Sticking To The Basics
Anil Whabi, who joined Finolex Industries as CFO in 2014 and became a part of the company’s journey of transformation and growth, says the stellar growth of Finolex Industries became possible only due to the focused approach of its management in following simple business strategies such as optimising capital allocation, operating only in areas of core competencies, exploiting market opportunities, taking adequate steps for risk mitigation, strong governance and transparency and making continuous improvement a way of life and quality.
According to Whabi, PVC being a petrochemical product, the risk of volatility is inherent in the PVC segment. In FY15, when the crude price fell by almost 50 per cent in Q3, PVC prices also came down by 20 per cent in a matter of few weeks. This resulted in losses in Q3 and lower profits of Rs 48 crore in FY15. But barring such an exception, generally, the effect of volatility, which is seen from quarter to quarter, evens out in a year as any change in PVC prices is followed by change in feedstock prices with a lag of a few months. And in the pipes and fittings segment, because of the immediate pass through mechanism to customers, the effect of volatility is generally not there. On the currency front, though majority of inputs are imported and the sales are in the domestic region only, due to import parity pricing of PVC in the domestic market, the company enjoys natural hedge and the time gap between payables and receivables is bridged by short-term borrowings in foreign currency. Further, by following cash-and-carry model, the company has no risks of recoveries of receivables.
On sustainability of growth, Whabi states that in more than three decades of its existence, “the company has consistently grown and has built strong brand equity by quality supply and customers’ experiences. By balancing growth with financial prudence, the company today is in a very strong position and is poised for sustainable growth over a long period of time. The thrust provided by the government in areas of irrigation and housing will enhance the market pull for the company’s products and sustain the growth momentum.”
Among the company’s other positives, Whabi says, “At Finolex Industries, we feel the business prosperity is sustainable by sharing with the needy and giving hope to people who often feel they do not have the right to be hopeful.” The company has been conducting CSR activities for many years in healthcare, education, water conservation and community welfare with Mukul Madhav Foundation, its CSR partner.
On environment, social responsibility and governance, he states that “Sustainability is an integral part of who we are and how we do business. Finolex pays utmost attention to energy and resource conservation. Be it energy saving or optimisation, we keep working towards the overall goal of sustainability. Our approach has been recognised in the past, both at the state and national levels, through various awards.”
