Kiri Industries Chairman Speech

CHAIRMANS MESSAGE



First of all I would like to thank investors of all categories,

especially retail investors for their response to our Initial Public

Offering (IPO). Our IPO was opened on 25th March, 2008 and was closed

on 2nd April, 2008 with price band of Rs. 125 to Rs. 150 per equity

share. When we entered into primary market, the market sentiments were

weak. With your support our IPO was subscribed to 1.35 times net. Our

Stock got listed on Bombay Stock Exchange Limited and National Stock

Exchange of India Limited on 22nd April, 2008 with overwhelming

response in secondary market. Our price touched to Rs. 228 on NSE and

204 in BSE.



This is first Annual General of the Company after listing, I would like

to Just brief you on the history, we made modest beginning with a

manufacturing unit in GIDC, Vatva, Ahmedabad in the name of Kiri Dyes

and Chemicals Private Limited in year 1998 that to start with

manufacturing limited quantity of reactive dyes. As on date our

installed capacity is 15000 MTA reactive dyes comprises of more than

120 dyes stuff. Unparallel dynamism, rich experience, in-depth

knowledge and farsighted business policies have strategically

positioned us as a leading exporter of dyes and dye-intermediates from

India. Driven by innovation and passion to excel, we continue to grow

every year not only to generate high revenues, but also to create

shareholderswealth by increasing percentage profit margins as well as

by generating more rupee term profits from exports. Due to the

distinctive product range that comes with irreplaceable high quality

standards, we got international repute in all business practices that

we conduct. This has been proved by being not only a major supplier to

the multinational companies, but also a brand provider to them.



In the year 2006, we have started the first phase of backward

integration expansion project to manufacture Vinyl Sulphone at plant

situated at village Dudhwada, Tal: Padara, Dist: Vadodara. In the year

2007, we have achieved another milestone starting second phase of

backward integration expansion project to manufacture H-Acid at the

same Dudhwada manufacturing facility and have become independent as

regard to major raw materials for manufacturing of reactive dyes. VinyL

Sulphone and H Acid are major raw materials to manufacture reactive

dyes, which are consumed in the highest quantity at KDCL.



KDCL has proved unprecedented highest growth in the history of dyes and

dye-intermediate industry globalLy. KDCL has established its presence

in about 20 countries worldwide with esteemed organizational

recognition and reputation as the most prominent, highly efficient, and

the most competitive manufacturers from India.



ACCELERATING FURTHER GROWTH:



KDCL is now also expanding its operations into basic chemicals

manufacturing of sulphuric acid and its derivatives with a target to

achieve exponential growth in the next few years. This plant is also

located at village Dudhwada, Tal: Padara. This plant is being set up

with latest double absorption technology. Alongwith sulphuric acid

plant we have also planned for 3.3 MW co- generation steam based power

plant. The steam generated from the plant will be used for generation

of electricity. The Power generated will be sufficient not only to run

Sulphuric Acid plant but also to operate intermediate plants of Vinyl

Sulphone and H- Acid, which will affect directly to our profit margin.

The production capacity is 180000 metric tones annual. We have taken

all required Statutory approvals for the said plant and the

Construction activities of the said plant was started from November,

2007 and commercial production of the plant will start from December

2008.



To become stronger with higher economy of scale for key raw materials

V. S. & H. Acid and to provide reliable supplies of these raw materials

to JV Company, we have also planed for expansion of our existing

intermediates plant capacity. The Existing capacity of V. S. and H.

Acid is 7200 metric tones annually. After expansion the capacity will

be 90000 metric tones annually alongwith 30000 metric tones annual

production capacity of Acetanilide. Alongwith capacity expansion, we

are also proposing for 15 MW captive power plant. We have already

acquired land for expansion of production capacity. Our environment

clearance application with Ministry of Environment and forest is in

process and environment clearance will receive at the end of September,

2008.



To share another milestone, I glad to inform you that, we are also

planning to set up various types of dyestuff manufacturing plant with

latest technology alongwith our joint venture partner Well Prospering

Ltd (WPL), a Honk Kong based company, subsidiary of Zhejiang Longsheng

Group Co. Ltd., China. We have executed joint venture agreement with

WPL on 24th May, 2008 for setting up dyes manufacturing facilities at

village Dudhwada, Tal: Padra, Dist: Vadodara. Kiri dyes shares in the

said plant will be 40% and we are also responsible for providing

required raw material to Joint Venture Company. The initial production

capacity will be 20000 metric tones annually in First phase and will be

increased to 60000 metric tones annually in due course. KDCL will get

be benefited in two way one for providing key raw intermediates from

existing plant and will get 40% profit share.



PERFORMANCE 0FTHE COMPANY:



Due to Starting of the backward integration project in worldwide

increases in price of chemicals, the turnover of the company increased

toRs. 22162.51 Lakhs for the financial year 2007-08 as against Rs.

13342.44 Lakhs for financial year 2006-07, registering the remarkable

66%. The Net profit for the year 2007-08 increased to Rs. 2014.08 Lakhs

as against Rs. 842.20 Lakhs for the year 2006.07.



Before I conclude, I would like to thank again all the shareholders of

KDCL for putting their trust and confidence into me and the team of

KDCL. We are committed to value and enrich your wealth.



Yours Sincerely,



Pravin Kiri

Chairman