we
have successfully
implemented
Enterprise Resource
Planning software
which would be
instrumental in
better and faster
decision making.
While
we have made
significant strides
towards a better
future, the
price-driven
competition from
China has been at
its worst. Though we
have been able to
retain or increase
our market share,
the profitability
has suffered. On the
positive note, the
prices seem to have
bottomed out and
have started inching
upwards. In order to
improve our
long-term
competitive
position, we have
conducted a detailed
scrutiny of all our
business processes
from efficiency
viewpoint. We have
taken a range of
targeted measures to
raise efficiency and
reduce cost. Hence a
combination of
improved external
environment and
internal measures to
boost efficiency
should augur well
for the future.
I
wish to place on
record my
appreciation of the
commitment and hard
work of all our
employees.
I
am also grateful for
continued support of
my colleagues, our
customers and
business associates
and above all the
shareholders and
members of the
Board.
With
best wishes,
D.
C. Mehta
Managing
Director
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