RAMKRISHNA FORGINGS LIMITED
ANNUAL REPORT 2007-2008
CHAIRMAN'S REPORT
Dear Shareholders,
2007-08 was eventful for us, as it brought both successes and unforeseen
challenges. I am happy to report that your Company has been able to
leverage the successes to offset the perils and produce sustainable gains:
we posted a Rs. 236-crore turnover as on March 31, 2008. Performance would
have been better but for the ring rolling facilities not stabilizing in the
expected time however, your Company should earn a full year's benefits in
2008-09. and targets to achieve a growth rate of more than 50 percent for
the financial year 2008-09. We expect to hit it, having provided for the
looming recessionary trends, on the strength of the various measures
undertaken during the year, which are as follows:
Improved Efficiencies:
Many cost reduction initiatives have been taken which will help to conserve
energy and furnace oil and expected to yield substantial cost savings . The
Company is also planning to implement Total Quality Management (TQM) and
Total Productive Maintenance (TPM) which will improve equipment
performance, production efficiency and timely delivery of service and
products.
Industry:
The commercial vehicle sector recorded a 3.1 percent growth over 2007-08
driven primarily by an increase in light commercial vehicles. However,
inflation and interest rates have created significant pressure. Ramkrishna
Forgings, in order to mitigate the slowdown in the industry, has
diversified its customer base and increased its thrust on exports. The
advent of our ring rolling facility has already increased our roster of
international customers and will help the Company realise improved margins.
The industry is also facing several hurdles in the form of steel and oil
price increases which adversely impacted input costs. The Company is taking
all-round measures to improve efficiencies productivity to control costs.
With an expected CAGR of 20.4 percent over the next five years, the outlook
for the industry is extremely upbeat.
Competitive edge:
The stabilisation of the ring rolling line will provide the Company with a
competitive edge on account of higher productivity, better yield of raw
materials and better quality of the components. The installed gear cutting
and testing facilities of the Company are of superior technology. The
Company also boasts one of the few completely automated plants in the
country which improves product quality while reducing labour costs.
Additionally, it is one of the few approved suppliers to Indian Railways,
providing critical safety items. Increasing the capacity of machining
facilities and improving efficiencies is our current focus.
Outlook:
The main focus of the Company will be to consolidate the expansion
undertaken and provide the necessary balancing equipments to improve upon
the efficiencies and utilise the existing capacities more efficiently.
In this aspect the Company will be installing new cnc shaving, shaping and
hobbing machines in the machining section which will not only enhance our
machining capabilities but will allow us to balance out our existing heat
treatment capacity. Similarly in the ring rolling division the Company will
install more machining centres to enhance the machining capacities,
drilling machines to improve efficiencies and a billet cutting machine to
augment our raw material cutting facilities
With all new inputs in place, I have every confidence that Ramkrishna
Forgings will record a superior performance at the end of the current year.
Warm regards,
Mahabir Prasad Jalan
Chairman